1 All costs, with the exception of that for psychiatry and home care, are based upon experience under the Connecticut 65, New York 65, and Golden 65 insurance plans. Comprehensive insured lives experience do not presently exist with respect to the cost of psychiatry and home-care programs. For these benefits, therefore, the estimate is based on actuarial judgment and a review of the limited experience of such programs in a few areas of the country.

2 It is assumed that 40 percent of the beneficiaries will have $50 or more per year in medical expenses; that 40 percent will have an average expenditure of $25 per year; and that 20 percent will have no medical expenses. Under these assumptions, the value of the $50 deductible is $30.

Long-range cost estimates

It is generally acknowledged that the cost of benefits under part B of H.R. 6675 will increase in future years. For this reason, the bill provides for a periodic review and adjustment of the adequacy of the premiums, based on the experience which develops.

Accurate forecast of long-range costs of medical expenditures are difficult because fo the many underlying forces involved, many of which are unpredictable. Under assumptions as to cost trends which we regard as reasonable, the insurance associations have valued the long-range cost of the benefits of part B of H.R. 6675 under the following set of assumptions:

(1) The home-care benefit contains the greatest possibility for expansion and resulting substantial increases in costs. It is assumed that the claim costs of this benefit will increase by $0.82 per person per year (including administrative expenses).

(2) The cost of the other medical expense benefits, and the frequency of their use, will increase in future years as follows: 4 percent per year from 1968 to 1972; 31⁄2 percent per year from 1973 to 1977; and 3 percent per year from 1978 on. These increases are somewhat lower than those predicted by the insurance associations (and the Social Security Administration) for increases in hospital costs under part A of the bill.

Under the foregoing set of assumptions, the cost will reach $218 per person per year by 1990 ($18 per person per month).

Level-cost estimates

The associations' level cost of the benefits under part B of H.R. 6675, during the 25-year period to 1990, will be 0.79 percent. Of additional interest, the insurance associations have valued the level cost of the benefits under part A of H.R. 6675 to be 1.54 percent of taxable payrolls. These level-cost estimates are based on (1) the assumptions of the associations as to the costs of the health care benefits and (2) the assumptions of the Social Security Administration as to taxable wage basis, population, interest, and rising earnings levels.

Mr. EDDY. Could I make a personal comment which I do not wish to saddle my trade association with, but in studying this new bill, H.R. 6675, Senator, I have found that I have been able to see more appreciatively some of the advantages of the King-Anderson bill than I have ever been able to see before. (Laughter.)

47-140-65-pt. 2- -3

Senator ANDERSON. I am sure that will be the most appreciated statement you can make this morning so far as I am concerned. (Laughter.) On that happy note I will call on Senator Williams.

Senator WILLIAMS. Mr. Eddy, has the insurance company, your company, or any of the other companies, to your knowledge, made any estimate as of this time as to the actuarial soundness of part B of this bill?

Mr. EDDY. Well, perhaps, you are aware, sir, that over the years our estimates of costs, insurance estimates of costs, have seemed to run in excess of estimates of cost made by the administration. It is very difficult to price the benefits in part B.

As I recall, it has been identified by the administration that the level premium cost of part B is 0.49 percent of payroll. I think that the industry's estimates of costs would come out closer to 0.79 percent of payroll.

The great imponderable, one of the great imponderables, in the forecast of costs lies in the extent of the use of home care, which is a relatively new and untried field, and is unlimited under the provisions of part B.

Senator WILLIAMS. You are speaking of the supplemental insurance?

Mr. EDDY. Supplemental, I am sorry, sir. We have got A and B, and I am not sure whether it is A for Anderson and B for something else.

Senator WILLIAMS. How long do you think it would take for actuaries of your industry to come up with a reasonable estimate of the projected cost of that supplemental insurance program?

Mr. EDDY. At your request and the request of this committee, we would expedite it and do it to the best of our ability very quickly. Senator WILLIAMS. Thank you.

Mr. EDDY. But an estimate of cost is no better than the basic assumptions. As we all know, we have to work with our best judgment on assumptions, particularly as they involve the future.

Senator WILLIAMS. Well, I appreciate that.

Senator ANDERSON. You go ahead and make the assumptions, but list what they are.

Mr. EDDY. We will, sir.

Senator ANDERSON. Because those are what are valuable to us, because we can take it back to HEW and say that these people assume that so many people will have a broken arm, and with a broken leg will be ill for period of time, and they can look at their figures and see if it sounds reasonable or not, and if you give us your assumptions we would very much appreciate it.

I want to join with Senator Williams and have you supply as much of that information as you can, because there is very little before this committee thus far-I do not know what the House committee had before it-which shows the actuarial soundness of what this bill does. I remember launching an insurance company some 37 or 38 years ago, and I had to backpedal as hard as I could to keep from getting too much business in the beginning and swamping it. I did not know how to operate it yet. It took me time to find out, and I assume it is the customary experience of the insurance business. Mr. EDDY. It certainly is.

Senator ANDERSON. Therefore, we would like to have your experience, with a record of 100 years of service for the company, what it means in terms of this bill. Anything your company can do will be welcomed by me, at least, and I am sure by the members of the committee.

Mr. EDDY. We will do our best, I assure you.

Senator ANDERSON. Thank you very much, Mr. Eddy.

Mr. EDDY. Thank you.

Senator ANDERSON. Senator McClellan is here, and I want to have him introduce the next witness, Dr. Robins. Senator McClellan.

Senator MCCLELLAN. Thank you, Mr. Chairman and members of the committee. This is indeed a pleasure for me to have this opportunity to present Dr. Robins of Camden, Ark. Incidentally he is my neighbor and my family physician. I may say in that capacity he has sometimes prescribed an unpleasant but always very potent and effective remedy for my ailments and therefore, I think that his views and opinions anywhere, anytime in the field of medicine merit the most careful consideration.

For that reason, I am proud to present him, proud to present him also as the past president of the Arkansas Medical Association, and one of the founders and, I believe, the fifth president of the American Academy of General Practice. The doctor was one of the founders of that, and its fifth national president, I believe.

By the way, I think it would also be appropriate, certainly not too much out of line, to present him as a former national committeeman from Arkansas. He served for 8 years in that capacity as Democratic Committeeman from Arkansas.

I see you say you may be outnumbered here this morning, but that is still a good recommendation for me, and I hope it is for you. Dr. Robins.

Senator ANDERSON. Dr. Robins, we are very happy to have you.

STATEMENT OF R. B. ROBINS, CHICAGO, ILL.

Dr. ROBINS. Thank you, Senator McClellan.

Mr. Chairman and members of the committee, I would like to thank you very much for giving me the opportunity of appearing before you here this morning to present a short statement of my views as a physician on H.R. 6675.

As the Senator said, my name is R. B.-Bob-Robins, and I have been a medical doctor for 39 years. While my years have been devoted to medicine, I also treasure this opportunity for another reason. It gives me an opportunity to see old friends in these Halls, including members of this committee, and to renew ties dating back to the 8 very satisfying years I spent as a member of the Democratic National Committee.

As a matter of fact, I believe I enjoy the unique distinction of being the only physician who has served on the national committee of either major party in this century. I represented Arkansas on the Democratic National Committee from 1944 to 1952 and there worked closely with the leaders of our party. Today they are the leaders of Congress, holding in their hands the responsibility for the Nation's present and future well-being. Needless to say, I have only the greatest respect and warmest affection for all of them.

But it is as a doctor, as one of the 285,000 members of the medical profession in this country, that I speak to you now in vigorous opposition to a program of health care under centralized Federal administration, with wage earners compelled to finance "free" Government benefits for millions of Americans who do not need the assistance.

First, let me salute the committee for holding hearings on this legislation. Physicians cannot understand why this measure was not open for public comment before it went to the floor of the House of Representatives for a final vote.

This recent chapter in the legislative history of H.R. 6675 points up a situation which I believe should be noted here. Bills of this kind have been introduced in one form or another for 20 years but Congress has never seen fit to act favorably on any of them throughout that long period. If these proposals were wrong in the pastif there was reason for successive Congresses to reject them-they are still wrong. But now, this bill, the most sweeping one of all, is being rushed through to passage, and with hardly more than pro forma consultation with the medical profession, who will have to implement the legislation.

It appears that a long debate over a fundamental issue may be nearing an end. I believe it is reasonable to point out that physicians alone bear the ultimate responsibility for making this program work in whatever form it is finally enacted.

Your work on this matter will be done. You will turn to other issues of these times. Physicians will be left to contend day in and day out, month after month, with the terms of the legislation. They will be expected to go on providing only the best care while they strive to make sure the achievements of the past 25 years continue and multiply to the benefit of all mankind.

Most physicians do not believe this will be possible under the limitations and requirements imposed in the measure that is presently before you.

Surely their views and recommendations merit some serious consideration. It is unreasonable, in my opinion, to plunge ahead with the formulation of a program to which the great majority of members of the medical profession are opposed, both as to its expressed terms and its implied threat to the system of health care which this Nation has always known.

As you consider the action you are being asked to take, I urge you to remember that heretofore in the United States the health professions have been free to pursue their constant search for better methods of treatment, more effective drugs and more efficient techniquesunencumbered by the outside interference which is inescapable under a vast federally financed and controlled program. Under our system as we have known it, America has become the medical mecca of the world.

When I began medical practice, students who could afford it flocked to the medical centers of Europe for their basic and postgraduate education. Today, the reverse is true, medical students from all over the globe come to the United States to study and become finer phy

sicians.

Yet, at a moment when American medicine is preeminent throughout the world, it is proposed that we adopt the very system under which

one European country after another has lost its former leadership in medical science.

There is no question, American physicians today are unsurpassed in their knowledge and ability. But what will happen when this seed crop is gone? Will the most talented young men and women continue to be attracted to medical careers when they see a profession falling more and more under Government supervision? I doubt it. Many of our best young minds will turn to pursuits where they can exercise their abilities to the fullest, to make the most out of their lives, without the stultifying effects of Government regulation. The loss of able entrants into the health-care field cannot help but lead to a deterioration of the quality of care in this country. I have personally observed this in England and other European countries.

The plan before you, of course, as I know that you know would cost a staggering sum. The administrative problems it would create would be enormous. But let these considerations be secondary for a moment. The important thing to perceive and understand is the disruption of the doctor-patient relationship that it entails; the time to be spent waiting in overcrowded offices and facilities; the beginning of the regimentation of medical practice of this country; the overburdening of medical facilities and personnel; the delays in admission to hospitals.

These are the perils which a physician sees in this proposal. I wish I coudl make you see them, too, so that someday they will not come back to haunt us all.

Before I conclude, there is another point in this bill to which I should like to address myself. That is the compulsory inclusion of self-employed physicians in the social security system.

I am 65 years old, the age for retirement written into the social security law. I am actively engaged in the practice of medicine and surgery, and expect to be so engaged for a good many years to come. In this I am typical, I think, of the overwhelming majority of physicians my age and older.

We don't stop practicing at any arbitrary age limit; our patients, I am happy to say, do not want us to. I can tell you from experience that they expect us to keep on serving them as long as we are able and for a great many physicians that goes well into the seventies. Any program built around a 65-year retirement age simply does not fit our career pattern. It is unnecessary and unwarranted to force us into a system designed for persons in other callings where similar pressures do not exist to continue working into the latter years of life. I urge you to delete this section from the bill.

In this brief testimony, I have tried to communicate, as a physician, my very deep and very sincere reasons for objecting to the passage of H.R. 6675. Medicine has been my life. I don't want to see it harmed-for the sake of the profession and for the sake of Americans of the future.

Time has not permitted me to go into specifics. But in the many hours of testimony here, you will receive a great many detailed objections to the terms of the bill from spokesmen for medical organizations throughout the country. I urge you to heed them.

I urge you to give serious consideration to the physicians' plan for meeting this problem, and the physicians have a plan called the eldercare program with which I am sure you are all familiar.