In Alabama, we have a unique administrative situation. The Medical Association of the State of Alabama differs from all other State medical associations in that the entire physician membership is, by law, the State board of health and, as such, is charged with all matters pertaining to public health. Because of this responsibility, which we individually and collectively feel, we are greatly concerned in all matters of health legislation.

Senator ANDERSON. Do I understand that 2,200 members are on your State board of health?

Dr. CHENAULT. Yes, sir.

Senator SMATHERS. Briefly, how does it function, just through the officers?

Dr. CHENAULT. Through a committee that is elected from the voting body, the voting delegates.

The general provisions relating to the health insurance programs are, for the most part, unwieldly, and we believe unnecessary in our State. In Alabama, the State board of health has the responsibility for licensing and inspecting health care facilities, including hospitals and nursing homes. Our established procedure is efficient, adequate, and appropriate for our needs.

We oppose many of the provisions of this bill, especially part 1-A of title I-proposed new title XVIII-which provides financing of hospital care through social security. This legislation would centralize control over many aspects of the care of the sick. We feel strongly that there is a basic error in the concept of our Federal Government providing a service of this nature to the aged segment of the population.

It appears to us that, of necessity, the administration of the proposed program will result in control of both the vendor and the recipient of the services. We sincerely believe that such a step would be dangerous to the physical health of our people, not in the public interest, and an improper function of the Federal Government. The practice of medicine-art and science-is a highly individualized endeavor, fitting particular needs with best available remedies, and does not lend itself to rigid rules or regimentation.

The proposal is a radical departure from present procedure in that the Government undertakes the provision of services rather than funds for the needy.

As it is now written, H.R. 6675 excludes coverage of the services of pathologists, radiologists, physiatrists, and anesthesiologists as part of inpatient hospital services. We urge that this feature be retained as it now stands. The practice of pathology, radiology, anesthesiology, and physical medicine are branches of the practice of medicine just as are surgery, general practice, and internal medicine. The services of these physicians are not hospital services and do not belong in that

portion of the bill solely designed to offer hospital benefits. The approval of any amendment classifiying these four specialties as "hospital services" would force approximately 15 percent of this country's physicians to become salaried employees of hospitals rather than independent practitioners.

The use of a regressive tax to fund this proposal of health care, we feel is another basic error. While we make no claim as financial or fiscal experts, we understand some of the errors of a regressive tax. We consider it to be unjust to tax the working people of this country to provide health care for everyone 65 years of age, regardless of their financial need. It seems unrealistic to expect a young couple with children, and multiple costs-of-living payments, to be saddled with an additional tax for the care of all the elderly.

In Alabama, according to our latest available figures, 8 percent of the total population is 65 or over; 52 percent of our State's popula tion is between the ages of 18 and 64; 50 percent of all the families in Alabama have an annual income under $4,000 and 71 percent have an annual income under $6,000. In Alabama, 50 percent of the nonwhite families have an income of less than $2,000 and the income of 80 percent of these families is under $4,000. A large percentage of this group are the so-called disadvantaged. The point is that the lower income families would pay a tax disproportionately high. We consider this to be unwise, unfair, and discriminatory against these very people whom we are all desperately trying to help, at both the State and Federal levels.

As to part B of title I, part 1-of part B of proposed new title XVIII-we favor provision of adequate health care for all the elderly. We support the concept of a voluntary insurance program but feel strongly that it should be administered by a State agency on the local level so that the peculiar needs of any area can be properly

met.

Further we believe such a program should be limited to those in need. We feel that administration at the Federal level will inevitably result in inefficient operation of the program, and inadequate care for the aged's ills.

The physicians of Alabama respect fully remind you that we have always given freely of our time and talents for the needy. We desire and expect to continue to contribute our time and efforts, and we believe that we can best serve our patients without third-party interference.

The medical assistance program proposed in part 2, title I-new title XIX-greatly expands the Kerr-Mills Act. Our experience in Alabama with medical assistance to the aged under the Kerr-Mills law has been good. There has been a steady growth in utilization of this program. In 1962 there were 1,639 claims, for which hospitalization costs were $390,959; fees paid to physicians totaled $2,189. In 1964, 2,710 claims with hospitalization costs $836,864 and only $4,475

paid for physicians' services. During 1962, HOAP-hospitalization for old-age pensioners-hospitalization costs of 19,130 claims was $3,962,277 with $17,259 paid for physicians' services.

In 1964, $6,323,418 was paid for hospitalization for 26,369 claims. The total number of hospitalization claims for both plans in 1964 is 29,074, while 7,566 claims for physicians' services were filed. $7,160,283 were paid for hospital service, while $65,174 were paid for physicians' services.

This simply means that in many instances no claims were filed for the services of physicians.

We consider this to be further evidence that the Alabama physicians will cooperate in voluntarily furnishing health care services for the sick, the aged, and freely to the needy.

We favor this portion of H.R. 6675 since it appears to extend a program of medical care administered at State and local levels, a procedure which we have found to be workable.

The self-employed physicians in Alabama oppose their inclusion in the social security system. Historically, no group has been included under social security until its national organization has approved such inclusion, and in the case of self-employed physicians, this has not been done. Under the proposed combined social security and hospital benefits act, the self-employed individual would pay $355 on maximum annual earnings of $5,600 in 1966. This would gradually rise to $514.80 on annual earnings of $6,600 in 1987. Any self-employed person earning $6,600 annually would contribute $9,642.70 during the next 20 years of social security, and $5,148 for each succeeding 10-year period. This seems to be a poor investment, with no interest return. Physicians in Alabama rarely retire at any age, and almost never by age 65; thus they would not benefit from this program. Most physicians in Alabama, as elsewhere, already have private investment plans for retirement income. This additional tax may jeopardize many of these plans.

It is regrettable that the Members of the House of Representatives were denied the opportunity to debate the various features of H.R. 6675 before its passage. We urge the Senate to assert its independence and consider each proposal of H.R. 6675 separately, so that its good features may be adopted, and objectionable features rejected or amended.

Thank you for giving us this opportunity to help discharge our obligation to the people of Alabama in our effort to preserve for them the best possible health care plan. We hope that our opinions will be of some benefit to you in your deliberation. We would be pleased to attempt to answer any questions and to obtain additional information for you. We are submitting for the record charts and more details concerning MAA and HOAP utilization in Alabama.

Senator ANDERSON. Without objection those charts will be placed in the record.

(The documents referred to follow :)

47-140-65-pt. 2- -10

Senator ANDERSON. I am not going to spend any time in trying to argue, but you say that the self-employed physicians in Alabama oppose their inclusion in the social security system. Historically, you say, no group has been included in social security until its national organization has approved such inclusion.

You may be right, but my impression was the dentists were put in, and the American Dental Society did not approve.

Dr. CHENAULT. I think the American Dental Society did approve. Senator ANDERSON. Did they approve?

Dr. CHENAULT. It was my understanding that they did approve it. Senator ANDERSON. Will someone here give us expert testimony on that case?

Mr. JAMES W. FORISTEL. I am James Foristel. I understand they did disapprove twice, and finally approved, at least on an elective basis, and were taken in in 1956.

Senator ANDERSON. I am not sure. I thought they disapproved all the way through, and finally approved the action at a later time. Mr. FORISTEL. The same story for the lawyers.

Senator ANDERSON. Good. I am glad to have an expert witness to give us the information.

Any questions?

Senator SMATHERS. No questions.

Senator ANDERSON. Thank you very much for coming here.

Dr. Flannery.

STATEMENT OF DR. WILBUR E. FLANNERY, PAST PRESIDENT, PENNSYLVANIA MEDICAL SOCIETY

Dr. FLANNERY. Mr. Chairman and Senator Smathers, I am Wilbur E. Flannery, a practicing physician in Newcastle, Pa. I am here as the immediate past president of the Pennsylvania Medical Society which consists of some 12,000 members, and having the present duty to express to your our opinions with reference to the legislation before you. We have a six-page statement which, of course you have the long statement in your hands, and our oral presentation will be briefer. We would like to request, if it is possible, to put in the record the statement that was made before the House Committee on Ways and Means November 20, 1963, in connection with H.R. 3920 of the 88th Congress, if this can be made a part of the record, or available to Senators to look at. We believe it makes some points of interest with reference to our opinions about the legislation.

Senator ANDERSON. Without objection that will be done at the end. of your statement today.

(The document referred to will be found at the conclusion of the statement of Dr. Flannery, p. 672.)

Dr. FLANNERY. Thank you.

There are aspects of H.R. 6675 which we favor, such as that portion which would increase the cash benefits to social security recipients and the concept of voluntary participation in medical insurance subsidized by general fund revenues. Our position on the measure as a whole, however, must be one of opposition. This is why:

1. Those who are able to pay for their health and medical care should pay for it, regardless of age. To give financial support to those who do not need it is

Economically unsound: It would waste Government aid on those who do not need it instead of focusing it on those whose limited income calls for help. We in Pennsylvania have proof that the aged who need help can be given adequate help.