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doctor care was needed. These problems of nonparticipation and of poor util ization were analyzed as problems of membership miseducation. Thus an LHI membership education committee was set up to find some answers to these problems. Though in existence for just a few months, they have made soul progress. An attractive, easy-to-read LHI membership information booklet bas been prepared and will be distributed to all LHII members in the near future. A series of health posters is being prepared for monthly posting on shop-bulletiu boards.

All union new member meetings now have an LHI person assigned to explain what are the benefits of LHI membership and to encourage these new members to come in for a complete physical checkup.

How to get greater participation at the annual meetings is being given series consideration by the LHI membership education committee because of its interest in seeing that a basic principle of LHI, democratic control by the membership, is a living reality.

2. Blood bank.-Supplying the pints of blood needed by LHL members an' their families during the course of illness was a problem that reached emergency proportions during the past year. A special blood-bank committee workini out a proposed plan consisting of the following basic principles : (1) Establishment of a unionwide donor-registration plan, to include eligible donors am eligible family members of the local. (2) Adoption of the principle of giving when needed h" registered donors.

3. Hospital x rvice plan.-- Before 1949, hospital insurance coverage was given to LHI members through the Blue Cross. After careful study, it was felt that our members would receive more extensive benefits under a plan of our own. With this thought in mind, the LHI Hospital Service Plan was brought into being on February 6, 1919. Now, 4 years later, the adequacy of the benefits provided by the LHI Hospital Service Plan is being questioned. For hospital charge have steadily mounted during the plan's existence while the schedule of benefits drawn up in terms of 1949 hospital prices, has remained constant. Thus, tlie gap between the amount LHI pays to hospitals, on the patient's behalf, and the total hospital bill means, for the hospitalized patient, a deeper reach into his own pocket than has hitherto been necessary.

What can be done to lessen the amount the patient is paying is a problemi currently confronting the Labor Health Institute. To help in its solution, a special extension of benefits study is in the process of being made. As soon as the results of the study have been analyzed by the LHI rules and regulations committee, recommendations will be forthcoming which should do much to answer this problem of the membership.

(NOTE.-Benefits were increased; LHI's costs remain lower than if Blue Cross were used.)

4. Doctor negotiation 8.--- The problem of doctor-fee determination confronted the LHI administration most of the year and is still not completely settled. The difficulty arises because of the lack of established precedent for this payment of part-time doctors connected with a prepayment medical care plan. An attempt has been made to tie in LHI doetor fees with going rates for doctors in private practice in St. Louis. The principle of seniority increment has also been intro duced in order to discourage turnover among the medical center staff, and to show some form of appreciation for doctors' years of service to our member ship.

It is our hope in the coming years to consolidate the gains pointed up in this report and to extend the services. We hope by a broad program in which the membership participate actively to learn how to obtain greater cooperation between the members and the medical center, hospitals, and auxiliary facilities. We hope by this type of health education program to more wisely utilize the serviets available, to teach our membership the symptoms of disease that they should be alerted to watch for, and finally, to render the best medical care program available anywhere. It is by mutual understanding and a spirit of cooperation that comprehensive medical care reaches its ultimate fruition within the framework of presently known medical knowledge.

Submitted by John 0. McNeel, M. D., medical director of LHI.


(Summary of oral report) The Cooperative Medical Services Federation represents 38 indemnity insurance plans, and 36 of these are members of the federation. There are 45,000 menubers in these 36 plans which adds up to 112,500 people.

In the past year attention has been directed to developing a field service for its members. In the 20 percent of the population that is rural, development is taking place by townships. There is a drive being conducted now to obtain 40 percent enrollment. In some cases enrollment goes up to 80 percent. The present policy is not to start a group unless 40 percent of the rural population of a county is enrolled. Twenty associations have added surgical insurance in the last 4 months, and as a result, 1.5,000 new people enrolled.

Two new types of insurance have been introduced. One is the catastrophic insurance, which has met with much success. In each township a secretary is appointed with the responsibility for a meeting each year for member relations. The second type, the industrial insurance, has just started, and not much progress has been made on it as yet.

Submitted by Paul Meehan, secretary-treasurer.



(Summary of oral report) The Group Health Association moved into its new building 'which has made the operations of the organization much better. The membership has grown slowly up to 19,500 during the past year. The impact of the change in government personnel has not yet been felt. In order to serve more fully, the GHA sent out a questionnaire to all of its inembers regarding their needs, and a good return is now being obtained.

Member education is being conducted, especially in prenatal care. Mental hygiene programs are also conducted.

Services are being increased by inclusion of neurosurgery. Also, after 1 year, members are entitled to care of preexisting conditions. A dental clinic has also been established. There are problems regarding the administration of dental care, not as to the care itself, but education of members is probably the key to this problem.

Submitted by Henry H. Lichtenberg, M. D., medical director.


Celo Laboratories is a cooperative organization whose primary purpose is to serve the members of the Cooperative Health Federation of America. We act as a cooperative within a cooperative and serve CHFA members by supplying them with needed medical supplies.

We were organized 2 years ago and have been making steady progress. We operate a testing laboratory for checking the preparations we handle and we also do a limited amount of research.

The major items we have been handling have been in the form of tablets, capsules, and liquids and we are now about to enter the field of injectables. The research we have done in this field indicates that we should be as successful in reducing the cost of injectables to the participating associations as we have been in the field of tablets and capsules.

In addition, we have supplied co-op pharmacies with consumer unit packaged preparations and have made nonprescription items available to the Group Health Association of St. Paul.

Dr. Dean Clark reported that Massachusetts General Hospital has found it to their advantage to purchase some of their medical preparations from celo Laboratories.

Submitted by Harry Abrahamson, Celo Laboratories, Celo, N. C.

1 In 1951.


An address by Thomas J. Burke, president, Janitors Union, Local 25, (Chicago, Ill.

On May 28, 1953, Senate bill No. 589 was introduced in the Illinois Legislature by Senator Marshall Korshak, of Chicago, at my request. This bill amended sections 8 and 20 of the Voluntary Health Services Plans Act, approved june 27, 1951, by the then Governor, Adlai E. Stevenson, of Minois. That act, as you will remember, provided for the organization and operation of nonprofit corporations for the purpose of furnishing hospital, medical, nursing, and related health services to members and subscribers. That act has been described as the greatest step forward in group medical care in the history of Ilinois, and I am happy to have played my small part in putting this law on the statuite books of Illinois.

In 1951 we were forced to accept certain restrictive and unreasonable p quirements not imposed upon other similar nonprofit plans in order to pass the act. Now Senate bill 589 was introduced in order to remove those restrictions and I am very happy to report to this great meeting that we were successflil in having the Illinois Legislature approve this bill last Friday, June 26. 1 dar before adjournment. In fact, the bill was passed in less than 1 month, and achievement of success in itself.

The changes brought about by the enactment of this bill will bring great p. lief to us in operating Union Health Services, Inc., incorporated last December 1. This corporation is the first and only voluntary health services corporation in Illinois, and was organized by Janitors Union, Local 25, of Chicago. The changes brought about by the passage of this bill are threefold :

1. The bill clarifies the meaning of the term “working capital," by changing it to "original capital.” Although this may appear to be of little important, yet if that term had been improperly construed, it could have restricted our operations. I will not bore you with other details on this point other than 19 say that we are now satisfied with the statutory language.

2. The most important change wrought by the act was to remove the unfair and restrictive requirement that we could not accept from our members or subscribers in any 1 year sums of more than 4 times the working capital of the corporation at the beginning of each fiscal year. Thus, if our capital was $100,000 at the beginning of the year, we could not accept premiums or jayments of more than $100.000 during that year. This would restrict expansiuni, the giving of additional benefits to our members and their families and might well prevent other groups from joining ours in an effort to provide complete and adequate medical and hospital care to their members.

I want to illustrate for your bentfit the unfairness of that requirement. First, it has no counterpart in any other insurance law in the State of Illinois. No other company, whether profit or nonprofit, was so restricted in its operations. The Blue Cross and Blue Shield plans had no such limitations. It was apparent that this so-called four-times requirement, as it has been referred to, was grossly unfair.

I have been told that of the 38 States having nonprofit plans of a similar nature, not one had that requirement imposed upon it. It was advised therefore, by our attorneys and others, that we should attempt to have this serion of the law removed prior to the commencement of business.

At the last minute some opposition developed on the floor of the Horise a ainst the removal of this restriction. This opposition, it now seems, stemme i from commercial insurance companies writing accident and health insurance in Illinois and elsewhere. However, we were well prepared for them since our legislative sponsors, the director of insurance, and other interested parties had been advised that not even the commercial companies were so restricted and hampered. Thus, we were able to convince the Illinois Legislature of the fair. ness of our position and our canse prevailed late last Friday night as the blouse of Representatives passed our bill hy a big majority.

3. The third and final change made by Senate bill 589 was to remove a re. quirement that the aggregate working capital should never be less than $66,000. We objected to this because the term "aggregate working capital" was not defined, because other special reserves were required of us annually, and lause this money is needed for salaries of doctors and nurses, for operating expenses and for the purchase of professional equipment and perhaps real estate. We further felt that we were being discriminated against because neither Blue Cross nor Blue Shield had any such requirement imposed on them.

This does not mean that we will not have ample reserves and surplus on hand to meet emergencies, since good business practices dictate such reserves in order to forestall any possibility of insolvency.

We feel confident that we have now removed those obstacles in the law which were detrimental to the operation of voluntary health services corporation. We look forward with cheerful enthusiasm to a great plan of medical, hospital, and nursing care for our members and their kids and we are now in a position to give our members better health at less cost.

The CHAIRMAN. Mr. Myer.

Mr. Dillon S. Myer was born at Hebron, Ohio, and in 1914 graduated from Ohio State University. He has been in several phases of Government employment since the year 1934, including the Agricultural Adjustment Administration, the Agricultural Conservation Adjustment Service, and later as head of the War Relocation Authority whose job it was to relocate the Japanese on the west coast.

After the war, he was executive director of the Coordinating Committee of the Department of the Interior, and then became Commissioner of the Public Housing Administration. In 1947, he became president of the Institute of Inter-American Affairs. In 1950, Mr. Myer resigned and became Commissioner of the Bureau of Indian Affairs in the Department of the Interior, and stayed with that position until March 20 of this year.

After serving with the Government for almost 20 years, Mr. Myer began work with Group Health Association of Washington, D. C., a prepayment medical cooperative organization where he is now employed as executive director.

Mr. Myer, we will be pleased to hear from you.



Mr. Myer. Thank you. Mr. Chairman, may I make a brief preJiminary statement to my prepared statement by pointing out that Group Health Association is really not an insurance plan as such. It is a service agency, because we provide the medical service directly, and is not set up and organized under the insurance laws. The association is incorporated under the laws of Washington, D. C., as a nonprofit membership corporation. There are at present 7,500 members and 19,600 participants being served by the organization.

The service area is the territory within a radius of 15 airline miles from the White House.

Any person 18 years of age or older is eligible to become a member of the association by the individual admissions procedure or as a member of a group

The business of the association is managed and controlled by a board of nine trustees elected by and from the members of the association. The chief administrative officers are the medical director, a physician who is a nonvoting member of the board and serves as chief of the professional staff, and the executive director who is the chief lay administrator and nonvoting executive officer of the board of trustrustees.

The Group Health Association provides prepaid comprehensive medical services and hospitalization within the area and dental service for members based on a schedule of charges for services rendered. It provides hospital coverage outside the area but not medical service unless recommended by the chief medical officer.

The association has its own full-time medical staff and, in addition, has retained the services of a number of part-time physicians, mostly specialists.

It has also a staff of full-time dentists and a number of part-time dentists on its staff.

It maintains its own clinic and clinical facilities, including medical laboratory, equipment for electrocardiograph and basal metabolism tests, X-ray, physical therapy, optical shop, pharmacy, and dental laboratory.

It operates a health room under contract for the convenience of the employees of the International Monetary Fund and the International Bank.

All members and their listed and qualified dependents are eligible for services, subject to any limitations imposed on the membership and providing the member's account is in good standing.

The services provided to all full service members are as follows unless limitations are imposed :

Medical and surgical examinations and treatments, physical theraps treatments, surgical operations, and obstetrical care. (These services are provided at the medical center of the association, in the hospitals in the service area, and in the home.)

Professional consultations are provided when approved by the medical director.

Refractions of eyes, X-ray diagnosis, superficial X-ray treatments. laboratory tests and examinations, when provided in the medical center.

Hospital and ambulance services to full service members.

Hospitalization services are limited to a period not exceeding 9) days in any 1 calendar year or in any one illness, or in any continuous period of hospitalization. These services include (a) bed and board in semiprivate room and general nursing care included in daily room charge; (b) use of operating or delivery room; (c) services of anesthetist; (d) surgical dressings including casts; (e) limited routine medications; (f) routine laboratory tests (urinalyses, blood counts, serology tests).

For hospitalization procured outside the area not more than $11 per day for semiprivate room, and operating room or delivery room and anesthetist's charges not to exceed those within the area are also provided.

Hospitalization and services relating to the termination of preg. nancy are not provided unless husband and wife have both been listed for services for a period of 10 months immediately prior to delivery

Elective surgery is not provided during the first 10 months of membership

In cases of members or dependents enrolling by the individual admissions procedure, the association, upon recommendation of the medical director, imposes limitations for services including hospitalization, for conditions which existed prior to admission to membership. All acute conditions existing at the time the applicant's final acceptance of membership has been received will automatically be restricted without the process of notification.

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