ESTIMATED COSTS FOR CHANGES IN SOCIAL SECURITY PROVISIONS I have then included in my statement for the consideration of the committee some of the costs of the illustrative social security changes which give an idea roughly of what it would cost to make some changes in social security. Any such improvements involve very substantial costs, and since they have to be financed, they involve very important matters of public policy. I have listed several of them in my statement as illustrative of what these costs would be. If we were to make social security benefits payable to all individuals irrespective of whether they were retired or not, it would cost an additional 1 percent of payroll, which means under the existing system the costs would have to be increased a half a percent on the employer and a half a percent on the employee. That gives a rough measure, as we begin to discuss these proposals, of what it would cost employers and employees to do this. I have also included in the statement under item "D" what a 10 percent increase in social security benefits would cost. You will see that this cost is nearly 1 percent of payroll, ninety-three one-hundredths of 1 percent, which is roughly equivalent to the same cost to repeal the retirement test, but benefits a very, very different group. A very costly item would be to reduce the retirement age to 60 for men and women, paying them full benefits, which would cost roughly 112 percent of payroll, thus necessitating an increase in cost of around three-quarters of a percent on the employer and a similar amount on the employee. To pay widows the full 100 percent as you pay other individuals living by themselves, would cost a little over a half a percent of payroll: Namely, 0.57 percent. And to provide for hospital benefits up to a 60-day maximum for all beneficiaries of social security would cost roughly two-thirds of a percent of payroll, meaning that it would cost an extra one-third on the employer and an extra third on the employee. I have just taken the illustrative ones there to give us some idea that to do these things for older people costs money, and that we must consider the costs in doing so. SUMMARY Summarizing what I have had to say, I would put it this way. We cannot think of the aged as one single group having entirely the same characteristics. Unfortunately, when we talk, we refer to "the aged," "the aged as a whole," "the aged on the average," and "the aged as a group.' ." This is inevitable in trying to describe the characteristics of 15 million people. But it is extremely misleading and erroneous as a matter of public policy to think of 15 million people as having all of the same characteristics, all of the same problems, all of the same needs. In order to convey this point that the aged are individuals, that each has different problems, that there are some problems similar to large groups but dissimilar to others, I have listed in my statement some of these similarities and dissimilarities: Some of the aged are between 65 and 70, but most are over the age of 70. Some of the aged are working, but most of the aged are not working. Some of the aged are in good health, but most of the aged are not in good health, at least in sufficiently good health to be employed in competitive labor market conditions as they exist today. Some live in institutions, but most of them do not. Some are living with their spouses; most are not. Some live alone, but most do not. Some of the aged have had a high-school education, but most have not. Some of the aged have very adequate income, but most do not. Some of the aged do not receive social security benefits, but most do. Some receive private pensions, but most do not. Some receive social security and a private pension, but most do not receive both. Some have hospital insurance, but most of the aged do not. A very, very few have comprehensive medical insurance, but most aged do not have comprehensive medical insurance. Most of the aged live in the State in which they were born; some do not. Most of the aged live in urban areas, but some do not. These, Senator, are just some of the characteristics of this large and growing group of aged which I think will make for many of the problems and challenges that we are faced with and which this subcommittee is faced with in dealing with the problem of the aged and the aging. Senator MCNAMARA. Thank you, Professor Cohen. You have set the stage for the hearings that we are to hold, and I am sure that your testimony this morning has brought up many questions. I am not going to take the time to ask you all of the questions that come to me at this point, but I would just like to ask you a couple. ABILITY OF ECONOMY TO SUPPORT NEEDS OF THE AGED Do you think our economy is capable of supporting the health and income needs of all the aged in the country? Do your studies indicate that it is possible to do it? Professor COHEN. Senator, my own personal feeling is that we can do a great deal more for the aged of the United States within our financial ability in this country. By the end of this year or the beginning of next year the United States should have a gross national product of $500 billion. For the first time in the history of this country or any country in the world, the total value of the goods and services produced will be a half a trillion dollars. According to the statements made by the Committee on Economic Development, the Rockfeller Brothers Fund, the National Planning Association, and various independent sources, our gross national product for the next decade should increase a minimum of 3 percent per year, and possibly closer to 5 percent, and some of them have estimated a little over 4 percent, which would mean that at the end of 10 years our gross national product would be closer to $750 billion. During that period of time, the aged of the United States is going to increase about 3 million, or roughly 20 percent. Our gross national product is going to increase about 50 percent. I see no reason why, if we develop the proper economic and social institutions in this coun try, the aged 5 or 10 years from now cannot be given a larger share of the gross national product by distributing this increased productivity, and thus our economy should be able to provide much more medical care and income to the aged. ROLE OF FEDERAL GOVERNMENT Senator MCNAMARA. Professor, you indicate, from your presentation here this morning that this whole program is a national one, not one that can be handled solely by the individual States. Is that a correct conclusion? Professor COHEN. I believe, Senator, that the States have a very, very important role to play in the development of these various programs. I think they have a very important role to play in public assistance. I think they have a very important role to play in the development of standards in licensing of nursing homes, visiting nurse services for the aged, a whole series of areas in which the States today are very inadequately providing for older people. I believe that those services and standards for older persons will only be improved if the Federal Government, exercising its great powers of leadership, training of personnel, funds for research and stimulation, will aid the States in doing the things that are necessary for older people; plus the fact that insofar as the income maintenance needs of social security and the hospital insurance needs of aged persons are concerned, I think that has to be handled primarily through our national social insurance systems, although insofar as hospital insurance is concerned, the States might have a role to play in helping to provide better standards for that. Senator MCNAMARA. Professor, you used a comparatively small figure in indicating the number of older people who are housed in institutions. Does your term "institution" include convalescent homes? Professor COHEN. My figure for the 3 percent that live in institutions is taken from the census. Senator MCNAMARA. Maybe one of the other panel members can answer that. Professor COHEN. Here it is. In 1950, there were 385,000 individuals in institutions, of which 217,000 were in homes for the aged, public and private; 141,000 in mental hospitals, Federal, State, local, or private; 8,800 in chronic hospitals; 6,500 in tuberculosis hospitals; 5,100 in correctional institutions; 4,100 in homes and schools for the mentally handicapped; and 1,764 in other. This is the 1950 figure. The numbers are probably somewhat different today, but these are the official census figures for 1950. Senator MCNAMARA. You have already placed the data in the record by reading them. The figures apparently do not include private nursing homes, then, generally speaking. Professor COHEN. At that time it says "homes for the aged" and it includes proprietary nursing homes; yes, Senator. In this category, under private, there were 6,500 in voluntary homes, and the category of 91,000 at that time in proprietary, including nursing homes. Senator MCNAMARA. This was 1950? Professor COHEN. Yes. Senator MCNAMARA. Of course there has been a tremendous increase in the number of nursing homes and convalescent homes. A great many of our older citizens are now living in these institutions, so I think this figure would greatly change. Professor COHEN. Yes. Many, of course, Senator-perhaps we should discuss this later-of those living in these nursing homes are living in extremely inadequate and I would say even in scandalous conditions. Senator MCNAMARA. I think the States are taking more interest in the quality of these places and in the safety of their inhabitants. Thanks again. Now we would like to hear from the other panel members at this time. We are very happy to have Dr. Frederick Swartz with us at this time. He is chairman of the committee on aging of the council on medical services of the American Medical Association. We are glad that the American Medical Association has taken such an interest in the studies that we are undertaking here. Certainly we need their cooperation, and we welcome you here today, Doctor. You may proceed in your own manner. Dr. SWARTZ. Thank you, Senator. STATEMENT OF DR. FREDERICK SWARTZ, CHAIRMAN, COMMITTEE ON AGING OF THE COUNCIL ON MEDICAL SERVICES, AMERICAN MEDICAL ASSOCIATION, PRACTICING PHYSICIAN Dr. SWARTZ. We have a paper submitted. If it suits your pleasure we would like to have this incorporated in the record. Senator MCNAMARA. Without objection, that will be done. (Dr. Swartz' prepared statement follows:) PREPARED STATEMENT BY FREDERICK C. SWARTZ, M.D., LANSING, MICH. If it is not inappropriate, I should like first to compliment the chairman and committee members on the way in which they are beginning their study of the problems of the aged and aging. The deliberative, thoughtful approach which the committee apparently intends to follow should help provide the Senate with a clear picture of the basic needs of older persons. NEEDS OF PERSONS OVER 65 ARE COMPLEX The work of the American Medical Association in the field of aging has shown that the needs of persons over 65 are complex and that providing opportunity for these citizens to meet their needs requires full recognition of the widely varied circumstances under which they live. The calm, dispassionate approach by the committee, therefore, augurs well for its study results. If the experience of the American Medical Association Committee on Aging is any indication, the members of this committee may even find their own concepts of aging undergoing material changes as the study progresses. PRACTICALLY NO DISEASES EXCLUSIVELY ATTACHED TO THE AGING PROCESS When our committee was first formed, it was charged with the responsibility of studying the problems of geriatrics, that is, the diseases of the aged, and was so named. It became apparent early in our deliberations that there are practically no diseases specifically and exclusively attached to the aging process and that while there are diseases among the aged, there are no diseases of the aged. In the light of this, the committee recognized that its real purpose is the health of the Nation's aging population, sick or well. GOALS OF AMA COMMITTEE ON AGING The committee's goal is optimum health for each individual. This embraces the areas of (1) adequate medical care at the lowest practical cost for those who are ill, (2) promotion of better understanding and wider use of restorative services on behalf of those who are disabled, (3) encouragement of activities, both group and individual, for the prevention of illness among all older persons, and (4) the promotion of long-range positive health programs which will increase the overall capacities of persons to live active, meaningful lives in their later years. From the earliest, study of these areas showed that the health of the senior citizen is not solely a medical or health habits matter. It became increasingly plain that the health of persons over 65 depends in a large measure on socioeconomic and psychological factors which prevent many persons from exercising their potential for responsible participation in society. As long as these patterns exist, unnecessary illness will occur despite medical care and otherwise sound health programs. Likewise, the duration of illnesses may be unnecessarily prolonged, the degree of disabilities increased. THE AMERICAN MEDICAL ASSOCIATION POSITIVE HEALTH PROGRAM It was in this frame of reference and after protracted study, that the American Medical Association Committee on Aging developed its positive health program for older citizens. It did so only after numerous conferences with physicians throughout the Nation and other informed persons and groups capable of providing data on aging. The program calls for: 1. Stimulation of a realistic attitude toward aging by all people The present general attitude or perspective of the public toward this everincreasing segment of itself is well-known but somewhat puzzling to understand. After a fourth of a lifetime spent in preparing to be a producer and after a half a lifetime spent in gaining experience and contributing to the public welfare, the oldster finds himself with a commodity which is still in demand but not from him. Just try to find him a market for his work. In spite of all the testimony in his favor, he is unacceptable. That which he was taught to believe made life sweet, his work, is taken from him. In addition, just let him make a little mistake in traffic-the same kind of mistake made by the younger group every day-or let him voice an unpopular thought in the meeting places, and he will be tagged by an number of names, all preceded by the word "old," as if this were an anathema that excommunicated him from all that was human. He is robbed of his ego and individualism. He is now just "Grandpop" or "Gramp" or "Grandpa." He is cashiered out of the human army. He now stands naked without rank, weapons, medals, or identification. To change this perspective will take much good, hard work. We, as a Nation, can ill afford this tremendous loss of human resources. Retirement at the present retirement age for all of the ever-increasing older group is economically unsound and will prove ruinous in time. As physicians, we know it often interferes with optimum health for the individual. The argument that there are not now and will not be enough jobs in the future to go around is just as fallacious as it was when it was offered to keep women from working. Now, 9 million women are working without having impaired the earning power of the male. Automation may dislocate labor on occasion but industrial advances have always been associated with increased employment opportunities. It may well be that industry of the future will hire bim for his entire working life and by inservice training keep him as a member of the production team in the face of automation, changing products and changing times. The medical profession is not opposed to retirement for those who want to retire. As physicians, however, we know that retirement to inactivity, for health reasons if no other, can for many people be an impediment to their health. Inflexible retirement based solely on age is unsound and unfair to many thousands of men and women who deserve better. Is it too much to ask that the aging, who are no less human because of their age, be reincorporated into the human family? Is there no still healthful and happy motivation that is worthwhile to the total group? |