in a few years the whole social security bill will have to be paid on a currentcost basis.

In short, during the next 10 or 15 years, the total annual cost of social insurance will be somewhere between one-seventh and one-sixth of the pay roll, or 10 to 12 billion dollars. It is almost certain that before the costs are stabilized, they will equal or exceed those of the British system which are estimated at 24 percent of the wage bill.

It would be inexpedient to have the worker and employer bear this whole cost. The May 1945, edition of the Wagner-Murray-Dingell bill provided that the employer and employee should each be taxed 4 percent of the pay roll. Thus from the outset a large and increasing sum would have to be defrayed by the general taxpayer. Already he has to meet the costs of the Federal and State governments, as well as interest on the public debt, a burden which will probably not fall below $30,000,000,000 a year for many years to come.

Besides supporting the various governments and paying their debts, the general taxpayer-either as an individual or a corporation-is the source of funds on which business draws for expansion and research necessary for increased productivity. The crux of the economic problem of health insurance is this:

"Can business expand and become more productive if the funds of the general taxpayer are curtailed by taxes to meet an increasingly heavy social security burden on top of his other commitments?"

Political dangers in the health insurance program offered this country are just as real as the economic ones, although less obtrusive. The bureaucracy necessary to administer the Wagner-Murray-Dingell bill might comprise 500,000 persons or more. These government agents would be strategically placed in every village and in every district of every sizable city.

We may credit American voters with enough political maturity that the danger of such a machine being seized by a demagogue, as Hitler seized its corresponding facilities in Germany and turned them to his own uses, is remote. But we have seen our farm aid machinery, in its limited field, turned to producing majorities in referenda on farm-control policies that Hitler might have regarded with envy. There is no guaranty that the health insurance bureaucracy wouldn't groom a class of benefit-receivers as compact and as single-minded for their own interests as the farmers are for theirs.

Aside from the tremendous cost and the grave political dangers, there is the major consideration that the health insurance probably won't even have the beneficial effects claimed for it.

This doubt is not based only on the fact, heretofore mentioned, that the rate of claims never levels off, as it should if public health were really growing better. Sir Henry Brackenbury, one of the most distinguished British advocates of health insurance has admitted that any betterment in the health of the people may be due "to education, public health measures and increase in medical knowledge," and not to the health insurance system itself.

Indubitably, there are some places where public health has improved, and there are some where it has deteriorated. An English publication, Labor-Management, admits that the medical services under health insurance, have developed "with patches of brilliancy, and patches of gross inefficiency." It is not primarily the fault of the insurance doctors; they are overworked. One writer estimates that even before the war, the average consultation with a panel doctor lasted only 4 minutes.

It is not surprising that the workers distrusted this type of medicine. In 1936, about 600,000 British workers distrusted this type of medicine. In 1936, about 600,000 British workers renounced their right to medical care under the insurance system by failing to register on the panel. In the same year, one-third of the French workers who were eligible for insurance did not qualify for it. These facts underscore the question as to the medical success of health insurance. Dr. Boas. Senator Murray, I have a bit more detailed report which I should like to submit in addition to my testimony.

The CHAIRMAN. Yes; you may do that.

(The statement referred to is as follows:)

TESTIMONY ON S. 1606 BEFORE THE SENATE COMMITTEE ON EDUCATION AND LABOR, APRIL 18, 1946, BY DR. ERNST P. BOAS, CHAIRMAN, THE PHYSICIANS FORUM

I represent the Physicians Forum, a national organization of doctors who are interested in the improvement of medical care and in the dissemination of infor

mation on the subject among physicians and the public. We are concerned first with the quality of medical care; second, with the widest possible distribution of the highest quality of medical care; and third, with the practical attainment of these ideals through a system of prepayment.

Our group, all doctors, counts among its members some of the country's mos distinguished physicians, including a large number in private practice who have a first-hand knowledge of medical economics as it affects doctors and patients Our membership also includes physicians who are connected with hospitals and medical schools and are therefore familiar with the influence of these instit tions on medical practice and the health of the public. All our members belong to the American Medical Association or to the National Medical Association. Therefore, I address you as a physician and on behalf of physicians.

The Physicians Forum unequivocally supports the bill under consideration. S. 1606. As practicing physicans we know better than any other group of fellow Americans the present deficiencies in medical care, the needless suffering at death constantly occurring throughout this land because of bad distribution and scarcity of doctors and hospitals in many communities. We know that many persons cannot afford to buy ordinary medical care, and that few can cope with the costs of catastrophic illness. We know that many regions of this country cannot support the doctors and hospitals they need so badly. After searching inquiry we have reached the conclusion that national compulsory health insuran represents the only practical method to finance medical care and bring it with reach of all the people of the United States.

Ample factual evidence has been presented to this committee of the need fo such a program. The availability of medical care depends today on how mo the patient can pay, and in what part of the country he lives, not on his medica needs.

The past decades have been years of tremendous medical discovery and prog ress. Good medical care today is better than it has ever been, but it is also mor expensive, so costly, in fact, that the majority of patients cannot afford to benefit from the present available medical knowledge. No longer is the solitary medi practitioner able to give adequate service to his patients. The constant devel >ment of new laboratory techniques, the increasing tempo of specialization, wi the complex and difficult technical procedures which this involves, have brot it about that frequently many doctors must cooperate to reach a diagnosis az carry out treatment for a single patient. He pays a separate fee for each serve rendered, and the doctor is compelled to send him from one specialist or of laboratory to another in order to obtain the data that he needs to reach a diag nosis or carry out treatment. The costs rapidly mount, so that often neede special examinations are postponed or omitted because the patient cannot affe to pay for them. A survey by the National Opinion Research Center of the Ur versity of Denver revealed that 31 percent of the people questioned had put «ď seeing a doctor because of the cost, and 23 percent had to borrow money to pa doctor or hospital bills.

We believe that in a democracy adequate medical care is a right to which n” citizens are entitled. This right is necessary for the enjoyment of all other rights and privileges, for sick people are not free people. The most articulate expression of this viewpoint is found in the late Franklin D. Roosevelt's new b of rights. In January 1944 he said:

"We have accepted, so to speak, a second bill of rights, under which a re basis of security and prosperity can be established for all-regardless of station race, or creed." Among these he said is: "The right to adequate medical care a** the opportunity to achieve and enjoy good health; the right to adequate prote tion from the economic fears of old age, sickness, accident, and unemployment" This principle was reaffirmed by President Truman. In his message to-Cot gress on November 19, 1945, the President said:

"We are a rich nation and can afford many things, but ill health which c be prevented or cured is one thing we cannot afford. * We should resis now that the health of this Nation is a national concern; that financial barres" the way of attaining health shall be removed; that the health of all its citie deserves the help of all the Nation."

If we agree that medical care is a right to which all are entitled, and f many cannot afford to buy it it is clear that a large part of the money to pay it must come from other sources. There is ample precedent for government fill this gap, whether it be the local, State, or Federal Government. For yea government has provided medical care for the indigent, and it has borne alm

the total cost of the medical care of the mentally ill and of the tuberculous, because families are unable to bear the drain of such long drawn out chronic illnesses. Expenditures by government for public-health activities, for child and maternal health, and for veterans run into sizable figures. Today public agencies in the United States spend hundreds of millions of dollars of tax revenues for the support of medical facilities and services for the civilian population.

No one challenges the principle of the use of public funds for the prevention of disease. But the prevention of disease today involves much more than the old-line activities of the public health officer-sanitation and vaccination. Today the chronic, so-called degenerative diseases, such as the heart diseases, highblood pressure, diabetes, cancer, and chronic rheumatism, are the great hazards to life and health. Their control and prevention involves the creation of complete facilities for early diagnosis and treatment, and making them freely available to all. People must be encouraged to consult a physician at the first intimation of a bodily disorder, and not wait, as unfortunately many do, until the disease has progressed to an advanced stage at which damage may be irreparable. The financial barrier that keeps patients from seeking medical advice must be eliminated.

Today we can no longer say, "This is preventive medicine, a proper function of government; and this, on the other hand, is curative medicine, the function of the practitioner of medicine whose services must be bought in the open market." These two aspects of sickness control are inseparable; preventive medicine begins with measures of personal hygiene and health examinations conducted by the medical practioner. So it is a logical and natural step in the prevention of disease today to turn to government for funds to provide adequate medical care facilities for all citizens of this country.

Because of the uneven distribution of wealth in the United States the Federal Government must assume responsibility. A State such as New York could finance its own system of medical care, but there are many States that are unable to do so. North Carolina, for instance, has an average net per capita income of $317 compared to $573 for the country as a whole; it has only two-thirds as many doctors and two-thirds as many hospital beds per unit of population as the country at large. Similar parallels between income and medical resources can be traced throughout the country. The increasing mobility of our population also makes it necessary that health plans be national in scope, so that the worker will not lose his benefits when he moves from one State to another.

The proposals for improvement of medical care have concerned themselves principally with the application of the insurance principle to the payment of medical care. Insurance applies the sound principle of pooling risks to reduce individual hardships. It spreads the cost of illness and makes it possible to meet the extraordinary cost of major illnesses out of a common fund to which all contribute. Insurance furnishes a practical method of overcoming the financial limitations to the purchase of adequate medical care. People can budget and make regular payments when they are well to pay for medical services when they are ill. Providing medical care for the people of our Nation by the insurance method is not foreign to our system of government. It is no more "foreign" than is the system of old-age security and unemployment insurance. The Physicians Forum supports Senate bill 1606 because the bill recognizes, as we do, that sickness is a problem which concerns the whole community, and promotes the aims we consider essential for a system of national health insur

ance.

Under the provisions of the bill, medical coverage would include upward of 90 percent of the entire population in one medical-care program. This is as it should be, for the need for health insurance arises from the fact that the vast majority cannot afford to pay individually for adequate medical care.

It has been suggested by some that initially the coverage should be limited to a fraction of the population and that the benefits should be extended gradually as experience accumulates. Limitation of coverage to certain occupational groups or to geographic areas would be inequitable. Limitation by setting an income ceiling eligibility, say an income of $3,500, would exclude only a small fraction of the population and would make administration of the act more difficult, not easier. The Physicians Forum approves the broad coverage proposed In this bill.

Much has been made, by opponents of this bill, of the point that this program adds over $4,000,000,000 in taxes on a now overburdened taxpayer. This is not a true statement of the facts. Before the war the people of this Nation as a

whole spent about $4,000,000,000 a year on medical care, so that the cost of the proposed medical-care program will not be significantly higher. It is not all new money that has to be raised over and above present expenditures. The advantage will be that persons would not be called upon as individuals to meet the heavy obligations imposed by the need for medical care and they would be free to seek medical services as soon as needed.

The bill does not state how these funds are to be raised, but leaves this decision up to Congress. The forum believes that it would be sound policy for Congress to legislate a distribution of national health insurance costs between employer and employee on a social-security basis, with supplementation from general tax funds, as called for in earlier drafts of this bill. There are definite advantages in financing a national health program by contributory insurance payments through pay-roll deductions. With the worker and employer cotributing directly to the cost, they would be more apt to take an interest in the proper administration of the whole program, for they have a stake in it. It is just and psychologically sound for the worker to contribute to the costs of his own medical care. Knowing that he has paid for medical service, he will regard this service as a right, he will demand that it be adequate; and every stigma of charity, that in the past has been associated with medical services provided by government, will be eliminated. The benefits to the employer, derived from proper care for the health of his employee, are well recognized.

The provision in the bill, that if it should become necessary to prevent abuses. the patient may be required to pay a fee for the first service or for each servic in a period of sickness, is unfortunate. Should this ever be applied, it would set up a financial barrier between the insured person and the physician, a barrier which health insurance is supposed to remove. It would tend to delay early recognition and treatment of disease. It would offer financial inducement tr the physician to increase the number of his visits. If abuses arise that threaten the integrity of the insurance fund, it is better that they be regulated by the operation of local committees on which physicians are fully represented. A possible limitation of laboratory, dental, and nursing benefits is also unfortunate but may become necessary, we recognize, until more administrative and actuarial experience has become accumulated and more professional personnel is available The administrative and organizational features of the bill are well conceived Quite properly the Surgeon General of the United States Public Health Service is the administrator. The opponents of this legislation have raised the cry tha: the Surgeon General would become the "medical dictator" of the Nation. Nothing could be further from the truth. The bill provides that he is responsible to the Federal Security Administrator. Of equal importance is his responsibility to the National Advisory Medical Policy Council. This Advisory Council is not as some have maintained, without power or responsibility. The bill specifically provides that in matters of policy, and in most important matters, the Surgeon General can act only after consultation with the Advisory Council, any for members of which may call a meeting. Public airings of the opinions of the Council are assured by the provision that the Surgeon General in his regular reports to Congress must include a report of his consultations with the Courel along with its recommendations. Thus the Council will have real responsibility and power to advise and make its views known. The cry of "dictator" is being supported by those of the medical profession whose dictatorial control of the medical policies of the country is being threatened.

It is also falsely charged that all details of medical care would be run from Washington by a horde of bureaucrats. Once more the provisions of the bil itself give the lie to this argument. Actually all that the Federal Government would do is what is necessary to the success of any national plan-collect the money and set up minimum standards to be followed by all doctors and hospitals. Decentralization of administration is assured by the instruction that the Ser geon General utilize as far as possible the services of State and local advis and technical committees to advise in administration.

The bill does not affect the present set-up of medical practice. Doctors may refuse patients, patients may choose doctors. Unfortunately, even the fee-forservice system of payments to practitioners is allowed if practitioners so elect. We say "unfortunately," because it is an accepted fact based on experience, that no health-insurance plan has been able to function with fullest efficiency under the fee-for-service system. It creates a huge amount of paper work for physician and the administration, and it leads to inevitable abuse by doctor and patient We predict that physicians will be the first to repudiate this method of payment

The section of the bill that provides a substantial appropriation for both research and professional education is laudable. Without the continuous leaven of research and education the practice of medicine quickly withers and becomes a mediocre routine. The best medicine today is practiced in our university hospitals where teaching and research go hand in hand with the care of the sick. We are physicians and it is natural for us to ask the question: "How does compulsory national health insurance affect us? Granted the public has everything to gain from this measure, what about us?" The physician today is a split personality. He is a combination of a professional man and a small businessman. These dual activities often conflict with one another, to the doctor's distress and patient's disadvantage. All too often, the physician is prevented from giving his patient the benefit of the full resources of medicine because the patient cannot afford the expense of the procedures involved. The doctor is unable to practice medicine in the way he wishes to and in the way it should be practiced. At present, all doctors are very busy and very prosperous. They forget that only a few years ago 60,000 doctors who are now being released from the armed services were competing with them for patients, and that a large number of these patients had no money. In 1936 the median net income of physicians was $3,234; in 1938, $3,027, and in 1940, $3,245. Compulsory health insurance will stabilize the income of doctors over the years and, in fact, will increase the incomes of the majority. It has been estimated that general practitioners under the plan will earn about $8,000 a year gross, and specialists about twice as much from insurance practice aside from private practice.

Because there will be no such thing as free services, we should no longer hear, as we did, in the recent past, that physicians are contributing a million dollars' worth of free medical service per day. Dispensary services in their present form, where doctors receive no pay whatsoever, would disappear. All medical service would be paid.

Moreover, doctors would no longer be compelled to choose their locale on the basis of whether the community could afford a physician. They would not be forced, as they are now, to crowd the urban areas and enter into harsh competition with one another for the restricted number of middle-class patients from whom they derive the bulk of their income today. There would be less inducement for them to indulge in the dishonest practices of fee splitting and the kick-back.

Economic pressure on the young doctor entering practice would also be relieved to a considerable degree. Smaller communities would be in a position to attract the younger man who nowadays shuns them for economic reasons. Moreover,

the young physician could always enter into contract with the insurance fund on a salary basis, full or part time, and thus bridge the first years of practice during which economic insecurity is greatest.

Most physicians enter and remain in the field of the practice of medicine because they derive a sense of satisfaction from the prevention and alleviation of sickness. Under this bill the physician will find his relationship with his patients unimpeded by economic barriers. No longer will the problem be whether the patient can afford the treatment the physician thinks is necessary. No longer need the physician hesitate to call for the complete working up of any case, regardless of cost. No longer need the patient wait until the disease becomes acute before consulting the physician. For the first time preventive and curative medicine can come into its own on the largest possible scale.

The Physicians Forum is gratified by the provision in the bill authorizing cooperative groups of physicians to give services under the plan. The application of the national compulsory health insurance principle will solve the economic problem involved in the provision of medical care to all, but it would be a grave mistake to believe that all problems of medical care will be solved when the economic basis alone is assured. Professional and technical medical considerations determine the adequacy of medical care, whether paid for by an insurance fund, by governmental, philanthropic, or private enterprise. The record of the various compulsory health insurance schemes in Europe demonstrates that an economic solution alone is not the whole answer.

We must adopt a fresh approach to the technical and professional aspects of medical care, just as we have for the economic aspects. The old answer was to supply a family physician for all. This would give each patient the services of a general practitioner and assure the doctor's income. It does not allow for all of the components of medical care that today are accepted as essential; it does not recognize the preventive services, the services of specialists and con