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8. This plan would permit much more efficient use of the limited medical manpower of the Nation, and more widespread use of the country's top medical skill and brains. The Armed Forces, for example, could utilize the facilities of the diagnostic clinics in those areas where the Army or Navy has no clinic of its

The Veterans' Administration could also make use of the diagnostic clinics. Under present laws, only the service-connected veteran-patients are permitted to use VA clinics. Non-service-connected cases, or two-thirds of the VA patients, must enter a VA hospital and take up a bed in order to get complete examinations. A non-service-connected case could obtain a free medical examination at the community diagnostic clinic, and if his treatment required special attention, he could be sent to a major VA hospital.

9. Biggest problem would be the staffing of the diagnostic clinics in the face of the national shortage of medical personnel, a shortage due to be with us for many years to come. The medical schools would provide for the staffing by fulltime and part-time physicians and associated auxiliary workers.

The Veterans' Administration should be ready to cooperate by encouraging its young doctors to pursue part of their training in the outlying areas of the country, which as a rule progressive physicians shun. Doctors training for the specialties must put in a period of service or practice under diplomates (accredited specialists). The VA could send to the diagnostic clinics a large number of young doctors with 3 to 4 years of special training. These doctors would be assigned for 2 years, and their practice would be supervised by diplomates, who are consultants to the VA.

Similarly, the proposed National Science Foundation, which would undertake to assist in the training of young scientists, would be able to arrange, on a contract basis, for doctors educated at Federal expense to pay back Uncle Sam by serving for a stipulated period in the outlying diagnostic clinics.

10. There is no element of compulsion in this plan-as there is in national health insurance-a factor of prime importance to physicians and all men of integrity. High quality health care and disease prevention must come out of cooperation and good will, on the community level, and will not come out of orders from Washington. The outstanding success of the Veterans' Administration medical program is attributable to the local supervision by the medical schools. The selection of virtually each doctor in the VA is made by the medical schools, which are in a position to know what kind of a physician he is, what kind of medicine he practices, whether or not he is a good teacher, whether or not he is a public-spirited citizen.

11. The local board, which would be the controlling influence over the policies and operations of the clinic, might be a representative body composed of persons drawn from State and local public health agencies, State and county medical societies, local philanthropic bodies, and local civic and altruistic bodies such as veterans organizations, service clubs, and the like.

ADVANTAGES OF THIS PLAN

This plan bas several obvious advantages: 1. It is realistic in its emphasis upon local controls. (a) This would avoid an unnecessary Federal bureaucracy. (b) This would prevent abuse of a governmental system of medical care. (c) This would tend to reduce costs, and hence taxes.

(d) This would permit maximum utilization of our present trained personnel and would stimulate efforts to train more.

2. The plan would preserve the doctor-patient relationship and would enhance the doctor's value to his patient through a diagnostic service which he is not equipped to provide himself.

3. This plan would tend to attract doctors and other medical personnel to rural areas. This would obviously serve to bring about a better distribution of our medical personnel and in the long run would serve to increase the total supply of medical personnel. Furthermore, the personnel in rural areas wuold be stimulated to keep in touch with progressive developments in medicine. (The rural areas are basically ignored in present proposals for compulsory health insurance.)

4. The plan would permit a local or regional concentration upon specific health problems. For example, tuberculosis is a problem most prevalent in the southern States; heart disease is most prevalent in New England. Local control of health problems would permit a flexible approach to diverse health problems.

5. This plan woud provide a vital check against unnecessary operations. Proper diagnostic service would go far toward preventing such operations.

6. The nature of this plan is such that the American people would be warned that the solution of the national health problem depends not upon a mere Federal statute but upon a continuing fight by the people in their local communities.

7. This plan could be effectuated in large part within 18 months. A PLAN FOR NATIONWIDE MEDICAL CARE

KEY TO SUCCESS - LOCAL CONTROL

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Dr. MAGNUSON. But I would like to see diagnostic clinics encouraged. And I think Mr. Wolverton's bill on loans to various institutions for such purposes is a very admirable thing and should be incorporated. Because many of these things are stymied because the hospitals or the local people can't get money to start them. And I am just starting a rehabilitation institute in Chicago.

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And, incidentally, I raised more than $200,000 before I even had a board of directors in Chicago inside of 6 weeks; just going to my friends, and some old patients, and some people I didn't know, and industry and labor. And we are now starting this rehabilitation institute, which is a completely free service organization, not supported by anything except private subscription.

And we will take all kinds of disability cases. I don't care whether it is tuberculosis or infantile paralysis or heart disease or paraplegia, or what not.

Our only object is to give a thorough examination first, to determine what this patient is able to do, and then, if they are accepted for rehabilitation, they will be put to work several hours a day, 5 days a week, not to teach them any trades but to teach them all they can with what they have left.

The third thing is to find them jobs in industry so that they can make a living again. And we figure that if the charities—this is a service organization-will pay $8, we will save them $10 the first year, and after that we will have the patient off their hands so that they won't have to pay him anything. He will pay taxes himself. That has been done in Chicago in less than a year, and we bought a $300,000 building and are ready to start.

All this stuff needs is some leadership. But doctors as a whole don't have the time to do it. I am out of circulation now. I am out of practice. I had to do something to occupy the rest of my life, so i thought I would do this. But it is just a question of someone in a community presenting these things properly and taking leadership to see that they are done.

Mr. HESELTON. I hope that the very fact that these hearings are being held, plus the hope that something will be done by the committee and Congress, will serve to help arouse the public to the sort of work you are doing, because I think it is not only helpful but most significant.

People may differ as to proper solutions, but I am sure they are concerned about what can be done.

Dr. Magnuson, Gus Thorndyke got one of these things started up in a ward of the Massachusetts General Hospital, and Dr. Howard Rusk and Kessler, down in New Jersey, but there is nothing between those, so far as I know, and San Francisco. Chicago, probably the largest manufacturing town in the world, hasn't any place you can send one of those people. And we figure 500,000 people in Chicago need some form of rehabilitation, to increase their earning power, or put them back to where they are earning some sort of dough.

The CHAIRMAN. Do you think it might be a proper function of the Public Health Service to locate these various ideas that are promising and make them available to the people who are known to be interested in hospitals all around this country, as well as the local medical associations?

Dr. MAGNUSON. Well, in the first place, you have got to have people trained, to train other people. That is one of the great troubles with medical education today. There are not enough teachers. There are not enough people with the ideals of teaching, or information, to staff our hospitals.

Now, when you start anything new like this, you have to start from the ground up. You have got to get a few well-informed people as a nucleus, and then build up from there.

Each one of these things, started in the right way and staffed in the right way, will be the nuclei for a spread of this.

I went to Louisville a few weeks ago to talk to them. They are contemplating getting one started. They said to me, “Where do we get the people?"

Well, I robbed the VA to get mine. I happened to know who the best ones were. The VA squawked a little about that, but I said, “Listen. You had plenty of time to educate them. That is what we started this thing for, to educate them. If you haven't educated them since I left, you have just done a bum job, that is all, because I think we were educating them when I was there."

Mr. HESELTON. That is all.
The CHAIRMAN. Any further questions, gentlemen?

Mr. PELLY. Mr. Chairman, I would like to ask Dr. Magnuson if he did not infer, a little earlier in his testimony, that he was under the impression that the Kaiser Foundation has lay management? I think I might refer to the testimony Mr. Kaiser gave, in which he said the heart of the medical care program is the partnership of doctors who supply their services to the members. The physicians supply their own independent private partnership.

Then a little later on, he said there is no control over service to patients.

Dr. MAGNUSON. That is fine. I qualify my statement by saying that I didn't know anything about the Kaiser institution, and then I went on to the hospital business, and apparently Mr. Kaiser has his organized like I spoke about the hospital, with a wise lay manager, or wise management and board of trustees, with a group of doctors paying attention to their own business and passing the ball back and forth for team play between them.

And I am sorry if I gave the impression that I thought that I knew that the Kaiser institution was run on that basis. I didn't mean to imply it, because I don't know.

Mr. PELLY. Well, Mr. Kaiser, I thought, was very emphatic on that point of having the doctors run their programs.

Dr. MAGNUSON. I am glad he feels that way about it.

The CHAIRMAN. I just have one or two questions that I would like to ask, Doctor.

In the first place, with reference to your statement concerning reinsurance, I do not know what others have in mind by the use of the word “reinsurance.” However, I have introduced a bill that might be termed the "reinsurance bill.” The theory of the bill is not dissimilar to that which prevails under the FDIC, in which the FDIC guarantees to depositors that the United States Government will stand back of them to the extent of $10,000 in deposits. This necessitates, of course, some supervision by the FDIC to make certain that the rules and regulations of good banking are carried out by the banking institutions which are insured. And that guaranty to the depositors in that overlooking, so to speak, is based on a small fee to be paid by the insurance company.

leason.

Now, the bill which I have introduced is not the last word, by any means. I have introduced it from the standpoint of creating interest and discussion, in the hope that as a result we will have a worthwhile bill, that will be sound and will obtain the results that we are seeking.

However, I have been told that one of the objections to the bill by the medical fraternity grows out of the fact that in the opinion of some, it has a tendency to lead toward governmental control of medicine.

It seemed to me that that was a bit farfetched under the circumstances, but to me it illustrates how far some individuals will go to oppose an arrangement which has a good intent back of it, and the purpose of which is to be helpful.

Now, you have been speaking with reference to the rehabilitation of the injured and ill persons.

Mr. HESELTON. Mr. Chairman, may I interrupt you a minute?

I think in terms of what has been said, that reached your ears, it might be well to put in there the first portion of your bill. It says definitely that it is the belief of the Congress that the solution to the people's health needs can be obtained from free enterprise and private initiative without so-called socialized medicine.

The CHAIRMAN. Of course, as Dr. Magnuson has realized in his life, and you have in yours, we realize very often good intent can be misconstrued, and I accept any criticism of the kind that has been made against the bill which I introduced. It is just lack of knowlelge or an opposition which is based upon something other than

With reference to the splendid work you have inaugurated in Chicago, in connection with rehabilitation, is it not true that some rehabilitation services are very expensive?

Dr. MAGNUSON. Yes.

The CHAIRMAN. Well, would you care to comment on the economic side of rehabilitation? That is, How does the outlay compare with measurable economic returns to the employer and the employee in the community, for instance!

Dr. MAGNUSON. Well, the figures, as far as I have been able to get them, were given to me by Miss Mary Sweetser, who is head of the rehabilitation effort in the new Department of Health and Welfare. They figured that the first year, for rehabilitation of an individual, they spent eight-tenths of the money which was being paid for benefits, in addition to the benefits, and after that the benefits were eliminated the year after, and those patients went back to being taxpaying units on an average of $10 per year per patient.

Now, how much that amounts to in dollars and cents, can be gotten from the Department, because those are Department figures. We have said to people in Chicago:

By spending $8 with us, you will save $10 the first year, and after that you will save the whole $18, besides making a happier individual, a self-supporting and taxpaying unit. It has been well proven up to now that disabled people are good employees. They can't go out and get another job so easily.

And the result is that they stay on the job, and they learn it well, and I can assure you of this: That we have had tremendous cooperation from labor in Chicago in establishing this effort. And I think

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