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Washington, D. C. The committee met at 10:15 a. m., pursuant to recess, in room 1334 of the House Office Building, Hon. Charles A. Wolverton, chairman of the committee, presiding.

The CHAIRMAN. The committee will be in order.

For the past few days we have heard very illuminating statements on medical-care plans of different types :

First, a plan developed under the auspices of industry; next, plans developed through the initiative of physicians who have formed physician-owned group practice plans.

Yesterday, we heard about the health-insurance plan of Greater New York, a community plan stimulated by Mayor LaGuardia to provide prepaid health services for the employees of New York City.

Today, we begin hearing the views of representatives of labor unions. The interest of labor unions in prepaid medical care is nothing new. It extends over many years and health and welfare benefits are now important items in almost all collective-bargaining agreements.

The unions provide health services to their members in many different ways. Some unions have enrolled their members in existing plans, such as the Health Insurance Plan of Greater New York, the Kaiser Plan, and the Ross-Loos Medical Clinic, and others.

Some unions have their own medical centers where they provide comprehensive medical care, such as physicians' services in the center, home, and hospital and various types of X-ray and laboratory services with special emphasis on preventive services. Other unions have health centers which provide diagnostic services and upon the request of the patient sends the results of the tests to the family physician.

Some unions provide protection through Blue Cross and Blue Shield plans or group-insurance contracts. Union members and their dependents represent a substantial proportion of the total membership in such plans.

I might indicate how long the unions have been interested in this field. I understand that in 1913 the International Ladies' Garment Workers Union established the first service type of medical-care plan that was sponsored by a union; that is the first union plan that provided physicians' services rather than cash benefits. But before that, as early as 1887, the granite cutters union established the first union sick benefit program that was national in scope. The barbersunion

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established a sick benefit program in 1895 and the tobacco workers' union a year later. The interest of the unions in obtaining health benefits for their members is as old as the unions themselves.

Some people think this is a new interest. It is only the practice of including such benefits under collective bargaining agreements that is a new development.

This committee expects to benefit greatly from learning of the experience of the various unions in providing health benefits for their members.

Today we have the privilege of having before us witnesses from the International Association of Machinists. It will be our privilege to have Mr. Nelson Cruikshank, the director of social insurance activities of the AFL as our first witness, and following him Mr. A. J. Hayes, international president of the International Association of Machinists. Following him will be Mr. Fred Umphey, executive secretary of the International Ladies' Garment Workers Union.

I am certain that you will agree with me that these representatives of labor are in a position to give us very helpful information for this important subject that is occupying the attention of the committee at this time.

The first witness, as I have said, will be Mr. Nelson Cruikshank. He is the director of social insurance activities for the American Federation of Labor and secretary of the American Federation of Labor standing committee on social security. He has held this post since 1945 with the exception of the years 1951 and 1952 when he was on leave of absence from the American Federation of Labor to act as Director of Labor Activities for the Economic Cooperation Administration, stationed in both Paris and Washington.

During the war, he was secretary to the labor members of the Labor Management Advisory Committee of the War Manpower Commission.

He has written numerous articles and addressed many meetings on the subjects of health insurance and social security.

Mr. Čruikshank, we will be pleased to hear from you at this time. STATEMENT OF NELSON H. CRUIKSHANK, DIRECTOR OF SOCIAL


Mr. CRUIKSHANK. Mr. Chairman and members of the committee, I am very happy to have the opportunity to present our views on this very important subject, and appreciate the generous words of the chairman on the background, interest, and the role that the American labor movement has had in the development of some of these plans and the experiences that we have had.

Mr. Chairman, I had expected to be accompanied at this time by my colleague, Mr. Andrew J. Biemiller, but he was detained by a conference in President Meany's office. With your permission he will join me when he is able to come over.

The CHAIRMAN. We will be very glad to have Mr. Biemiller take part in these hearings.

Mr. Biemiller was a member of this committee, a very active member; he was intensely interested in this subject of public health. His interest has not deteriorated since he left the Congress. I would say that he is performing a very wonderful service for the AFL with which he is now associated. He has been helpful to the committee in the days previous to these hearings.

I am pleased to know that he will be here to be associated with you.

Mr. CRUIKSHANK. Thank you, Mr. Chairman.

My name is Nelson H. Cruikshank, and I am director of social insurance activities for the American Federation of Labor. My office is located in the AFL Building, 901 Massachusetts Avenue NW., Washington, D. C.

I appreciate the opportunity of presenting to this committee our views on the important health issues you have under consideration.

The American Federation of Labor agrees with President Eisenhower in being flatly opposed to the socialization of the medical profession. Also in common with President Eisenhower, the American Federation of Labor supports the principle of social insurance as a method of dealing with social problems. We believe that this sound and tested principle should be extended to the field of health on a national basis, so as to make it possible for all of the citizens of America to have access to, and a means of meeting the costs of, high-quality medical care, without the imposition of an undue economic burden upon any person or class of persons.

The official policy of the American Federation of Labor was most recently restated by a resolution adopted unanimously by the 72d annual convention, held in St. Louis in September 1953. That resolution reads as follows:

Whereas the health and physical well-being of its citizens is one of the most important gages of the general welfare and social progress of any nation; and

Whereas good health is the greatest asset of the working man and woman whose livelihood is entirely dependent upon the physical ability to work; and

Whereas the health of the people of America is suffering as a result of the serious shortage of doctors and other medical personnel and the unfilled need for more and better hospital facilities, clinics, and health centers; and

Whereas, even where physical facilities are available, the high cost of adequate medical, surgical, and hospital services places high-quality medical attention and health care beyond the economic reach of many large groups in our population and imposes a heavy burden of debt and economic insecurity upon workers and their families; and

Whereas the so-called voluntary health insurance plans promoted by insurance companies and medical societies are grossly inadequate to meet the needs of the public, are not available to millions, neglect vital areas of health care, are duly costly in terms of benefits derived from premiums paid, tend to push up the cost of medical care, and are subject to widespread abuse by members of the medical fraternity as well as others; and

Whereas these facts have again been emphasized and underscored and placed before the attention of the public after exhaustive study, in the final report of the President's Commission on the Health Needs of the Nation; and

Whereas organized labor, as the spokesman for the interests of the working people of America and their families must accept a large share of the responsibility in a democracy for the development and promotion of programs, policies, and methods of organization to enable wage earners and their families to overcome the hazards of ill health: Therefore be it

Resolved, That the delegates to the 72d American Federation of Labor Convention assembled in St. Louis, Mo., call upon the Congress of the United States to enact legislation to expand public health facilities and programs, to promote and assist the expansion of medical training and educational facilities, hospitals, clinics, and health centers, and to provide a nationwide system of national health insurance to assure tbat good medical care will be made available to ll of the people of America.

On November 12, 1953, the social security committee of the American Federation of Labor, following a meeting in Washington on that day, issued a statement which declared, in part, that:

The health needs of the Nation are still urgent. They cannot be ignored. They continue to exact a heavy toll in human lives, suffering, and economic distress. They do not evaporate and disappear with a change in political parties in control of the instruments of Government. They demand action, through a constructive program for the expansion of health services, personnel and facilities and for a method of payment which will alleviate the crushing burden of cost now borne by the American people, and make possible the broader distribution of high quality medical care. This can best be done through a sound and democratic system of national health insurance, coupled with a program of Federal aid to medical education, medical research, and the expansion of hospitals, clinics and other health facilities and services. This is not socialized medicine, but a logical extension of the established principle of social insurance.

We call upon the admnistration and upon Congress for action now, through the presentation of a constructive, comprehensive health program to the people The Nation cannot afford further inaction or delay in this vital area of public responsibility,

The members of the committee are: Mr. William F. Schnitzler, secretary-treasurer, American Federation of Labor, chairman, AFL social security committee; Mr. George Meany, president, American Federation of Labor, ex officio member of committee; Mr. James A. Brownlow, president, metal trades department, American Federation of Labor; Mr. Gordon W. Chapman, secretary-treasurer, American Federation of State, County, and Municipal Employees; Mr. William H. Cooper, secretary-treasurer, Building Service Employees' International Union; Mr. George Q. Lynch, president, Pattern Makers League of North America; Mr. Lee W. Minton, president, Glass Bottle Blowers Association of the United States and Canada; and Mr. Matthew Woll, first vice president, American Federation of Labor.

I am calling attention to this to point out both with respect to this statement that the views that I am presenting here are not views of my own, although I do believe in them wholeheartedly; but they are the views developed by the membership, their representatives in the convention, and by these 9 elected officers of unions of the American Federation of Labor.

This is a well-considered opinion of our organization through its elected representatives.

The American Federation of Labor favors a Federal program of national health insurance, not because we are in any sense committed, as a matter of philosophical principle, to governmental action as against private voluntary action, but because, as practical people, we are convinced that this is the only practical way in which the job that needs to be done can be done, within the framework of a free and democratic society.

If the existing pattern of private voluntary plans could do this job, or could do it as well, we would be content to place our hopes in the further development of such plans. But, unfortunately, that is not the case.

Our authority for this statement is the experience of many of our affiliated unions. No other group in this country represents a greater amount of accumulated firsthand experience with all types of voluntary prepayment plans than does the trade-union movement. The majority of our members are now covered by group health plans of one sort of another, established through collective bargaining with employers. We have a tremendous stake in the quality and performance of these plans. And, with a few notable exceptions, we have found them to be grossly inadequate as an answer to the esesntial health needs of our members and their families.

The most important health need of industrial workers and, I believe, of the public generally, is preventive care.

A constructive, progressve medical care program is one which seeks to improve and to maintain the health of those who are served by it, rather than merely to patch up and repair their disabilities after they have reached an advanced stage. Every system or program of medical care should be tested by the attention which it pays to this vital aspect of the total national health problem. No program or approach which neglects it can be considered adequate or satisfactory.

This point cannot be overemphasized. Your committee has devoted much of its time to a study of chronic illness, and of the problems of those with disabilities and diseases which involve prolonged periods of hospitalization and medical attention. The promotion of so-called major medical expense or catastrophic insurance coverage, providing partial reimbursement of, or indemnity against, the heavy hospital and medical costs incurred by the victims of such conditions has been suggested by some who have appeared here as the best and final answer to this very serious problem.

We disagree strongly with that contention. We agree, of course, that such protection is a significant contribution to the economic welfare of those who are faced with catastrophic medical and hospital expenses.

Protection against such expenses is an essential ingredient of an adequate health program, for there are very few people in this country, even among the well to do, to whom the cost of prolonged disability and medical treatment does not come as an economic catastrophe.

But even if the entire population were covered by a major medical expense policy the real problem presented by chronic or long-term disability and disease would still be with us, and it would still be a catastrophe to its victims.

No commercial insurance policy alone can overcome the physical and mental suffering, the loss to the individual of his power to contribute to and enjoy the pleasures of life, the loss to the Nation of his production, and all of the other consequences, both concrete and intangible, which flow from the loss of health. A policy which helps to pay a part of the bill, even a substantial part, after the disaster occurs, still leaves the individual, the community, and the Nation with the problem of the disaster itself.

The only really constructive and hopeful approach to that basic problem is one which seeks to preserve health, to prevent disease, and to check its progress at the earliest possible stage. It is upon this approach that the major emphasis of any national health program properly belongs. It is the only way in which the actual cost of medical care can be progressively reduced, and the health of America progressively improved.

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