Mr. CRUIKSHANK. No one would say that except in this way, and in a quite different way than I think your question may imply: That when as a member of a group he determines that he will participate as a member of this group, in a group activity over which he, as a voting member, has a right along with others to control the arrangements, all of the arrangements, that he is going to receive his medical care in this way.

Now, when a person joins any kind of a group, or participates in a group activity, he voluntarily gives up a certain part, at least for the time being, of his area of choice. But, he has done that voluntarily.

Mr. BENNETT. It seems so me that you would be setting up a very highly complicated administrative arrangement. If, under your plan, the funds for the payment of medical and hospital services had to be disbursed to private groups and associations, and disbursed by them in accordance with their rules and regulations and their bylaws and so on, then have the individual physicians handle their patients, it looks to me as if it would be an administrative hodgepodge, to say the least.

Mr. CRUIKSHANK. I do not see that it would. You would have a minimum set of standards to which these participating groups could accommodate themselves. It is just as you have now. Some of these same objections, sir, were brought up when we were considering the Hill-Burton hospital construction bill. To be eligible for aid under that program, there had to be, first, a State agency setup, and there were very few States in 1946 that had those agencies. The State agencies were set up, the local agencies were set up, and the hospital service areas were established. Then, on what looks as you read it as quite a complicated formula which takes into account population, the per capita income of the area as related to the per capita income of the whole United States, allocations made to the States and then from the States to the hospital service areas, that is running smoothly. Mr. BENNETT. I realize that, but I think that is an entirely different matter administratively.

You take the State of Michigan for an example. You may build 10 hospitals under the Hill-Burton Act. In the program that you are suggesting in the State of Michigan, you would be dealing with 3 or 4 million people. Now, to deal with the day-to-day medical and hospital problems of 3 or 4 million people, in my judgment, is quite a different matter administratively than to deal with the construction of a dozen or more hospitals in an entire State.

Mr. CRUIKSHANK. The extent of the problem, admittedly, would be greater but the basic principle, I think, has been established and proved workable in programs of that kind in a number of the grantin-aid programs we have. This would be an extension, I think, of principles that we have found necessary in a number of cases. But we get back to the fact that we have these choices to make.

On one side, some critics say, "Well, you must not have a centralized agency that controls all of these things." Now, granted a centralized agency does give you certain advantages, a streamlined clear-cut almost military type of control or administration. But we say that we don't want that. We say we want the maximum of local flexibility. Well, we believe that is right and we believe it is sound. We think then it isn't quite fair, if I may say so, to say when we have accepted

the idea of the maximum of local administration to have the critics of the program say, "Well, yes, but that is going to be too complex, because it is too elastic and allows for too many variations.”

Now, I think that there are values involved here and there are choices to be made. The flexibility that we feel is highly desirable does make administration somewhat more complex, but we think that the complexity of administration is a price that is well worth paying in order to preserve the flexibility and the degree of local control we think is desirable.

Mr. BENNETT. My point is that if the program you suggest were to be adopted, certainly we would all agree it would present plenty of administrative problems. It would be your idea, I am sure, to minimize rather than to add to an administrative problem.

I have just one further question, Mr. Chairman.

It seems to me that the greatest problem, or the greatest single problem, with respect to public health as it relates to medical care and hospitalization in this country today is the payment of extraordinary medical and hospital expenses and that is where the average American family is hit the hardest. Paying any kind of a bill is a hardship, but the greatest hardship to the average person, as I see it, is not paying for doctor's office calls, or for a house call for a child's disease, or for a cold or something of that sort, but the hardship comes when he has serious surgical difficulties in the family or certain serious contagious diseases that require hospitalization and medical expenses. That is the thing which hits many people right square over the head.

Do you not think that instead of undertaking this broad program you are talking about, it would be better to approach this problem first where the greatest need is? I am talking now about the average person, trying to provide some insurance against these tragic extraordinary catastrophic medical and hospital expenses.

Mr. CRUIKSHANK. No, sir; I don't agree that is the greatest need. There can be a very honest difference of opinion about that, but I don't think it is the greatest need. It is severe when it hits and it cannot be minimized. But when you think of insuring a family and protecting a family, you want to think about the protection of them against the thing that is most likely to happen. The things that are most likely to happen are what may appear to the individual as a minor thing but which has incipient possibilities that can be serious.

Now, that gets us again to the other aspect of it, that the most important part of the family's health problem is the preventive care. When you think of the thing that is most likely to happen to a family, it is not these unusual burdensome catastrophic things which are bad when they do happen, but do not happen so often, but the kind of things that the father of a family, a middle-aged father, with children in school, who is paying for a house and desires to send the daughter or son away to college, experiences when he begins to have a little something, a pain in the chest, that he does not quite know what it is. He should go to a doctor immediately, but he doesn't, partly because of the fear of what the doctor will tell him. He postpones that and keeps on going to work, maybe for a month or 6 months, until he falls over at his machine some day with a serious case of heart trouble. There are a number of other things that you could do. That is the kind of thing that is the basic need of American working families.

Mr. BENNETT. I agree. That is a serious thing, but, as you so well pointed out, in many cases it is the fear of what the doctor might do or say to him.

Mr. CRUIKSHANK. And the cost of going to the doctor and all of that. Mr. BENNETT. I recognize that is a factor, and, no doubt, the dayto-day medical expenses are burdensome in many cases, but for the Federal Government to get into this overall program is in itself a far-reaching and expensive proposition. It may be that we could accomplish a very worthwhile objective if we were to approach the problem where it hits the pocketbook the hardest.

Mr. CRUIKSHANK. We would be in favor of any steps taken in the right direction. Because we feel national health insurance is the best overall answer does not argue against any attempt to work out experimentally in that direction that the Congress would wish to undertake at this time.

Mr. HESELTON. Mr. Cruikshank, I did not have the privilege of hearing your full statement but I have read it, and it may be that sometime during the course of the examination you have covered the ground I would like to inquire about. If so, please advise me.

In the first place, I am very much interested in what you have just said expressing your preference for flexibility and probable greater benefits if we choose to utilize the various methods of stressing local responsibility and developing that. As this inquiry has been going along, I have had in mind that it has clearly developed such a complex problem that it is probably beyond the power of the Federal Government, even if it would like to do so, to adopt immediately, anyway, a wholly comprehensive program. There are certain fields where, undoubtedly, it could do a great deal of good. There are other fields where it is quite possible we could utilize the existing framework of State, county, and local government functions. I think this is emphasized by the inquiry that is going along already to determine what the responsibilities of those agencies should be and how they could best be accomplished.

Do you have any specific ideas about what could best be done by the Federal Government and what could best be done by the other agencies of government, or in cooperation with one another? Let me just add this, if I may. As I see it, and it has been developed within this week on the part of one witness who said he is firmly convinced that this problem must be met on something of a regional basis because of the very nature of the different conditions that exist. What might be helpful to Massachusetts would not be helpful to, let us say, a State like Mississippi. Or what was necessary in New York was not at all successful to cover the ground in Nevada or Idaho or some other place. It is simply that conditions are different.

I think you will agree that medical development has been different in States like New York, Massachusetts, Minnesota, and California in contrast to other States.

If I have made myself clear, I would like to have you define, if you will, what you think might properly be done by other agencies than the Federal Government.

Mr. CRUIKSHANK. I thought you meant at first what specific steps might be undertaken by the Federal Government, and I think that there are some which could be very valuable and very worth while.

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I think it would be very helpful if some provision for advancing loans to cooperative local health centers could be made. We are not minimizing the problems that Mr. Bennett brought up. We are going to have to have a great volume of experience to make a national program work eventually. We need to learn in the school of experience. HIP in New York has taught us a lot of things and others will teach us as we go along. But, there are a number of places now that are ripe for the development of experiments of this kind.

A group of citizens, including a number of labor unions both AFL and CIO, for example, in Milwaukee have gone a long way toward developing a local health plan on a cooperative prepayment basis. They are up against the tough problem of finding enough money right now to do two things. First, it was to make the full survey that is necessary in the community and to find out just what they need to do. Secondly, it is to get the minimum facilities to get started, and it is a hump that is hard to get over.

You cannot go to people very well and say, "Well, you pay down $10 or so in the hope that 15 months from now we'll be able to do something for you."

They need to get over that hump, and we are reminded with the start of HIP in New York, for example, there was, I believe, a $200,000 grant from a private foundation, or group of private foundations, that made the thing possible to get started and to get over the first hump.

Now, there are a number of places that are just about at that development stage where some kind of loan provision to be repaid, but on liberal terms of refinancing and interest, could be made available by the Government and would be very very helpful.

Mr. HESELTON. Have you had an opportunity to examine either H. R. 6950 or H. R. 6951, which were introduced by our chairman on January 6?

Mr. CRUIKSHANK. Yes, sir, I have read those measures with a great deal of interest. We feel the general principle of those measures is very hopeful and forward looking. There are some questions, not as to basic principle, but as to some of the specific principles that we would question.

Mr. HESELTON. Are you prepared at this time to suggest what provisions those are?

Mr. CRUIKSHANK. Well, I could raise some of them.

For example, we are not sure about H. R. 6951. We would want to have it clarified, looking on page 3, whether the three provisions there set forth provided adequately for voluntary cooperative groups to get started and to have the aids available here. Now, it may be that reading the bill, that section 642 (b) on page 4 does seem to contemplate that such groups be eligible for this kind of aid. But it is not spelled out with equal clarity over on the preceding page when the three types of organization that are eligible are mentioned.

We just raised that question. It may be that those have all been anticipated by the persons drafting and introducing the bill, but we would raise the question as to the adequacy for participation of voluntary cooperative groups to have this aid available.

Mr. HESELTON. Essentially, you approve of the approach that is spelled out in H. R. 6951?

Mr. CRUIKSHANK. Yes. The objective of the bill is certainly in the right direction and something that you could well give constructive attention to.

Mr. HESELTON. Will you go ahead with your comment on the other bill?

Mr. CRUIKSHANK. On H. R. 6949, we feel that possibly some of the provisions are a bit rigid and some of the standards are, too, but there was one in particular, I think it is at the top of page 12, about the additional charges there, that we think there should be a provision in plans negotiated by collective bargaining that no additional charges would be made. It would be that you could have an agreement of that kind. We have that already and we think if there were not that kind of protection put in the bill, we might be taking a step backward. Mr. HESELTON. Do I understand correctly that with reference to section 5 (b) (6), you feel the language should be omitted, or do you feel that the language should be inserted which would prohibit that? Mr. CRUIKSHANK. I think it would be better to omit that possibility of additional charges, but, particularly, I think that specifically with regard to our groups we would like to see another provision added there which would not permit the 25 percent additional fee for prepayment plans that had been negotiated by collective bargaining.

Mr. HESELTON. May I suggest that it might be helpful to us if you would be willing to give more consideration to that bill and submit language which you think would accomplish that objective. Again, however, I take it that you approve of the central purpose of that bill? Mr. CRUIKSHANK. Yes, and when I submit something on this section, I would like to submit some more detailed comments on some of the provisions and standards that are referred to later.

Mr. HESELTON. We will be glad to have that.

Do you want to comment on H. R. 6950?

Mr. CRUIKSHANK. Well, as I read this, and none of these have been reviewed by our social security committee, or have the endorsement of the federation

Mr. HESELTON. I appreciate that.

Mr. CRUIKSHANK. These are personal comments at that point.

Mr. HESELTON. In connection with these comments, I am sure that the committee will be happy to have you file any supplemental statement you wish to file for consideration.

Mr. CRUIKSHANK. My own reaction to this bill, H. R. 6950, is favorable. As a matter of fact, the four of them appear to me to look in the right direction but there are specific comments I would like to make with respect to 6951 and 6949.

Mr. HESELTON. You also think that there is something valuable in the suggestions of 6952?

Mr. CRUIKSHANK. Yes, sir.

Mr. HESELTON. That is all I have.

Mr. YOUNGER. When you get down to me, all of the superlatives are exhausted, Mr. Cruikshank, so I will make no comment about having you here. But in your statement on page 7 in the fourth paragraph, you say there are a number of consumer-controlled plans. Now, in your explanation, you did explain that what you meant was that the medical care is solely controlled by the doctors and they are in control of all of the medical care of these groups.

Mr. CRUIKSHANK. Yes, sir; all medical matters.