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The Ives-Flanders bill also requires that such plans provide benefits not only for covered persons, but to their dependents as well. In many cases existing collective-bargaining plans provide for benefits only to employees and not to their families. I suggest that this provision be amended to make the coverage of dependents permissive rather than mandatory.

The Ives-Flanders bill places a great deal of emphasis on enabling acts by the States. At the same time the bill excludes from the administrative State agencies, and properly so, persons directly concerned in furnishing medical services. This exclusion will without doubt create a great deal of opposition to such legislation in the State legislatures where the local medical societies have an even greater influence, if that is possible, than their national counterpart has had on the Congress. I fear that unless a more direct incentive is given the States, the necessary enabling legislation will never be passed by many States and the congressional intent will never get beyond the statute books. A pattern for such a direct incentive exists in the FederalState unemployment-insurance system, under which a tax is imposed upon the State, substantially all of which is repaid to the State if it enacts an enabling statute which meets the requirements of the Federal law. Perhaps a similar approach should be used in the area of health insurance to make sure that the local medical lobbyists do not defeat the intent of Congress.

The Ives-Flanders bill puts a ceiling of $15 per capita on the Federal Government's contribution to an approved plan. The State must pay the remaining deficit. In many of the poorer States, the State's contribution would be considerably larger than a Federal contribution, if a really comprehensive service is offered and if a substantial proportion of low income citizens is enrolled. I believe, therefore, that this committee should consider the effect and wisdom of raising the ceiling to a figure above $15.

The emphasis upon small localized groups contained in the IvesFlanders bill, as well as in Representative Wolverton's proposal, means that the risks of illness will be spread over relatively small and localized groups. This means, of course, that the insurance risks will necessarily be greater and the costs more expensive than they would be under a comprehensive, truly national program. I believe that the committee might well consider means of encouraging the spreading of such risks over wider areas. We have found that in experience with unemployment insurance and disability benefit statutes that there is an ever-present neeed for some appellate procedure by which persons dissatisfied with the decisions of the administrative officials may file complaints and appeal from such decisions. We suggest that any proposal for subsidizing voluntary health programs contain some provision for such an appellate procedure.

Again my I reiterate that the emphasis in the Ives-Flanders bill and the Wolverton bill on subsidizing private voluntary plans raises one serious question. Neither proposal will do much good in areas where people are not permitted by the machinations of the organized medical aristocracy to join in a voluntary plan or where, as a result of organized medicine's efforts, such plans are limited in scope and expensive in cost. The obstacles which the medical aristocracy has continued to place in the path of free enterprise self-help in the field

of health insurance belies its claim that all it wishes to prevent is "socialized medicine." I therefore believe that the time has comeparticularly if Congress should consider the imposition of specific legislative prohibitions on the restraints which organized medical groups have imposed on the growth of voluntary health insurance programs. If the steel magnates or the tobacco tycoons got together to restrain business competition and labeled their program Principles of Ethics, they would be greeted the next morning by a grand jury indictment under the Sherman Act, ethical label or no label. There is no reason why the same reason should not be applied to the medical profession. True, previous administrations and some of the States have attempted to apply the antitrust acts to the American Medical Association and its local affiliates, but such attempts have been somewhat inconclusive. Our major stumbling block on the Federal level has been the fact that the Federal antitrust laws apply to trade or business in interstate commerce. The one major case in which the AMA has been slapped down by the Federal courts took place in the District of Columbia in which the courts did not have to find interstate commerce to acquire jurisdiction. In the Oregon case, in which the indictment of the local medical societies was ultimately thrown out, the United States Supreme Court accepted without extended comment the lower court's finding that interstate commerce was not involved. There may be a serious constitutional question about the extent to which the Federal antitrust laws could, in their present terms, be extended to cover the restraining activities of the AMA, and particularly such activities of its local affiliates. However, even within constitutional limits, I believe that the following legislation is in order if any real effect is to be given to the proposals for encouraging voluntary self-help in the field of health insurance:

1. In the Oregon. case, the United States Supreme Court did hold that the activities of a group plan constituted trade for purposes of the Antitrust Act, but specifically avoided the question as to whether the professional medical services of a single practitioner constituted trade. However, a great many of the most effective restraints on voluntary health insurance plans which the AMA and its local branches have been able to impose have been those directed against individual doctors. To lay at rest any question whether such conspiracies against any individual doctors are as much a violation of the law as restraints against group plans, I propose that section 1 of the Sherman Act be amended to provide explicitly that, for purposes of the act, the provision of medical and hospital services shall constitute trade or business. Therefore, to the extent that the practices of the AMA and its local affiliates do restrain interstate commerce, there would be no question that their activities against individuals as well as groups are covered by the act.

2. If it is the congressional policy to encourage the development of independent voluntary health-insurance programs, then I believe that the Congress can quite properly restrain the organized medical aristocracy from imposing any restraints on the development of such programs by explicitly forbidding any individual or group from using the mails and other instrumentalities of interstate commerce in the furtherance of any contract combination or conspiracy in restraint of the development of such plans.

3. Finally, I believe that any organized group which makes the restraint or limitation of voluntary health programs one of its basic objectives should be deprived of any exemption which it might otherwise be entitled to under the Federal tax laws.

I fully appreciate the severity of these proposals. But I am sure that this committee is very much aware of the severity of the restrictions imposed by the medical aristocracy on free enterprise in the field of social insurance. I respectfully submit that only such a program will permit free and independent health-insurance plans to flourish and that only such a program will give meaning to the sound proposals contained in the Ives-Flanders and Wolverton programs.

I think we are the pioneers in the field of operating health centers on a union-operated basis. Our first center was established in New York City as far back as 1913. We are over 40 years old in the operation of that center, and I think that that really qualifies us as pioneers in that branch.

I think in the year 1953 that center will have rendered 600,000 services to the members in New York who have the services available. We do service in the New York area upward of 200,000 of our members out of a total of 436,000, of which our union is composed.

You can well see that New York is the concentration of our membership and for the rendition of that type of service.

We do operate in addition to the New York center 14 other centers in widely scattered areas of the United States, in all sections of the United States. We have one in Allentown, Pa., Boston, Mass., Cleveland, Ohio, Dallas, Tex., Fall River, Mass., Houston, Tex., Kansas City, Mo., Los Angeles, Calif., Minneapolis, Newark, Philadelphia, San Antonio, St. Louis, and Wilkes-Barre.

You can see the way we have scattered them throughout the country. They render a very, very valuable service, but very far from what we would like it to be in terms of comprehensive service for our members. In some areas we are prohibited by the barriers created by the medical societies from rendering a therapeutic service. They are limiting us to the rendition of purely diagnostic services. Frankly, it is not satisfactory to us nor to our membership.

We had a case recently in one of the areas where after we had conducted an elaborate examination of a member's eyes, we were told we could not prescribe the glasses that we found to be necessary. We had to send that patient back to a private doctor in order to prescribe the glasses.

That is the kind of limitation we think is a barrier to the advancement and progress of these plans.

Frankly, in some areas, we have become discouraged. In New York we do not have that problem because many, many years ago we faced that problem realistically. For the first 17 years of our operations we were constantly under fire by the medical societies, but in 1930 there was an amendment to the State statute which permitted the creation of a clinic and the obtaining of a clinic license under the department of social welfare. We therefore eliminated all future interference by the medical societies with the kind of medicine we wanted to practice.

Today, we have no barriers in New York. We render not only the most complete diagnostic service, but we do render therapeutic service and prescribe drugs and fill drug prescriptions in that very center.

Our experience in some other areas has not been that fortunate. The CHAIRMAN. You mean by utilizing the services of physicians? Mr. UMHEY. Of course in the New York institution we have 176 physicians on the staff, and it is under the direction of a doctor. It is true we do have a union board to which he reports, but the union board does not attempt to lay down policy with respect to medical practice. All it does is to provide the fiscal policy and provide the money by which the institution may operate. They have never attempted to interfere or dictate to the medical profession who should be the doctor or what medicine they should practice. Doctors are selected by the medical staff.

The CHAIRMAN. Is there a special fee charged to the membership for participation, or is that part of the service that is rendered in return for the dues that they pay?

Mr. UMHEY. It is not on that basis, Mr. Congressman. Since 1945 we have had what we call employer contributed health and welfare plans. Prior to that date the New York center was operated wholly by union financing out of union dues and out of the treasury of the union. But with the development of these health and welfare plans which resulted from some of the impediments of the war situation and the development of fringe benefits, we did obtain from employers a fixed contribution based upon payroll toward health and welfare plans. For a limited period of time, those plans provided a limited amount of medical care, in some instances limited to $20 or $25 or $30 worth of medical care per year. But about a year and a half ago that was changed, and we now provide unlimited medical care to any member, not at the expense of the member, but paid for by the employercontributed fund. Have I made myself clear on that?

The CHAIRMAN. Yes, I understand your statement. indication that the employer considers it good business.

That is an

Mr. UMHEY. We have found that to be so. We find that today when we open a health service, the employers are the proudest lot that come there to participate in the dedication of the institution. They are very happy and very proud of the fact that they have been able to contribute to this type of advanced medicine and made the facilities available to their people.

Of course, I will say this for our employers. They have been ready to be in the forefront in granting many social advancements that others have not been ready to do. It may be strange, and perhaps it is due to the fact that our employers are usually small-business men and they are not big plants, and they do not have public relations advisers who tell them what to do, nor do they have labor relations advisers who advise them against it, and we have found that generally speaking we have been more successful in getting from the employers in our industries social advancement than any other industry. I believe we were the first to obtain on an industry basis not at a State level or national level, an unemployment insurance fund. It was 12 years before we had any such thing on a basis of legislation.

The CHAIRMAN. There is no doubt that it is general knowledge that your organization has worked along the lines that have proved very beneficial not only to the employer in the type of service you render, but likewise to the membership of your organization.

Mr. UMHEY. We have, and we are very proud of the fact that we are able to do it.

The CHAIRMAN. Feel free to express any views you please and I hope the members of the committee will ask questions when they wish. Mr. UMHEY. In my prepared statement I did make some comment with respect to the pending bills. I made some comment with respect to the Ives-Flanders bill, and with respect to the Wolverton bills. I think they are in the category of constructive suggestions, perhaps, for omissions or tightening up that we feel is necessary.

The CHAIRMAN. The probabilities are that if the present plans of the committee are carried out, when these hearings of the type we are now holding are concluded, on or about the second day of February, we will have then gathered together a tremendous amount of information that we think will be helpful to us in our consideration of the type of legislation that should be presented to the Congress.

Now, at that time, the bills to which you have referred, and other bills which will be introduced either in the meantime or at that time, will be given specific attention so that an opportunity will be given to make constructive criticism of the bills and to make suggestions that would improve them, and that would enable the committee to make worthwhile reports of legislation to the Congress.

Mr. UMHEY. Mr. Chairman, may I add one point, that while I have commented with respect to these special bills, I must say that I am under a mandate of our last convention to support the national health bill in its entirety, and I recognize, being a realist, as Mr. Hayes has pointed out, being in the labor movement I have got to be, I recognize that is perhaps the last feature that might have a chance of adoption at the coming session.

The CHAIRMAN. What is the name of that bill, or the number of it? Do you have the name or number of the bill? Is that the Dingell bill?

Mr. UMHEY. Our last convention met in May of last year, and at that time it may have had a wholly different number. It was referred to then as the national health bill, and perhaps I can find the reference to it.

The CHAIRMAN. I think that that will enable us to identify it. Mr. DOLLIVER. I take it that the union which you represent, the International Ladies Garment Workers Union, has its own medical setup apart from the health insurance program that was outlined to us yesterday?

Mr. UMHEY. Oh, yes.

Mr. DOLLIVER. Yours is an independent one?

Mr. UMHEY. We operate the program ourselves.

Mr. DOLLIVER. You hire the doctors yourselves and operate your own clinics, so to speak?

Mr. UMHEY. That is right.

Mr. DOLLIVER. That includes such things as catastrophic health care and health examinations and preventive medicine?

Mr. UMHEY. Preventive medicine fully, yes, sir.

Mr. DOLLIVER. What is the cost, the average cost to your members for that kind of service?

Mr. UMHEY. Well, in the 15 centers which we operate, I would say that it is a little less than $6 per member.

Mr. DOLLIVER. That is per month?

Mr. UMHEY. Per year.

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