prehensive care-preventive as well as curative. (4) Sharing of risks by a reasonable cross-section of the population. (5) Responsibility and initiative in the people; control by the consumer over the economic aspects of the plan-somebody in a position to be concerned about the cost and the consumer interest over the economic aspects of the plan, and nonprofit operation.

I will discuss each one of these briefly.

The people are attacking this problem of medical economics through their own voluntary action. In this they should be encouraged, not combated; their doctors should be honored, not discriminated against; and doors should be opened for broader application of these sound and tested principles to the needs and problems of the groups of people not yet reached, which is the very purpose of these hearings, as I understand it.

Now we would all think it very bad, I am sure, if instead of our well-stocked food markets our wives had to go to a dozen or more stores every time they need to purchase groceries. We would not want them to have to go to one store for potatoes, another for bread, still another for cereal, and yet another for canned goods. Yet in the absence of organization of medical services on a rational basis, this is almost exactly what we are doing when it comes to medical care. The average family cannot possibly have the advantage of medical specialization unless it can get it through group practice, unless it can get it under circumstances where a group of doctors practice as a team, so that referral by the family physician, who must be the central person on the team, does not become a matter of exorbitant expense. We should be permitted to pay for medical care as we pay for other things, on an orderly, budgeted basis, and we should be able to get service on an organized basis. This principle of teamwork or group practice is No. 1 in the solution of the American people's health problems.

Now for principle No. 2. The average family simply cannot pay for modern medical care on an emergency fee-for-service basis. It can't be done. The family that tries to do it that way sees the budget get hit for unbearable expenses in every emergency. Moreover, under this system, there is no control of costs and not even any predictability of costs. In fact where fee-for-service is in full flower it is questionable how much good it does a family even if it is covered by certain types of commercial insurance. Because unless there is agreement with the doctors as to the charges to be made for certain types of service, the family may find that the fee has simply been increased by all or a substantial part of the insurance claim. That is why, even while we are spending 4 or 5 percent of our overall average income, most of the people are not getting adequate care, especially in the smaller communities.

Prepayment plans have been the means of bringing needed doctors to many communities, especially rural ones, because they can provide some assurance of income. Prepayment is the best, if not the only entirely satisfactory base for group practice. And anyway almost every student of the problem agrees, at the very least on this one point, that there must be prepayment. And there is increasing agreement that the closer we can come to prepayment on a percentage-ofincome basis, the nearer we will be to a general solution of the total problem.

There has to be a scheme whereby people can pay a fixed amount each month in return for which they are entitled to the care they need. People have to have the means for fitting their medical care costs into an orderly budget just as they budget their other expenses.

The next question in this problem of medical economics is, prepayment for what? For just when you are in the hospital? Well, prepayment for hospital care is a very good and necessary provision if this problem is ever to be solved at all. But most of us don't want to have to go to the hospital. So it is even more important to have prepayment for the services we hope will be given in time to make hospitalization unnecessary.

In other words, we need prepayment for comprehensive care, to keep people out of hospitals and keep the cost of medical care as reasonable as we can. For we must remember that while the cost of general medical care in 1951 was 157 percent of what it was in 1940, the cost of hospital care was 235 percent of the 1940 figure. Obviously, one big way to deal with the problem of costs is to give the doctor a chance to practice preventive medicine, by seeing him regularly for periodic checkups and examinations, and by consulting him for small as well as serious symptoms.

Of course, the way to do this is to have an arrangement with your doctor so that these services are already paid for, so that you do not have to stop and consider the expense before you go and see him. If you pay each month into a health plan for services that include annual physical checkups for the family and consultations when they are needed, then you are giving the doctor a chance to practice preventive medicine.

Also, you are giving the doctor an income that does not depend upon your getting sick, and you are giving him a workload that is lighter as you keep well, and heavier as you grow ill. You are giving the doctor a number of incentives and rewards for keeping you well. This is what a comprehensive prepayment plan gives you. So the third principle is comprehensive care.

Now, none of this is possible unless a substantial and representative cross-section of the community bands together to provide themselves with this service. You can't start with just those who are in immediate need of the service. You have to have the healthy people, too, and in large numbers. In one small midwestern community, they have 70 percent of the community, voluntarily pooling the hazards of life, sharing the risks of sickness so that all will pay an average cost and none will be hit hard when illness strikes. You have to have group action, cooperation, and mutual aid.

Finally you have to have the initiative of the people-the people insisting on the right to act for themselves, on the right of mutual self-help to meet their problems.

I have always believed that this was in accordance with the principles upon which the United States of America was founded, and upon which it has grown great. But to hear some people talk, you would think that we had repealed these American principles; that the solution of these problems has to be delegated to a small group that has staked out a claim on the people's health; that if you get more than two people doing things together, there is something communistic about it. Of course, it is the opposite of communism, because under a

Communist or Fascist system no two people dare to get together at all except by permission of the government. The individual does exactly as he is told.

But in the United States, I think we don't want that sort of thing. We want to do things for ourselves. We are concerned with the application of Christian and moral principles in which mutual aid of man to man is fundamental. And so the idea of people acting for themselves is the fifth principle. This means responsibility of the people and consumer control in the matter of the availability and quality of medical care, its cost, the manner of paying for it, and such matters. Now, when I talk about "control of the quality of medical care," I want to make it absolutely clear that this is not at all a proposal for laymen in any way to interfere with the practice of medicine. Anybody who takes the trouble to form a health plan of this kind is going to be an intelligent enough person, at least, that he is not going to want to tell a doctor how to take out his appendix. He just is not going to do it. But, what we mean by "control of the quality of medical care" is the right to pick good doctors instead of poor ones, the right to provide good diagnostic and therapeutic equipment, the right to bring enough general practitioners and specialists on a part-time basis instead of making people go to a distant city, the right to insist that the doctors keep medical records and otherwise conform to good standards of practice, the right to install $50,000 worth of X-ray and other equipment so that the doctors can practice better medicine.

So you have group practice, prepayment, comprehensive care, sharing of risks, and consumer initiative and control. Put these things together, and the problem of medical economics can be solved. Modern medicine can be brought even to the small communities, and it can be put within the reach of every modest family budget-for the amount of money that is now being expended.

Naturally, it helps to accomplish these objectives if the plan is a nonprofit one, because this too helps to reduce cost. And where consumers or their organizations put the plan together they naturally set it up on a nonprofit basis. They must, of course, provide for at least as good an income for the doctors and other professional people involved as they could obtain elsewhere. And what is said here is in no disparagement whatever to the fine group-practice clinics and prepayment plans organized and owned by doctors. It is just that all other factors being equal, nonprofit operation can bring somewhat greater benefits at somewhat less cost.

The next question that arises is whether 1 or 2 or 3 of these 5 principles cannot give considerable benefit even if the others are not present. The answer to that, from the viewpoint of the Cooperative Health Federation would be this: While we do not believe the best solution can be found short of a combination of all 5 principles, we think that wherever any one of these is applied it is that much clear gain. I have already paid well-deserved praise to some of the doctorowned group practice clinics which have provided organization of medical care for their patients. This was our own No. 1 principle.

It must certainly also be said that there are a number of cashindemnity insurance plans which are making an outstanding contribution to solution of this problem of health economics so far as their subscribers are concerned. These are the indemnity plans which

make agreements with the doctors to whom their subscribers go for care that the doctor's total charge for his services of various kinds will not exceed the amount of the insurance claim payment for that service. In other words they make sure that the insurance really does insure against financial disaster.

Again no reasonable person could do other than give unstinted praise to the general practitioner in the rural community, of whom there are some, who works out a plan so that families for whom he cares can pay for basic medical services at least on an orderly prepayment schedule.

Obviously, too, plans which provide something less than comprehensive care are to be heartily welcomed so far as they go and for all they do even though it is not the whole job. It is vastly better to have prepayment of hospital costs, for example, than to have no prepayment at all. And plans which provide protection against inhospital charges are likely to help pay for most of the more expensive illnesses.

So we come back to the statement that we are experimenting along logical lines to try to find an answer to a great unsolved problem of the American people. Every sincere, well conceived, honest effort to contribute to the effectiveness of that experimentation should be welcomed. We are only sure that we must do considerably better than we are doing now. And, so far as the Cooperative Health Federation of America is concerned, we are also sure that the five hopeful paths to progress are:

(1) More group practice;

(2) More prepayment;

(3) More comprehensive and preventive care;

(4) More sharing of the risks of illness by more cross-section groups; and

(5) More responsibility and initiative on the part of the people. I now come to a discussion of the five specific points listed in the letter from the distinguished chairman of this committee on which he invited us to present the testimony.

THE EXTENT AND COST OF PROTECTION AGAINST THE COST OF ILLNESS PROVIDED BY VOLUNTARY PLANS

I now come to a discussion of the extent and cost of protection against the cost of illness provided by voluntary plans.

At present, the answer to the question of the scope of protection afforded by the various voluntary health service plans is varied, to say the least. Some of the very oldest plans established by labor organizations, and which are the pioneers in this whole field, and in many respects provide diagnostic services and treatment for ambulatory cases. And an example of this type of service is the Union Health Center in New York City, established by the International Ladies' Garment Workers Union now serving upward of 200,000 persons. This union has similar plans in Philadelphia, St. Louis, and a number of other cities. The Amalgamated Clothing Workers operate services along similar lines in a number of cities as well. In New York City the Sidney Hillman Health Center provides not only all types of medical examinations but also minor surgical treatment for practically all .sorts of illnesses of patients who are able to visit the center. It is

estimated that this center provides 75 percent of the health needs of the union membership and their families. This does not include hospitalization, but it does include basic necessities for taking care of the people, and 75 percent is a significant figure, and shows again how important basic medical care is to the total picture.

The United Mine Workers' Welfare and Retirement Fund provides complete payment for all types of care given miners or their families when they are hospitalized. But at the present time it does not attempt to cover the medical expense outside of the hospital, although some beginnings in this are being made where groups of doctors have established group practice clinics in the mining communities and where it is possible to work through those group practice clinics. Probably the most comprehensive care being provided by any of the labor unions is that provided by the Labor Health Institute of St. Louis, Mo. Here, in a clinic building belonging to them, the 14,000 workers and their family members who are covered by this plan can obtain all types of medical care including services of general practitioners and all the major specialists. Dental care is also provided. The members are also provided with hospitalization through the hospital payment plan conducted by Labor Health Institute itself. The cost of this plan is met by contributions to the fund of 5 percent of payroll where whole families are included, and 32 percent of payroll where the worker only is covered. Incidentally they have just increased the hospital benefits under this plan, because they found that they could give the people more benefits than they had been giving them before.

Alongside the labor health plans are the community and cooperativetype health plans. The largest of these is the Health Insurance Plan of Greater New York through whose 33 medical groups about 5 percent of the population of New York City receives comprehensive medical care of every sort. There are practically no exceptions or exclusions from the scope of services provided by HIP. There are, of course, some, but there are not very many. One reason this is possible is because only groups are enrolled-never individual families-so that an effective population cross section is assured.

On the other side of the country in Seattle the Group Health Cooperative of Puget Sound provides almost as comprehensive care for 5 percent of the people of that metropolitan area. Here, however, the plan does enroll individual families as well as groups.

A good many other examples could be given, some in rural areas such as the Community Hospital-Clinic in Elk City, Okla.; some in large metropolitan areas such as the Group Health Association in Washington, D. C., where you will hear from Mr. Myers, as soon as I get through-some in small industrial towns like the Community Health Center in Two Harbors, Minn. In all these plans the subscribers or members receive for their monthly dues payments not only basic medical care, including preventive care, but also care for catastrophic illness. Seattle plan, for example, provides 120 days of hospitalization. Concerning Washington, D. C., and Health Insurance Plan of Greater New York, the committee will have heard directly. Approximately 57 percent of our population have some kind of protection to cover the cost of illness. But only about 3 percent of our people have what might be termed a virtually complete form of com