Mr. GREENBERG. I would like to add one word to what Mr. Tomayko has said. I would be the first to say that the Lloyd Nolan Hospital greatly benefited the employees of TCI in Birmingham and made an outstanding contribution to, particularly, the health of the Negro employees of the TCI. To the point, as a matter of fact, where the health of Negro employees was so improved that no distinction is made in life-insurance rates as between Negro and white employees. That was made possible, only, by the fact that the TCI hospital offered medical care to our Negro members down there.

But there is one very serious shortcoming in that TCI plan, so far as we are concerned, and that is it does not offer a prepaid medicalcare plan. That is true except to the limited extent described by Mr. Tomayko. We think that is a very serious deficiency. What it means is that very often employees will have bills in the TCI hospital running literally to thousands of dollars, which are checked off from their pay. That often reduces employees to the point where they have to borrow money to meet their food and clothing bills.

We have tried on several occasions to negotiate with the Lloyd Nolan Hospital down there a prepaid medical care which would allow our people to make monthly contributions into an insurance fund from which all of the medical bills of employees and their dependents would be met. But, so far, we have not been able to negotiate that type of coverage.

Mr. HINSHAW. What is the experience you have had with the Permanente Foundation in California?

Mr. TOMAYKO. I might say, also, in the United States Steel, we had quite a great deal of experience and it has happened rather recently. We have a local union of the United States Steel Corp. in Pittsburg, Calif. It was this local union which had a great deal of difficulty in securing a high enough surgical reimbursement through private insurance companies to satisfy the doctors. We provided them through our regular program with an indemnification up to $200.

Mr. HINSHAW. I am asking you about the Permanente Foundation. Mr. TOMAYKO. May I lead up to that point. Our local union in Pittsburg, Calif. since 1949, had taken insurance out in addition to our regular program with private insurance companies, to the extent that they then had a surgical schedule that reimbursed them for operations up to $500. That was still an insufficient amount to meet the doctor bills in California.

So we approached Mr. Kaiser and pleaded with Mr. Kaiser to build the most recent hospital that he has built in Walnut Creek. Since that time, we have met with the United States Steel Corp. and through their mutual agreement in addition to the regular program provided by the United Steel Workers, this group of people, approximately 4,000 of them, are now also subscribing to the Kaiser Health Foundation plan and are utilizing the benefits at the Walnut Creek Hospital.

I might also add that several of our Bethlehem Steel local unions are also utilizing the Kaiser plan and they find it meets with their great satisfaction, and they want to continue it, and, if possible, they would like to expand it in other parts of the country.

Mr. HINSHAW. Now, I think that your organization represents the employees at Fontana, do they not?

Mr. TOMAYKO. They do.

Mr. HINSHAW. What is the experience there? That is what I am particularly interested in.

Mr. TOMAYKO. The people are particularly satisfied with their participation in any Kaiser health facility.

Mr. HINSHAW. You have not mentioned it in the course of your testimony.

Mr. TOMAYKO. We did not because we have adhered to the typical program and these are not typical instances, you see. They only cover a small percentage of our membership.

I might add that before Phillip Murray died, he approached Mr. Kaiser when the United States Steel Corp. was talking about giving the Lloyd Nolan Hospital away and he asked Mr. Kaiser to come down to Birmingham and operate the Lloyd Nolan Hospital before the corporation decided to create this foundation. So we are interested, if possible, in aiding Mr. Kaiser in expanding the kind of facilities he has offered our workers in California.

Mr. HINSHAW. Do the workers make any extra contribution to that system?

Mr. TOMAYKO. Yes. The entire contribution is borne by the employees. The corporation up to this point makes no contribution in that direction.

Mr. HINSHAW. I wish that you would outline that system in your testimony, and your experience with it, so that we may have the other side of the picture, if possible, along with Mr. Kaiser's testimony.

Mr. TOMAYKO. I would be glad to give you a history of our participation.

Mr. HINSHAW. Also give us the history as far as the contributions are concerned.

Mr. TOMAYKO. That is right.

The CHAIRMAN. Are there any further questions, gentlemen?
Mr. YOUNGER. I have just one question of Mr. Childs.

In regard to the physician's fees, I take it from your testimony, Mr. Childs, that you feel that in your collective bargaining you have increased the fees of the doctors without the benefit of being the collective bargaining agent for the medical asociation?

STATEMENT OF JOSEPH W. CHILDS, VICE PRESIDENT OF THE
UNITED RUBBER, CORK, LINOLEUM, AND PLASTIC WORKERS OF
AMERICA, CIO-Resumed

Mr. CHILDS. I think that is a point that I tried to make.
Mr. YOUNGER. That is true, then?

Mr. CHILDS. Yes. There is an example which we had called to our attention by our local people, and also the insurance representatives of the B. F. Goodrich Co. that operates a plant in Oaks, Pa. There, prior to our settling for an increased schedule, the maternity schedule they had in their insurance program amounted to $50. The doctor's fee at that time was $60. The maternity schedule now provides for a $75 payment, and the doctor's fee has been increased to $125. Where the worker had to pay an additional $10, now he is privileged to pay an additional $50, with a 50 percent higher fee.

Mr. YOUNGER. Do the hospitals in Akron provide for a certain number of charity cases, as most hospitals do in the country?

Mr. CHILDS. The charity cases are paid for either by the city or by the community services. The city of Akron does pay for certain charity cases.

Mr. YOUNGER. In other words, they have no beds available for charity cases which the hospital itself carries?

Mr. CHILDS. No, none that I know of. There are none.

Mr. YOUNGER. Now, there is one other question. You would not want to leave the impression, would you, that the hospitals or the doctors from 1949 to 1954 would not be entitled to some increase?

Mr. CHILDS. Oh, not at all, sir. I certainly feel that the doctors the same as everyone else, even Congressmen, are entitled to a wage increase.

Mr. YOUNGER. That is all.

Mr. EDELMAN. Perhaps, the steelworkers could add some significant information on this same question that the Congressman has asked. Mr. TOMAYKO. I believe in Mr. Abel's testimony we say that we have offered more or less of a challenge to the doctors last May through our President, telling him that we were ready to sit down with them and work out some kind of a fee schedule that would be accepted as reimbursement in full for services rendered and, until this date, there has not been any doctor or group of doctors who have stepped forward to sit down with this organization and work out some sort of an acceptable fee.

We had the same experience that unions have had throughout the country. Nowhere can we say that our fee schedules have been accepted by doctors in any particular locality as payment in full. Rather, we find that the doctors merely use our schedule as a base to begin charging additional fees. We would find that this is true in the overwhelming majority of our cases.

Mr. YOUNGER. Just one question there, though. Do you believe that in your collective bargaining that you have indirectly represented the medical association without having the benefit of being appointed the collective bargaining agent for the physicians?

Mr. TOMAYKO. We think we have given them a guaranteed annual wage in the steel towns.

Mr. GREENBERG. I think in addition to that, we have in a sense been discussing the matter with the representatives of the medical profession because we have dealt with the Blue Shield which, as we understand it, is an approved plan of the medical association. Moreover, we have indicated on numerous occasions that we were agreeable to meet with any representatives of the medical association to discuss this matter. We have never taken the view that we felt our program should in any way injure or reduce the income of physicians. It has always been our view that we were agreeable to negotiating a schedule which would provide a decent and generous income to physicians, but would allow our people to pay through monthly premiums in advance into an insurance fund which would allow them to meet their medical costs as they arose, completely, of course, through no fault of their

own.

Mr. CHILDS. On this particular question, I would like to make a further statement that we arranged a meeting with the Summit County Medical Council prior to our time of entering into negotiations with. the three major rubber companies which operate in Akron, Ohio,

namely the Goodyear, Goodrich, and Firestone Cos. That is in addition to many smaller companies.

We attempted to get them to agree with us to a schedule which would be acceptable to them prior to our getting into negotiations and attempting to establish a schedule. They were not at all inclined to do so. In fact, they opposed setting any sort of a schedule which would in any way tie them down to a fixed charge.

Mr. HESELTON. Did they give any reason for their opposition? Did they express any reasons for that?

Mr. CHILDS. For not agreeing to a schedule, you mean?

Mr. HESELTON. Yes.

Mr. CHILDS. Well, one of the reasons they advanced that, I remember quite well, is that they did not want to do anything that would put them on a salary basis and, of course, being that the rubber industry is an incentive industry it was quite hard for us to understand. We have to work on a piecework basis, and they were objecting to working on a salary basis. But that is the way they interpreted the acceptance of a schedule. They said it would put them on a salary, which I thought was rather nice. It was a guaranteed annual wage. They are quite busy.

The CHAIRMAN. Are there any further questions, gentlemen?

In that connection, I might say that information that I gained in some of the countries that I visited during the recess of Congress, with respect to fixing of fees with physicians, it seems to have worked out in those countries very satisfactorily to the physicians. It is in the countries where the general medical plan was put into effect and there was difficulty in the beginning to get the consent of the doctors. They did not cooperate at first, but the general opinion seemed to be in all of those countries that we visited where they had these health programs that the doctors had worked out with them cooperating fully to the point where it was not a question of contention on the fees as in the past and that everybody was doing well and that, on the average, the doctors were doing better than they had done previously. I am not offering that as a suggestion that plans have been found acceptable in some other countries and should be adopted in this country. We have a different concept in this country and it is always with some hesitancy that I speak of the experiences that I gained elsewhere for fear that some who are not always inclined to correctly report what is said or the impressions to be drawn from it, are apt to say I would be advocating the adoption of those plans. That is not the case.

We learned that cooperation of the doctors is a very important element in any of these plans, whatever system you have. It does seem as if necessary cooperation has been gained in the countries which I was privileged to visit during the recess of Congress. The outstanding ones, of course, were England, Sweden, Australia, and New Zealand, to say nothing of all of the other countries that we visited. But those were probably the outstanding ones, and we found that there was a very fine cooperative spirit existing in all of those countries at the present time.

It does not mean that every doctor agreed to it. You can always find some who disagree in activity of life, but I am speaking of it in general terms. They expressed general satisfaction and so far as the doctors were concerned, they were cooperating.

Mr. CHILDS. It has been our desire to try to work these programs out in complete cooperation with the doctors. We recognize the fine services that the doctors provide and we appreciate the training that is necessary for a person to become a doctor and the cost of the training and all that they encounter. We feel that they are a tremendous factor in this whole program, and we certainly have sought their cooperation. Collectively, they have been quite reluctant to enter into any sort of an agreement which would be at all acceptable. In fact, they have indicated clearly, that no agreement could be reached with them.

We do know that individually many of the doctors agree with what we are attempting to do, but collectively they do not seem to be able to accomplish what they tell us individually.

The CHAIRMAN. I still have hopes before these hearings have ended that we will have an opportunity of hearing directly by witnesses from doctor's organizations as to their viewpoint with respect to the proposals that have been made. I am hopeful that sooner or later it will be recognized that it is a problem by medical associations as well as by labor organizations and by citizens, generally. I hope they will recognize it is a problem that must be met, and it deserves the best and most cooperative assistance on the part of everyone that we can provide a system that is in line with our theory of government and that will prove helpful and beneficial to our people.

Mr. CHILDS. I read an article in a newspaper with respect to the California Medical Association's attempt to combat the Kaiser Permamente type of program. It was written as a fight between the Kaiser Foundation and the California Medical Association. The California Medical Association was bringing its thinking up to date in dealing with this problem. I do not know whether the committee has had that article called to their attention or not.

(The following letter was later received from Mr. Childs:) UNITED RUBBER, CORK, LINOLEUM, AND

Hon. CHARLES A. WOLVERTON,

PLASTIC WORKERS OF AMERICA,
Akron 8, Ohio, February 15, 1954.

Chairman, Interstate and Foreign Commerce Committee

of the House of Representatives,

House Office Building, Washington, D. C.

DEAR SIR: In answer to your request of February 5, 1954, for additional information on health-insurance programs in our organization, we are happy to submit the following data. We have numbered the data to coincide with the numbers contained in your letter of February 5.

I. We have virtually no prepayment medical care and hospitalization plans covering members of our organization. There is one example of such a program in the Gates Rubber Co., local 154, of the URCLPWA, of Denver, Colo. This is a program worked through with the full backing of the Gates Rubber Co. and provides exceptionally wide and comprehensive benefits at a very modest cost to the employee. This is the most comprehensive program of this nature that we have in effect. There are no other programs in effect of the prepayment nature in the United States.

II. Our organization has not drawn up any agreements with medical groups, individual physicians, or technicians to give service under the prepayment programs. Contracts in effect at the Gates Rubber Co. plant are between the Gates Rubber Co. and the staff physicians. Copies of all material relating to the Gates Rubber Co. plan will be forwarded to you as soon as we can obtain them. III. The following health-insurance programs cover the members of our organization. This information includes the data submitted in my original testimony of January 19, 1954, and supplments that testimony to some extent.