Instead, they would abolish the old program and substitute a radically new addition to the federally aided public-assistance programs. A fifth category of Federal aid would be established, in which the Federal Government would participate directly, with earmarked dollars, in the provision of medical care to the more than 5 million persons who now receive public assistance through the joint programs. The American Medical Association is vigorously and firmly opposed to this step. First, we see no need for the establishment of medical care as a fifth and separate category of Federal aid in public-assistance programs. Pooling arrangements now available to the States under the existing program can accomplish more flexibly and less dangerously all that the new proposals seek. Second, such a new program would burden the community with regulations and restrictions inconsistent with local problems, local laws, or local customs. As an example, amendments to the aid-to-the-blind program under the Social Security Act have granted to optometrists since 1952 the privilege of diagnosing pathological conditions of the eye. This privilege, until 1952, had been uniformly denied to them by State licensure laws. Third, this section is totally inconsistent with the philosophy heretofore underlying Federal participation in public-assistance programs. This philosophy, as expressed in the other titles of the pending bills, presupposes that Federal participation in such programs is a temporary expedient, necessary only because the old-age and survivors benefits are not yet sufficiently matured to furnish the basic protection required. As the old-age and survivors benefits mature, it has always been supposed that Federal participation in public assistance would be reduced. The medical provisions of the pending bills represent an expansion in Federal participation, contrary to this established policy. Fourth, we cannot escape the conclusion that injection of medical care as a separately matched category of expenditure under public assistance is only a forerunner to the injection of medical care as a categorical benefit under old-age and survivors insurance. You are aware of the overwhelming rejection by both the American people and the medical profession of this philosophy. As physicians, we must continue to oppose programs which, in the guise of improving medical care, will lead to the destruction of the system which has produced the best medical care ever enjoyed by any people. In summary, the American Medical Association is vigorously opposed to the proposed changes in the medical-care provisions of the public-assistance sections of the Social Security Act. We are opposed to these changes because they are needless, wasteful, dangerous, and contrary to the established policy of gradual Federal withdrawal from local public assistance programs. I will appreciate your making the foregoing views of the association a part of the record of your hearings on H. R. 9120 and H. R. 9091, 84th Congress. Respectfully yours, GEORGE F. LULL, M. D., Hon. JERE COOPER, CHAMBER OF COMMERCE OF THE UNITED STATES, Chairman, Ways and Means Committee, Washington 25, D. C. DEAR MR. COOPER: The bill, H. R. 9120, to amend the public assistance titles of the Social Security Act, contains two provisions in which the Chamber of Commerce of the United States is interested. The first proposal provides for a separate grant-in-aid in each of the four programs, calling for Federal matching of State funds if the money is placed in a pool to make vendor payments for medical care. The national chamber is opposed to this provision for several reasons: 1. Under the existing Federal law, each State can now establish a pooled arrangement to meet vendor payments for medical care. Several of the States have been doing this for the past few years and have been receiving Federal financial support. It should be noted, however, that a few States under their own laws (as of 1954) either cannot make vendor payments or cannot establish a pooled fund. 2. This proposal would result in unnecessary expenditures of Federal money in several States. Most of the States making vendor payments have an average monthly payment (as in old-age assistance) above the present (in OAA$55) maximum. Since this proposal in effect raises the participation maximum (from $55 to $61 in OAA) it would result in paying additional Federal money (up to $3 per OAA recipient) to those States already taking care of the situation. 3. This proposal will not enable the poorer States to make vendor payments if the are not now doing so. A number of these States have average monthly benefits somewhat below the maximum subject to Federal participation. Under the present law, such States could receive Federal support for larger monthly payments. However, under the existing law or under this proposal, they would be faced with the same problem-where to raise additional cash to increase expenditures in any one of the four assistance programs. The second proposal in this bill in which the chamber is interested is the provision for a reversion to the original matching (50-50) arrangement—but only in cases where new OAA recipients are also receiving OASI benefits. The national chamber supports the objective of this proposal, but believes it does not go far enough. OASI now provides virtually universal benefit coverage for those retiring in the future-including farmers. We believe Congress should establish an orderly method which would rapidly eliminate the overlap of benefits from Federal tax money from other programs with OASI. Cordially yours, CLARENCE R. MILES. STATEMENT OF KENNETH WILLIAMSON, ASSOCIATE DIRECTOR, AMERICAN HOSPITAL ASSOCIATION, ON THE 1956 PUBLIC ASSISTANCE AMENDMENTS TO THE SOCIAL SECURITY ACT The American Hospital Association appreciates the opportunity to express its views on the 1956 public assistance amendments to the Social Security Act (H. R. 9120 and H. R. 9091). These bills provide separate matching by the States of payments for health care for the four categories of public assistance recipients. Historically, the American Hospital Association has been vitally interested in working out solutions to the problem of financing hospital and medical care for low-income and needy groups. We have long recognized that one of the weakest points in our health system is the provision of care to people who cannot pay for it. Moreover, it is in these groups that need for health care is greatest. The magnitude of the problem of providing health care to the needy can be appreciated when it is realized that authoritative estimates on the number of low-income and needy families range from over 5 million to at least 11 million persons depending upon the criteria used. Current statistical reports of the Department of Health, Education, and Welfare set public assistance recipients at almost 5 million. To this figure should be added more than 300,000 general assistance cases. Among this group, the aged comprise a very large portion of the total number of persons in the low-income and nonwage categories. In any discussion of the broad problems that affect the whole low-income group, the problems of the aged should receive special attention. According to recent figures, released by the Bureau of Public Assistance, United States Department of Health, Education, and Welfare, America's population of persons over 65 was 14.2 million in June 1955. Of this number, 2.5 million are receiving old-age assistance or more than one-half of the total number of public assistance recipients. Statistics also demonstrate that the number of aged persons is increasing about twice as fast as the normal population growth in other age groups. The rapid growth of the aging population has great significance to hospitals. At a time when such persons generally have less income and are less able to pay for their hospital care, they use about 2.5 times as much hospitalization (days per person per year) as the rest of the population under 65, in general and allied special hospitals. Moreover, chronic illnesses afflict the aged to a greater degree than any other group. Since the majority of the aged are living on sharply reduced limited incomes, they soon become indigent from any appreciably long illness. It is a generally accepted principle that the provision of health care to the needy is a responsibility of society. An unequal share of this responsibility has been carried by hospitals. Regrettably governments at all levels have not always assumed their proportionate share of this burden. The American Hospital Association represents approximately 90 percent of the general hospital beds of the Nation. The matter of providing hospital care to the needy has greatly concerned us because it is a fundamental responsibility of hospitals to provide care to the community. Public assistance recipients receive a substantial proportion of hospital care provided in hospitals. In our opinion, the problem of providing adequate health services to needy people has been recognized by this committee as one requiring legislative action at this session of Congress. There is no magic which enables the voluntary nonprofit hospitals to provide care without cost. There is no such thing as free care; someone must pay for it. Medical costs for the population as a whole have risen 30 percent since 1948, and are still rising. Medical costs for public assistance recipients have increased even more rapidly because these individuals more and more represent the infirm aged, the disabled, and the chronically ill of our country. The load of charitable care adds to the burden of those able to pay. It was out of a recognized and growing concern for the problems involved in bringing modern quality hospital care to more of the public that the American Hospital Association had proposed and supported constructive measures that would bring better health care to the American people. An outstanding example of the association's concrete achievements of bringing better health to more Americans was its establishment of the Blue Cross voluntary, nonprofit, prepayment plans. Since its creation the Blue Cross idea has grown to 86 plans with over 51 million subscribers. The whole development of voluntary hospital insurance stemmed from these Blue Cross plans. So widespread is the acceptance of voluntary health protection that today over 100 million Americans carry some form of hospitalization insurance. Blue Cross plans are voluntary, local organizations serving humanitarian purposes. Their basic objective is to promote the health of the public. By spreading the cost and risk of hospitalized illness over all those covered, many persons who would otherwise be unable to pay for their care when they become ill are able to budget against the cost of such care. Large numbers of persons who might have neglected illness now secure hospital services as the need arises. These plans have lifted millions of individuals out of the classification of medically needy persons. There still remain, however, groups of people who are not financially able to pay the cost of the care needed when illness strikes. Current methods of financing hospital care are still inadequate to reach all low-income and needy families. The expansion and improvement of these methods are problems confronting your committee. Under the present law, Federal assistance is limited to the four categories of public assistance recipients, namely, the aged, the blind, dependent children and the permanently and totally disabled. No method exists by which the Federal Government can participate in obtaining requisite health services for all needy persons. The burden of providing care to those needy who do not fall in the four categories is borne entirely by local and State governments and voluntary charity. It is difficult, if not impossible, to accept any rationale spelling out the responsibility of Government to provide health services to limited categories of needy persons. The same condition faces all of them: inability to pay for necessary health services. The American Hospital Association has long recognized that the States need help to provide care to general assistance recipients. We believe that Federal legislation is required to enable the States to assume this added task, and that such legislation designed to improve public assistance should embody all needy persons and should not be limited to arbitrary categories. We should like to call your attention to recommendations of the Subcommittee on Low-Income Families, Joint Committee for the Economic Report, under the chairmanship of Senator John Sparkman. This subcommittee in November 1955 devoted considerable time to hearings and studies to determine ways of improving the welfare, health and general living conditions of our low-income population. We quote from the recommendations of that subcommittee which are embodied in its report entitled "A Program for the Low-Income Population at Substandard Levels of Living": "We recommend "(3) That the Federal Government, in cooperation with the States and private groups, develop a comprehensive health program covering the following: “(c)_Reduction in the cost to the individual of compresensive health protection. This may necessitate contributing part or all of the cost of approved insurance programs for low-income families. The Congress may wish to consider whether it may be necessary, in order that voluntary health plans reach all of the population, to provide Federal financial aid to those in the low-income groupswho are unable to purchase such protection; additional funds alone, however, would be useless to millions of our people in rural areas where there is a lack of doctors, nurses, and hospital beds; * * * * "(e) Expansion of Federal participation in public assistance payments for medical care. "(4) That the following changes be considered in the Federal grant-in-aid program of public assistance: "(a) Establishing a single, unified system of Federal grants for general public assistance in place of the current and separate programs which, according to› evidence presented to the subcommittee, tend to restrict unnecessarily the types of need for which Federal funds are available; "(b) Basing Federal grants-in-aid for general public assistance on an equalization formula which takes into account the relative financial needs of the various States and State differences in per capita income;" We believe these principles are sound. Moreover, we are convinced that Federal-State-local partnership is essential if necessary health care is to be given to needy persons. Title I of H. R. 9120 and H. R. 9091 encourages the States, through separate Federal financial participation, to provide health care to these people. Both suggest $6-$3 monthly maximums. In terms of present-day health costs and the needs of public assistance recipients, these figures may be too low. Congress in its consideration of this problem, we feel, will wish to establish monthly maximums more closely related to present-day costs. Title I of these two bills has tremendous significance. It establishes the principle that health care is a necessity of life, as are food, clothing, and housing. But it creates a system of providing health care through the administration of welfare offices rather than the development of a health program operated by health offices. To the degree that H. R. 9120 and H. R. 9091 meet an immediate need, they are important. We feel, however, that this legislation should provide for some reasonable time limit on the welfare administration of a health services program for publicassistance recipients. It is preferable to have permanent health programs operated by health agencies. This legislation can be improved with such an objective in mind. For a number of years, the American Hospital Association has been working to develop proposals and, if possible, legislation which would provide a more adequate measure of health care to low-income and needy families. Out of our deliberations have come certain principles which this association believes should be incorporated in legislation providing health services to needy persons. Attached is a copy of these principles for the information and consideration of your committee. In general, these principles recognize that the Federal Government has a positive role in assisting needy families and aged persons to have access to adequate health care. They recognize as well that the head of each family is primarily responsible for meeting the health needs of his dependents. But when he is unable to do so this responsibility involves not only State and local governments but also the Federal Government. The Federal Government's role as proposed would be to encourage and stimulate the States through grants-in-aid programs, to provide such vitally needed health services. Participation by local communities would be sought to the fullest extent possible. Eligibility of needy persons would be extended to inIclude all such persons as they are now defined and determined in each State; it should not be limited to the four public assistance categories of the Social Security Act. Real existing need, determined locally, would be the test. No additional characterization or physical handicaps would be required. Within the areas delineated by this statement, the American Hospital Association supports title I of both H. R. 9120 and H. R. 9091. In conclusion, the American Hospital Association firmly believes that some Federal assistance is needed not only for the categorical groups but for all the people on the public assistance rolls if the States are to provide adequate programs of hospital and medical care. Moreover, the association is convinced that it is increasingly important to develop a program to provide health services for the needy and aged persons of this country. It further believes that the attached principles provide appropriate guidelines for the drafting of needy legislation to accomplish this purpose. THE STATE VOLUNTARY ASSISTANCE PROGRAM TO PROVIDE HEALTH SERVICES TO RECIPIENTS OF PUBLIC ASSISTANCE (Approved by board of trustees mail vote June 22, 1955) STATEMENT OF PRINCIPLES TO BE CONSIDERED IN LEGISLATION 1. The recipients of health services shall be defined as those persons who are on the public assistance rolls in each individual State. 2. The program shall avoid any direct payment by the Federal Government to the individual recipient or to any institution or individual providing health services. 3. The grant of Federal funds shall be to a single State agency. 4. The administration of funds may be handled by the State agency in one of the following three ways: (a) The State agency may arrange for coverage of the recipients of health services through the mechanism of nonprofit voluntary health insurance organizations. (b) The State agency may arrange for nonprofit health insurance organizations to act as administrative agencies to be reimbursed for the cost of health services rendered and agreed costs of administration. (c) If, in the judgment of the State agency, administration of the program of health services required by persons on public assistance rolls cannot be provided under paragraphs (a) or (b) above, then the State agency may arrange for direct payment to institutions and individuals rendering health services. This might be handled through the pooled-fund method. 5. Any grant-in-aid program with Federal funds being matched by the States should, to the extent possible, provide for matching by the political subdivisions of the States. 6. The percentage of Federal participation for Federal funds on a matching basis should vary with the wealth of the State, ranging from 33% to 75 percent. There should be no stated dollar limit on the Federal grants. 7. The legislation shall provide for the insurance of administrative regulations and such regulations should be provided for minimum standards of health care to be provided. 8. Responsibility for the administration of the program shall be vested in the Surgeon General of the United States Public Health Service. 9. The legislation shall set forth the broad general principles under which the States may participate in the program. Each State, to participate in the program, must submit a State plan in accordance with detailed specifications provided by the Surgeon General as outlined in these broad principles. 10. There shall be an advisory council composed of eight members appointed by the secretary. Four of the eight members shall be persons who are outstanding in fields pertaining to hospital and health activities and the other 4 members shall represent the consumers of hospital services and shall be persons familiar with the need for hospital services in urban and rural areas. The Surgeon General shall consult with and submit all specifications and administrative regulations to the advisory council for approval. 11. As one of the possible methods of encouraging the States to participate in the provision of care for public assistance recipients, a special pool of Federal funds shall be established to be administered by the Surgeon General for the purpose of conducting studies of experience under the act and to determine improvements in care rendered. 12. The State plan should provide for general standards of administration. 13. A State plan much provide that it shall be in effect in all political subdivisions of the State and, if administered by them, be mandatory upon them. 14. The legislation shall provide for an advisory council within each individual State in the same manner that such council is provided for at the Federal level. 15. Federal funds appropriated under this act may be used only for the provision of health services to recipients of public assistance and for no other purpose. Federal funds may not be used as a substitute for present appropriations for health services, except in States which now provide for full cost of health services. |