assure close working relationships among the various community agencies, and especially between health and welfare programs, are also vital to meeting health needs.

7. Research.-Expanding the frontier of knowledge is basic to all progress in the field of health. Financial aid from all levels of government should, there fore, be available to expand and advance health research by both public and voluntary agencies, including the construction of needed facilities and support for research workers. Such research should be directed toward still unresolved problems and methods of prevention of physical and mental illness, but there is particular need for intensified research in the following areas: (a) the nature, prevention, and treatment of mental illness, including such specific aspects as mental retardation, alcoholism, and drug addiction; (b) chronic illness and all its ramifications; (c) the health aspects of aging; (d) the application and improvement of public-health measures; (e) the relationship of social factors to illness; (f) the economics of medical care, and methods of measurement of adequacy of health program.

8. Personnel. Serious personnel shortages among physicians, psychiatrists, nurses, technicians, medical and psychiatric social workers, health aids, and other health personnel, together with the increasing cost of training such specialists, make governmental financial assistance for such education essential. All levels of government should therefore combine their resources to provide increased financial aid for the following: (a) recruitment, (b) the expansion of educational facilities for preparation of needed health workers, (c) increasing scholarship aid, including educational leave for qualified persons in governmental service, (d) in-service training, and (e) increasing compensation for governmental health workers. These measures will serve to facilitate recruitment and to hold qualified personnel. Barriers to the preparation of otherwise qualified persons which are based on race, religion, sex, or economic status should be eliminated.

9. Facilities.-Modern health care and research require extensive physical plant and equipment. Such facilities are at present inadequate numerically, poorly distributed geographically, not always suited to meeting the major need, often below desirable standards. Adequate support, including Federal financial aid for construction, should be provided for public and nonprofit facilities in the following categories: (a) general hospitals and related facilities, with special emphasis on the regional plan envisioned in the Hill-Burton Act; (b) hospital and clinic facilities for treating metnal illness, including special facilities for children with severe emotional disturbances; (c) faclities for long-term care of the chronically ill and infirm aged; (d) resources for convalescent care; (e) health centers and mobile clinics; and (f) facilities for service to members of nonprofit group practice-prepayment plans.

Mr. SCHOTTLAND. Mr. Chairman and members of the committee, my name is Charles I. Schottland, and I am here as the representative of the National Association of Social Workers. By way of further identification, I was Commissioner of Social Security from July 1954, having been appointed to that position by President Eisenhower, to December 1958, when I resigned to become dean of the Florence Heller Graduate School for Advanced Studies in Social Welfare at Brandeis University. Prior to that time I was director of the California Department of Social Welfare, to which position I was appointed by the then Governor Earl Warren.

Since 1927, when I entered the social-welfare field, I have frequently been engaged in programs involving medical care for the aged, and it is out of this experience and study that I have come to some of the conclusions which I am setting forth today.

My testimony today will be brief because I think both the problem and the solution can be briefly stated.

The problem: The problem is an easily stated one although one of gigantic proportions. The aged in the United States are increasing rapidly. Today we have 15.5 million persons over 65. Tomorrow at this time there will be 1,000 more such persons since that is approxi

mately the daily net increase. But it is not only a question of large numbers of persons over 65. Because of the improvements in medical care and in our standards of living, more persons are living to a ripe old age. Of all persons 65 and over, more than one-third have passed their 75th birthday. One in seven is in the eighties, and most of them are women; the women exceeding the men by nearly 120 to 100. There are, I understand, more than 5,000 persons in the United States over 100 years of age and some of them are actually working and paying their social security taxes.

With old age have come the usual diseases of age and senility-diseases which are long in duration and chronic illnesses which frequently require expensive care in hospitals.

Încome of the aged: Any casual analysis of the income position of the aged in the United States reveals the very simple truth that by and large the aged in this country cannot afford to pay for medical care. Sixteen percent of the aged receive old-age assistance which means that they meet very strict standards of need. Another million aged persons are receiving pensions because of the death or retirement of à Government employee or railroad worker and almost a million are receiving veterans' pensions because of previous military service. In 1956 and 1957, three-fifths of all people 65 and over had less than $1,000 in money income. Only one-fifth had more than $2,000. Of all couples with a husband aged 65 and over, almost half had cash incomes of less than $2,000 in 1956. Half of the aged persons living alone or with nonrelatives had incomes of less than $900. Even this small income is not reasonably certain since much of what goes into these averages comes from employment and other sources which decrease as age increases. Almost half-45 percent of the total income of the aged comes in the United States from income-maintenance programs, primarily social security and other public programs.

The problem is simply stated. When the aged have expensive hospitalization or nursing home care frequently amounting to as much as $20 to $30 a day or more, they simply are unable to meet this unusual and expensive medical care bill. While I was Commissioner of Social Security, the Social Security Administration conducted a survey of the OASI beneficiaries in 1957. This revealed that among the aged couples 52 percent had medical bills of more than $200 a year; of the single persons, one-third had medical bills of more than $200. Relate these figures of medical expenditures to the limited income of the aged and the problem is clear the aged in the United States simply do not have sufficient income to meet the mounting costs of hospitalization or other long-term care.

The solution: What is the solution to the problem? In the United States we have developed one of the highest standards of medical care in the world. Our physicians, our dentists, and other members of the healing arts professions have combined to give us a system of medicine equal to any. We have learned much about the prevention, diagnosis, and treatment of disease, and I think that the medical professions and allied medical groups can take just pride in what they have accomplished, and the contributions they have made to our American society. But the prevention, diagnosis, and treatment of disease is one thing, and the economic arrangements under which persons are able to purchase medical care is another. The former is

the province of the physician and the allied medical professions. The latter is the problem of all of us.

Medical care today in the United States is just like any other commodity. It is available to those who have the purchase price. If they do not have the purchase price, some may obtain such commodity by going on relief.

Now there are only a few alternative methods of obtaining the funds necessary to purchase medical care. Let me explore with you

these several methods.

(1) The individual: The traditional method of paying for medical care is that of payment through the individual's resources. For many aged, this can result in an excellent medical care program. But, as already indicated in the few figures I have presented on the income status of the aged, very few can afford extensive hospitalization or nursing-home care. For the average aged person, an occasional doctor's bill or dentist's bill or an occasional pair of glasses or drugs may be met from his income or other resources. But for the vast majority the payment of hospital bills or extensive nursing-home care is out of the question. We, therefore, must become reconciled to the fact that payment of medical bills by the individual will not take of the rank and file of aged people.

(2) Voluntary organizations: A second method of handling the problem would be through philanthropic medical and social welfare agencies. Private hospitals have provided yeoman service in giving medical care to the indigent of our country, but they have reached the point where they are no longer able to serve the increasing aged population. Many of our hospitals face tremendous deficits because of free service to the aged, and Blue Cross and other programs have found it increasingly difficult to finance medical care for this segment of the population. I hope that voluntary effort through hospitals, social welfare agencies, and other such groups will continue, that the sources of funds for such voluntary effort will increase, and that they will continue to make their contribution as voluntary agencies to the solution of this difficult problem. But I think that the representatives of these voluntary agencies engaged in medical care would be the first to admit that they are in no position to make substantial increased contributions to the medical care costs of the 15.5-million aged in the United States.

(3) Public assistance: A third method of taking care of the problem would be to provide a very extensive system of public relief or public assistance for persons who cannot pay the medical care bill. This year, almost a half-billion dollars will be spent by Federal, State, and local communities to care for the medically indigent through public assistance alone. Many persons receiving old-age assistance are receiving old-age assistance almost entirely because of their medical-care needs. In other words, were it not for medical-care bills, these aged would be self-supporting or living on their old-age and survivor's insurance benefits. I wonder how many Americans feel that it is sound practice to force a person to go on public relief in order to receive medical care.

If I might interject here, Mr. Chairman, yesterday I ran across a case in Massachusetts of a 68-year-old woman receiving a $72 old-age insurance grant. Her husband died 6 or 7 years ago. She was get

ting along not very well on this $72, but she was making ends meet. However, she suddenly became ill with a stomach ailment and in a few days had accumulated a $600 hospital and doctor's bill. How could she pay a $600 hospital bill out of a $72-a-month OASI income? A voluntary agency advised her to go on public assistance in order that she could have the bill paid for. That is what she is going to do.

It seems to me that this is unsound in theory and is not in accordance with American tradition. Furthermore, public assistance is a State program. In many States persons without income will not qualify because of other assets such as real property. In some States the aged do not qualify until they have been in residence for 5 years; and a variety of other restrictions makes it impractical to think of public assistance as an answer to the problem.

(4) Voluntary insurance: A fourth approach to the problem would be through voluntary insurance. There is no question that voluntary insurance for the aged has made tremendous progress in the United States. The voluntary prepayment of hospital and medical costs has won wide acceptance and today some 72 percent of the total population are covered by some form of hospitalization insurance. I believe that the insurance industry has made a yeoman effort to make a contribution to the solution of the problem of costs of medical care among the aged. In the past few years the percentage of aged with some form of medical insurance has risen. In the 1957 survey previously mentioned 43 percent had some insurance protection.

There is no question in my mind that voluntary insurance can make an even bigger contribution to this problem and that it will continue to do so. There is also no question in my mind that it cannot be the answer to the total problem of medical care for the aged. The reasons will be given to you by many witnesses so it is not necessary to labor them here. The high cost of medical care for the aged; the fact that many aged will not be able to afford the premiums; the fact that many aged are such poor risks that the premiums would be very high; the numerous exclusions; the inability of many voluntary insurance programs to carry persons into their 80's and 90's-these and many other factors have already been reported to this committee. Furthermore, voluntary insurance cannot finance, without extremely higher premiums, the many millions already aged and receiving medical care. The various modifications proposed to these four methods likewise will not solve the problem-public subsidy to voluntary insurance plans; public aid to low-income groups needing medical care but not eligible to public assistance these and many other proposals are stopgap measures which do not offer satisfactory solutions.

(5) Social insurance: It seems to me that the solution to this problem is clear. We have developed in the United States a method of insuring against widespread social risks. We have insured against industrial accident through workmen's compensation; we have insured against old age through old-age, survivor's, and disability insurance; we have insured against total and permanent disability through this system; and we have insured against the contingency of death of the wage earner. We have also insured against the contingency of unemployment through unemployment insurance. In four States in the Union we have insured against temporary disability or

sickness. All of these have been done through the mechanism of social insurance.

The social security program has become thoroughly accepted by the rank and file of the people of this country as it has by the rank and file of the people of practically every Western industrialized country in the world. It is a sound method of insuring against certain risks, and it is in the tradition of American values in that it provides for saving during a person's working and productive years so that when the contingency insured against arises the person will be able to take care of his problems.

The Forand bill (H.R. 4700) sets forth a program based upon this principle of social insurance. I would be happy to make available to the committee additional comments of some of the specifics, but I believe the principle embodied within this bill is sound. Here is an opportunity through a relatively small payroll tax (a tax which I believe the American people are willing to pay) to finance the program contemplated.

I am not impressed with many of the arguments against this proposal. The charge of socialized medicine is not a valid one. The use of the social insurance principle to provide economic arrangements under which medical care bills will be paid has nothing to do with socialized medicine. There is no proposal here for the establishment of Government hospitals or doctors employed by the Government to treat patients. There is nothing here to disturb the traditional patient-physician relationship. When workmen's compensation was first introduced into the United States the same arguments were used against it as are now used against the proposal in the Forand bill. It was said at that time that it would destroy the physician-patient relationship and introduce socialized medicine into this country. Certainly, this has not occurred because of workmen's compensation. What has occurred is that workmen's compensation has made it possible for the injured workmen to obtain medical care and for the employer to be safeguarded from suits for injuries on the job. In the four States that provide against temporary disabiltiy, namely, New York, Rhode Island, New Jersey, and California, such program has not constituted any threat to the traditional American system of medical practice.

There is nothing in this bill which would prevent the Secretary of Health, Education, and Welfare from development arrangements with existing organizations such as Blue Cross or with existing hospitals to pay for the cost of medical care to such hospitals in exactly the same way that Blue Cross now reimburses such hospitals.

Conclusion: In my experience I have run across numerous tragedies among the aged because of the high cost of medical care. I have seen persons who saved for their old age, who owned their homes and had substantial assets, reduced to destitution because of prolonged illness; I have seen persons go on relief who had always been self-supporting until they reached their 70's and 80's and medical costs forced them to seek public assistance. I do not believe that a society such as ours, conscious of its medical needs, cannot afford good medical care with out such hardship and humiliation. In the distant past men frequently resigned themselves to such a situation, but today our people have made the discovery that there is a way to insure against various social risks; namely, through the device of social insurance-a device