(2) Lower the high standard of medical treatment, health education, and medical and pharmaceutical research which the citizens of our country enjoy today;

(3) Place an additional tax burden upon the working people and business people of this Nation;

(4) Place Federal controls over any program which can be better administered, both professionally and economically, at local, State, or county levels.

The Iowa Medical Society has made tremendous progress within the past few years toward solving these problems at the local level. We of Iowa pharmacy take pride that we have been able to assist them in making these programs successful and of realistic benefit.

The majority of Iowa pharmacists are in everyday contact with the public. Many of our everyday customers are in the over 65 age group. We do not feel that this group is suffering from lack of medical treatment or hospitalization. We attribute this to the fact that medicine, as practiced in Iowa, is performed on an individual, personalized basis which cannot be duplicated in any federally controlled program. I, personally, have found out through informal discussion with my customers, that they do not feel there is a need for a national compulsory health program which would be administered and financed through social security payments.

Pharmacy has always welcomed the opportunity to work with medicine to produce improved health facilities and services for the public. We firmly believe that only through individual effort of all the allied health professions can proper medical care be provided for all who are in need of it. We do, however, recognize that special attention must be given to those who are in need of assistance. But that need of assistance must, of necessity, be determined on a local basis and administration and medical treatment be performed at a local level. Such a program will provide the continued high level medical care enjoyed by the populace of the United States, and will not effect undue and unfair penalties against an individual segment of our accepted and democratic way of life.

The CHAIRMAN. Mr. Coontz, we thank you, sir, for bringing to us the views of the Iowa Pharmaceutical Association. Are there any questions of Mr. Coontz?

Thank you, sir.

Mr. COONTZ. Thank you very much, sir.
The CHAIRMAN. Dr. Goldman.

STATEMENT OF DR. FRANZ GOLDMANN ON BEHALF OF THE GROUP HEALTH ASSOCIATION OF ST. PAUL

Dr. GOLDMANN. Mr. Chairman, my name is Franz Goldmann. I speak on behalf of the Group Health Association of St. Paul, Minn. The CHAIRMAN. Doctor, you are recognized for 10 minutes, sir. Dr. GOLDMANN. I am a physician specializing in the social and economic aspects of medicine and related disciplines, a diplomate of the American Board of Preventive Medicine, and a fellow of both the American College of Preventive Medicine and the American Public Health Association. I am grateful for the opportunity to appear today to testify on an important social problem.

My testimony is on behalf of the Group Health Association of St. Paul, to which I have repeatedly rendered consultant service because it believes, as I do, in the social concept of democracy.

This association uses a special organization, known as Group Health Mutual, St. Paul, for the operation of a voluntary insurance plan that at present serves more than 140,000 persons, including large numbers of rural people.

Twenty years of experience show that the numerical and proportional increase of insured senior citizens, and especially of elderly people living on farms, has caused many difficulties to the operation of the Group Health Mutual, which is the insurance organization covering about 140,000 persons in 5 States served by Group Health Association.

Elderly people need more service more often and for longer periods than younger persons, and accordingly, the cost of service to this age group is relatively high. Extension of group contracts to rural people, and especially to those living on farms, involves payment of the whole premium by the insured, and this all too often is an expense older people cannot afford.

With further increase in the proportion of insured senior citizens in the near future, the situation is likely to become critical. To avoid a deficit, either the premiums for all members will have to be raised to continue coverage of the elderly, or higher rates must be charged for group contracts of farm people.

Group Health Mutual, much like many other voluntary insurance plans, would operate more effectively if insurance of senior citizens were financed in a better way than it is now. It would be able to

reach more of the senior citizens who at present are not insured. It could continue to serve those who have crossed the 65th parallel in stead of finding that members of long standing drop out simply and only because of inability to afford the premiums. It might have an opportunity to improve the insurance benefits, once the greatest financial risk is removed.

It is my considered opinion that voluntary health insurance plans can only gain if the mechanism of the old-age and survivor's insurance system is used for the purpose of financing health services for senior citizens. This principle has been approved by the delegates of the Group Health Association, St. Paul, at annual meetings of the Group Health Association of America.

The task to be solved in protecting senior citizens against the cost of illness is highly complex because of the interplay of a variety of socioeconomic and health factors.

These factors are infrequent employment of older persons, low average income of those who are fortunate enough not to require institutional care, indigence of the majority of those living in institutions and of a considerable proportion of those outside institutions, need for much, and often very prolonged, health service, and high costs of medical care.

The health needs of senior citizens are numerous, complex, in many respects different from those of younger people, and subject to steady increase with advancing years. They are greater than those of younger persons because of a higher frequency of physical and mental illness, longer duration of illness, and the substantially larger number

and proportion of cases of partial permanent disability and invalidism.

Multiplicity of health conditions requiring attention, repeated shortterm excerbations of old chronic conditions, prolonged illness, and severe impairment of function, especially disability lasting 6 months or longer, pose the most serious problem to the financing of a satisfactory program.

Compared with other age groups, senior citizens require medical, nursing, and other professional services, drugs, and appliances more often, in larger amounts, and over longer periods of time. They are admitted and readmitted to general and related hospitals more frequently and stay much longer.

Furthermore, the aged constitute a considerable proportion of the patients in mental hospitals and the vast majority of persons living in institutions for long-term care.

Senior citizens as a group spend more on personal health services than younger age groups, and they must do so at the very time when income from gainful employment has ceased or become small for most. Expenditures for service to people 65 years and over make up a relatively large part of the total national expenditures for medical care in the wide sense of the term, accounting for substantial proportions of the public as well as private outlays for all types of personal health services.

To look forward, one must believe in old age. If the ideal of growing old gracefully is to become a reality, if the concept of equal opportunity is to be translated into a practical plan, then individual effort must be combined with social action directed toward development of as comprehensive a health program as can be devised on the basis of present scientific knowledge and technical skill.

The most important alternatives of social action requiring discussion at present are two:

1. Extension of voluntary insurance without direct aid from the Federal Government; and

2. Use of the mechanism of OASI to finance health services for senior citizens.

I am refraining from remarking on other alternatives, as they are not under active consideration at present.

Extension of voluntary health insurance from the present level of about 40 percent to a majority of the senior citizens is possible. Degree and pace of increase are contingent on the number of insured persons who "grow old under the plan." But many self-employed persons with small incomes and many family dependents are likely

to remain uninsured.

How long senior citizens will be able to maintain their insurance depends on development of lifetime insurance under both individual and group contracts. This implies readiness of all commercial insurance carriers to discontinue the practice of terminating contracts for reasons of health or age and, equally important, payment of higher premiums by all insured people during the years of earning. The introduction of such provisions in group contracts raises countless questions of personnel policy by employers and of labor-management relations, in addition to those about method of financing and regular collection of the premiums.

To consider solely the frequency of insurance among senior citizens is to disregard the maxim "thou shalt not worship numbers." What counts most is the type, scope, and period of benefits covered. Senior citizens, more than other age group, need home care by physicians, nurses and other personnel, medical and nursing services in the institution for long-term care, and drugs and appliances-benefits rarely, if at all, included in contracts-and they require full coverage of hospital care and professional services in the hospital for a much longer period than is offered by most plans at present.

If continuation of nonsubsidized voluntary insurance is the official policy, considerable expansion of medical care through public assistance will be necessary to help persons who cannot meet the full costs of needed health services, including those who are not insured and those who have exhausted their benefits. Adoption of such a policy would involve considerable new expenditures out of general tax funds and, naturally, establishment of eligibility standards and application of a "means test." It would jeopardize all efforts to reduce the need for public assistance to the irreducible minimum. These implications should be clearly understood.

To

The principle of financing health services for senior citizens through the mechanism of OASI has clearly definable advantages and potential disadvantages. As 9 out of 10 gainfully employed persons are already covered and the contributions toward the cost of the present benefits are regularly collected by OASI, most of the future senior citizens and their survivors could easily acquire paid-up insurance for health service as well as for income maintenance. They would qualify for health services through regular prepayments during the working years and be eligible for them regardless of place of residence. future senior citizens this would mean protection through organized self-help. To physicians in private practice and the voluntary hospitals and institutions for long-term care the advantage would lie in the certainty of payment for services rendered to senior citizens, with decrease in the amount of free service and less time and money spent on collection of charges. There would be a marked reduction in the expenditure of general tax funds for the medical care of senior citizens and the maintenance of families impoverished because of the illness of an elderly member.

Inclusion of health benefits in OASI would be of limited value if the pattern of benefits set by most of the voluntary plans were followed and it would be open to serious question if the emphasis were placed on payment of medical bills rather than on maintenance of high standards of service. These dangers can be avoided, though. If the choice is between letting the voluntary plans do it and extending OASI, a strong case can be made for financing health services for senior citizens through the mechanism of OASI. At the risk of laboring the obvious, it must be stated that organization of payment and organization of service are entirely different matters.

The bill under consideration (H.R. 4700) has three noteworthy merits: (1) It provides for service benefits, thereby affording very much better protection than that offered to the majority of the persons carrying voluntary insurance; (2) it covers the full costs of hospital service for a period of 60 days, in contrast to the large number of voluntary plans terminating full benefits after about 30 days; (3) it

includes nursing home services following hospitalization for a combined total of 120 days, thereby filling a serious gap in the benefits provided by the vast majority of all voluntary plans.

The bill is deficient in that it calls for coverage of surgical service only, whereas elderly people need nonsurgical services as much, if not more. It would not work out satisfactorily, unless definite steps are taken to assure maintenance of high standards of service. It appears advisable to stimulate improvement of the standards of those nursing homes which do not meet basic requirements by allowing performance grants. And it seems worthwhile to consider addition of visiting nurse service so as to help those-numerous-elderly people who do not need hospital or institutional care or do not need it any longer and, that the same time, prevent unnecessary or unecessarily long hospitalization.

Thank you, sir.

The CHAIRMAN. Dr. Goldmann, we thank you, sir, for bringing us your views and those of the organization you represent, and particularly do we appreciate your analysis of the various alternatives in

this effort.

Are there any questions of Dr. Goldmann?

We thank you again.

Our next witness is Mr. Waite.

Mr. Waite, please identify yourself for the record by giving us your full name and address and capacity in which you appear.

STATEMENT OF BENJAMIN E. WAITE, LYNN, MASS.

Mr. WAITE. Mr. Chairman and gentlemen of the Ways and Means Committee, my name is Benjamin E. Waite, of Lynn, Mass.

In the brief time allotted, I have just given a few notes. The bulk will be in the brief that I furnished you.

The CHAIRMAN. Your entire paper will appear in the record, Mr. Waite.

(Prepared statement of Mr. Waite follows:)

RESPECTFULLY SUBMITTED BY BENJAMIN E. WAITE, J.P., OF LYNN, Mass. APRIL 7, 1959

To the Ways and Means Committee on the Forand bill, H.R. 4700:

I was born in England 1877, now 82. Migrated 1913 to United States of America on family bereavement. Six years on my town council, 1906-10; was parliamentary subagent which saw the birth and passage of England social insurance law, 1911.

I did not see England again until 1951 when I carried greetings from mayors of Massachusetts and Connecticut who were offsprings to mother towns in England. I had unique opportunity over widespread areas to judge results of 38 years under a complete social security system. I found tranquility of mind, displaced tensions and fears which existed prior to 1911, superb health fit for any change or chance. That gave me fresh impetus for continuance of campaign. I have worked to that end from 1906 to 1958, and now 1959 so I celebrate golden wedded to social security. Until 1934 in United States of America social security was politically absent. But in that year I got through a resolution for a national health law to be a part of a national security law at Washington conference. 1935-36, 1939, filed amendments in Massachusetts Legislature; 1936 filed memorization law for Congress to enact a national health law, lost; 1956, filed memorization for Congress to enact a national health law, Massachusetts, passed; 1936, appeared before Senate Labor and Education on S. 3475: 1958 filed brief and endorsements on H.R. 9467 before Ways and Means Committee, pages 1200-1205,