Page images

TABLE 3.—Percentage distribution by type of hospital and by source of expendi

ture of public and private payments for general hospitals, tuberculosis sanatoria, and nervous and mental institutions, 1953–55 1


4. 9



1 See table 1 for items not included as expenditures and for other details.
• Excludes payments under California temporary disability insurance laws.

TABLE 4.Percentage distribution by type of hospital of (a) public expenditures

and (b) private expenditures for hospital care, 1953-55

[blocks in formation]

1 Includes payments under California temporary disability insurance laws, assumed to have been entirely for care in this type of hospital.

3 Excludes payments under California temporary disability insurance laws. NOTE.-See table 1 for items not included as expenditures and for other details.

Mr. Cohen. In 1955 the total hospital bill of the country was $6 billion.

Mr. BETTS. Is any amount of Federal contribution you mentioned for service insurance?

Mr. COHEN. Yes, sir; you have the veteran's hospitals; you have the Marine hospitals. States and localities finance hospital care very extensively in this country.

In many communities like California, Mr. King, hospital care is very largely a local governmental responsibility. These localities are having a very difficult time to keep their costs within bounds.

So that I would think that in the course of time hospital administrators and hospital trustees are going to have a very, very difficult problem.

And more and more hospitals have to, I won't say they are inconsistent with the income tax laws in not having charitable activities any more, but most hospitals cannot even engage in charitable activities any more because neither the community chest nor private endowment wiil support them with the necessary funds to meet their deficits and there is only one other way to meet their deficit if they take in these older people who cannot pay. That is to charge the paying patient somewhat more than his cost in order to finance the cost of those who cannot pay.

I think this is inequitable and if there is an element of compulsion that is sometimes decried in this legislation, I think it is much more inequitable to be compulsorily required when you go to the hospital to pay for the cost of some aged person or some other aged person than it would through general public legislation.

Now, in my statement I have listed some 10 advantages of the pending bill. I will only list them now. I have discussed them in more detail in my paper.

First, under the Forand bill contributions are collected from nearly all persons who work for a living many of whom would not be covered under voluntary health insurance and can never be covered under voluntary health insurance.

Even Dr. Flemming and the American Medical Association have indicated there are large proportions of people who will not be covered under voluntary health insurance. These are the people who can be most satisfactorily covered through social insurance.

Secondly, contributions are payable under the Forand bill only while the individual is employed.

One of the great difficulties of the voluntary system is that also you have to pay your premiums when you are not employed.

This is a very great hardship on many people. The value of the social insurance approach is that based on earnings you pay while you are working over your entire lifetime.

Third, contributions under the Forand bill are levied in some measure to ability to pay because the payroll tax is a proportion of earnings. This is a much fairer and much more equitable manner than voluntary insurance.

Fourth, contributions in the Forand bill are levied over the individual's working lifetime and are not paid during the period when he is not earning and is retired.

One of the most unfair things about voluntary insurance is that it makes the aged person pay his premiums when his income is the lowest in his entire lifetime. This is not conducive to his keeping the insurance and is certainly inequitable.

Fifth, contributions in the Forand bill are not related to the number of dependents. If you take out voluntary health insurance you pay more during your working lifetime if you have a wife, as I do, and more for dependents. This is true of voluntary insurance in the Blue Cross area.

But in social insurance it is related to your income, not to the number of dependents. That is a much more socially desirable objective.

Sixth, the employer is required by the bill to pay one-half of the cost. This, I think, is a very important point. I do not think it is possible in the United States to reach 70 or 80 or 90 percent voluntary coverage unless employers of a large number of these people pay the entire


If the employers pay the entire cost naturally the general taxpayer helps to support that because such contributions to those plans are tax deductible.

But unless the unions make those contributions in effect compulsory on employers, I don't think we will achieve that degree of coverage that some say will happen.

I would like to say on the use of the word "compulsory,” many of the contributions to voluntary plans are now compulsory. This business of saying the voluntary plans have voluntary contributions and social insurance is compulsory is a very unfair comparison.

In many cases because of collective bargaining, because of prevailing wage patterns, fringe benefits are compulsory in these plans.

Finally, benefits are not cancelable under the bill. Benefits under the bill are not limited during a person's lifetime as some voluntary plans are. The benefits are mode adequate than under some of the private plans and the administrative cost would be less.

Finally, may I say in answer to Mr. Forand's request, over the last 2 years I have consulted with some of the 20 or 25 leading students of medical economies, including doctors in the United States, and out of that we have made some specific suggestions for improvement in your bill to insure both comprehensive coverage and high quality of medical service.

I have included those in my testimony. They are the product of a vast amount of discussion among people who believe that the approach that you have in the bill could be made really effective to give comprehensive health protection to the American people.

The CHAIRMAN. Does that conclude your statement, Mr. Cohen! Mr. COHEN. Yes, Mr. Chairman.

The CHAIRMAN. 'Would it be convenient for you to return at 1:30 for questions?

Mr. COHEN. Yes. The CHAIRMAN. Without objection, the committee will recess until 1:30.

(Thereupon, at 12:25 p.m., the committee recessed, to reconvene at 1:30 p.m., the same day.)


The CHAIRMAN. The committee will please be in order.

I first want to express my own appreciation for your appearance and your presentation of the thoughts of the American Public Welfare Association on the legislation before us. Your statement was very interesting and presented certain information that had not been brought to the committee's attention prior to your presentation.

Mr. FORAND. Mr. Cohen, I realize, of course, that you have a number of charts that you have not been able to get to and I hope as a result of some of the questions from the committee that you may have an opportunity to discuss them.

I also was wondering whether or not you had those charts reproduced in smaller form for members of the committee.

Mr. COHEN. Yes, I do, Mr. Forand.

Mr. FORAND. If you would leave those with the clerk of the committee it would be very helpful.

Mr. COHEN. I have three additional charts and I will leave them with the clerk.

The CHAIRMAN. Are they capable of being reproduced ?
Mr. COHEN. They are.

The CHAIRMAN. Without objection, they will be made a part of the record.

(The charts referred to follow:)



15.2 Million Aged

[subsumed][ocr errors][merged small][merged small][merged small][merged small][graphic][merged small]
« PreviousContinue »