Finally, with the assistance of the American Dental Association, the House Committee on Veterans' Affairs recommended a revised program of outpatient dental care which in effect gave wartime veterans the right to one series of dental treatment for their serviceconnected conditions. This was enacted into law in 1955.

Necessarily, the civilian dentists who cooperated completely and willingly in the Veterans' Administration outpatient program at its onset after World War II became disillusioned and resentful when it became apparent that Congress was unwilling to appropriate funds to provide the dental care to which the veteran was legally entitled. A similar sequence of events already is taking place in connection with the operation of the Dependents Medical Care Act.

Summary and conclusions: The association's opposition to H.R. 4700 is founded primarily upon longstanding policy that government sponsorship of personal health care programs is justified only where government responsibility is clearly shown. Additionally, the abuses which are seemingly inherent in government-sponsored health care programs justify, in the association's opinion, the intensive opposition of members of the health professions to proposals such as that contained in H.R. 4700.

This does not mean that the dental profession is unaware of, or inattentive to, the Nation's health problems. As has been noted earlier, the most critical need at the present time in respect to the aged is for more information concerning the identification of specific health problems and methods for solution. The American Dental Association supported the legislation providing for the White House Conference on the Aging to be held in 1961. The association is participating actively in the efforts to make that conference productive of solutions to the problems of the aging.

In addition, the association is participating in and supporting the work being done by the Joint Council To Improve the Health Care of the Aged which has been established by the major health organizations to investigate thoroughly the health problems of the aged to devise solutions to these problems based upon extensive research into the full range of the subject. The recent national conference of this organization highlighted the impressive work that is underway to meet the health care problems of the aging.

In the dental area, reports were made on operations of home-care programs by which the bedridden, chronically ill can be given the treatment they require. Formulations of additional plans for similar programs were cutlined. It was demonstrated beyond question that such programs can and are being carried on to an ever-increasing extent through private local agencies. More and more attention is being given and new methods devised to accommodate the specific needs of the homebound or institutionalized patient. These activities are being accelerated in order to keep up with the advancing number of people in the older age groups.

We are confident that the needs of the aging will be met without the introduction of a program such as that contained in H.R. 4700. Accordingly, it is respectfully recommended that this committee disapprove H.R. 4700.

The CHAIRMAN. We thank you gentlemen for bringing to us the views of the American Dental Association. We regret that Dr. Besdine

could not be present personally. We appreciate your substituting for him.

Are there any questions of these gentlemen? If not, we thank you. Our next witness is Dean Brown.

For the purposes of this record, Dean Brown, will you give us your full name and address and capacity in which you appear?

STATEMENT OF J. DOUGLAS BROWN, DEAN OF THE FACULTY AND PROFESSOR OF ECONOMICS, PRINCETON UNIVERSITY

Dean BROWN. Yes, sir. I am Dean J. Douglas Brown, dean of the faculty at Princeton University and professor of economics. I appear entirely as a private individual. I am not a consultant to any organization except where they come to me for advice, which is given free. Nor am I a member of any organization which is favorable or unfavorable to this legislation.

The CHAIRMAN. You are recognized, sir, for 15 minutes.
Dean BROWN. Thank you, sir.

I have had the honor of appearing before this committee to discuss proposed legislation on social security on several occasions since I helped plan the original legislation on old age insurance in 1934 and 1935. I was the Chairman of the Advisory Council on Social Security which proposed the basic changes in that program in 1937-38, and was a member of the steering committees of the Advisory Councils in 1947-48 and 1957-58. I am, therefore, deeply committed to and concerned in the sound evolution of the old age, survivors, and disability insurance program, which has been, apart from teaching and administration at Princeton University, my chief research and advisory assignment for a quarter of a century.

Each time a new element is proposed for incorporation in the basic old-age insurance legislation, I have considered with great care several test questions which help one to decide whether the new element belongs in the Social Security Act. These include:

1. Is there a great and growing need for Government action in meeting the problem concerned?

2. Should such action be by the Federal Government?

3. Will the people support such action, and be willing to pay the costs?

4. Is the social insurance mechanism the best available to accomplish the purpose?

5. Can effective administrative machinery be developed within the social insurance mechanism?

6. Are the people and the Government ready to take another step in the enlargement of the social security program, or should this await further consolidation of existing operations?

The inclusion of hospital and associated health services for the aged beneficiaries within the social security program is not a new and sudden proposal. It has been studied long and carefully. I might say, in my statement, I am talking on the basic principles and not the details. I had the privilege last winter of reviewing the draft of the excellent report of the Secretary of Health, Education, and Welfare on the subject while it was being prepared. I have reached firm conclusions on the answers to the questions outlined.

1. There is a great and growing need for Government action in assuring adequate hospital and associated health services for the aged population of the United States. Of that I am convinced. Longer life beyond three score and ten brings with it many illnesses which earlier deaths formerly foreclosed. These illnesses are often more serious and protracted than those of youth and middle age. They are not only a cause of personal impairment, but a great source of financial insecurity and haunting anxiety because of their uncertainty and their heavy toll in a time of sharply increased costs of medical care.

Further, few people can, as self-sufficient individuals, make sure that they are prepared for the fortuitous dimensions of health costs in old age. For the great majority of wage earners reaching old age, neither personal savings nor private insurance can provide adequate protection against sudden and serious drains. Private health insurance, which I have studied with great care in fact am a group member of both Blue Cross and Blue Shield-works well for those still employed and earning regular wages. Health costs in old age are, however, not a current risk, but a life risk, which the person already old cannot normally bear out of his sharply reduced income, even if then averaged by insurance methods.

Unless the Government establishes some mechanism for meeting the life risk of health costs in old age during the whole of working life, millions of American citizens will become dependent in time of serious illness upon the charity of the State or the community, or the charity of the medical profession. We owe a great debt to the medical profession of this country, but, with the rapid increase of our aged population, we should not, and do not, want to make that dedicated profession assume an obligation which all of us should share.

2. Governmental action in meeting this problem should be that by the Federal Government. Since life earnings should bear the cost of health care in old age, then earnings should bear the cost wherever and whenever the eventual beneficiary has been employed throughout life. We are a mobile people. A wage earner in New York or Illinois today may become ill in Florida or California in his declining years. Only the Federal Government can effectively protect us through contributory mechanisms for bearing life risks. Our old-age insurance system was founded on that sound and unchallenged premise.

3. The people of the United States will, I am convinced, support such Federal action and be willing to bear the cost. We have tested them time and time again in various other social insurance programs. It is, of course, the responsibility of Congress to make its determination on this point. I offer my conclusion as an economist who has long specialized in this area of public policy and who, at the same time, is continuously responsible for the welfare of a thousand articulate individuals meaning the professors at my university, both active and retired.

4. The social insurance mechanism is the best available to accomplish this purpose. The provision of benefits in kind in the form of hospital and associated health services in old age under the OASI system is essentially "insurance within insurance." A particular level rate of benefit, established at retirement, does not meet the variable

but insurable risk of heavy health costs. Insurance, in general, is an ideal mechanism to average such costs. Social insurance is an ideal mechanism to average and support such costs over the whole earning lifetime of the potential beneficiary. On this point, I can speak with conviction based on a lifetime of study.

5. I am convinced, also, that effective machinery can be developed with our social insurance mechanism, the OASI system, to administer the proposed program. In 1936, on behalf of the U.S. Government, I studied the administrative operation of most of the European social insurance systems. Several foreign administrators then doubted our ability to handle the size of operation we were planning in the United States. They have long since taken over a great many of the methods we developed. Administering large-scale industrial, financial, and service operations seems to be a special genius of the American people. We have learned how to gain the advantages of efficient administration of vast coordinated procedures and, at the same time, give individual attention to the individual beneficiary of such procedures, whether it is putting gas into your car or cashing a check at one's bank. Social insurance is no exception. The OASI system has done a grand job. I have been very close in watching it. I have been on review councils where we have thoroughly put them to the test. It has the capacity to take on further activities involving new but soluble problems, not only internal to itself, but in coordination with many additional service agencies.

6. Finally, I firmly believe that the people are and the Government should be prepared to take this additional step in the enlargement of the OASI system without delay. The need of our older citizens is clear. It will not decrease, but grow. The roles of the Federal Government and the OASI system are clear. Administrative machinery can only be developed on the basis of legislative authorization and direction. Appeals for caution will not diminish. I may say, parenthetically, I have listened for the last 10 years to many of the same arguments I have heard today. Appeals for caution will not diminish. if they are really based on stubborn opposition to the concept of social insurance. I am convinced that the American people have accepted that concept and will support the sound enlargement of its application. They have been most fortunate in the great interest and concern evidenced by this committee for a quarter of a century in constructive social insurance legislation. I know that their continuing confidence in its interest and wisdom is not misplaced.

Thank you, sir.

The CHAIRMAN. Mr. Brown, we appreciate your coming to the committee and giving us your own thinking on this matter. We doubly appreciate your taking time from your otherwise busy schedule to do so in view of the long experience you have had in this field. I am sure that the members of the committee join me in expressing their appreciation.

Are there any questions?

Mr. FORAND. Dean Brown, I join with the chairman in expressing thanks to you for your taking time out to come here, particularly with the type of background that you have with relation to the Social Security System. I followed your statement very, very carefully.

Do you think that governmental action in this field of the kind I am suggesting would lead to governmental control of medicine?

Dean BROWN. I do not, sir. I feel that there are very adequate provisions possible to disassociate the practice of medicine from the financing of the risk of need of medical care.

Mr. FORAND. That is what we are doing in this bill.

Dean BROWN. Exactly, sir. I think one of the confusions that my respected colleagues in a sister humane profession have is not to disassociate the financing of costs from the practice of a profession.

Mr. FORAND. I know you have had an opportunity to evaluate the actuarial estimates of the Social Security Administration for a long period of time. A spokesman for the Department of Health, Education, and Welfare has indicated that they believe that Federal health benefits for the aged can be soundly financed.

On the basis of your experience and in the light of the views of the spokesman for the Department, do you have the fears expressed by the American Medical Association that Federal health benefits may jeopardize the financing of the Social Security System?

Dean BROWN. I do not, sir. I feel that the actuarial determinations which have been made repeatedly since the old-age system has been developed are entirely adequate to protect the system now and with the addition of other services to the American people.

We have developed elaborate and effective actuarial methods which will be as effective in that as in any other area, it is my belief.

Mr. FORAND. Now the American Medical Association News of July 13 says that the future expense of the Forand bill would be staggeringly high and could jeopardize the retirement security of millions who depend on social security. Could you comment on that?

Dean BROWN. I do not believe that is at all a correct estimate. I think, sir, what is often in such sweeping statements is a lack of proportion; that is, the health costs of the American people are high and will always be high in absolute figures. In the handling of old-age insurance, the administration and the country are handling an immense mechanism, but we are handling it effectively with low administrative cost and with a total cost, relative to the production of the country, which is entirely reasonable.

I feel that the American people have a right to decide what proportion of their income shall go to automobiles, trips to Florida, education, or health. I am sure that a wise determination of that proportion should not be staggering, even though the absolute figures have many zeros after them.

Mr. FORAND. So does our population figure.

Dean BROWN. Yes, and our productivity figures, sir. But the thing that concerns me and has for 25 years is the increasing balance of our age population. We must expect, especially those of us ourselves who are approaching that time, that we will be a part of a vastly larger proportion of the American population so that the Government of the United States and all other agencies must expect to deal with a much larger proportion of aged persons. That is the reason why we needed the old-age insurance system. That is the reason why we now need to take steps to help us to meet the peculiar health problems of people whose income is reduced because they are old, but whose medical needs are increasing because they are old.

Mr. FORAND. We applaud the medical profession for the great progress which has been made which has resulted in the longer span of life