Page images
PDF
EPUB

Mr. BAKER. The other question is in regard to life insurance which is still very germane to Mr. Forand's bill. Most life insurance, at least the part I have, incidentally with mutual companies, provides on

I the disability feature, as I remember it, it must occur before age 60 or age 62, or something, the permanent total disability feature of it. Is that still common practice?

Mr. FAULKNER. That practice which was common is still relatively common and it is based on the mistaken notion, I think, that age is chronological rather than physiological.

That was the practice for many years and is probably still the predominant practice among life insurers providing a total permanent disability benefit.

It stems in part from the notion that we have adopted in this country that a man who is 65 is all through.

I would like to suggest to the committee philosophically that that is one of the worst things we can do to our old people. I am sure that there are men in this room who are 65 who do not think they are all through.

The CHAIRMAN. Are there any further questions of Mr. Faulkner? Mr. Alger.

Mr. ALGER. Mr. Faulkner, I want to thank you for attaching in addition to your statement the cost estimate because we have had differences of opinion by witnesses, men of good will on both sides, who are not sure of the cost. I appreciate your taking the trouble of appending these estimates.

We have had a report which we have come to think something of, prepared by the Health, Education, and Welfare. I direct your attention to the chart on page 44. I simply ask: Is that chart accurate to the best of your knowledge, Mr. Faulkner?

Mr. FAULKNER. We are familiar with tủe chart, Mr. Alger. The chart is not accurate.

I think the chart was drawn by someone who suffered from the same misapprehension of fact as Mr. Cruickshank. The line does not bend down for the year ending December 31, 1958; the line being the line illustrating the expansion of voluntary health insurance.

In the early part of 1958 a preliminary forecast was put out which indicated that perhaps we would not continue to expand. But those preliminary forecasts estimates were wrong.

At the end of the year the actual survey showed that the ongoing progress in the expansion of voluntary health insurance had been maintained.

Mr. ALGER. Would you tell us how that chart should go? I am going to draw it in right now for my own information.

Mr. FAULKNER. It should go almost straight up because by the end of that year there were 123 million people insured.

We believe that as of June 30 of this year there were 124 million Americans insured.

Mr. ALGER. Would that make the line continue, according to this graph—of course, I realize we have 20 years in this one narrow groupin other words, is it going to continue up the same rate as it was prior to the dip?

Mr. FAULKNER. It will continue up, we think, on a curve that eventually, of course, is going to flatten out, but we are still in the going up phase of the curve.

The CHAIRMAN. Would it not be helpful at this point if you could prepare for the committee a chart which would reflect your feeling as to what will happen over this comparable period of time.

Mr. FAULKNER. Mr. Chairman, we will be delighted to prepare a chart which will show what the fact was as of December 31, 1958, and projected according to our figures.

The CHAIRMAN. You would have to make some projections, of course, according to your best judgment?

Mr. FAULKNER. Yes, sir.

The CHAIRMAN. That will be included in the record, without objection.

(The information referred to is on pp. 461–462.) The CHAIRMAN. Are there any further questions? If not, we thank you, Mr. Faulkner.

Mr. FAULKNER. The courtesy of the committee is greatly appreciated, sir.

The CHAIRMAN. The information you have given us is very helpful.

Mr. FORAND. Mr. Chairman, I ask unanimous consent to include in the record at this time a telegram that was sent to the committee by Jacob S. Potofsky, president of the Amalgamated Clothing Workers of America, AFL-CIO. It reads:

Medical directors of four amalgamated sponsored health centers in New York, Philadelphia, and Chicago, are preparing statement in support of H.R. 4700. Since statement may not reach you in mail prior to end of current committee hearings, I respectfully request that statement be incorporated into hearing record when received.

Thank you in advance for your courtesy.

The CHAIRMAN. Without objection, the statement will be incorporated in the hearing at this point.

(The statement referred to follows:)
The CHAIRMAN. Our next witness is Dr. Furstenberg.

Doctor, will you identify yourself by giving us your full name, address and capacity in which you appear?

STATEMENT OF FRANK F. FURSTENBERG, M.D., ON BEHALF OF

AMERICANS FOR DEMOCRATIC ACTION

Dr. FURSTENBERG. Mr. Chairman, I am Frank F. Furstenberg of Baltimore, Md. I am engaged in the private practice of medicine specializing in treatment of allergic diseases and have been in practice for more than 25 years. In addition, I have had the opportunity to be intimately associated with public medical programs and have been concerned with developing high quality medical services for the community.

Twenty-five years ago, I was medical director of the Maryland Transient Bureau, a Federal program designed to stabilize the migratory unemployed by giving necessary care, including medical care under the Federal Emergency Relief Administration. Later, I was State medical director for the National Youth Administration.

During the war, I spent nearly 4 years in the U.S. Public Health Service where I was first assigned to practice medicine in a rural community in west Florida for the civilian employees of Eglin Field as well as the local population. Later, I became health officer for

Monroe County, Fla., and then I was assigned to the Office of Vocational Rehabilitation as a regional medical consultant.

I am now the medical director of the Outpatient Department of Sinai Hospital of Baltimore and there administer, among other duties, ą program of complete medical care for the public assistance clients, dealing largely with aged, sick people. This program is known as the Baltimore City medical care program.

As a member of the executive committee of the hospital and of its planning committee, and a number of other medical planning committees in our community, I am intimately aware of unmet medical needs.

I am today appearing here on behalf of Americans for Democratic Action of which I have been a member since its founding in 1947 and in which I have served as an officer, both in the national organization and in the Baltimore chapter. Both as a physician and as a spokesman for ADA, I appreciate the opportunity to present these views to the committee on H.R. 4700, but I come to you as a physician and not in my capacity as a medical director of our outpatient department of our hospital. I would like to file my testimony.

The CHAIRMAN. Without objection your entire statement will be included, Doctor.

(The statement referred to follows:)

TESTIMONY OF FRANK F. FURSTENBERG, M.D., ON BEHALF OF AMERICANS FOR

DEMOCRATIC ACTION My name is Frank F. Furstenberg, of Baltimore, Md.. I am engaged in private practice of medicine specializing in treatment of allergic diseases and have been in practice for more than 25 years. In addition, I have had the opportunity to be intimately associated with public medical programs and have been concerned with developing high-quality medical services for the community.

Twenty-five years ago, I was medical director of the Maryland Transient Bureau—a Federal program designed to stabilize the migratory unemployed by giving necessary care, including medical care under the Federal Emergency Relief Administration. Later, I was State medical director for the National Youth Administration.

During the war, I spent nearly 4 years in the U.S. Public Health Service where I was first assigned to practice medicine in a rural community in west Florida for the civilian employees of Eglin Field as well as the local population. Later I became health officer for Monroe County, Fla., and then I was assigned to the Office of Vocational Rehabilitation as a regional medical consultant.

I am now the medical director of the Outpatient Department of Sinai Hospital of Baltimore and here administer, among other duties, a program of complete medical care for the public assistance clients, dealing largely with aged, sick people. This program is known as the Baltimore City medical care program.

As a member of the executive committee of the hospital and of its planning committee, and a member of other medical medical planning committees in our community. I am intimately aware of unmet medical needs.

I am today appearing here on behalf of Americans for Democratic Action of which I have been a member since its founding in 1947 and in which I bave served as an officer, both in the national organization and in the Baltimore chapter. Both as a physician and as a spokesman for ADA, I appreciate the opportunity to present these views to the committee on H.R. 4700.

ADA has always placed a very great emphasis on the importance of national legislation to bring the full benefits of modern medical and hospital care within the reach and within the means of every American. This, in fact, was 1 of the 11 national goals singled out by our 12th convention, in May of 1959, for highest priority in the planning and management of national affairs in the next decade. Our 12th convention specifically endorsed the principles of H.R. 4700, i.e., the use of the old-age, survivors, and disability insurance system for financing bealth benefits for OASDI eligibles.

There is a unique logic and reasonableness in this principle. The need to raise the standard of living of our growing population of old people, and the need to make better medical care more widely available are two conspicuouis pieces of unfinished business in our system of social and economic security. The line of attack proposed by H.R. 4700 concerns both. It offers a means of alleviating one of the principal causes of insecurity and poverty among old people; and at the same time it offers a means of bringing very necessary medical care to one of the groups in our population most in need of it.

You are fortunate in having before you an extraordinarily competent and comprehensive report on the subject recently submitted to the committee by the Secretary of Health, Education, and Welfare in compliance with your instructions. This report is a thorough documentation of the economic status of OASDI beneficiaries and of the economic effects of the cost of medical and hospital care. It is not my purpose to repeat what is so well documented in this report. I would like to use the time which you have so kindly allotted to me to make some observations drawn from my experience in the administration of medical care and their implications for public policy and legislation.

The HEW report shows clearly that, in spite of repeated increases in the level of benefits for QASDI, benefits over the past 20 years have just about kept pace with the cost of living and have at no time provided incomes sufficient to provide even a minimum level of living for beneficiaries. Thus, we find that even after 20 years of social security, poverty is still widespread among our population 65 years old and over. The HEW report records that in the recent prosperous years of 1956 and 1957, three-fifths of all people 65 and over had less than $1,000 in income from all sources, and only one-fifth had more than $2.000. Insufficient incomes were the rule both among single beneficiaries and couples. It is recorded that in 1957 half of the couples had incomes from all sources of less than $2,000.

What I am certain is self-evident to you, and the daily experience of every physician, is the realization that the medical requirements of older people far exceed those of any other group in the population. Illness among old people is more frequent, more severe, and more prolonged. Chronic disabilities in this age are more common and their care is more expensive. And, of course, there are frequently heavy medical and hospital costs associated with terminal illnesses. By way of documentation, the HEW report records that half of the nonmarried OASDI beneficiaries incurred medical expenses of $100 or more during the single year of 1957, and half of the beneficiary couples expenses of $200 or more. In relation to their meager incomes, these are very large expenses indeed.

When these facts of medical life are superimposed on the fact of low incomes, the aged person lives in double jeopardy, facing illness and poverty. If we are going to make any real progress toward our announced goal of permitting our older citizens to spend their years of retirement in good health and in peace of mind, clearly we must find some way to remove the economically disabling burdens of medical and hospital costs from their already inadequate incomes. It seems to us that the social security system offers the unique opportunity for doing this.

The insurance principle has already been widely accepted in the United States in voluntary associations for insuring hospital and medical expenses. Of these, Blue Cross plans for hospitalization insurance now cover the majority of the population; and medical insurance, either through payment for service, or cash benefits, or through voluntary associations for prepaid medicine, or through labor-management health programs, are becoming more widespread. It seems to me that we must draw upon our experience with these new departures in the administration and financing of medical and hospital care to design a program which will best meet the medical and economic circumstances of our older population.

The first lesson of this experience is that such plans have serious, if not fatal, defects as applied to older people as a group. They are “poor risks” financially in any insurance scheme. Their disabilities are of kinds which frequently either exclude them from coverage, or admit them to only limited coverage, or cause their insurance to be canceled. Commercial indemnity insurance offers them only meager coverage, far short of their needs, and even this at very high costs. The medical and hospital costs of older people can be made self-supporting only if they can be averaged out, so to speak, by level premiums over the adult lives of the insured. For such a purpose the OASDI system is uniquely suitable.

As a physician, I approach this as a problem in health. The first objective of

I a health program for any segment of the population, including the older people, is to keep them well, to keep them out of hospitals, and to meet their medical needs fully, as they arise. There is much that can be done in preventive medicine among older people to forestall disabling illness and, even in the face of chronic illness, to keep them functioning in society, leading lives as nearly normal as they can, and above all in minimizing their dependence. Such a program requires not only access to medical and hospital services, but also adequate and suitable housing, specialized personal services, and, where possible, measures for rehabilitation. We cannot and must not simply put these people on the shelf because they are OASDI beneficiaries and face a limited life span.

If we think of medical and hospital care for older people in such a context, we should be searching for programs which will meet their total needs. The American scene will develop its own solution to the problems of an aging society. It is important that we experiment freely until we have satisfactory answers for methods of both the financing and the organization of medical services. It is my experience in private practice, as the director of the outpatient services of a large metropolitan hospital, and with the programs for the care of the medically indigent at public expense that prompts me to make a number of suggestions.

I think it is necessary to recognize that hospital insurance, though it may be a necessary, immediate first step, is not the answer we are looking for. By only paying for insurance benefits when the patient is hospitalized or placed in a nursing home, it may promote excessive hospitalization. A similar danger lies in fragmenting medical care by only paying for surgical services. It would be sounder for the patient, and it would encourage the development of high quality medical practice, to contract with accredited hospitals to provide for the care and treatment of OASDI eligibles for both outpatient and inpatient care. These services should cover all the services given by the hospital, including all medical and surgical services as well as drugs and appliances, and the necessary care in the nursing home or patient's home. There are American patterns established and functioning well that could be followed the Health Insurance Plan of New York, the Permanente Foundation on the west coast, the Palo Alto Clinic, the Gunderson Clinic, and the Baltimore City medical care program for public assistance clients, to mention a few.

Thus, the Department of Health, Education, and Welfare could contract with hospitals to expand their services to cover outpatient care and become responsible for the continuity of care for the patient. Hospital standards of practice are improving and are constantly under scrutiny of the Joint Commission of Accreditation. If the hospital were responsible for all medical care, and for the quality of care rendered, the hospitals would have to expand their staff to become group practice units. While it is true that such services would be uneven throughout the country at first, the legislative pattern is sound and would promote better medicine for all the people.

Mr. Forand has stated that he hopes to include benefits for demonstration projects for improving medical care for the aged. In this I heartily concur. The haphazard care of the aged under present programs leaves much to be desired and does not teach us a great deal. We recommend that the Congress authorize and direct the Department of Health, Education, and Welfare to contract for demonstration projects for complete medical and hospital care for OASDI eligibles. Such contracts could be made with hospitals or group practice units where there are large aggregates of our senior citizens, so that comprehensive plans may be developed experimentally. From these experiments we may learn much about meeting the mounting health problems of an aging society.

Such demonstration projects might concentrate on integrated health services, hospital care for acute illness, chronic disease facilities, convalescent and nursing home care, as well as medical service in the office and home, and would emphasize preventive medicine. These demonstration projects would be concerned with foster home placement for the aged, organized home care programs, “mealson-wheels", nursing services in homes, programs involving the use of housing built for the aged designed to prevent home accidents and above all, tying to gether health services with rehabilitation so that our aged will continue functioning as happy and useful citizens in our society.

The country owes a great debt of gratitude to Mr. Forand for his bold and vigorous sponsorship of H.R. 4700 and its predecessor bill in the last Congress. By his sponsorship of these bills, he has not only pointed the way to the application of the insurance principle in problems of medical care, but he has stimulated widespread awareness and discussion of the need to explore new forms

« PreviousContinue »