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I am sure you will hear from Dr. Baehr later on this afternoon that the HIP groups will stand ready to take care of the OASDI beneficiaries on a capitation basis. I am certain some of the private groups, too, would agree with this.

Now, there are other methods of caring for these beneficiaries. In my view the Baltimore City medical care plans for public assistance clients constitute such a program and I just want to take a moment to explain it. This is a comprehensive program to take care of 35,000 people on public assistance, largely aged people.

These individuals are given diagnostic services in the hospital on a capitation basis. They are given home and office care by local physicians. Some 300 physicians are in the program on a home-and-office basis.

The services in the hospital are on a diagnostic basis and on a therapeutic basis, and patients are given drugs and special prescriptions from the local pharmacies. They obtain glasses and other appliances, and when they are hospitalized they are hospitalized under another program, a State-paid program.

This program could be a prototype for taking care of OASDI beneficiaries.

One other point: About all I would urge the committee not to make H.R. 4700 so rigid that the advancing concepts in American medicine in the organization and use of teams of physicians and health personnel to keep the aged person functioning in society, could not be introduced at this time, or at some later date.

We have a unique contribution to make here in America in the organization of medical practice and we should make use of this.

One other final point I wish to make is that I hope that in this bill a special fund might be made available for demonstration projects. These are very necessary projects.

These projects might concentrate on integrated health services for aged beneficiaries, using such facilities as the acute hospital, the chronic facility, the nursing home, home care, as well as home and office care. Such demonstration projects should go further and emphasize preventive medicine, rehabilitation, and include new programs developing in this country, such as foster home placement for the aged, meals on wheels, nursing and housekeeper services, and work with the housing and recreational agency groups, which enable us to learn more about the needs of our aging groups.

I thank the committee for the opportunity of presenting these views and will be glad to answer any questions the committee members may have.

The CHAIRMAN. Doctor, we appreciate your bringing to the committee your views and those associated with you.

Mr. Machrowicz will inquire.

Mr. MACHROWICZ. Dr. Furstenberg, are you a member of the American Medical Association ?

Dr. FURSTENBERG. Yes, sir.

Mr. MACHROWICZ. Your views are not exactly in line with those expressed by the association. I wonder if you can tell me why you believe the American Medical Association opposes the Forand bill!

Dr. FURSTENBERG. Well, I cannot speak for the American Medical Association. I have received a letter, as did every other physician

in the American Medical Association, asking them to make known their opposition to the Forand bill to their Congressmen.

I feel the American Medical Association is wrong in this. They are taking a stand which I think they will reverse as they have reversed their stand on doctor's memberships in group practice.

Mr. MACHROWICZ. I am very much surprised to hear from Mr. Reuther's testimony that the American Medical Association and doctors originally opposed the Blue Cross plan.

In some areas at least they refused to participate in it originally. Do you think the doctors would oppose the comprehensive medical plan suggested here and would refuse to participate?

Dr. FURSTENBERG. I do think the physicians as a group are interested in high quality medical practice in a fashion that gives respect to the patient and allows the physician to practice with dignity.

I don't think there is any question that when the Forand bill is a law, the physicians will cooperate as they have cooperated in the final analysis with Blue Cross and Blue Shield, which many American physicians opposed at first.

Mr. MACHROWICZ. Why do you oppose the inclusion of surgical care in this bill?

Dr. FURSTENBERG. I do not feel that medical care should be frag'mentized into surgical subspecialties, and into medicine with its specialties.

The patient should be treated as a whole. It is better that a group of physicians should be paid for the care of that person and his rehabilitation as a functioning member in society than that he be considered as a case, solely a case of cancer that has to be met surgically.

I am not saying that the surgeons do this alone, but as Mr. Forand has well pointed out, the method of paying for medical care determines the quantity and the quality in practice.

I would say that the fee for surgery may well perpetuate other intrinsic evils in this method of practice.

Mr. MACHROWICZ. That is all.
The CHAIRMAN. Are there any further questions?
Mr. Utt.
Mr. Urt. I have only one or two questions, Mr. Chairman.

Dr. Furstenberg, you say you did receive a letter from the American Medical Association asking you to oppose the Forand bill?

In that letter, was there any suggestion that if you did not do that that you would be excommunicated from the American Medical Association ?

Dr. FURSTENBERG. No, there was no suggestion. I don't feel that I will be excommunicated.

Mr. UTT. You have never been instructed by the American Medical Association that if you did take a position to oppose the American Medical Association, that you would be expelled from the American Medical Association and not be able to make a living!

Dr. FURSTENBERG. I don't think the American Medical Association, or my local medical society, will interfere with my practice of medicine.

Furthermore, I am certain that there will be many members of the local medical society who will not be pleased that I was here to testify today.

Mr. Ur. I think you are probably correct, but we did have testimony to the effect that the reason most doctors will not testify against this was the fact that they feared expulsion from the American Medical Association.

I think your testimony will refute that.

My second question is this: Do you feel that Mr. Curtis, who is president of General Motors, and his wife, is entitled to free hospitalization and medical care at the expense of the workingmen of the country?

Dr. FURSTENBERG. Congressman, if he pays the same as the workingman pays for Blue Cross he is entitled to the same benefits.

I don't see any difference in this from payments made under the Social Security Act. He should be entitled to the insurance that the social security legislation would give him. That is his right.

Mr. Urt. It seems to me that there are nearly 10 million self-employed people in the United States, most of whom built up a very sizable estate for retirement and if they are not permitted to draw upon the free medical care and hospitalization, there would be a better service and more money available for those people who actually need it.

Those are the people who I am more interested in than those people who are presidents of General Motors and General Electric and other large corporations.

I feel that while they have made a contribution to the fund that anyone who draws on that fund is going to draw so much more than he contributes that somebody is going to have to go without who has made a contribution.

My position is different from yours on that.
That is all.
The CHAIRMAN. Mr. Alger.

Mr. ALGER. Dr. Furstenberg, you described the Baltimore plan to us. Who pays for that plan?

Dr. FURSTENBERG. Up until recently they had been paid out of State funds. I believe now under the matching funds in the Social Security Act, that part of the money is being channeled through the State health department to the city.

Mr. ALGER. Do you turn away people who were sick because they cannot pay?

Dr. FURSTENBERG. As a hospital administrator? Let me put it this way:

There is a lot of poppycock about everyone getting medical care who needs it. It depends on the rate at which you get the medical care. If someone comes to an outpatient department or to a hospital emergency room and is in cardiac failure and needs to be hospitalized right away, there are no questions asked.

But suppose the person comes with hypertension and incipient failure, and it looks as though he needs medical care and he is a transient or he is indigent. There are many hospitals that will not take care of such patients until they establish eligibility, go through a means test so that the hospital can collect, and in a State such as Maryland where we have a great deal of public funds being channeled into hospitals, this is still the rule.

The patient has to show that he is medically indigent before he can get medical care in the hospitals.

Mr. ALGER. I appreciate that statement. I have had a little uneasy feeling that it was too much the other way.

So I share some of your concern, but does your hospital turn people away that obviously need help?

Dr. FURSTENBERG. No hospital and I don't believe any physician would turn the patient away who obviously needed help.

Mr. ALGER. It is the ones they are not too sure about they might delay or postpone?

Dr. FURSTENBERG. Fortunately most patients are not emergencies.

Mr. ALGER. You mentioned one other thing that I do not think everyone else has mentioned. First of all, they contract with hospitals and something about the fee or cost' handled on a capitation basis.

I know what the word means, but what is in your mind when you make this suggestion?

Dr. FURSTENBERG. The health insurance plan of New York City, and I am sure that Dr. Baehr will be glad to go into this if he is asked that question, pays groups of physicians so many dollars a year, I think it is about $29 now, for the total care of a patient, exclusive of hospital care, I believe, which is paid for specially.

Mr. ALGER. He handles so many?

Dr. FURSTENBERG. The group takes care of so many thousand people, and receives so much per head. That is the capitation.

We have that system in the Baltimore city medical care program set up by medical authorities and approved by the medical society in our city for persons receiving public assistance.

Mr. ALGER. I have one other thing:

Does it seem fair to you, Doctor, that a number of aged who are not covered by social security are not covered by this bill?

Dr. FURSTENBERG. It does not seem fair to me that anyone should have to be pauperized in order to get medical care or that he should have to go through a means test to obtain medical care.

Mr. ALGER. Thank you, Doctor.
The CHAIRMAN. Are there any further questions of the witness ?
If not, we thank you again, Doctor, for bringing us your views. .

The CHAIRMAN. Mr. Eubank, will you please identify yourself by giving us your full name and address, and the capacity in which you appear.



Mr. EUBANK. Mr. Chairman and members of the committee, my name is Mahlon Z. Eubank. I am director of the social security department of Commerce and Industry Association of New York, 99 Church Street, New York 7, N.Y.

The CHAIRMAN. Mr. Eubank, you will be recognized for 5 minutes. If any part of your statement is not orally delivered, it will appear in the record.

Mr. EUBANK. Yes.

(The formal statement of Mr. Eubank follows:)

STATEMENT OF THE COMMERCE AND INDUSTRY ASSOCIATION OF NEW YORK, INC. Presented by Mahlon Z. Eubank, director of the social security department of

Commerce and Industry Association of New York, Inc. Commerce and Industry Association of New York, Inc., the largest service chamber of commerce in the East, represents approximately 3,500 employers, large and small, in all branches of industrial and commerical activity, including many corporations headquartered in New York but engaged in multistate operations. Through its special committee on health insurance, which includes executives of leading national business organizations specializing in this field, and its social security department, the association studies and actively presents management thinking on significant health insurance issues at both the national and State levels. The Commerce and Industry Association appreciates this opportunity to testify before your committee concerning the Forand bill (H.R. 4700) which would provide hospital, nursing home, and surgical service for persons eligible for old-age and survivors insurance benefits.

Over the years Commerce and Industry Association, recognizing and concerned with certain problems of the aged, has cooperated actively with governmental and private agencies to encourage more employers to provide opportunities for the hiring of the older workers. In line with that active interest, we are sympathetic toward making health insurance available to more of our senior citizen's. While we believe that it is meritorious to focus attention on this im. portant problem, we are convinced its solution does not lie in the Forand bill or similar Federal legislation. There are other and better ways to insure that our senior citizens can obtain medical care fitted to their needs and desires. Mandatory Federal action, inherent in the Forand bill, is not the answer. Our reasons for opposing Federal action follow :


All of the aged, and other OASI beneficiaries, should not be compelled to accept the same form of medical expense coverage. Our way of life is not one of regimentation but one of freedom of choice for all, in this instance, for both employers and employees. Medical care is one of the most complex, highly skilled and intensely personalized services an individual can require. As such, it is not compatible with a compulsory and uniform program for all the aged.

Today, employers may help to protect their retired employees with Blue CrossBlue Shield coverage, with conversion privileges under group health insurance policies issued by insurance companies, with the continuation of such group coverage after retirement, with group practice or with other types of voluntary plans. Benefits may include hospital charges, surgical or physicians' fees, major medical coverage or group practice. The retired employees may purchase individual health policies or in some instances unions may provide a similar variety of benefits and coverages for their members. Within all these areas there remain many necessary improvements that are being sought through constant revision and experimentation. To arrest these developments with the regimentation of a Forand bill would be most unwise.

At the present time no one-neither the insurance companies, employers, Government officials, nor even doctors—knows all the answers on how best to provide adequate medical care for the aged. All know the various ways but this is a relatively new type of coverage and still in the growing stages with better methods constantly developing. For example, will nursing home care for chonic or convalescent cases shorten the stays in hospitals equipped to deal with acute illness without converting nursing homes into residence clubs for the poorly motivated? Does visiting doctor or nurse care in the home promote more rapid rehabilitation and avoid the collapse of the will to live sometimes seen in hospitals or nursing homes? Will widespread diagnostic studies reduce the need for hosiptal care or will it merely breed more hypochondriacs? Such questions are being studied, experimented with and ultimately answered by the experience of the medical profession, insurance experts and industry. Passage of the Forand bill would freeze the format of coverage for older people and stultify the healthy growth which has been going on in industry.

In our opinion, if Congress enacts legislation for hospital and surgical expenses for OASI beneficiaries, it not only would hinder development of group health

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