pitalization of the indigent. Funds appropriated by the State and matched on a voluntary basis by 90 of Tennessee's 95 counties have been used to pay hospital bills. Physicians provide their services without cost to patients, county, or State. The administration of the program is the responsibility of the Tennessee Department of Public Health.

When, more recently, the State legislature accepted Federal matching funds for the welfare hospital assistance program, an unwieldy distortion developed. Administered by the Tennessee Department of Public Welfare, all recipients of the welfare department's old-age assistance program became immediately eligible for 30 days "free" hospitalization annually and were so informed by that Department. Here the definition of "group" is based on welfare department qualifications plus old age, plus desire for hospitalization. This last factor is by no manner of means always a medical need. Such hospitalization, particularly in the smaller communities in Tennessee, has placed an additional strain on our general hospitals, their medical, nursing, and other personnel, without definition of medical need and its excessive cost necessitated a cut to 10 days of "free" hospitalization.

We believe H.R. 4700 to be uneconomical because it seems to us unlikely that it will accomplish what it proposes to do in terms of human values. The variation of costs estimates for administration of H.R. 4700 during the first year is also most impressive as are the cost estimates themselves and the presently projected increases in the social security portion of the total tax withholdings. Certainly we recognize inflation and its threatened growth as a serious medical problem to our older patients with whom we deal directly, intimately, and, we hope, with concern and good judgment.

We consider this legislation untimely, having reason to fear that a solution to the medical problems of the aged by what amounts to Federal monopoly of those problems will not only be unwieldy and uneconomical, but at this time will destroy the increasingly successful efforts in recent years of voluntary prepaid insurance, physicians, and our communities to deal with those problems. It has been our experience in Tennessee that education of physician, insuror, and policyholder requires both time and devotion and involves a sense of responsibility and participation which makes for flexibility and viability, a type of growth which to us in Tennessee promises more and better quality medical care for the aged than seems likely to be gained bv passively leaning upon a Federal tax structure.

Eleven years ago the Tennessee State Medical Association established the Tennessee plan which presently provides protection to more than 1,300,000 individuals and is underwritten by Blue Shield and 39 commercial carriers. A majority of physicians have contracted to accept its benefits as full payment of fees for individuals and families of modest income.

Still more recently the Tennessee State Medical Association's Committee on Aging in June 1958 initiated activity which established the Tennessee Council on Aging, composed of 41 member agencies, each interested in and concerned with the problems of our senior citizens. To destroy it, we believe, is particularly hazardous at this time, though we recognize there are those dedicated to the principle that such joint

efforts cannot of their very nature succeed and therefore earnestly seek a solution by Federal edict.

As early as 1957 there were 278,000 Tennesseans in the age-65-andabove group, 55,000 of them covered by health insurance in one Blue Shield company alone and an equal number, perhaps more, covered by other plans. Action of the TSMA house of delegates at its annual meeting this year supported a senior citizens policy of the Tennessee plan, encouraged the insurance companies to utilize their actuarial and selling skills to obtain broad and practical coverage and urged the hospital associations to study methods of meeting by voluntary prepaid insurance the costs and cost accounting of hospital care for the aged. Still more recently the prepaid insurance committee recommended to our house of delegates that members of the Tennessee State Medical Association accept the fee schedule outlined in the Tennessee plan and the maximum fee schedule for all patients over age 65 of modest resources and low incomes.

Unwieldy, uneconomical, and untimely, we also oppose H.R. 4700 because we believe it unlikely that this legislation will meet significantly or effectively the medical needs of the aged and that it will destroy the motivation and means of meeting those needs which increasingly stem from a voluntary concern for the aged by an active rather than a passive participation in defining and meeting those needs.

We would not belabor the fact that Tennessee is known as the Volunteer State but we would emphasize that monopoly is a poor substitute for medical, social, and economic conscience and that conscience does not long survive without responsibility. There is, therefore, reason to believe that H.R. 4700 not only may result in shoddy medical care for the aged, but bears some promise of shoddy medical care for us all.

Like the other speakers today, Mr. Forand, however, we are grateful to you for the stimulus you have given us. We have learned a great deal more about the political, social, economic world we live in, thanks to you, sir.

Thank you, sir.

Mr. FORAND (presiding). Dr. Johnson, we thank you for your appearance before the committee and the information you have given us. I personally want to thank you for joining the chorus of those who have been praising me for stirring up all of this hullabaloo.

Dr. JOHNSON. There is no question you have been very effective, sir. I would like to say this-that we in Tennessee know a lot more about it than we did 7 years ago.

Mr. FORAND. I want to assure you that I am not through.

Dr. JOHNSON. I want to assure you, sir, that I hope you will not consider that we are through, either.

Mr. FORAND. I have repeatedly asked for the assistance and cooperation of all interested persons to try to find a solution to this problem. I am sure that you and your colleagues are going to try to do your part. Dr. JOHNSON. We can promise you that.

Mr. FORAND. I appreciate that personally.

Are there any questions? Mr. Alger.

Mr. ALGER. Dr. Johnson, if you were here earlier you will recall Dr. Furstenberg bringing up something that has some of us puzzled.

The statement has been made by many witnesses that those who need medical care, hospital care and services of all kinds, including doctors' services are granted this even if they are unable to pay.

On page 2 you make the statement in the middle of the page about the fact that the fees are not charged for hospitalization. Dr. Furstenberg comes along and says it is not so. He says it is true that those who are in emergency get this, but a lot of people in the in-between area do not. Maybe it cannot be spelled out. If it is pride or dignity we are dealing with here, maybe that will have to go before we put a compulsory tax on all of our people which is hardly the correct solution.

Have you anything to say about this matter of free medical health? Dr. JOHNSON. Yes. This bill that I mentioned refers to an indigent care bill. We do set up what has been referred to, I think unfairly, as a means definition as though it lacked a certain amount of dignity. Our definition means it is established by the community. I think this definition of means has somehow always to be considered if we are dealing with an indigent care bill.

Now in the indigent care bill the State matches the funds of the county and the doctors under the indigent care bill provide free service to those persons who are under the indigent care bill. Up to 1957 I think there were 7,200 individuals cared for under that particular program.

Now I think it is difficult for any legislative body to define need and to define disability. Yet if we are going to consider groups in terms of disability, we have to use some type of definition. I think we have all recognized this in the Veterans' Administration. It has been difficult to adhere to a concept of need. This is particularly true in defining disability.

As Mr. Faulkner pointed out today, in life insurance you have a cutoff point, which is death. In accident, sickness, health insurance you have matters of judgment; you need definition. I think we have to adhere to those definitions. A definition must have meaning if it is going to lead to action. It is in that area I think that Dr. Furstenberg brought up a serious weakness of the Forand bill. That is, you are really dealing with the whole person, the whole individual is the person we treat as physicians. The surgical aspects are important aspects, but they are not the only aspects. For example, I notice in the bill, and I have read it, sir, that the surgical aspects of the thing limits it to certain qualifications by the American College of Surgeons. In dealing, for example, with carcinoma it may be a matter of much better medical judgment to treat it with radioactive gold or with a variety of radioactive isotopes, or surgery may be the best way of dealing with this problem.

To get back to dignity again, for example, there is no provision for psychiatric hospitalization. These are aspects that are not even begun to be approached by the Forand bill. I think we need a completion. of these studies and I want to say again how grateful I am to Mr. Forand for stimulating these studies.

Does that answer your question, sir?

Mr. ALGER. Yes.

Mr. FORAND. Any further questions? If there are no further questions, again we thank you.

Dr. JOHNSON. Thank you very much, sir.

Mr. FORAND. Our next witness is Dr. Andrus.

Will you come forward please?

For the purposes of the record, will you give your name, address, and indicate the capacity in which you appear?

STATEMENT OF DR. ETHEL PERCY ANDRUS, NATIONAL PRESIDENT, NATIONAL RETIRED TEACHERS ASSOCIATION AND AMERICAN ASSOCIATION OF RETIRED PERSONS, ACCOMPANIED BY MRS. RUTH 0. LANA, EXECUTIVE SECRETARY, AND LEONARD DAVIS, PRESIDENT OF LEONARD DAVIS ASSOCIATES, NEW YORK CITY AND WASHINGTON, D.C.

Dr. ANDRUS. I am accompanied by Mrs. Ruth O. Lana on my right, executive secretary of our two associations, with offices in the B. F. Saul Building, Washington, D.C., and on my left Mr. Leonard Davis, President of Leonard Davis Associates, Insurance Consultants, New York City and Washington, D.C.

The CHAIRMAN. You are recognized for 15 minutes.

Dr. ANDRUS. First, I want to thank you very much for the privilege of bringing to you what we think is a proposal that is the answer that we have been looking for. We have had the affirmative assurance of this proposal by our two associations meeting in St. Louis on June 27, 1959.

May I, too, express to you, Congressman Forand, our deep appreciation of your championship for the cause of care for older people. Mr. FORAND. Thank you.

Dr. ANDRUS. By way of identification, may I tell you that the National Retired Teachers Association is a voluntary nonprofit allinclusive organization of retired teachers of our Nation. Of the 170,000 retired teachers, the National Retired Teachers Association now enrolls 100,000. Theirs is an exciting story of voluntary organization and humanitarian achievement.

In 1952, the National Retired Teachers Association, finding itself crushed between a static retirement income and the upward thrust of inflation and the rising cost of living, spearheaded the campaignnot for its own members alone, but for all retired folk-for an increase in income tax exemption which in 1954, through the recommendation of this very committee, resulted in the Mason bill. By it the 83d Congress granted our aging population an additional $240 tax credit in the computation of retirement income.

We have worked with our State organizations in securing liberalized retirement benefits on the State level.

We have encouraged, fostered, and constructed housing projects, and are planning nursing homes. We have worked for reemployment of the retired. We have so successfully challenged our membership to participation in constructive community activities that I as their president have been chosen one of the 130 members of the National Advisory Committee of the White House Conference on Aging to be held in January 1961.

In 1958, to share with other retired persons the various services which the National Retired Teachers Association had secured for its

own membership, there was founded by our association on a plea of thousands of our members, and with their help, an affiliated group of persons of 55 years or over, the American Association of Retired Persons with its publication, Modern Maturity.

Although founded as late as October 1958, the membership of this nonprofit association now totals in excess of 50,000 and is growing daily. Like the teachers' group, it is not radical in its demands, it faces reality and welcomes responsibility in helping to solve the problems facing older persons.

These two organizations are proud of their membership. They, however, realize that the proposal we are making in the service of all older folk may result in a lessening of their memberships. Nevertheless, both associations urge your serious consideration of the plan.

The proposal we make is an outgrowth of our pioneer achievement in 1955, when our association made available to its membership, at low cost, the first noncancellable group hospitalization-surgical insurance ever written nationally for retired persons. This social achievement has had many imitators in the years following. Over the years we have slowly developed know-how and experience. Each year we have extended our benefits and our fields of service. Today, over 100,000 retired persons participate in the medical protection offered by our program, without limitation as to age or physical condition, with no medical examination required, and spouses also included.

On the first day of July 1959 we extended our health program to provide for all retired teachers residing in the State of California a coverage including hospital room and board for a period of 121 days; surgical benefits up to $300-these are tied in to the relative value schedule approved by the California Medical Association for persons over age 65 with modest income; postoperative care in licensed nursing homes, plus an additional $500 for specialist services, drugs, and doctor's visits in home, office, or hospital.

Proud as we are of the results of our pioneering efforts in the field of health protection, we are not satisfied. Nothing less than the best possible coverage, at the lowest possible cost, is our goal.

So we offer for your consideration the following proposal, dedicated to the end of providing the best medical coverage for that portion of our older population-men of 65 or over and women of 62 or over— which is not eligible for and/or being served by public assistance in its welfare medical care program:

The formation of a trusteeship for the initiation and administration of the insurance plan for the elderly; this trusteeship to work in liaison with the social security trust fund. It would be similar to that now functioning in the insurance plans of NRTA and AARP. In order that this trusteeship should represent the total effort nationally, the membership should be composed of equal representation for the following agencies, the persons to serve to be appointed by their respective agency:

(a) Representatives of health care, such as AMA and AHA; (b) Representatives of business, such as U.S. Chamber of Com

merce;

(c) Representatives of industry, such as the National Association of Manufacturers;