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STATEMENT OF DR. EARL C. LOWRY, PRESIDENT, IOWA
MEDICAL SERVICE (BLUE SHIELD)

Dr. LowRY. Mr. Chairman, members of the committee, I am Dr. Earl C. Lowry, of Des Moines, Iowa. I am president and medical director of Iowa Medical Service, better known as Blue Shield of Iowa.

I am on a full-time basis in this position.

I appear here today as representative of the board of directors of Iowa Medical Service, which is composed of distinguished physicians and laymen.

The CHAIRMAN. You are recognized for 10 minutes, Dr. Lowry.

Mr. LowRY. The primary mission of Iowa Medical Service is to furnish to the people of Iowa medical services under a nonprofit service plan of several Blue Shield policies offered in Iowa, each relating the policy to his income, 90 percent of our people could receive physicians' services on a full service basis. That is, the Blue Shield payment would constitute payment in full for physician services.

Dr. Donald Stubbs has informed you of the views of national Blue Shield as related to H.R. 4700. Our plan heartily endorses Dr. Stubbs' position.

Since Blue Shield in Iowa is engaged in offering medical care for the people, all the people, we are greatly concerned about the health of our senior citizens.

The percentage of persons over 65 in the population of Iowa is as high as any State in the Nation. We have given careful study to the health needs of this group.

If I might depart from the statement, Mr. Chairman, I would like to take cognizance of the stimulus which has been given in this area by the Honorable Mr. Forand. It has been quite effective in stimulating the survey. We have given careful study to this area and share with your committee a joint interest.

I would, therefore, like to review for you the problem in Iowa. We have over 300,000 persons in Iowa over 65 years of age. They are divided into the following groups:

1. Those persons whose income and resources are such that they do not need and normally may or may not buy health insurance.

2. A large group of middle income persons who financially can, and many do, purchase health insurance coverage. This includes purchases from Blue Cross, Blue Shield, and commercial carriers.

3. Another group which might be classified as "Persons of low income and modest resources." This is the group wherein our problem lies.

4. The medically indigent.

I would like to comment on each of the above groups separately: 1. Those persons whose income and financial resources are more than adequate usually purchase what they want from sources of their choice and need not concern us further here.

2. The middle income group; historically, Blue Cross and Blue Shield in Iowa have never canceled a policy because of age. Some 60,000 persons over age 65 are currently covered for health service by the regular policies of the two corporations.

We also continue to enroll persons over 65 who are employed in groups already covered, or new groups. These people continue their premiums at customary rates and receive the usual adequate health

coverage.

I am certain that among this group there is a large number carrying health insurance sold in our State by multiple private health insurance companies. All policies available from voluntary sources give this group a wide choice of health coverage from which to choose.

3. Now we come to the problem area, which includes persons over 65, of low income and modest resources. In this group, the cost of living consumes nearly all of their income. It includes many persons who are social security beneficiaries.

Like other persons 65 and over, they get sick more often, they stay sick longer, and more often require treatment for multiple diagnoses when ill. This makes them exceedingly difficult to insure by common insurance principles.

Further, the income of this group is lower than the average person and by the regular rules of the insurance game, the premiums are higher.

After careful analysis of this problem in our State, the Iowa Medical Society, asked Blue Shield to present a program for this group, within their means.

In considering what could be done, it was determined that these persons could probably pay the overhead costs of their medical and surgical services, if payments could be made on a monthly basis and the physicians would donate their time and effort to the cases.

On this premise, a Blue Shield policy and a companion Blue Cross policy was developed and made available to such persons. Without going into detail, the senior citizen pays $6.35 per month for the combined policies of Blue Shield and Blue Cross.

I might add this is $3.00 and $3.35 if you want to break that down. If such a family has an income of $3,000 per year or less, or a net worth of $30,000 or less, the participating physician accepts Blue Shield payment as payment in full for services rendered. These policies went into effect May 20, 1959, and there are approximately 7,500 already in operation. The purchases are continuing at the rate of 30 per day.

I would like to say that similar efforts are being made in California and many other States. Of course, this is a pilot study and changes will be required, but the object is to meet the needs of the people and there seems to be no doubt that this can be done.

May I also add here that during 1959 in the State of Iowa, two major private insurance companies have conducted campaigns and have insured large numbers of persons in our State over 65, without underwriting, that is, an open period where anyone could enroll, regardless of health status, entirely with the ingrown eye lid.

4. The medically indigent. Iowa is blessed with substantial source of medical care for indigent persons. This includes beds and professional services at the medical school of the State University of Iowa at Iowa City.

All counties have a bed quota at this hospital. This includes free ambulance service to the hospital. A patient is qualified for admis

sion by certification from local authority in the county where he lives. There are also many indigent beds available from municipal and county sources, such as the well known Broadlawns Polk County Hospital in Des Moines. Sources of aid in this group are too numerous to mention, but I would like to pause at this time to point out that not infrequently a social security beneficiary qualifies for medical help from this source.

Mr. Chairman, it is my purpose to call to your attention the fact that the voluntary health agencies, and especially Blue Shield and Blue Cross, have for some time recognized the need which H.R. 4700 is designed to correct.

More recently, real progress toward a solution is being made. During the year 1959 more progress has been made toward the solution of the problem than in the past 10 years.

The fruits of these efforts are only now becoming available. I, therefore, urge the committee, in its careful judgment and wisdom, to consider the merits of the voluntary health plans versus a Government plan.

I believe that when this is done, you will conclude that the present efforts from private sources deserve further time and opportunity in order that they can get the job done.

Thank you.

The CHAIRMAN. Dr. Lowry, we thank you for bringing to us the views which you have expressed. We appreciate your coming to the committee.

Are there any questions?

Mr. MASON. Mr. Chairman.

The CHAIRMAN. Mr. Mason.

Mr. MASON. Dr. Lowry, among the 75 or 100 witnesses we have. been listening to for 5 days, about 8 or 10, I would judge, represented State medical associations. But I am told that some 20 or 30 other State medical associations have filed testimony on this bill.

I think perhaps we ought to know that so that it is not just six or eight, it is quite a good number of State medical associations that are testifying.

That is all, Mr. Chairman.

The CHAIRMAN. Are there any further questions?

If not, we thank you, Dr. Lowry, for coming to the committee. The next witness is Dr. Carl Fortune.

Mr. WATTS. Mr. Chairman, members of the committee, it gives me a great deal of pleasure, real satisfaction, to introduce to this committee Dr. Carl Fortune of Lexington, Ky.

He is a personal friend, family physician, and one of the most eminent medical authorities in the State of Kentucky.

He is eminently qualified to testify on this subject before the committee.

It is a pleasure to have you here, Doctor.

The CHAIRMAN. Doctor, we are pleased to have you. Can you conclude your statement in the 5 minutes we have allotted to you? Dr. FORTUNE. I believe so.

The CHAIRMAN. If you omit any part, you may do so with the understanding that your entire statement will appear in the record. You are recognized.

STATEMENT OF DR. CARL FORTUNE, IN BEHALF OF KENTUCKY STATE MEDICAL ASSOCIATION

Dr. FORTUNE. Mr. Chairman and members of the committee, my name is Carl Fortune. I am a practicing physician in Lexington, Ky., where I practice internal medicine.

I am here today to present the views of the Kentucky State Medical Association on H.R. 4700, urging that this bill not be reported favorably by the committee.

Some 10 years ago the Kentucky State Medical Association, made up of more than 2,000 members, began to realize the necessity for the physician to do more than to treat the physical and mental ills of his patient. Now more and more physicians in our State have accepted the responsibility of helping the patient to solve his socioeconomic problems pertaining to medical care.

In 1949 the Medical Association sponsored and financed the Blue Shield medical care plan in the State that has had a phenomenal growth which has and is making it possible for 585,000 people to budget their medical bills.

The association has encouraged and worked with commercial insurance companies to develop similar plans.

The association and Blue Shield are now working in the State on the development of a special plan to provide medical care for the aged on a reduced fee basis that the patient with limited income and resources can afford.

In fact, Mr. Chairman, the medical profession in Kentucky for many years actually has been taking care of the aged, accepting a reduced fee or no fee at all, depending upon the patient's circum

stances.

The association has supported a liberalization of the Workmen's Compensation Act and various public health measures which accrue to the public's improved health care.

Recently, after careful study, the Kentucky State Medical Association has set into motion a new policy expanding the health care of the aged in our State. Included in this program are requests for new construction and enlarging of present facilities for nursing homes; experimentation in the adding of a functional wing to existing hospitals for convalescent care; utilizing existing facilities such as heat, laundry, food, etc., thus cutting down on the overall costs.

This policy also calls for a visiting nursing service to provide for the chronically ill in the home, operating under the supervision of the family physician, closer cooperation with the nursing homes, and encouraging a program of education on making greater use of the skills of our senior citizens.

Apartments for the aged are being developed in urban areas of Kentucky. One such project will have nearly 200 units located in the downtown area where aged couples can live and in the event of illness they will be near to doctors and medical facilities.

Members of this association are actively cooperating with the Governor's Commission for the Aged in Kentucky. Eight physicians are on this Commission which plans to employ an executive director and is embarking on an extensive survey and action program in the State. Kentucky physicians, working as a part of the health service team,

had their part in contributing to the situation which now finds the average life expectancy at the age of 70 instead of age 50 as it was at the turn of the century. In view of this development, we will do all we can to find the answers to this problem we helped create.

Tremendous strides have been made by the medical profession, hospital groups and the insurance industry in meeting the problems of health care for the aged. This is as it should be-it is the American way. This is the economical and effective way. This is the method that preserves the dignity of the individual, the integrity of the community. It is the way that has made the United States the great country it is. This would be destroyed if H.R. 4700 is enacted.

Gentlemen, you have been very kind to let us present this testimony; to give you reasons why we, in the Kentucky State Medical Association, feel H.R. 4700 should not be reported favorably.

May we close our statement by urging you to remember that this problem has always been handled at the local and State levels. There is every reason to believe that it is still the problem of the individual, his family, the community, religious groups and local political subdivisions working with the various private purveyors of insurance coverage to solve in the American way.

The CHAIRMAN. Doctor Fortune, we thank you, sir, for bringing to us the views of the Kentucky State Medical Association.

Mr. Watts, we thank you for your introduction of Doctor Fortune. Are there any questions?

If not, thank you, sir.

Dr. FORTUNE. Thank you, Mr. Chairman.

The CHAIRMAN. Our next witness is Doctor Twente. Our colleague from Mississippi, Hon. John Bell Williams, is accompanying the Doctor to the witness table and desires to introduce him.

We are pleased to have you here, Mr. Williams, and we are glad to have you introduce Doctor Twente.

STATEMENT OF REPRESENTATIVE JOHN BELL WILLIAMS, OF

MISSISSIPPI

Mr. WILLIAMS. Thank you, Mr. Chairman.

Mr. Chairman, and members of the committee, it is my great privilege to introduce to the committee a very dear friend of mine of long standing, and a man recognized as one of the most skilled surgeons in the Southern States. He is Dr. George E. Twente.

Dr. Twente is not a native of Mississippi. He was born in Thebes, Ill., Mr. Mason's home State. Dr. Twente tells me that Thebes is a town of 90 people. As a matter of fact, he was born 7 miles out in the country. He was educated at the University of Illinois, interned and took his residency at St. Louis City Hospital, served in the military service during World War II as a major, and came to Mississippi about the same time that I came to Congress, about 13 years ago.

Since that time he has become a leader in his own profession. He is recognized throughout Mississippi as a leader in the medical profession there. His practice is limited to general and thoracic surgery. He is a Fellow in the American College of Surgeons, and Diplomat of the American Board of Surgery. He is a consultant in cardiac surgery to the Mississippi State Crippled Children's Service, and

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