the President who gets information from all over the world and gets it from sources that he can rely upon.

In time of war, we must rely upon the President because he has the latest and best information. It is almost that way in the case of this price and wage controls, and we expect to do our duty as a committee and make sure that all the facts are brought out from people who have knowledge and understanding about the facts to see what should be done. But I do not believe any member of this committee right now is committed, and to be perfectly frank with you, we had a meeting of the committee and there was not any overwhelming sentiment for the legislation at all.

Now, I hope I am not misquoting anyone. I am not going to do that. But we are in a situation now that we do not know exactly how to proceed. So we will finish with you gentlemen today with your approval and your consent, and then we will suspend for a few days and see what the reaction is, and if there are people that want to be heard on either side, we want to bring out all the facts. We will consider other sessions of the committee for that purpose.

But it is not an enthusiastic condition that we are facing on either way. So without objection, we will hear Mr. Roy, a Member of Congress.

Mr. BLACKBURN. Mr. Chairman, I should like to offer a few words of explanation to the gentlemen before us.

When these hearings were scheduled, Congress was supposed to be in session today. That would have insured a better attendance than what you see before you. But the Congress adjourned for the weekend last night. In customary practice, a large number vacated Washington to get back to their districts. That explains the poor attendance. I apologize to the witnesses.

The CHAIRMAN. I am glad you brought that out. That is the exact situation. You cannot have a quorum of the committee in the House unless the House is sitting.

Do you not agree to that?

Mr. BLACKBURN. That is our usual experience.

The CHAIRMAN. We did not contemplate this at all. But this will allow you at the best or the worst-and I think it is the best-each one of you will be allowed to file your statements and to file any comments that you want to make. We cannot hear everybody today, but then, with the understanding that before we write the bill up, before we report the bill, we will give you an opportunity to be heard before this committee or to file a supplemental statement, whichever you desire to do, we are not going to foreclose you. We are going to give you a fair chance to be heard. With that understanding, we will ask you to file your statements and be brief, but bring your points out. Mr. Roy-where is Mr. Roy? All right, would you take a seat over here. You have your place marked over here, Mr. Roy.

STATEMENT OF HON. WILLIAM R. ROY, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF KANSAS

Mr. Roy. Thank you, Mr. Chairman.

Distinguished members of the committee, I am William R. Roy, Representative, Second District, Kansas, and I appreciate the opportunity to be here.

Everybody knows, Mr. Chairman, that over the past decade there has been a great increase in the cost of health care services. There has been an increase in expenditures on many occasions, rather than just an inflation in prices.

It was not surprising, however, that in November of 1971 the administration identified health services as a severely inflationary sector of the economy, and so established a special committee to develop a program for cost containment in that sector. A special committee was also established to develop a plan for the construction industry. That health program did not succeed in significantly affecting health services cost escalation. From November 1971 to November 1972, health services costs increased 10.3 percent. In July 1973, a second special health services committee was named. This committee, after extensive deliberations, developed a special program, phase 4 for health services, the regulations for which were first published on November 7 of last year.

It is this program and these regulations with which I am concerned today. The phase 4 regulations for health services are not a mere extrapolation of general economywide regulations to the health services sector. They are, in fact, a separate program unto themselves, the goal of which is the systematic reorganization of our health services system. It is a separate program which Mr. Stein states will continue after economywide regulation has been eliminated.

Perhaps of greater importance, is the fact that it is a separate program, a permanent program, which is not coordinated with other programs established by the Congress to control health services costs. It is a program whose administration is, with few exceptions, incompetent to deal with as complex an area as health services. Coordination and competence must be part of any program to control health care

costs.

Mr. Chairman, there is no doubt, in my mind at least, that there must be continuing efforts to constrain the increase of health care costs. I do not believe that is the issue. I think the real issue, the real question is, What constraints? The questions are how are these constraints to be administered and by whom are they to be administered.

If this administration agrees that a special program to control health services costs is necessary, I would invite it to submit the provisions of such a program to the Congress, so that we here, and the people of the country, can consider in detail such a program.

Until such time, I would request and urge the Banking and Currency Committee to include three provisions in any extension of the Economic Stabilization Act-and I want it stated for the record that I have no conviction whatsoever that the Economic Stabilization Act should be continued in any form. But if indeed the Economic Stabilization Act is extended, I would like to see the inclusion of these three provisions:

No. 1: Any regulations of the health services sector which are in addition to, or significantly different from, regulations which have been established for the general economy should be administered by the Department of Health, Education, and Welfare. The goal in saying this is, I think, that such a program should be coordinated and it should be competent.

No. 2: Any changes in the regulations for the health services industry should be submitted 60 days before the implementation of such regulations to the House Subcommittee on Public Health and Environment of the House Interstate and Foreign Commerce Committee and to the Subcommittee on Health of the Senate Committee on Labor and Public Welfare. The goal here is to coordinate any such proposed programs with programs already in place.

Finally, the Secretary of HEW and the Administrator of the Cost of Living Council should be required, 60 days after the enactment of any legislation to extend the Economic Stabilization Act to submit a report to the House Interstate and Foreign Commerce Committee and the Senate Labor and Public Welfare Committee, describing their proposed program for the control of costs in health services. The goal in this regard is again coordination.

Over the past decade the costs of health services have increased dramatically. Again I would like to emphasize that this is primarily because we are providing more units of care as well as more expensive units of care. In other words, we are talking about an increase in expenditures, and I do not think there is any question that some program or some effort is needed to contain these costs.

I only ask you, this distinguished committee, in any extension of the Economic Stabilization Act, to require the administration to work with the Congress, not independent of the Congress, to develop any program to constrain health care costs. I think we must have a coordinated and a competently administered program if we are going to deal successfully with these problems.

I thank you, Mr. Chairman, for the privilege of being before you today.

Mr. GETTYS [presiding]. Thank you, Mr. Roy, the distinguished Member of Congress from Kansas. We are always delighted to hear from you and appreciate your time taken here. You have your statement, I believe. Would you like it submitted for the record?

Mr. Roy. Yes.

[The prepared statement of the Honorable William R. Roy follows:] PREPARED STATEMENT OF HON. WILLIAM R. ROY, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF KANSAS

Mr. Chairman, over the past decade, there has been a great increase in the cost of health services. The total cost of health services increased from $39 billion in 1965 to $105 billion in 1973. The percentage of the GNP spent for health services increased from 5.9% in 1965 to 7.7% in 1973.

It was not surprising in November of 1971 that the Administration identified health services as a severely inflationary sector of the economy, and established a special committee to develop a program for cost containment in that sector. Health services was one of two such areas; the other was construction.

That program did not succeed in significantly affecting health services cost escalation, however, for from November 1971 to November 1972, health services costs increased 10.3%. In July 1973, a second special health services committee was named. This committee, after extensive deliberations, developed a special program, Phase IV for health services, the regulations for which were first published on November 7, 1973.

It is this program, these regulations, with which I am concerned today. For the Phase IV regulations for health services are not a mere extrapolation of general economy-wide regulations to the health services sector. They are, in fact, a separate program unto themselves, the goal of which is the systematic reorganization

of our health care services system. It is a special program which Mr. Stein states will continue after the economy-wide regulation has been eliminated.

Of greater importance, it is a separate program, a permanent program, which is not coordinated with other programs established by the Congress to control health services costs. And it is a program whose administration is, with few exceptions, incompetent to deal with as complex an area as health services. Coordination and competence must be part of any program to control health care costs.

Mr. Chairman, there is no doubt that there must be continuing efforts to constrain the increase of health care costs. That is not an issue. The question is what constraints. The questions are how are these constraints to be administered and by whom.

If this Administration agrees that a special program to control health services costs is necessary, I would invite it to submit the provisions of such a program to the Congress; so that we here and the people of the country can consider the details of such a program.

Until such time, I would request and urge the Banking and Currency Committee to include three provisions in any extension of the Economic Stabilization Act:

1. Any regulation of the health services sector which is in addition to or significantly different from regulations which have been established for the general economy should be administered by the Department of Health, Education, and Welfare. The goal here is both coordination and competence.

2. Any changes in the regulations for the health services industry should be submitted 60 days before the implementation of such regulations to the House Subcommittee on Public Health and Environment of the House Interstate and Foreign Commerce Committee and to the Subcommittee on Health of the Senate Committee on Labor and Public Welfare. The goal here is coordination.

3. The Secretary of HEW, and the Administrator of the Cost of Living Council, should be required, 60 days after the enactment of any legislation to extend the Economic Stabilization Program, to submit a report to the House Interstate and Foreign Commerce Committee and the Senate Labor and Public Welfare Committee, describing a permanent program for the control of costs in health services. The goal here is again coordination.

Over the past decade the costs of health services have increased dramatically. There is no question that some program to contain these costs is necessary. I only ask that you, in any extension of the Economic Stabilization Act, require the administration to work with the Congress, not independent of it, to develop a program—a coordinated and competently administered program-to deal with these problems.

Mr. Roy. I have some additional material, a release from the Cost of Living Council news, Dr. Dunlop's health testimony of March 6, 1974, which I would like to have included in the record.

Mr. GETTYS. Without objection it will be put in the record.

Mr. Roy, we thank you for taking your time to appear before the committee. Mr. Roy is one of the few Members of Congress, I think the only one, who is both a lawyer and a doctor. I have a very bad cold this morning.

Do you have any recommendation or prescription? [General laughter.] Mr. Roy. I think a good one. When I was in medical school there was a remedy, Mr. Chairman. They said you were to hang your hat on the bedpost, take a good bottle of bourbon and drink until you see two hats. Sleep until you wake up and your cold will be gone. [General laughter.]

Mr. GETTYS. Thank you very much, Dr. Roy, for coming.

I believe the next gentleman on the paper would be Dr. Sammons.

STATEMENT OF JAMES H. SAMMONS, M.D., CHAIRMAN, BOARD OF TRUSTEES OF THE AMERICAN MEDICAL ASSOCIATION; ACCOMPANIED BY RUSSELL B. ROTH, M.D., PRESIDENT OF THE AMERICAN MEDICAL ASSOCIATION

Mr. GETTYS. Dr. Sammons is chairman of the board of trustees of the American Medical Association.

Dr. Sammons, we would like you to submit your statement for the record in view of the circumstances this morning. My good friend from Georgia, Mr. Blackburn, so well stated, the House was expected to be in session today, but is not. It being an election year, most of the Members when they can get away go back to their districts, and that explains the poor attendance today. However, your statements will be in the record and they will be available for the Members and their staff to study, and your comments will be given every consideration, I am certain, by every member of this committee.

Would you like to submit your statement for the record and briefly summarize it?

Dr. SAMMONS. Yes, Mr. Chairman. We would be most pleased to do just that, recognizing that the demands on your time are great today,

too.

Dr. SAMMONS. Dr. Russell B. Roth, who is president of the American Medical Association, and I are pleased to be here.

Mr. GETTYS. Dr. Roth, we are pleased to have you.

Dr. SAMMONS. We are delighted to submit this statement. We would like to unequivocally let the record reflect that we are opposed to the continuation of the economic stabilization program. We concur with Congressman Roy in his comments that the behavior of the Cost of Living Council to date has been totally discriminatory. It has been arbitrary and capricious. They have exceeded the law in almost every direction as it applies to health services.

In addition to that, I would like to very forcefully point out to the committee that in our judgment the Cost of Living Council, by their capricious activities, poses a very grave threat to the quality and availability of medical care in this country.

I would also advise the committee that we feel so strongly that for the first time in the 126-year history of the American Medical Association we have filed suit in Federal district court for relief from the arbitrary and capricious activities of the Cost of Living Council, and that suit is now before the courts.

Dr. Dunlop, in presenting the administration's proposal to you gentlemen, has said that the administration wants these controls continued only until a national health insurance program is devised by the Congress, and one presumes from his comments that he then expects the national health insurance program to take over where the ESP has stopped. We feel that that is a most inappropriate manner in which to consider the problems of health care costs in this country as they relate to the rest of the economy. We certainly do not agree with the position that the administration has taken or that Dr.