Mr. THOMAS. It is merchant seamen themselves, Coast and Geodetic Survey, Coast Guard, and Public Health Service personnel. What is the total number of them to occupy your 5,000 beds?

Dr. MILLER. We have approximately 35,000 Coast Guard personnel and dependents. I would have to supply you with the figures for the rest of it, sir.

CONTRACT HOSPITAL COSTS

Mr. THOMAS. Your G.M. & S. hospitals are costing you about $27 or $28 and your contract hospital for dependents is less expensive. It used to be $55 a day. Now it is down to $52.50 a day.

Dr. MILLER. That is the revised estimate.

Mr. THOMAS. Do you need this service? You have 75 dependents in there. Can't your own 5,000 beds in 15 locations take care of your own personnel?

Dr. MILLER. We do not have control over these patients who are permitted to go to these hospitals. In order to go to the contract hospitals the dependents must get an availability statement from one of the people of the service which they represent.

Mr. THOMAS. Do you ever turn anybody down when they do not like your hospitals and they want to go to another one?

Dr. MILLER. Yes, sir.

Mr. THOMAS. You have a right to incur a deficiency here. All you can do is pick up the check?

Dr. MILLER. Yes, sir.

Mr. THOMAS. You gentlemen were in favor of this act when it was passed, were you not?

Dr. MILLER. Yes, although we only constitute about 2 percent of the dependent medical care program.

Mr. THOMAS. That is your contract, your private hospitals. Then you go into Federal hospitals-Veterans', Army, Navy, and what have

you.

Mr. KELLY. Army, Navy, and Air Force.

Mr. THOMAS. You have a setup here for $32.25 per day. Why is that figure so high when the highest price in these hospitals is around $25 a day?

Mr. KELLY. It relates to a study of the Bureau of the Budget. It is primarily because obstetrics are more costly for a short stay than the average patient.

Mr. THOMAS. That is for dependents in your Federal hospitals. Where do the retired personnel go? You have a unit cost per day of $23.

Dr. MILLER. These are in Federal hospitals only, sir. They are not eligible to go to contract hospitals. It is only in the Federal hospitals.

Mr. THOMAS. You cannot take care of these in your own hospitals? Dr. MILLER. Yes, sir. We take care of them in our hospitals but they are also permitted to go to any of the Armed Forces hospitals. Mr. THOMAS. Doctor, we understand that.

The program cost for this year is $2,675,000?
Mr. KELLY. Yes, sir.

REASON FOR INCREASED NUMBER OF PATIENTS

Mr. THOMAS. By virtue of that you increased bed rate occupancy from 144 per day to 172.

Dr. MILLER. Yes, sir.

Mr. THOMAS. What reason did you give for that increased sickness?

Dr. MILLER. There was a certain amount of liberalization of the restrictions that were placed by the Department of Defense on the dependents going into contract hospitals. There were certain medical conditions that they now permitted to be treated in these hospitals that formerly were not.

CONDITIONS FOR USE OF CONTRACT HOSPITALS

Mr. THOMAS. When was the certificate granted to one of your personnel to use outside facilities, contract facilities, and not your own facilities? Under what condition is that certificate granted? Is it a matter of right? Can they go to another hospital and you pick up the

bill?

Dr. MILLER. In the matter of retired personnel, if they are in an area where we do not have one of our hospitals but there is a hospital, another hospital of the armed services located there, they are permitted to go to that hospital, which, of course, they prefer to do rather than travel several hundred miles.

Mr. THOMAS. What about your actual active dependents and your active personnel?

Dr. MILLER. The dependents and active personnel for the most part do utilize our hospitals but we have personnel and officers located in many areas of the United States where we do not have hospitals. Mr. THOMAS. What is the condition precedent, if you require one, before they can go into the outside facilities?

Mr. KELLY. The law and regulations provide that if the dependents are not residing with their sponsor, such as their sponsor being on oversea duty, that they can go to any hospital of their choice; if they are residing with their sponsor they must go to the nearest hospital, military or PHS hospital, and they are only given a certificate to authorize them to go into a contract hospital when it is determined that there are no facilities available. In connection with our hospitals, they might come to our hospital to get such a certificate because we have obstetric care at only one of our hospitals and if the problem was an obstetrical problem, they would have to be authorized to go into a contract hospital.

Mr. THOMAS. What did they do for the service before the act was passed in 1956? Did they have to pay for that service?

Dr. MILLER. Yes, sir.

Mr. JONAS. If the chairman will yield, he said in answer to your question the law and regulations—which is it, the law or the regulations?

Mr. KELLY. The law makes the prescription that I just gave, that the person who is not residing with his sponsor has this option by law. Originally the regulations of the Department of Defense, which were joined in with the Secretary of Health, Education, and Welfare, gave this option to everybody.

It was subsequently eliminated and the option now remains only as provided in the law and they may not-those that are residing with their sponsor by regulation may not go into a contract hospital unless authorized by the head of a hospital that there are not facilities available.

Mr. THOMAS. Do you mean to say that your hospitals all through the years before this act was passed did not do any obstetrical work? Mr. KELLY. Only one of our hospitals is accredited.

Dr. MILLER. The Staten Island, N.Y., and the New Orleans, La., hospitals provide obstetrical services.

AVERAGE DAILY PATIENT LOAD

Mr. THOMAS. There is a table that sets out the location of the hospitals and the number of beds in each hospital as of August 1. Give us your bed occupancy in each of your hospitals.

(The information requested follows:)

Average daily patientload, constructed bed capacity in PHS hospitals, and percent of occupancy, fiscal year 1961 and Aug. 2, 1961

1 The hospitals at New Orleans, La. and Staten Island, N.Y., are the only hospitals which provide obstetrical services.

Mr. THOMAS. How many vacant beds have you had in your hospitals in the last 2 or 3 days?

Dr. MILLER. It varies, sir. Many of our hospitals have far more patients than their constructed capacity.

Mr. THOMAS. You are a doctor, are you not?

Dr. MILLER. Yes, sir.

Mr. THOMAS. What is your field?

Dr. MILLER. My field is internal medicine.

Mr. THOMAS. Generally speaking, what is your bed occupancy, in

the hospitals?

Do you have that specific information?

Dr. MILLER. You mean the percentage of occupancy, sir?

Mr. THOMAS. Yes.

Dr. MILLER. In our neuropsychiatric hospitals it runs well over 100 percent of our constructed capacity but in our general hospitals it runs about 85 percent, I think, on an average.

Mr. THOMAS. You had better give us some information when you revise and extend your remarks. I am afraid you have a pretty high vacancy rate in the hospitals.

Mr. Rooney?

Mr. ROONEY. I have no questions, Mr. Chairman.

Mr. BOLAND. No questions.

Mr. THOMAS. Mr. Bow?

ESTIMATES AND APPROPRIATIONS, 1961 AND 1962, DEPARTMENT OF
HEALTH, EDUCATION, AND WELFARE

Mr. Bow. I would like to ask a general question, if I may, of the budget officer. What was the budget request for fiscal year 1961 for HEW?

Mr. KELLY. For 1961?

Mr. Bow. Yes.

Mr. KELLY. Just over $4 billion, as I recall it.

Mr. Bow. What was the actual amount appropriated by the Congress?

Mr. KELLY. About $4,280 million.

Mr. Bow. What was your budget request for fiscal year 1962 for HEW?

Mr. KELLY. It would be about $4,400 million.

Mr. Bow. What was actually appropriated?

Mr. KELLY. They have not completed the action yet.

The bill is in conference.

Mr. Bow. What is in conference now? What is the amount? Mr. KELLY. The House added a net of $45 million over the President's budget and the Senate added a net, I believe, of $260.5 million over the President's budget.

Mr. Bow. That is all. Thank you.

Mr. ROONEY. That is all in the area of public health, is it not? Mr. KELLY. It is largely in the area of public health.

Mr. BOLAND. Was a lot of it occasioned by changes in the law? Mr. KELLY. The figures I cited were not. The reason I explained it the way I did, the amount in conference is about $880 million, but a significant part of that is because of items that were sent up as budget. amendments to the Senate and not considered by the House.

Mr. JONAS. How much were you given for this program? Did the House or the Senate cut you?

Mr. KELLY. No, sir.

Mr. JONAS. They gave you the full amount requested for this?
Mr. KELLY. Yes, sir.

REASON FOR INCREASED COSTS FOR 1961

Mr. JONAS. What has happened in the meantime to cause you to revise your figures upward from 100 to 177, whatever it was?

Mr. KELLY. Mr. Jonas, this bill was passed and it authorized the provision of medical care for dependents through the whole hospital system of the Federal Government, military service and public health and in contract hospitals. The program is administered for all agencies by the Department of the Army and it is extremely difficult for us to estimate it and the best we can do is to provide an estimate and then come back and tell you what it is. It is an item over which we have no administrative control. The Surgeon General of the Army tells us how much bill we have incurred and we have to come back and tell you.

Mr. JONAS. You had to tell the regular committee. You told them one thing and now several months later you revise it upward. What has happened in 3 months?

Mr. KELLY. We have received information from-well this was not 3 months. This item was acted on by the Congress last July and this item relates to

Mr. JONAS. This is a supplment for the 1962 bill, is it not?

Mr. KELLY. No, this is a supplement for fiscal year 1961.

Mr. JONAS. You have incurred the deficiency?

Mr. KELLY. Yes, sir.

Mr. THOMAS, They can incur any amount. There is not a limitation. Mr. JONAS. This is an actual deficiency you have already incurred? Mr. KELLY. Yes, sir.

Mr. JONAS. Your estimate turned out to be low.

Mr. THOMAS. It runs about 6 months behind.

CONTRACT HOSPITAL COSTS PER DAY

Mr. JONAS. I want to be clear on one other thing. Do you mean that you pay on an average in contract hospitals $52.50 a day?

Mr. THOMAS. It was $55.

Mr. KELLY. This includes hospitalization, physicians' fees, and other professional service costs.

Mr. JONAS. For what average length of stay in contract hospitals? Mr. KELLY. Between 6 and 7 days.

Mr. JONAS. For an OB case?

Mr. KELLY. This is the average of all cases.

Mr. JONAS. What is it for obstetrical?

Mr. KELLY. I do not know.

Mr. JONAS. How does this compare with private hospitals?
Mr. KELLY. These are private hospitals.

Mr. JONAS. When they pay the bill themselves, I mean.

Mr. KELLY. What the Surgeon General of the Army has done is to make contracts with hospitals through such organizations as Blue Cross. Blue Cross for the most part serves as the agent to undertake or to arrange what the fees will be, the same as they pay on

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