ticular type of coverage for their employees. States are fully capable of handling such problems. It is inconsistent to endorse voluntarism and then subscribe to an elaborate detailed mechanism of compulsion. Compulsory politicalized medicine is too expensive in dollars and in bureaucratic inroads against individual liberty.

Prepaid per capita group practice, misleadingly termed Health Maintenance Organizations, is merely a part of the drive for compulsory politicalized medicine and should not be subsidized and controlled by the Federal Government.

Personally, I want my doctor to have a stake in my welfare undiluted by any conflicting loyalty or subservience to Government agents.

The devices of Government dictation and control, deceptively referred to as utilization review and professional standards review organization, are against the interests of patients and physicians alike and should be eliminated.

The United States should build upon the knowledge available from past experience in this country and abroad where the evidence is clear that compulsory politicalized medicine contributes to inflation. And mark you well, inflation can destroy our system in the United States as it has been used destroy other free choice systems in other areas of the world.

You, the Members of Congress, have the power to protect liberty and justice in America, but the question is, "Will you be statesmen enough to do it in the face of the sophistry, self-pity and clever efforts to further plunder the people in the disguise of being a political Santa Claus?"

Thank you.

[The prepared statement and appendix follow :]

STATEMENT OF DONALD QUINLAN, M.D., CHICAGO, ILLINOIS

I thank this Committee for providing the opportunity to give you my views on so-called National Health Insurance-which, of course, isn't insurance, but a governmental taxation and control scheme.

I am Donald Quinlan. I'm engaged in the practice of private medicine in Chicago, Illinois. I was educated in Ireland, England and Switzerland, and served from 1948 to 1953 in general practice under the British National Health Service. I emigrated to the United States in 1958. Since then I have obtained additional resident training, and United States citizenship. I have practiced in Chicago since 1960 as a specialist in internal medicine. My professional time is totally devoted to the ethical care of patients, and defending the right to such practice.

After reviewing the debate in this country on this subject, and considering my experience both here and abroad, I have decided to discuss the subject under three headings:

I. Compulsory Politicalized Medicine-a description used in preference to the misleading and inaccurate term National Health Insurance;

II. Prepaid Per Capita Group Practice-used instead of the misleading label Health Maintenance Organizations (HMOs) used by its proponents;

III. Devices for Government Dictation and Control-which are deceptively referred to by their proponents and apologists as Utilization Review, and Professional Standards Review Organization (U/R and PSRO).

The latter two items are actually a part of the whole scheme to nationalize Medicine. But, since the HMOS and PSROS have been the subjects of separate acts of Congress-even though the planners see them as a part of the whole drive to politicalize medicine, and defraud free citizens of their birthright-they should be dealt with separately.

57-677-7529

I. COMPULSORY POLITICALIZED MEDICINE

Most so-called National Health Insurance proposals both here and abroad-in non-communist countries at least-are based upon the following assumptions:

1. That ordinary law abiding citizens who are competent to vote and make choices among competing candidates for public office are considered incompetent to make proper choices for their own medical care in a free market and, therefore, should be denied the right to choose where, when, how and by whom they should be treated.

2. That all citizens should have a part of their earnings forcibly taken from them by government and spent for medical care and that, as a consequence, government agents should directly interfere with the physician's judgment while he is treating the patient.

3. That government agents are more capable and competent than ordinary citizens and even more capable and competent than the attending physician who supplies the service.

4. As a corollary, that where patients are at liberty to select the physician and hospital of their choice both the physician and hospital will unethically, inappropriately and unnecessarily provide medical care that the patient does not need. 5. That the normal behavior of physicians now caring for patients should be changed by government agents so that doctors' actions uniformly conform to undefined behavior goals of these government agents.

6. That the most important element of a person's health is the kind of medical care he receives.

7. That everyone has a definable need for medical care that government can identify and provide at reasonable cost and satisfaction to patients if only physicians and other suppliers of services will subordinate themselves to dictation and control through mechanisms devised and employed by a centralized bureaucracy.

8. That if government controls the provision of medical care, quality will rise, costs drop, and more satisfactory care will be available for everyone.

I not only challenge these assumptions as being false and unwise, but also challenge the bureaucracy and its supporters in the legislature to clearly delineate where the authority exists in the United States Constitution for such unreasonable and arbitrary dictation and control. I mean by this that the proponents of such a program have the burden of proving that it was the intention of the Framers of the Constitution to deny patients the freedom to choose their own doctor or hospital.

With respect to people's capabilities, obviously, if citizens are competent to vote in a society that presumably is based upon self-government with emphasis on the self, then they should be considered competent to obtain their medical needs on their own initiative without governmental paternalism and interference.

Neither the record in this country nor any other country will sustain the assumption that government agents are better qualified to determine the medical needs of citizens than the citizens themselves. For any person who wants to seriously examine whether politicalized mericine in any form is better or more desirable than free-choice medicine, he should read the book "Medicine and the State" by Lynch and Raphael who have done the most objective job of examining the claims of the proponents of politicalized medicine and thoroughly discrediting it as a desirable method of meeting the needs of patients.

The proponents of subsidy and control habitually accuse physicians of unethical practice, such as unnecessary surgery on a wholesale scale. The evidence does not support these charges. In fact, it has become an accepted tactic of the government interventionists to snatch figures out of the air with no basis whatever in fact and to otherwise falsify the record simply to discredit doctors and create a false picture of a need for government action.

The changing of behavior of physicians as a goal of the bureaucrats may come as a surprise to some legislators, but those of you who don't think this is substantiated should read the Brookings Institution Report of 1972 entitled "Setting national priorities-the 1973 Budget” and, particularly, Chapter 15 entitled "A New Approach to Priorities" in which it is arrogantly assumed that it is the proper province of government bureaucrats and their allies in the academic community to use government force to change the behavior of everyone. If anyone is still in doubt, I commend to your attention the draft of the PSRO Program Evaluation Plan" developed by HEW Bureaucrats. The idea, alien to America, to

use the power of government to force behavior changes is clearly set out in this document as a goal of the PSRO program.

Of course, it is obviously false that medical care is most important to health. Many people have lived to be 70, 80 or 90 years of age without having once seen a doctor. It is obvious that the most important factors for good health are food, water and air and ancestors with a history of longevity. It is also obvious that the ordinary individual can have much greater control over his health than can any private doctor at liberty to do his best for his patient or even more so than by a doctor smothered by government red tape and inhibited by bureaucratic interference. The health of millions of people who abuse their bodies and minds by excessive smoking, eating, drinking and by other intemperate actions is not going to be improved by politicalizing medicine. Likewise, the millions of injuries through automobile accidents will not be reduced by denying to the people free choice of physician or hospital or otherwise treating them as government wards as far as medical care is concerned.

The assumption that government is capable of defining medical needs and satisfying them is contrary to the experience of people who have tried to make socialized medicine work only to find that it is inherently unworkable. This false assumption and others I have mentioned will be further elaborated upon during the course of this discussion.

Cost

I suggest that the Committee should recognize that government cannot give everyone everything they want and that if it attempts to do so, it will surely decrease rather than increase what is available to sustain life, liberty and the pursuit of happiness.

The cost of politicalized medicine to government and the people is more than Congressmen should force their constituents to pay. And when their constituents find out the truth, they are going to rebel.

Not only is the cost of politicalized medicine in money too high but its price in denial of individual liberties is unconscionable. Most people in this country at lesast treasure liberty as highly as they do anything else. Liberty is severely impaired by politicalized medicine and the record shows that to be true. Let's first deal with the raw money or dollar cost of political medicine and see why the evidence shows that it is far, far too high.

Not only: (1) do the bureaucrats admit that political medicine is too costly but; (2) experience with Medicare and Medicaid since 1966 proves it, and (3) clearly the Kennedy-Corman bill will more than bankrupt the United States and the evidence is conclusive.

1. With respect to the bureaucrats admitting that political medicine is too costly, they have stated that "The Medicare and Medicaid programs are in serious financial trouble. The two programs are also adversely affecting health care costs and financing for the general population." Quite illogically they conclude that "Unless the rapid and continuing escalation in the costs of health care are moderated, the Congress may reasonably anticipate increasing pressures upon it to extend the Medicare and Medicaid programs." The absurdity of this is a horrible example of bureaucratic rationale. (See Senate Committee Staff Report, Medicare and Medicaid Problems and Issues, February 9, 1970, Pages 1 and 2.) The bureaucrats attempt to lay the blame on physicians and hospitals but the real blame lies upon the heads of the politicians who opened Pandora's box by promising millions of people medical care at less than the market cost. Any time any group of people are promised something at less than cost at the point of consumption, the demand is infinite.

The Honorable J. Enoch Powell, British Minister of Health 1960-1963, who tried to make the British National Health Service work, said in his book "A New Look at Medicine and Politics" that "Under the National Health Service care is rendered free to the consumer at the point of consumption. Consequently supply and demand are not kept in balance by price. Since, therefore, resources are limited, both theoretically and in practice at any given time, or the demand is unlimited, supply has to be rationed by means other than price. The forms of rationing adopted deliberately or by default, and usually unrecognized, certainly unproclaimed as such, are among the major irritant ingredients in Medicine and Politics."

He goes on to say that "Common thought and parlance tend to conceal or deny the fact that demand for all practical purposes is unlimited. The vulgar assumption is that there is a definable amount of medical care 'needed,' and that if that 'need' was met, no more would be demanded. This is absurd.”

He goes on to explain why. "There is a characteristic of medical care that makes its public provision exceptionally problematic. The demand for it is not only potentially unlimited; it is also by nature not capable of being limited in a precise and intelligible way.

He then adds that: "The National Health Service, then, must and does apply covert rationing devices in order to limit demand to the actual amount of the supply."

Attached are pertinent excerpts from his book which are medically and economically unassailable. The bureaucrats in the United States are trying to make it appear that the doctors are responsible for the costs of the actions of the politicians. In Britiain, the government is rationing medical care by making patients wait for the promised services. The bureaucrats here are trying to tell the patients that they can have whatever their heart desires and that if they don't get it, it is the doctors who are keeping them from getting it. This is what all of the elaborate bureacuratic machinery with respect to utilizaion review and PSRO is all about. It is impossible for an ethical doctor to put the patient's interests first and, at the same time, be an agent of government responsible for artifically holding down demand. It is Congress that is at fault for having promised to give patients something for nothing. This causes the well and the worriedwell to usurp physicians' time that should be devoted to the truly ill. Doctors are not policemen and when they try to exercise the role of policemen they are no longer doctors.

2. Experience with Medicare and Medicaid since 1966 shows that political medicine is too costly. What is the evidence?

First and foremost, the bureaucrats solemnly assured the Congress, (the Ways and Means Committee, in fact) that hospitalization under Medicare the first year would cost $900 million.' Actualy, the first year cost was $2.7 billion. They pledged that it would cost no more than $1.4 billion the fifth year. Actually it cost $5 billion.12 They said that after the 10th year it would cost $1.7 billion and it is actually costing $10.9 billion. The first year cost was three times as much as bureaucrats said it would be and the 10th year cost has soared to over six times as much as they promised.

These expenditures are absolutely unconscionable and indefensible. But it is unconscionable, irresponsible and wrong to place the blame on the doctors; it is wrong to place the blame on the hospitals. The proper place to fasten the blame is on the Congress and the bureaucrats who were instrumental in the enactment of the Medicare and Medicaid laws. Medicare and Medicaid have helped skyrocket HEW expenditures. HEW, in the fiscal year 1976, will spend over $118.4 billion. This is more than all of the spending for military defense. It is more than all the profits after taxes of all the corporations in the United States. It is more than all the personal savings of all the people in the country.

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The record shows that in 1974 federal spending for medicine and health was $28.35 billion and that was more than twice as much as the expenditures by the states. This is significant because responsibility as exists in government for the people's health which was properly delegated to it resides solely in the state and local governments and not in the federal government. But because this power has been usurped by the federal government, HEW expenditures have contributed mightily to inflation. A dollar that a person saved in 1940 is now worth only 24 cents. A dollar that a person saved in 1967 is now worth only 64 cents. This arithmetic of cost comes from government documents. This means that since 1940, over three fourths of the value of the dollar has been deceptively taken by government. And over one third the value of the 1967 dollar has thus been stolen from the citizen by irresponsible government. In 1940, 25% of everything everyone earned in the United States was taken and spent by local, state and federal governments.' That figure climbed to 48% in 1974.' The fact that this has been hidden from the people causes them to wonder why the price at the grocery store and at every other place where people buy things have gone up through the roof. The answer is that a tax on a tax on a tax, from the raw

1 Actuarial Study, No. 57 by HEW, July 1963.

2 U.S. Budget. Special Analysis, fiscal years 1975, 1976.

3 Survey of Current Business, April 1975.

Testimony of AAPS on the 1976 HEW Budget to House Appropriations. Subcommittee on Labor, HEW, May 14, 1975.

5 Social Security Bulletin, January 1975.

6 Calculated from Consumer Price Index. Bureau of Labor Statistics.

7 Statistical Abstract U.S. 1974; Survey of Current Business, February, 1975.

material through every stage of processing, is gouging everyone. Certainly, it is gouging the elderly, the widows who are living on fixed incomes and the poor who cannot vote themselves, as Congressmen have done, income which is protected from the escalation in inflation. The plunder through the Congress and Bureaucracy is scandalous and must stop.

The proposed Kennedy-Corman bill will drive this country into bankruptcy. The HEW bureaucrats who are for complete politicalized medicine for everyone in this country say that it will cost $129 billion. If we apply the understatement of the bureaucrats who promoted Medicare and Medicaid to this bureaucratic estimate of the cost of the Kennedy-Corman bill, it would probably cost the first year not $129 billion but $388 billion. This should be compared with the fact that during the current calendar year total federal expenditure for all purposes are only $209 billion. If the estimates of the bureaucrats for the 10th year for the Kennedy-Corman bill turn out the same as they did for Medicare, then the 10th year would cost $829 billion. These figures are so incomprehensible that they need to be translated. This is what you need to know and this is what your constituents should know-and to the extent that this information can be communicated accurately to the electorate, it will be done.

The present cost per family of four for all the expenditures now by local, state and federal governments and for private medical care, is $1,938 per year." The HEW estimate of the Kennedy-Corman bill would raise that the $2,400 per year. But if allowance is made for the understatement of the bureaucrats, on the same basis that they understated the cost of Medicare, then the first year of KennedyCorman would cost a family of four $7,136. Compare this with the average annual earnings of workers as of April, 1975—only $8,031. This is brankruptcy. John Maynard Keynes, a Fabian-Socialist economist whose disciples have misled the free world into destructive deficit government spending that has caused inflation to rage in Great Britain and threatens to destroy responsible selfgovernment in the United States, recognized, however, that inflation was a deadly trap. In his book, written soon after World War I, The Economic Consequences of the Peace, beginning on Page 235, he said:

"Lenin is saidto have declared that the best way to destroy the capitalist system was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens."

Then, he goes on to say:

"Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose."

According to the Budget of the United States, the public debt of the United States at the end of the fiscal year is expected to reach an incredible $596 billion.10 Incredible as that is, you should realize that since the Department of Health, Education and Welfare was organized as such in 1958, its expenditures have totalled a mind-boggling $682 billion." It is instructive in the light of Lenin's drive for state monopoly capitalism that the Department of Health, Education and Welfare publishes from time to time charts showing the expansion of public spending and the complimentary contraction of private spending for health care. They point out clearly the inexorable direction in which more government spending and control is leading us.

12

If anyone doubts that this course will bankrupt us, then I suggest he study the evidence very carefully because it is abundantly clear that government plunder through medicine and other devices must stop if we are not to destroy liberty in this country.

There are those who scoff at the possibility of the United States government going bankrupt. Past apologists for the bureaucratic excesses of New York City scoffed at it going bankrupt, but it is.

Government after government is beginning to realize that government spending must be controlled. The budget deficit which this country now faces of $60 billion for this year alone is an outrage. Stoking the fires of inflation by bureaucrats and then passing laws to insulate the bureaucracy and the Congress from the direct effect of the inflation by an automatic cost of living escalator, could be the spark

8 H.E. W. Testimony, July, 1974.

9 Survey of Current Business, April, 1975.

10 U.S. Statistical Abstract, 1974.

11 Ibid. No. 10; Library of Congress, U.S. Budget, fiscal year 1976

12 The Law by Bastiat.