The present Federal Hospital Act-Hill-Burton-has operated efficiently and has been sufficiently flexible to meet the varying needs of the various States.

It should be continued without change and any expansion of facilities or new facilities for providing additional medical care should follow closely the principles and plans of operation of the HillBurton Act.

Now, I suppose you have reasonably full information, but I would like to read in exhibit A, 2 or 3 paragraphs:

The commission's overall activities for the succeeding 7 years to June 30, 1954, have involved the encumbrance of more than $75 million. The commission's expenditures for the administration of this program has averaged less than 1 percent of the encumbered funds.

The commission, since July 1, 1947, has sponsored 169 construction projects, of which 78 were local general hospitals, 44 new hospitals, and 34 additions to existing hospitals; 36 nurses' residences to serve hospitals and 47 health centers to provide quarters for the activities of county health departments. The 78 bospitals will serve local or county communities, and they will provide 4,647 new patient beds. The 36 nurses' residences will provide 1,939 new beds for nurses. Eight of the 169 projects are State-owned hospital facilities.

As stated, the State independently contributed liberally to enlarging the facilities for mental and tuberculosis hospitals.

They have provided 627 new beds for patients. In all, 5,274 new patient beds have been provided or contracted for.

The legislatures of 1949 and 1951 appropriated the funds necessary to cover the cost of State-owned hospital construction, including the 400-bed teaching hospital on the university campus.

I think there is some repetition there.

The commission's construction program during 7 years to June 30, 1954, has required the encumbrance of $73,967,291, of which $15,040,950.18 was supplied by the State, $26,850,273.66 by the United States Government, and $32,076,067.16 by the local authorities. The construction and equipment of hospital and healthcenter projects has, of course, been the commission's major activity.

Then I describe some needs that represent in the State, we believe, about 40 percent of the facilities under the Hill-Burton Act, somewhere between 50 and 60, and it leaves yet to be met a need for at least 40 percent of the program.

Senator PURTELL. Senator Hill has a question, I believe.
Senator HILL. Excuse me.

Your figures are most interesting. They show that your State and local communities have put up about $2 for every $1 of Federal funds, roughly speaking; is that right?

Dr. FERRELL. That is correct, and this has been a popular program. It is not over 60 percent complete; and while we strongly favor these additional projects, we would deplore any restriction in the continuation of a program that is a going concern, that is not yet completed to at least 40 percent.

The final paragraph of that exhibit states:

In review, it may be said that, although gratifying progress has been made in North Carolina in meeting the need for hospital facilities, a large part of the neel has not been met. Accordingly, there will continue for many years a large need for more and better hospital facilities.

Now, with regard to the bill about which you are having the hearing today, I will state very briefly with reference to pending Senate hill 2758, identical or similar to 8149 in the House, I can report that

in North Carolina we are interested in all of the proposals, and particularly in the $2-million appropriation for survey and planning. That is, we need more money and that will help us to get it. An intensive study of the existing facilities and those needed for each of the proposed four categories of facilities included in the proposed act will require considerable study.

The formulation of new programs will require time, as emphasized by Senator Hill.

Time will be needed for surveys.

Time will be needed for formulating programs and construction standards.

Sponsors must be found who will be able and willing to finance the construction, equipping, staffing, and operation of the proposed facilities.

Chronic diseases hospitals have been eligible for aid for 7 years in North Carolina, but sponsors have not come forward. This may be due largely to the fact that the indigent rate among the chronically ill will be high and funds with which to pay hospitals for their care are not yet available.

Public funds toward the cost of operating chronic diseases hospitals will be necessary.

Nursing and convalescent homes have been opened in numbers in recent years in North Carolina. No provision for licensing them has been authorized. The medical care commission submitted a bill to the 1953 legislature requesting licensing authority for them. The measure was defeated.

Most of the nursing homes, it is believed, are housed in buildings formerly used as residences. They are usually owned and operated by nurses for profit. Few, if any, are publicly owned and few, if any, are nonprofit.

It is reported that many of the homes constitute fire hazards for patients.

Information is not available as to the quality of medical and nursing service that is furnished in the homes. Moreover, the extent is not known to which the chronically ill are cared for in the nursing homes.

Only experience will reveal the extent to which the local government or nonprofit associations will sponsor, construct, and operate nursing homes in North Carolina.

Diagnostic and treatment facilities for ambulatory patients represents a real need in many isolated rural communities in North Carolina. A few communities have financed such facilities. Moreover, many physicians own and operate such facilities, particularly in the more densely populated areas. A number of publicly owned clinics might be operated as outposts of hospitals.

The same can be said of treatment clinics for nonprofit hospitals, but there are a number of rural and isolated areas in the State needing such facilities where it will probably not be feasible to have them affiliated or operated as a part of existing either publicly owned or nonprofit hospitals.

Again, there are a few small communities having populations ranging from 6 to 10 thousand-a few of them are counties-that cannot separately support hospitals and, yet, clinic affiliations with hospitals in neighboring counties may not be feasible.

46293-54-pt. 1—9

The nonprofit community clinic will facilitate the location of physicians in rural areas in North Carolina.

I might mention here that many of these rural communities that formerly had physicians don't have them any longer. They have tended to settle in the larger cities and towns where there are hos pital facilities.

They start out and try to attract physicians. The young physician, who is just finishing his internship, is probably in debt. He wouldn't have money with which to build or equip these centers. If the community can own the facilities, they are in a position to invite a resident or an intern to come in and start practice without having available a large amount of capital.

We have many communities in which this type of facility, affiliated where feasible with existing hospitals, is greatly needed.

The rehabilitation facilities have been operated to some extent in North Carolina. I think the State department of education is interested, but no survey or study has been made by the medical care commission as to need.

While this survey and planning regarding the four categories of facilities is carried out, funds should not be reduced for meeting the need of additional local general hospitals and health centers, aid for which has been provided under the Hill-Burton Act.

I might suggest while all these facilities are needed, as has been indicated for some time in the formulation of plans and the making of surveys, there might possibly be some discretion within the 50 million plus $62 million on the part of the Department of Health, Education, and Welfare for the allocation of funds where they are most needed and where the State and local communities are ready to use them, and in the meantime the information will be developed with regard to the additional facilities, where they are needed, and where suitable sponsors for the buildings, maintenance, and operation will be found.

We have in this exhibit a map showing the location by counties of the various projects.

We think we have a unique system in North Carolina of a slidingrule requirement as to the participation of communities based on their economic resources.

That is included as the last sheet, and we have included in our record a record of the 46 beds that operated during 1953.

That constitutes my statement, Mr. Chairman.

Senator PURTELL. I want to say your exhibits will appear in the record after your testimony.

Senator Hill, have you some questions?

Senator HILL. Let me ask you this, Doctor: You have done a fine. job down there in North Carolina. You have done one of the very finest jobs of any State in the United States. Speaking of clinics, I wondered whether or not, under the existing law-and, as you know, the law says:

The term "public health center" means a publicly owned facility for the provision of public health services, including related facilities such as laboratories, clinics, and administrative offices, operating in connection with public health

centers.

I wondered if you tried in any way to set up one of these clinics out in any small community.

Dr. FERRELL. Do you mean a public health center or do you mean a diagnostic and treatment clinic?

Senator HILL. Well, I think that word "clinic," as you and I know, is a pretty broad term, isn't it?

Don't you conceive of it as a pretty broad term?

Dr. FERRELL. Yes.

Senator HILL. I wondered if you had tried that.

Your State and my State are very much akin. We have, as you know, many rural areas and many communities where we have not had hospitals in the past, where people have had to come to the larger cities and large communities for diagnosis and for treatment and for

care.

Is that right?

Dr. FERRELL. Senator, the philosophies over the country on that question vary. There are those who believe the hospital and health department ought to operate under the same roof, and there are those who believe they are both essential to the community welfare, but that they are so different in character that the attempt to merge them will usually not be successful.

In four small hospitals we built facilities for the health department within the hospital, and it hasn't worked out.

The thing that we have tried to do-we haven't made it mandatory-is to acquire adequate land for the hospital that will take care of the hospital, the nurses' residence, the health center and any future needs, so that they will not have to move with the growth of these facilities; and we find it then pays us to have the hospital and the health center on the same site, but not necessarily under the same administrator and not necessarily under the same roof. Then when the heads of those facilities see fit to work together, they can; but if they see fit not to do it, each one can operate separately and perhaps efficiently.

Senator HILL. Wouldn't you say certainly in a small community it is very advantageous to do what you suggested you are seeking to do in North Carolina-put your health activities pretty much on the same site, not necessarily always under the same roof, perhaps, but put them together on the same site?

Dr. FERRELL. There are definitely advantages in the transfer of personnel from one activity to another-nursing and medical staffing. There would be advantages in the diagnostic laboratory service and in the X-ray services, and it would permit some personnel to serve in a dual capacity, and would be in the interest of efficiency and economy. Senator HILL. I judge from your testimony that if you earmarked you wouldn't make that earmarking too rigid or lasting, so to speak; is that correct, that is, in earmarking funds for some particular facility or particular purpose?

Dr. FERRELL. Well, you have a going program. It has been most remarkably successful. Having had some familiarity with the country before I went back to North Carolina, I know the difficulties of getting a single bill that can operate in all the States under their varying conditions. I know of no legislation which has come so near meeting all the requirements as the Hill-Burton Act.

Senator HILL. If that be true, wasn't it because we wrote it for administration at the State level, rather than at the Washington level? Dr. FERRELL. I agree.

To get back to your question, I think too rigid compartmentalization of funds, where you have got varying conditions, would probably not be desirable.

I think it is a fine program, but I do believe that some administration, some discussion by the administration, as to flexibility to carry forward the type of work and program most needed and for which the people are ready and willing to finance, would be desirable.

Senator HILL. Doctor, may I say this: I have had an opportunity to observe your work in North Carolina ever since the passage of this act and, as I said before, you have done a wonderful job in North Carolina, and I know you have been the guiding spirit there. You have certainly been a consecrated man, giving of your time and your efforts and of your great ability and your life to try to provide better health for the people of North Carolina.

Dr. FERRELL. Thank you, sir. It has been a great deal of fun for an old man.

Senator PURTELL. Doctor, won't you help us a bit?

I want to subscribe to what my colleague, Senator Hill, said. I read your record, and it is certainly an outstanding one.

I think you can be of great help to us because of your devotion to this very thing in perhaps elaborating on part of your testimony, in which you commented on diagnostic and treatment facilities, and you mention, Doctor, and let me quote:

A number of publicly owned clinics might be operated as outposts of hospitals. The same can be said of nonprofit hospitals.

But you go on to say this:

However, there are many areas needing diagnostic and treatment clinics where they will not become parts of hospitals.

That is a problem we have here, about which we are trying to get all facets, and if you could elaborate on that a little bit, as to what your idea is, it would help us.

How would we do it?

What are you suggesting we do?

Dr. FERRELL. I think you should have competent personnel, which the Government has, and I think that personnel should have some discretion in the adaptation of the program to meet the needs as they are found to exist on the basis of these studies and surveys.

I think it will be very difficult, if not impossible, to lay out a rigid formula and say that it is just this or that way, because our States and our communities differ, and I am sure it is the intent of this bill

Senator PURTELL. It may be a little bit unfair to ask this question. but you can help us so much because your experience is so vast in this field: Can you help us to how you visualize these diagnostic treatment centers or these treatment clinics could be set up where you say they would not become a part of a hospital?

What do you visualize, Doctor?

I realize it is unfair, in a way, to ask you to answer this without giving it much thought.

Dr. FERRELL. No; nothing is unfair when you want to get correct information.

I visualize, for example, Jones County, which has a heavy bonded indebtedness. It couldn't sell bonds if they were voted. They have about 10 or 12,000 population. They used to have 3 or 4 physicians