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Considerations of both humanity and national self-interest demand that steps be taken now to improve this situation. Today, for example, we are spending three times as much in public assistance to care for nonproductive disabled people as it would cost to make them self-sufficient and taxpaying members of their communities. Rehabilitated persons as a group pay back in Federal income taxes many times the cost of their rehabilitation.

There are no statistics to portray the full depth and meaning in human terms of the rehabilitation program, but clearly it is a program that builds a stronger America.

We should provide for a progressive expansion of our rehabilitation resources, and we should act now, so that a sound foundation may be established in 19.55. My forthcoming budget message will reflect this ohjective. Our goal in 1955 is to restore 70,000 disabled persons to productive lives. This is an increase of 10,000 over the number rehabilitated in 1973. Our goal for 1956 should be 100,000 rehabilitated persons, or 40,000 persons more than those restored in 1953. In 1956, also, the States should begin to contribute from their own funds to the cost of rehabilitating these additional persons. By 1959, with gradually increasing State participation to the point of equal sharing with the Federal Government, we should reach the goal of 200,000 rehabilitated persons each year.

In order to achieve this goal we must extend greater assistance to the States. We should do so, however, in a way which will equitably and gradually transfer increasing responsibility to the States. A program of grants should be undertaken to provide, under State auspices, specialized training for the professional personnel necessary to carry out the expanded program and to foster that research which will advance our knowledge of the ways of overcoming handi. capping conditions. We should also provide, under State auspices, clinical facil. ities for rehabilitative services in hospitals and other appropriate treatment centers. In addition, we should encourage State and local initiative in the development of community rehabilitation centers and special workshops for the disabled.

With such a program the Nation could, during the next 5 years, return a total of 660,000 of our disabled people to places of full responsibility as actively working citizens. Construction of medical-care facilities

The modern hospital-in caring for the sick, in research, and in professional educational programs--is indispensable to good medical care. New hospital construction continues to lag behind the need. The total number of acceptable beds in this Nation in all categories of non-Federal hospital services is now about 1,060,000. Based on studies conducted by State hospital authorities, the need for additional hospital beds of all types-chronic disease, mental, tubercu. losis, as well as general--is conservatively estimated at more than 500,000.

A program of matching State and local tax funds and private funds in the construction of both public and voluntary nonprofit hospitals where these are most needed is therefore essential.

Since 1946, nearly $600 million in Federal funds have been allocated to almost 2,200 hospital projects in the States and Territories. This sum has been matched by over $144 billion of State and local funds. Projeets already completed or under construction on December 31, 1953, will add to our national resources 106.000 hospital beds and 464 public health centers. The largest proportion of Federal funds has been and is being spent in low-income and rural areas where the need for hospital beds is greatest and where the local means for providing them are smallest. This federally stimulated accomplishment has by no means retarded the building of hospitals without Federal aid. Construction costing in excess of $1 billion has been completed in the last 6 years without such aid.

Hospital construction, however, meets only part of the urgent need for medical facilities.

Not all illness need be treated in elaborate general hospital facilities, costly to construct and costly to operate. Certain nonacute illness conditions, includ. ing those of our hospitalized aged people, requiring institutional bed care can be handled in facilities more economical to build and operate than a general hospital, with its dingnostic, surgical, and treatment ennipment and its full staff of professional personnel. Today beds in our hospitals for the chronically ill take care of only 1 out of every 6 persons suffering from such long-term illnesses as cancer, arthritis, and heart disease. The inadequacy of facilities and services to cope with such illnesses is disturbing. Moreover, if there were more pursing and convalescent home facilities, beds in general hospitals would

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be pleased for the care of the acutely ill. This would also help to relieve some the serious problems created by the present short supply of trained nurses.

Phtsical rehabilitation services for our disabled people can best be given in bisquitals or other facilities especially equipped for the purpose. Many thousands out jeople remain disabled today because of the lack of such facilities and


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Mans illnesses, to be sure, can be cared for outside of any institution. For such
Das a far less costly approach to good medical care than hospitalization
tilld be to proride diagnostic and treatment facilities for the ambulatory
ferient. The provision of such facilities, particularly in rural areas and small
wated communities, will attract physicians to the sparsely settled sections
abere they are urgently needed.

I recommend, therefore, that the Hospital Survey and Construction Act be
Lineaded as necessary to authorize the several types of urgently needed medical
ar facilities which I have described. They will be less costly to build than
general hospitals and will lessen hte burden on them.
I prosent four proposals to expand or extend the present program:

(1) Added assistance in the construction of nonprofit hospitals for the
care of the chronically ill. These would be of a type more economical to
build and operate than general hospitals.

(2) Assistance in the construction of nonprofit medically supervised nursIng and convalescent homes.

(3) Assistance in the construction of nonprofit rehabilitation facilities for the disabled.

(4) Assistance in the construction of nonprofit diagnostic or treatment centers for ambulatory patients. Finally, I recommend that, in order to provide a sound basis for Federal assistwe in such an expanded program, special funds be made available to the States to help pay for surveys of their needs. This is the procedure that the Congress osely required in connection with Federal assistance in the construction of bospitals under the original act. We should also continue to observe the priniple of State and local determination of their needs without Federal interference

These recommendations are needed forward steps in the development of a sound
ircrum for improving the health of our people. No nation and no administra-
ton can ever afford to be complacent about the health of its citizens. While
continuing to reject Government regimentation of medicine, we shall with vigor
and imagination continuously search out by appropriate means, recommend, and
101 into effect new methods of achieving better health for all of our people. We
shall not relax in the struggle against disease. The health of our people is the
Topy essence of our vitality, our strength, and our progress as a nation.

Jorge that the Congress give early and favorable consideration to the recom-
Doradations I have herein submitted.

THE WHITE HOUSE, January 18, 1954.
Senator PURTELL. Mrs. Hobby, we will be pleased to have you
Mrs Hobby. Thank you, sir.
Mr. Chairman, before proceeding with my prepared statement, I
should like to introduce and identify for the record several officials
of the Department who are here with me this morning.
First may I present Mr. Nelson Rockefeller, Under Secretary of
the Department, and Mr. Roswell B. Perkins, Assistant Secretary
of the Department. Dr. Scheele, Surgeon General of the Public
Health Service and Mr. Arthur Kimball, Acting Deputy Director of
the Office of Vocational Rehabilitation, will participate in the pres-
entation of our prepared statement. Also present to assist in answer-
ing technical questions on the provisions of the bill are Dr. John W.
Cronin, Chief. Division of Hospital Facilities of the Public Health
Service, and Miss Mary Switzer, Director of the Office of Vocational

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Mrs. HOBBY. Mr. Chairman and members of the committee, I ap. preciate the privilege of appearing before you today in support of S. 2758, which was introduced by the chairman of your committee to implement one of President Eisenhower's principal recommendations for progressive health legislation. This bill relates to the construction of hospitals and related health facilities. Our testimony will also encompass the provisions of H. R. 8149, a bill passed by the House last week which is identical in most respects.

As your subcommittee chairman has indicated, the legislation you are considering this morning is part of an integrated health program proposed by the President in his special message to the Congress of January 18. The schedule of hearings arranged by your subcommittee will provide an excellent opportunity for thorough consideration of each proposal contained in the President's program.

The recommendation that the Hospital Survey and Construction Act be broadened is the first of these proposals which you have selected for discussion. The hospital survey and construction program, generally known as the Hill-Burton program, is one of the most successful health programs ever undertaken by the Federal Government in cooperation with the States. A large measure of credit for its success belong to your committee, which played such a prominent role in the enactment of the original Hospital Survey and Construction Act in 1916. The soundness of the program was reaflirmed by the Congress in 1919 when it expanded the program and in 1953 when it extended its duration through the fiscal year 1957.

The essential features of the Hospital Survey and Construction Act are well known to your committee. Briefly, the law provides that each State and Territory, as a prerequisite to obtaining Federal aid, shall prepare and keep current a survey of its existing hospitals and public health centers and of its needs for additional facilities. On the basis of this survey, the State develops a plan, or program, for additional construction where it is most urgently needed.

Out of such sums as are appropriated annually by the Congress, allotments are made to the States and Territories to assist in the construction of hospitals in four major categories-general, mental, chronic disease, and tuberculosis--as well as for public health centers.

Progress under the program to date has indeed been very satisfying. We can now report that 2.200 projects have been approved, utilizing $600 million of Federal funds and $114 billion of State and local moneys. A total of 106,000 hospital beds, 416 public health centers, and many related health projecis, such as nurses' training facilities

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and laboratories, are being added to our health resources. NevertheJums, there still remains much to be done.

Our greatest need today lies in the area of facilities for the chroniwilly ill. By far the greatest percentage of construction under the program thus far has been in the general hospital category. As a consequence there has been a national net gain in the number of keptable general hospital beds since 1948, when construction under the program commenced. During this same period, however, there has been a net loss in the number of acceptable hospital beds for the are of patients with chronic diseases, including cancer, arthritis and heart disease. Thus, as valuable as the present program is, it has not, to date. provided a balanced answer to our Nation's needs for hospital are health facilities.

Before turning to the provisions of S. 2758, Mr. Chairman, I should
like to ask Dr. Scheele to present some additional background infor-
mation in graphic form.

Senator PURTELL. We will be very happy to have Dr. Scheele do so.
I think, Mrs. Secretary, that it is auspicious that we are starting
the bearings on St. Patrick's Day. If we can do as well with heal-
ing programs as St. Patrick is reported to have done with the snakes,
we will have accomplished a great deal.
Senator Hill. Do you have a magic wand ?
Mrs. Hoper. This one works today, Senator.
Dr. SCHEELE. Mr. Chairman, members of the committee, Mrs. Sec-
retary: Mrs. Hobby has described to you some of the accomplishments
of the program under the Hill-Burton Act to date. She has referred
to the construction or approval of projects for adding 106,000 beds to
our Nation's bed supply as a whole.

This chart A shows how these beds break down into the 4 principal
categories provided for in the original act: 86,000 of them are general
medical and surgical beds; 11,000 are mental beds; 3,000 are chronic
beds; and 6.000 are tuberculosis beds.

The Secretary has referred to another part of the program, namely, the assistance in construction of 446 public health centers. In additaon, the act authorized, and there have been constructed, many facilities related to hospitals, such as diagnostic centers, nurseries for premature infants, and training facilities for nurses.

In addition, a number of State health department laboratories have been aided.

Now, the next chart (B) projects the beds that have been built and will be built with assistance under this program, against the total need in the four categories mentioned. The green areas showing in these bars, and showing in the following chart, represent the same beds that are shown here in the first chart.

Here we see that we have this projection against the total need for beds. Total need is measured by the State in its survey, and these needs are based on formulas which are in the act, for example, 41, to 31. beds in the general category, 5 per thousand in the mental health

5 category, 2 per thousand in chronic disease category, and 21/2 times the average annual deaths in the State measured over a 5-year period, 1940 to 1944, for figuring needs in the tuberculosis field. Also, the States investigate existing beds in the States to see if they are acceptable that is, if they are in reasonably fireproof buildings; if they

to eligible applicants would be determined in accordance with a formula to be developed by the Surgeon General with advice and consent of the Health Serv. ices Facilities Council, provided for by section 11 of the bill.

The objectives of the bill are commendable. The establishment and expansion of voluntary prepayment health plans providing comprebensive health services are certainly desirable. The administration, however, has proposed measures which should go a long way to encourage this development. The enactment of the legislation recommended by the President to expand and finprove the hospital survey and construction program would provide for grants to States, on a cost-sharing basis, for the construction and equipping of general and special type hospitals, rehabilitation centers, diagnostic and treatment centers, and nursing homes. The Health Service Prepayment Plan Reinsurance Act, proposed by the administration, would stimulate private initiative in making comprehensive health services generally available on reasonable terms. The desirability of Federal encouragement is recognized by these proposals.

In our view, the administration's proposals as outlined above provide a constructive approach to the problem of promoting expansion of voluntary prepay. ment health service plans. In the absence of a demonstrated need for direct Federal loans for facilities, we believe it unwise to initiate a direct loan service administered solely by the Federal Government. In this respect we agree with the report of the Department of Ilealth, Education, and Welfare to your committee on this bill.

Accordingly, the Bureau of the Budget recommends against the enactment of S. 1052 Sincerely yours,

Donald R, BELCIER,

A88istant Director. Senator PURTELL. In order that the hearings may be completed promptly, it will be necessary to limit the time of those appearing before the committee, and it is requested that all witnesses present the substance of their testimony in concise form. Insofar as practicsble, efforts will be made to schedule witnesses so that their testimony may be received during one appearance before the committee, in order to avoid the necessity of reappearances as the hearings move on to the different subjects.

In general, it is proposed to hear witnesses on the hospital survey and construction program this week. The bills before the committee on this matter are S. 2758; H. R. 81.19, the companion bill which passed the House laut week; and S. 1052. The committee does not expect to sit in these bearings during the week of March 22. The reason for that is that, as the chairman of the full committee knows, we will then be deliberating on the Taft-Hartley in executive session.

It is proposed to hear witnesses on the matter of public health grant-in aid formulas on Monday, March 29, 1934. The bill presently before the committee on this subject is S. 2778. On Tuesday, March 30, the committee will take up vocational rehabilitation with the tes. timony of that day to be given by administration witnesses. We hope that they will be able to plan presently being with us on the 29th, also.

During the week beginning April 5, it is proposed to complete the bearings on vocational rehabilitation.

In addition to the President's recommendation on this subject, as embodied in S. 2759, testimony will be received on the following bills which have been referred to the committee: S. 21:36, S. 24:37, and S. 270.

Finally, it is proposed to take up health insurance proposals beginning Tuesday, April 13, and continuing through April 23. The bill embodying the President's recommendation on this matter is

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