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I would just like to hand these to you, and you may keep them, to look at when you find time.

We are increasing our own standards in our own nursing homes.

We have an institute there that is under the auspices of Indiana University.

This is the second one we have given. We are going to give advanced courses. This is for the nonprofessional operator, and we have access to and the use of and instruction from the entire medical staff of Indiana University, which is one of the leading medical universities in the country today, and that is a 3-day institute.

We had one completed in October. We are ready to go back from here and start another one next Monday.

We have advanced courses set up for next October, and they are for operators and members of the Indiana Association.

Gentlemen, it has been said before-I merely repeat it for the emphasis I wish to put upon it-if you could follow the suggestions as given by Mr. Muse, and which I also have incorporated in my statement, I would say in 4 to 5 years' time that this entire matter would be handled by private enterprise and there would be no question of it ever coming up before the United States Government to be providing money. We would just like to have the opportunity to do it ourselves.

If you have any questions, I would like to answer them. However,
I know the hour is late.

Senator Hus. Thank you very, very much, Mr. Latham.
Mr. LATHAM. Yes, sir. Thank

you.
Senator Hill. We appreciate your coming here and your testimony.

At this point in the record I would insert the leter from the Bureau of the Budget on H. R. 8149, a letter dated March 17, 1954, and also a second letter of March 17, 1954, on the same bill, H. R. 8149, from the Department of Health, Education, and Welfare. (The letters referred to are as follows:)

EXECUTIVE OFFICE OF THIE PRESIDENT,

BUREAU OF THE BUDGET,

Washington 25, D. C., March 17, 1954.
Hon. H. ALEXANDER SMITH,
Chairman, Committee on Labor and Public Welfare,

United States Senate, Washington 25, D. C.
MY DEAR MR. CHAIRMAN: This is in reply to your letter of March 16, 1934,
requesting the views of this office with respect to H. R. 8149, a bill "To amend
the hospital survey and construction provisions of the Public Health Service Act
to provide assistance to the States for surveying the need for diagnostic or
treatment centers, for hospitals for the chronically ill and impaired, for rehabili-
tation facilities, and for nursing homes, and to provide assistance in the con.
struction of such facilities through grants to public and nonprofit agencies, and
for other purposes.”

On February 5, 1974, this Office advised your committee with respect to S. 2758, an almost identical bill, that enactment would be in accord with the program of the President. In her testimony on these two bills, the Secretary of The Department of Health, Education, and Welfare plans to point out that H. R. 8149 confines eligibility for diagnostic or treatment centers to those instances where the applicant is a State, political subdivision, or public agency, or a corporation, or association which owns and operates a nonprofit hospital, whereas S. 2708 confers eligibility for such projects where the applicant is a State, political subdivision, or other nonprofit agency. She believes that the broader authority contained in the Senate bill is preferable. She also experts to call attention to the fact that S. 2758 would apply to the four categories of facilities covered, the same 20-year limit provided in the present act with respect

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to recovery of Federal funds in the case of facilities no longer operating on a nonprofit basis whereas H. R. 8149 removes this 20-year limitation. She strongly recommends retention of the 20-year limitation in the Senate bill.

The Bureau of the Budget recommends enactment of H. R. 8149, amended as suggested by the Secretary of Health, Education, and Welfare. Sincerely yours,

DONALD R. BELCHER,

Assistant Director.

DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE,

March 17, 1954. Hon. H. ALEXANDER SMITH, Chairman, Committre on Labor and Public Welfare,

United States Senate, Washington 25, D. C. DEAR MR. CHAIRMAN: This is in reply to the recent request, made orally by your staff, for a report on H. R. 8149, as passed by the House of Representatives. This bill would amend the hospital survey and construction provisions (title VI) of the Public Health Service Act to provide assistance to the States to surres their need for dia mnostic or treatment centers, hospitals for the chronically ill and impaired rehabilitation facilities, and nursing homes. The amended prorisions would also authorize the appropriation (for the next 3 years) of funds spécitically earmarked for grants to public and other nonprofit agencies to assist in the construction of each of the types of facilities referred to above.

This bill is, insofar as approach, scope, and major content are concerned, the same as S. 275S, which is clesioned to carry out the recommendations of the Presi. dent on this subject in his message of January 18, 1954, on the health of the American people. My testimony before your committee will treat in detail with the similar aspects of the two bills. There are, however, a few points of difference, described below, to which I should like specially to call your attention.

1. H. R. $149 would add a declaration of purpose applicable to the new provisions which is patterned after the declaration of purpose applicable to the existing hospital survey and construction provisions of the Public Health Service Act. We believe this amendment, which is not included in the Senate bill, is desirable.

2. I'nder the existing provisions of law, the Federal share of individual projects may, at the option of the State, either (1) vary in the State within the range of one-third to two-thirds of the total construction cost, or (2) be a flat percentage within the range from one-third to two-thirds of the total construction cost (but not in excess of the State's allotment percentage). Under the Senate bill, in the case of projects of the types covered by the new provisions, only the second of the two methods could be used and with a mandatory minimum of one-half, instead of one-third, of the construction cost.

Under H. R. 8149, the State would have three options with respect to the Federal share of the construction costs of projects of the types covered by the new provisions. It could choose either of the alternatives available under the existing law, or it could choose a flat percentage of 50 percent for all projects in the State eren though its allotment percentage is less than 50 percent. We have no objection to this amendment in the House bill.

3. Related to this difference between the House and Senate bills mentioned abore in item 2 is the provision, contained in S. 27.58 but not in H. R. 8119, permitting the Federal share of projects eligible for approval under both the existing and the new provisions (i. e., projects which constitute or are part of a "hospital" as defined in the law, as amended by S. 2758) to be paid either froin funds appropriated under the existing provisions or from funds appropriated under the new ones (or partly from both). We believe the flexibility permitted by this provision in the Senate bill would better contribute toward the accomplishment of the objectives of this legislation.

4. With respect to eligible sponsors for the construction of diagnostic or treatment centers, the Senate bill would include any nonprofit sponsor, as well as public sponsor. The House bill would limit eligibility to a public body or, in the case of a nonprofit sponsor, to one owning and operating a nonprofit hospital. We believe the broader eligibility provision of the Senate bill is preferable.

There are situations, particularly in rural areas, where construction or maintebance of a hospital may not le feasible but where the health needs of the community could be better met if adequate diagnostic or treatment centers were available for physicians practicing (or contemplating practice) in the area. The House bill would limit the opportunities to provide such centers in such situations.

5. The Senate bill limits "hospitals” and “diagnostic or treatment centers" to those in which patient care is “under the professional supervision of persons licensed to practice medicine in the State.” The definitions of rehabilitation facility and nursing home are similarly limited, though the language is slightly different. In H. R. 8149, the amendment to the definition of hospital was omitted and the requirement as to supervision by persons licensed to practice medicine ir the case of the other facilities was relaxed to include persons licensed to prac. tice surgery and was made applicable only where such facilities are not connected with a hospital.

The objectives of these changes were, as we understand them, to leave the situation as to hospitals as it is under the existing law and to avoid exclusion of cther facilities where the care is under the supervision or general direction of osteopathic physicians licensed to practice surgery in the State. We are in agreement with these objectives; some such modification of the Senate bill would appear desirable.

6. The House bill contains a provision permitting two or more States to pool funds from their several allotments for the construction of facilities which will operate on an interstate basis. This provision could well be useful in some cases--particularly with respect to rehabilitation facilities. It would therefore seem to be an appropriate amendment.

7. The Senate bill would make applicable to the facilities covered by the new provisions of law the existing provision with respect to recovery of a proportionate part of the current value of facilities which, within 20 years after completion of construction, are sold to ineligible persons or cease to operate on a nonprofit basis. H. R. 8149 would eliminate this 20-year limitation--and as to all types of facilities, whether covered by the new provisions or the existing provisions of the Public Health Service Act.

We believe that this indetinite extension of the recovery authority is not needed and night give rise to a number of administrative and legal difficulties. We would therefore strongly recommend retention of the 20-year limit in the Senate bill.

The House bill also makes a number of drafting or technical changes to which we would have no objection,

The Bureau of the Budget advises that it perceives no objection to the submission of this report to your committee. Sincerely yours,

OVETA Culp Hobby, Secretary. Senator Hill. I have a letter here, too, from the Association of Hospital Planning Agencies, Madison, Wis., dated March 15, 1954. This organization was unable to appear, and I will put in the record the letter from them signed by Vincent F. Otis, the president of the association. (The letter referred to is as follows:)

AssociATION OF HOSPITAL PLANNING AGENCIES,

Madison 2, Wis., March 15, 1954. Mr. Roy E. JAMES, Staff Director, Senate Committee on Labor and Public Welfare,

The Capitol, Washington, D. C. Dear Sir: The following statement is being submitted to set forth the views on S. 2775 in lieu of the invitation and opportunity to present oral testimony before the Subcommittee on Health at the public hearing on Thursday, March 18, 1954, at 10 a. m., and may be inserted in the record of the hearings:

The Association of Hospital Planning Agencies appreciates this opportunity to review and comment on bill S. 2758. Our association is directly concernd with the construction of diagnostic, treatment, rehabilitation, and nursing facilities for ambulatory, chronic disease, and other patients. The majority of our membership has been connected with activities of the Hill-Burton program from its beginning in 1946. In our opinion this legislation has been the least controversial of the many Federal laws affecting Federal-State relationships. Bill S. 2758 continues to preserve maximum authority for the States to permit wide diskretion in the solution of a variety of planning problems which differ among the States and are best understood at the local level.

The expansion of the Hospital Survey and Construction Act as proposed in S. 2758 has not been officially considered by our association but it is safe to assume from informal expressions by various members that there is overwhelming, perhaps unanimous, support for the proposed amendments,

The specific earmarking of funds for the several categories of facilities will stimulate sponsorship of projects in these special fields which otherwise would nerer develop. For example, most States bave been reluctant to approve projects for chronic disease facilities under the present law because the need for general hospital beds has been considered more pressing from the emergency nature of such facilities. Since the allotments to the States have been minimal compared with the overall need for all types of facilities, the States allocated such funds to the projects having the greatest relative need. The amendments as proposed in S. 2758 will substantially solve the need for a more equitable distribution of funds to the several categories by :

1. Allowing the States to continue the approval of general hosiptal beds (under the existing law) in the areas having the highest priorities, since the amount of the Federal allotment will not reach communities with needs a verage or better.

2. Permitting the States to encourage the establishment of cronie-disease projects where financing new construction has been the major obstacle and the continued need for general hospital beds a first concern.

3. Allowing the States to review the present State hospital plans to plan for diagnostic and treatment centers and nursing homes in areas where the costly duplication of small hospitals would be the only alternative.

4. Enabling many communities to establish central rehabilitation facilities for the general use of patients from small hospitals and nursing homes as well as for the many disabled persons not in institutions.

5. Encouraging the construction of nursing homes in areas having the most critical shortages, thereby reducing the number of substandard facilities which are allowed to exist because of the need and the lack of more adequate facilities.

The only suggestion for your consideration might be that the amount of the authorization for nursing homes be increased to $20 million and the amount for chronic-risease facilities decreased to $10 million. Our experience has led us to believe that there is much more interest and demand for the nursing home type of facility for the care of the chronically ill. Governing boards of general hospitals and hospital administrators are not yet sufficiently convinced that a chronicdisease unit as a part of the general hospital is the best answer to this complex problem. Many feel that good nursing homes either owned by, or at least affiliated with. general hospitals may be a better solution to this problem for the majority of today's general hospitals, particularly hospitals located in intermediate and rural areas.

The high-cost per-patient day in a chronic disease unit of a general hospital would greatly limit the number of chronically ill patients who could stay a sufficient length of time to benefit from such services. There definitely is a need for a limited number of such units in the more densely populated service areas, but the real need lies in an immediate increase in the number of nursing homes in the areas having the greatest shortage.

In behalf of the Association of Hospital Planning Agencies, I want to express our appreciation for this opportunity to present these comments to your committee for its consideration of bill S. 2758. Respectfully submitted.

VINCENT F. OTIS, President, Senator Hill. The committee will stand in recess until Monday, March the 29th, when testimony will be received on Senate bill 2778 which embodies the President's recommendations concerning public health grants-in-aid formulas.

(The following statements were later submitted for the record :)

STATEMENT BY MINNIE Hoop HOPKINS, VICE PRESIDENT, NATIONAL ASSOCIATION OF REGISTERED NURSING HOMES, INC., AND THE FIRST VIRGINIA NURSING HOME ASSOCIATION, INC. My name is Minnie Hood Hopkins. I am vice president of the National Association of Registered Nursing Homes, Inc., and also vice president of the First Virginia Nursing Home Association, Inc. Both of these associations are composed of owners and operators of proprietary nursing homes and we feel that,

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as proprietary nursing home operators, if this bill is enacted and through public grants to nonprofit organizations, they are permitted to expand their facilities, we, as independent operators, will be deprived of an inborn American rigtit of free enterprise to expand our own facilities, thus depriving us of the right to better meet the needs of our communities as has been pointed out so eloquently in other statements submitted by members of our association and allied associations of our profession.

In view of the part that the proprietary nursing home has played in the past and is anxious to play in the future in meeting the needs of the long-term-care patient, we believe that should this bill he considered favorably by your honorable bolly, for the protection and welfare of our Nation and for the protection and welfare of the proprietary nursing homes that there should be included under section 623A of the Hill-Burton Act and under the appropriate section of the present S, 2758 an amendment proviiling for the designated State agency for the administration of the plan to include in its body a representative of the proprietary nursing home. The agency of the State either in existence at the present time or to be created will have the opportunity of drawing upon the experience of our association and our members who are cognizant of the need of each community and will have the opportunity of knowing when the need of a newly created nursing home facility if apparent or real, or whether such application made by a nonprofit group would be in competition with existing facilities.

It is an established fact that people who have their own money invested, take a personal interest in the patients in their homes and work harder to make these nursing homes a success, we feel that because they have their money and years of their lives invested in their establishments, the proprietary nursing home operator will give their time to this agency to protect their interest and the interest of their patients.

It has been brought out in testimony before that in recent years so many years have been added to the life span of man, we, proprietary nursing home operators like to think that through our personal care in private proprietary homes, we are also adding living to these years. We would like to be allowed to continue to do so.

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STATEMENT BY HARI EKLUND, PRESIDENT, NEW YORK STATE Nursing HOME

ASSOCIATION, INC. My name is Hari Eklund. I reside at 25 Ridgeview Avenue, White Plains, N. Y., where for nearly a quarter of a century, I have served as owner and administra tor of "Restharen," an accredited nursing home an internationally known and patronizer proprietary metlical care facility.

As president of the New York State Nursing Home Association, Inc.-a nonprofit merbershin organization designed to enhance the welfare of the aged and infirm through nursing home operational standards and ethics-I represent approximately 400 proprietary nursing homes or similar institutions.

As concerning Senate bill 2758, or any similar proposed national legislation the New York State Nursing Home Association supports the position officially adopted by the National Association of Registered Nursing Homes, Inc., to which we are affiliated hoth by membership agreement and by cooperative procedures.

I deeply appreciate the courtesy extended to our association by this esteemed and most respected committee to add our testimony concerning the proposed legislation.

We are seriously concerned with two major premises. One-the welfare of the national economy, and the nondisruption of progress of the existing proprietary nursing homes and similar institutions.

The total proprietary nursing home investment for plant and equinment in New York State approximates $60 million. Conservative estimates indicate that the annuai payroll for these institutions is $2.5 million, which on a 15-percent basis represents a Federal payroll withholding tax of $2,750,000.

Such items when considered on a national scale clearly indicates that we are dealing here with a multi-billion-dollar industry or profession. Any influence that tends to disrupt the growth and development of this important private initiative wegment of our population, in equal ratio, tends to weaken the industrial structure of the entire Nation.

Gigantie forces are abroad today in the whole world which strives for the ascendency of one or the other ways of life. Our Nation is dedicated to the

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