The transition provisions contained in section 3 of the bill are also important. This section is designed to prevent any serious dislocation in the State-by-State distribution which might result from the allotment formula changes-which would become effective on July 1, 1955. Section 3 provides a procedure for limiting to 10 percent the decrease in any 1 year of a State's total public health grant allotments which may result specifically from the change in allotment formulas. This applies only to decreases due to formula adjustments; it does not, of course, constitute a guaranty against any reduction resulting from changes in the level of appropriations approved for those purposes.

Finally, I would like to recommend for your consideration an amendment to the bill to afford the States the same opportunity to appeal to the courts from certain administrative actions as is now afforded under the provisions of the Hospital Survey and Construction Act. Draft language which would be suitable for this purpose has already been submitted to your committee in our report on this bill.

SUMMARY AND CONCLUSION

In summary, Mr. Chairman, S. 2778 proposes to convert six present grants in the field of public health into an integrated, three-part grant structure. We believe that this proposed integration would improve the administration and effectiveness of public health grant programs in three principal respects:

First, it would simplify the existing structure and procedures. By reducing the number of separate grant authorizations, each of which has its own special provisions and requirements, it would eliminate some of the complexities which characterize the present pattern.

Secondly, it would provide the States with a more flexible means of meeting their ever-changing public health needs. It would correct the rigidity of fiscal and administrative structure which is unavoidable in a grant system based on various disease categories. Thus, it would offer to the States a greater opportunity for exercising initiative in the development and administration of the public health programs adapted to their own particular needs and circumstances.

Finally, it would more clearly identify and define the objectives of Federal grants and would enable congressional appropriations to be directly related to those objectives. The focus of the grant programs, at the Federal level, would be reoriented toward the broad objectives of program support, extension and improvement, and the development of better public health methods and techniques.

Before concluding this statement, Mr. Chairman, I should like to stress one additional point. The provisions of S. 2778 are addressed primarily to the structure and the mechanics of public health grantsin-aid. We should not, however, allow the present emphasis on structure to obscure our concern with the health services which these grants are designed to support. We must constantly keep in mind the fact that the preventive services provided through our State and local health departments are essential to the well-being of our people.

We believe that the provisions of S. 2778 will strengthen these health services by simplifying and improving the grant structure, and by clarifying and implementing the objectives of Federal aid. We therefore urge favorable consideration of the bill by your committee.

46293-54-pt. 1--18

Senator PURTELL. Thank you, Mrs. Secretary.

Have you any questions, Senator Hill?

Senator HILL. Mrs. Secretary, shouldn't States have separate funds for mental health? Certainly some of those who have been active in the field of mental health and are very active today, feel that certainly so far as mental health is concerned this would be a backward step by integrating your mental health in with these other programs. Have you any comment on that?

Secretary HOBBY. Dr. Scheele, will you answer that?

Dr. SCHEELE. This does not propose to change in any way the pattern of health services as the States now provide them in their public-health programs, except as they themselves might make a decision to change them. We would not have money earmarked in the appropriation for mental health, but if the States saw fit to expend it for that purpose then that would be appropriate. In the language of the bill, there is provision for State health officers to take into consideration the plans and interests of the State mental health people in developing their State plan. Some of those State mental-health authorities are other than the State health department.

The last thing in the world we want this program to do is in any way hurt the mental-health program, as it now exists.

Senator HILL. But instead of the funds going directly to the State mental health department it goes to the general State health department for them to make the allocation.

Dr. SCHEELE. They go to the State treasury.

Senator HILL. I know, but the authority would be in the hands of the State health officer. Is that right?

Dr. SCHEELE. That is correct, except that the mental health authority would develop the mental health part of the plan. The plan which would come to us for approval would show a segment for the mental health program, and therefore there would be a proportionate distribution of funds to the mental health authority for expenditure. There should not be any problem arising because the health officer is concerned in it, as far as I can see.

Secretary HOBBY. May I refer back to one sentence in the testimony, which was—

The bill therefore provides that the portion of a State plan relating to mental health activities shall continue to be developed by the State mental health authority and incorporated by the State as a part of the total single State plan.

Senator HILL. I appreciate that. Of course, as the matter now stands Congress can appropriate so much money for mental health, and that money goes directly to mental health without anyone else having anything to say about it, except the State's mental health au thorities. Is that right, Doctor?

Dr. SCHEELE. That is correct.

Senator HILL. Mrs. Secretary, I noticed a letter from the American Medical Association. I suppose it came to this committee and went to the House, too, in which they approved the bill but make the following recommendation:

1. That type 1 and type 2 grants shall be lumped together in a single category. Is there any particular comment you have on that other than what you have already said?

Secretary HOBBY. We do not look upon it with favor. Mr. Rockefeller, do you want to answer that question?

Mr. ROCKEFELLER. I think what you would have in that case is that you would lose the dynamic quality, Senator Hill, of the extension and improvement grants; because your money under the support grant comes on the basis of the equalization formula-the Hill-Burton

formula.

For the larger States particularly the amount of funds which they get relative to their total expenditure is very small. Therefore there is no incentive for them to undertake new projects under the support— in other words, just a normal program. Whereas, in the extension and improvement grant you have the leverage which is a financial leverage, you could say, and which is very important in getting new programs started, either geographically in the new counties or in including more of these services that are listed here.

So if you lump them into one and use the Hill-Burton alone you would not have the incentive you would by having two and having the States review their programs each year as a whole and see what might be done to improve them, and then get special assistance on favorable terms financially, as it were, to encourage them to new undertakings.

I think it would be contrary to the basic concepts which the Secretary developed if that were done.

Senator HILL. I notice it also said that the terms used in type 3 grants should be more clearly defined. Have you given any thought to that?

Mr. ROCKEFELLER. The Secretary has been studying that. They raised some questions and I think there are some words there which seem to have meanings which were not intended. Possibly they could be effectively taken care of.

Senator HILL. In that connection, the third recommendation is that the Surgeon General of the Public Health Service should be required to consult with the State health authorities on advising the committee in connection with type 3 grants.

Secretary HOBBY. We have no objection to that.

Senator HILL. Of course, I have been very much interested in the testimony this morning, having in mind the recommendations also to the Hospital Survey and Construction Act. Here your program is based on the idea that health needs would be best served by a unified public-health service grant or grants. The fact is that the Secretary stated there is offered to the States greater opportunity for exercising the need for development and administration in public-health programs adapted to their own particular needs and circumstances. This bill moves in one direction and your Medical and Hospital Survey and Construction Act moves in the directly opposite direction. Secretary HOBBY. That is correct. And for what seems to us like good and sound reasons. It is not a denial of the validity of categorical grants as such. It is a suggestion that they have served their usefulness here; and moving on another way into the amendment to the Hospital Survey and Construction Act, admitting that the Federal Government should give leadership in certain areas. So we are perfectly conscious that to the casual observer it might appear to be a reversal. But actually it was a very carefully-thought-out approach.

We suggested doing away with so-called categorical grants here, and we suggested in the amendment to the Hospital Survey and Construction Act that we emphasize nursing homes, beds for the chronically ill, rehabilitation facilities, and diagnostic and treatment

centers.

Senator HILL. You are using the categorical grant system there? Secretary HOBBY. Yes, sir.

Senator HILL. But they do move in opposite directions; do they not?

Mr. ROCKEFELLER. There is one difference, Mrs. Secretary, which I am sure the Senator knows. One is a continuing program of service; the other is construction and, in the case of the recommended bill which you have before you, for a 3-year program. So you do have a basic difference there.

Senator HILL. It is a 3-year program, of course, so far as the second category is concerned. But so far as the first category, which is your main category, your support category, so to speak, that is a continuing thing.

Mr. ROCKEFELLER. That is right. The support is continuing but not on a categorical basis. But where you have a continuing program on a categorical basis where the money is divided on a formula so that it is mechanical rather than able to meet the different needs in the different States, it becomes rigid and the States find themselves confined to a rigid use of that money. Whereas in the construction field with the Hill-Burton bill, each time the money comes up each year it is a new group of people who are seeking assistance under the grants-in-aid program.

But in order not to lose the quality of the categorical grants in its objective to assist special programs, this extension and improvement phase of the formula has been developed.

Coming from another angle, it only allows the initiative to come from the States rather than from the Federal Government, with the Federal Government concurring rather than dictating to the States. That was the thought I had.

Senator LEHMAN. May I ask a question?

Senator PURTELL. Yes.

First I would like to say that I note the chairman of the whole committee is with us this morning and I am happy to note that he is here.

Senator Smith, I wonder if you have some questions you would like to ask Secretary Hobby or her associates?

The CHAIRMAN. Thank you, Mr. Chairman. I am happy to be here because I am profoundly interested in this overall approach. I do not have any questions because I do not have enough detailed familiarity with the subject. But I do want to express to Mrs. Hobby and her aides how greatly I am impressed with their presentation, and the attempted simplification. I have thought in the past that we have had complications due to these separate grants which give no leeway and flexibility in dealing with the needs of the times.

I think the whole thing presents a big improvement in public health over the past and I am glad to commend you, Madam Secretary. Secretary HOBBY. Thank you.

Senator PURTELL. It is very nice that you found the time, busy as you were, to come and spend the time with your subcommittee. Senator Lehman.

Senator LEHMAN. Secretary Hobby, of course I am interested in this plan from the standpoint of the Northeast as a whole. But I am also very much interested in it in the way it will work in my own State of New York. It is not quite plain how your plan of making no specific appropriations or separate appropriations for various activities is going to affect our mental hygiene in New York. I will explain what I have in mind.

New York State a great many years ago assumed the responsibility for caring for the mentally ill. I think it was probably the first in the Nation. I do not believe by any means all the other States have assumed that responsibility. But New York has.

I have no accurate figures of the present appropriations and expenditures in the State of New York. During the time I was Governor, though, I believe that the appropriations and maintenance for alí mental hospitals, except for State aid directly for the schools and other activities, was the largest single appropriation that was made.

I would assume the appropriation today is as much as $100 million, because we had even when I was Governor over 100,000 patients in our mental hygiene hospitals.

That $100 million, which is my estimate of the appropriation now, is exclusive of any appropriations or expenditures made for capital improvements in the building of hospitals, which has run, of course, in the past 10 or 15 years, to many hundreds of millions of dollars. There is a proposed large bond issue that is going to be voted on in the coming election for the construction of hospitals.

That expenditure in mental hygiene is vastly greater, as I recall it, than the aggregate expenditures for all other health services in the State of New York. I do not believe we make any substantial appropriations for heart-disease control, or for cancer control, or for venereal-disease control. We probably do make some appropriations but I think that is all.

I think I am safe in saying that the appropriation for mental hospitals and operations is far greater than the aggregate of all our other operations in the State of New York.

Now, if you do not make any separate appropriations, or if the Congress does not make any separate appropriations for mental hygiene, it seems to me it is likely to be completely submerged in all of the other health activities. Instead of being a great part of the States' responsibility, I think it would be subordinated to the others. Today we have in the State of New York a separate mental hygiene department. Our commission of public health has nothing whatso ever to do with it. It is a separate and almost autonomous department, subject only, of course, to action by the legislature and the Governor. I can conceive if there is no separate appropriation for it that the people will not know how little or how much is appropriated and the mental hygiene activities of the State would be very greatly submerged in the office of health with all of the other health activities, and nobody would know how much or how little was being voted or appropriated for that purpose.