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The life-insurance business assures your committee of its continued cooperation in connection with the proposed legislation. We feel that more study of the proposal is indicated. We are eager to do anything we can to help spread sound voluntary health insurance to the people of this country.

Senator PURTELL. The next witness will be Dr. John O. McNeel, medical director of the Labor Health Institute.

Dr. McNeel. Is it your desire to brief your statement and then have the whole statement be put in the record ?

I shall so order it, if you wish, and then you may brief it and summarize it, if you wish.



Dr. McNEEL. Yes. Senator PURTELL. All right, sir. Dr. McNEEL. With one correction, sir. I would like to change the number of the Senate bill at the bottom of the first page to 1052 instead of 3114.

Senator PURTELL. That correction will be noted, and the statement will appear in the record, and you are free to present your testimony any way you wish.

(The prepared statement submitted by Dr. McNeel is as follows:)



My name is John 0. McNeel ; I am from St. Louis, Mo.; and I appear before you today as medical director of the Labor Health Institute of St. Louis, Mo.

Before proceeding with a brief outline of the history and operations of our institute, I would like to take this opportunity to express the appreciation of all of us connected with Labor Health Institute for your invitation to appear here today. Your investigation of health-insurance programs, as I have followed it to date, has been extremely constructive and gives promise of producing new and needed legislation. It has been our experience at LHI to meet visitors from all over the United States and many, too, from other countries--who are confronted with the problem of providing low- and middle-income families with first-rate comprehensive medical care without cost to the wage earners of these families. I am sure that these same community leaders will look forward to any legislation that may come out of these bearings with a great deal of interest.

There is much interest by the trade unions of the United States looking to the organization of comprehensive prepayment group practice health centers to insure that the wage earner and his or her dependents may be assured of a high quality of medical care.

A primary problem that immediately confronts unions in planning such a program is a deficit of funds for the initial construction and equipping of centers and to finance the program during the first few months of its existence until funds are built up to guarantee sustaining the program.

In order to obtain funds for these purposes Senate bill 1032 would go a long way to make it possible for the orderly, systematized development of prepay. ment health care plans, not only in unions but by other such segments of the population as desire such programs.

Not only does it assure sufficient funds but the bill permits citizen groups to so organize that medical care can be obtained on a prepayment basis with a minimum of governmental intervention. Furthermore, eventually these funds are returned to the Government and can be used over and over again.

It is in the public interest and welfare that such a system of reinsurance be given an adequate, fair trial.

The St. Louis Labor Health Institute had the very difficult problem of obtain. Ing adequate funds for construction and equipping their health center when they first began to render medical care in 1915. Such reinsurance assistance

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to them at that crucial period would enable more rapid expansion of their health care facilities and benefits.

A description of the St. Louis Labor Health Institute will illustrate the pos. sibilities that are opened to the public by the enactment of this bill,

DESCRIPTION OF THE ST. LOUIS LABOR HEALTH INSTITUTE The St. Louis Labor Health Institute is a prepayment, comprehensive medial care service based on group practice methods. It was originally organized in 1945 and at present is sponsored by Warehouse and Distribution Workers l'nion No. 688.

The union, in negotiating its contract with its employers, secures provisions for a health fund which is contributed by the employer and represents an amount equal to 342 or 5 percent of the gross payroll. The LHI undertakes 10 provide comprehensive medical, dental, and hospital care to the members enrolled. For 3162 percent these services are furnished to the individual wage earner, For 5 percent the plan provides medical care for the wage earner, his spuolise, and dependent children under 18. At the present time the average parler of eligible individuals total 14,276; of these, 6,753 are regular members and 7,415 are family dependents.

The LHI is governed by a board of trustees which is elected by the member ship. Management as well as labor is eligible for membership on the Dan LHI is a pro forma corporation under Missouri laws and is entirely indepedent of the union in its administration and financial control. Medical pollies are administered by a full-time medical director. Only the business policies are administered by the lay board. The professional relationship between physician and patient is maintained as in private practice, with the preservation of the customary professional secrecy and confidences of the patient.

PHYSICAL FACILITIES The LIII occupies the three top floors of a LHII-owned building, and has additional space on the first floor where the pharmacy and business othee ate located. This is an outpatient medical center maintained in the business district of St. Louis conveniently located near the majority of the business plants subscribing to its service.

Each floor has a large, centrally located waiting room, as well as a reception desk; and sections usually visited by many patients have special smaller waiting rooms next to the offices of the physicians. The suites of the physicians and dentists are equipped for routine consultations, examinations, and treatment

The roentgenological laboratory is located on the fourth floor and is equipped with two X-ray machines. It provides for diagnostic examinations and super ficial X-ray therapy.

The clinical laboratory is housed in a special unit close to the section of is ternal medicine. All routine tests are run in this laboratory.

SERVICES RENDERED In the medical center, members receive:

1. Health care: This includes preventative care, immunizations, periode physical examinations.

2. Sick care: This includes general medical care and medical specialistas ices-internal medicine: skin; allergy; neuropsychiatry: pediatrics: crneral surgery; ear, nose, and throat; eye; urology; obstetrics and gynecology; ortho pedics.

3. Dental care.
4. Laboratory service.
5. X-rays.
6. Physiotherapy.
7. Deep X-ray therapy.
8. Special studies, BMR, EKG.
In the hospital, members receive medical and surgical care.
In the home, members receive home visits by doctors and nurses

I attach as tables I and II some figures on the utilization of these services of our members for our last fiscal year.

GROUP PRACTICE PLAN The professional staff is organized to conform to the modern crocept of group practice, so that there is ease of referral to specialized consultants, ready

availability of radiological and clinical laboratory, diagnostic facilities without the usual barriers of cost, and an emphasis on the concept that the members may be allowed to visit the medical center as often as it is thought necessary because of the elimination barrier of cost for each service received.

The staff members on the medical service take turns at all hours to provide emergency service to the homes of patients requiring them. Every patient proposed for hospitalization or for surgery, except in cases of emergency, is presented at regular weekly meetings of the entire medical staff. Here also are discussed patients already in the hospital, those being discharged, and those presenting problems. These meetings and consultations serve to clarify the medical and surgical problems presented, and enlist discussions by various consultants of the proposed methods of treatment.

The medical and dental staff consists of 42 part-time physicians, 11 consultants available on the basis of special arrangements, 6 physicians available for home care only to members residing in outlying areas, 10 part-time dentists. In addition the auxiliary personnel is comprised of 2 full-time pharmacists, 10 fulltime and 3 part-time nurses, 3 full-time laboratory technicians, 2 full-time X-ray technicians, 6 dental assistants, 1 full-time X-ray technician, 6 dental assistants, 1 full-time medical record librarian and 1 part-time health educator,

FINANCES With contracts in force with 175 companies and industries, the total income of the LHI at the close of the last fiscal year amounted to $985,809.

The actual expenses for service and administration and the allowance for depreciation amounted to $751,960, or about $52.68 per eligible person. The operation of the medical-care plan, including administration and depreciation, involved costs of $604,037, or $12.31 per eligible person and the hospitalization plan cost $147,923, or $10.37 per eligible person.

Under the medical-care plan cost per patient visit was $6.06. Cost per hospital day was $12.26.

The average income of the wageearners was estimated between $50 and $55 a week. I attach as tables III and IV some more detailed figures on these matters.

QUALITY OF SERVICES RENDERED To maintain its high quality of care the medical director has three supervisors who operate under him: a chief of the medical service, a chief of the surgical service, and a chief of dental service. These men form the professional executive committee. At weekly conferences they discuss matters of organization and procedure as well as medical problems.

In addition, there is a medical conference committee which serves as an advisory committee to both the president and the medical director. This committee consists of five members selected from outstanding men in the community representative of both private practitioners and full-time teachers in the medical and dental fields. This committee concerns itself with all matters regarding the quality and quantity of the professional service, professional organization, professional personnel, and professional administrative problems. The committee meets periodically and reports both to the president and to the medical director.

In order to give you an idea of the quality of services rendered to our members, I am quoting from the summary of a study recently made by Dr. Franz Goldmann, associate professor of medical care, Harvard University, and Dr. Everts Graham, professor emeritus, Washington University School of Medicine, and chairman, board of regents, American College of Surgeons. This was a study requested by the Labor Health Institute.

SUMMARY "1. The quality of the medical care rendered to the more than 9.000 persons utilizing the Labor Health Institute in 1952–53 is of a very high order.

42. The staff of physicians, dentists, nurses, and technicians as a whole meets exacting requirements as to professional education and experience. It includes usually many persons possessing outstanding qualifications,

*3. The physical facilities of the Labor Health Institute are remarkable for their thoughtful design, proper dimensions of the various rooms, good equip

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ment, and emphasis on the comfort and convenience of people coming to a medical center. The hospitals used for service to in-patients are distinguished by high standards.

"4. The service organization is efficient and conducive to attainment of qualitatively and quantitatively adequate medical care. Noteworthy are the police of vesting full responsibility for selection of professional personnel entirely in representatives of the professions concerned ; the adequacy of the compensation paid to the professional persons affiliated with the Labor Health Institute; the stability of the medical staff; the emphasis placed on provision of family physicians, on comprehensiveness of the initial examinations and diagnostic tests, and of subsequent care, including necessary consultations by specialists; and a follow-up system organized to attain continuity as well as comprehensiveness of service and promotion of preventive medicine; the time spent by physicians and dentists on direct service to persons attending the medical center; and the system of regular staff conferences designed to foster high standards, efficiency, and economy of service. The effectiveness of the efforts to provide the best possible medical care at the least cost consistent with qualitative and quantitative ade quacy is clearly demonstrated by the content of the medical records studied as well as the data on actual utilization of the program. In volume and duration, the medical services, diagnostic tests, and hospital services received by those utilizing the program meet high standards, the dental services are very satis. factory, and only visiting nurse service falls short of reasonable expectations.

"5. The payment organization is such as to enable the union members and their family dependents to make optimum use of the services provided through Labor Health Institute without fear of the burden of costs.

“6. The administrative organization serves to maintain the quality of medical care at the highest possible level.

“7. The work performed at the Labor Health Institute is all the more significant as the people eligible for the program have a very low average income

“8. Telling is a comment made by one of the physicians on the regular staff: 'I wish I could practice as good medicine in my office as I can here.'"

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TABLE I.-Analysis of medical care utilization, St. Louis Labor Health Institute,

July 1, 1952, to June 30, 1953

11. plan

patients * eligible i

per patient netice plan * Der bospital

bospital of per year A members

ferrent pla jelent pla

: prrent *: gembers

enged in Hapital sert

p health **** member

Family B in

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6.98 5. 10 1. 41

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Eligible individuals as of June 30, 1953.

Regular members..
Dependents of regular.

Other individuals
Average number of eligible individuals
Number of different patients.

New to the institute

Total patient visits !
Total physician patient visits ?
Totul dental patient visits
Medical center:

Physician patient visits.
Dentist patient visits
Laboratory section patient visits.
X-ray section patient visits,

Physiotherapy section patient visits.

Physician patient visits..

Nurse patient visits..

Hospital cases".
Inpatient hospital days.
Physicia patient visits

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ī Total patient visits include medical care visits at the medical center, the home, the hospital, antite doctor's private office.

Physiciun patient risite include visits to the radiology section though the radiologist may not actually see the patient, but only reut his X-rays.

Dental patient viata include 2* visits made to the dental X-ray nurse. • Flexspit ul cases include all oves under the service of LHI doctors or LH1-referred consultants, dert et cluding newborn and outpatient cases,

Physician patient vis are estimated as follows: 1 visit per day of hospitalization of case tinder der tor's service and i visit per consultation, per delivery, and per outpatient.

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TABLE II.-St. Louis Labor Health Institute, analysis of hospital service plan

utilization July 1, 1952, to June 30, 1953 Number of individuals eligible for hospital service benefits as of June 30, 1953_---

14, 984 Average number of eligible individuals.

14, 264 Number of hospital cases?

1, 513 Per 1,000 eligible individuals..

106 Number of hospital days!.

12, 06912 Per 1,000 eligible individuals.

853 Average hospital bill received -

117. 36 Paid by Labor Health Institute.

97. 61 Paid by patient--

19. 75 Average payment to hospitals per day of hospitalization.

14. 71 Paid by Labor Health Institute.

12. 23 Paid by patient--

2. 48 Percentage of cases under service of Labor Health Institute doctor?

.71 Average days per inpatient case-

9. 12 1 Includes 213 outpatients. . Includes inpatients and outpatients. TABLE III.-St. Louis Labor Health Institute cost analysis July 1, 1952, to

June 30, 1953
Medical care plan
Cost per patient visit?-

$6. 06 Cost per eligible individual per year.

42. 31 Cost per patient per year--

63. 84 Hospital service plan Cost per hospital day'

12. 26 Cost per hospital case

97. 77 Dues income per year Regular members : 5 percent plan member--

148. 86 5 percent plan individual..

68. 57 312 percent plan member.

72. 75 Special members: Continued individuals.

39. 48 Hospital service plan individuals--

16. 77 Group health association individuals.

31. 11 Associate members: Family B individuals.----

3. 25 1 Cost excludes money allocated to reserves and hospital insurance plan,

Not comparable to previous years as nurse visits are no longer counted. Count based on those hospital bills completely processed during the fiscal year. Cost includes LHI payments to hospitals on these bills plus administrative costs of the hospital service plan during the fiscal year. * Each outpatient case is credited as 1 day.

Includes 213 outpatient cases. * Regular members : This group includes those workers who receive all the benefits of the Labor Health Institute (medical, surgical, dental, hospital) as a result of a collective bargaining arrangement under which the employer is the sole financial

contributor. Both the worker and his family are covered under the 5-percent plan. Only the worker is covered under the 312-percent plan.

Continued individuals are persons no longer covered by an LHI contract clause but who have elected to pay individually the amount of dues the employer formerly paid on their behalf. Benefits are the same as they had as regular members.

Group health association individuals are members of a cooperative group that contracts for medical and surgical services from the Labor Health Institute. They do not receive hospitalization insurance benefits.

Hospital service plan individuals are dependents of workers under the 31-percent plan who only elect to purchase hospitalization benefits. This group is gradually disappearing

Family B individuals are dependents of 34 percent plan workers. They receive only limited medical and surgical benefits and pay additional small fees for each service. This group is also gradually disappearing with the general adoption of the 5-percent plan.

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