TABLE IV.-St. Louis Labor Health Institute, income and expenses, 1 Includes laboratory and X-ray technicians, nurses, and dental assistants. * Includes all nondirect medical expenses such as rent, postage, and depreciation. Dr. MCNEEL. I first would like to state I happen to represent a comprehensive group practice plan, which is somewhat different from the indemnity insurance plans which you have been hearing about. I do not think anybody who is interested in this field could object to the objectives of the bill. I think that we might look with considerable questioning on how a bill such as 3114 would apply to the comprehensive plans which operate on a prepaid basis. I do not think that the bill spells out in any detail how this would apply in these cases of reinsurance. I think that some form of subsidy for prepayment health care plans, on a consumer or union basis, might very well have to be developed in this country in order to initially get them started. Now, the Labor Health Institute, which I represent, started in 1945, and it is a collective bargaining-funds are derived by collective bargaining, in which 5 percent of the wages of the employee is contributed to a nonprofit corporation. The corporation is incorporated under the laws of the State of Missouri. Initially they had a great deal of trouble financing the building and remodeling of a medical center; and I think that all plans or a great number of plans that are sponsored by either community groups or by labor unions have this same difficulty, and some form of help needs to be given in the initial phases to do this, and I think some bill such as 1052 would actually do this. Now maybe it could be developed in such a way that these funds would be returned to the Government, perhaps through some form of mortgage structure so they would be paid back, because in actuality that is what we now do. We borrow money from banks or some other business interest in the community. I don't recall whether anybody has borrowed any from the insurance companies or not. Maybe they should. Now the Labor Health Institute is organized on a group practice basis, prepayment basis, and we try to give comprehensive medical care to our people. That includes the wage earner and his dependents, and the limitations are very few. There are very few limitations. Now, we do not hospitalize for mental illness and we do not hospitalize for tuberculosis because there are facilities in the State and in the community for hospitalizing these people on a municipal or State basis; but all other conditions are covered. Now we treat mental illness or tuberculosis either in the medical center or in the patient's home. Now we always get involved in the discussion of the major medical expenses and the major catastrophic illnesses. I think it would be wise to discuss how a plan like this operates, which has been in operation now for pretty close to 10 years. Senator PURTELL. May I ask how many people your plan covers? Is it 9,000 or - Dr. MCNEEL. Nearly 15,000 people. Senator PURTELL. Nearly 15,000. Dr. MCNEEL. That includes the wage earner and his dependents. Senator PURTELL. I noticed in your summary you referred to the figure of 9,000 utilizing the health institute. Dr. MCNEEL. Yes. That is a problem which I think we cannot get into a discussion of. We would certainly like for the other five or six thousand to utilize it, too. Senator PURTELL. All right. Dr. MCNEEL. But there are various factors which are very complex, really. Senator PURTELL. Well, did you mean 9,000? What is the difference between your 9,000 and 15,000, the difference of 6,000 who did not utilize it? Dr. MCNEEL. Do not utilize it. Senator PURTELL. Are they covered by it? Dr. MCNEEL, That is right. Senator PURTELL. You mean they refuse to utilize it or are prevented from utilizing it? Dr. MCNEEL. Well, a lot of them are very young workmen, not married; they are never ill. Some of them are Christian Scientists. They wouldn't use the medical facilities if you built a million dollar one. Some of them still like to go to their own family physician, and we don't pay for that care; and then there are some people who just don't go to doctors. I mean the matter of educating the public to Senator PURTELL. They are not covered, then, if they don't pay for it? Dr. MCNEEL. If they want to use it, it is there for them to use. Dr. MCNEEL. Fifteen thousand. Senator PURTELL. You have got 15,000 covered, and you say there are 6,000 that don't want to use it? Dr. MCNEEL. Well, maybe they didn't have to use it, Senator. Dr. MCNEEL. Maybe they are not sick, and we haven't educati them to all come in for a periodic examination. Senator PURTELL. I am not trying to confuse you. Senator PURTELL. Maybe I am confusing myself. Do you mean that 9,000 of the 15,000 actually had need for your services? Dr. MCNEEL. Nine thousand had need, and 9,000 actually utilized it at least once. Senator PURTELL. And that may be for a physical exam? Senator PURTELL. I understand. Dr. MCNEEL. We emphasize the preventive aspect, that periode examination at intervals would be a good idea. Senator PURTELL. I think anything that is preventive is good. Dr. MCNEEL. Good. Senator PURTELL. Even in war. Dr. MCNEEL. I agree with you. Well, I was going to try to illustrate, I believe at this point wha: we try to do in the field of catastrophic illness. Now, in my book, a brain tumor is a catastrophic illness. In most cases they cost at least $5,000 to take care of, and in some cases they cost $10,000; and in many cases the patients die after they have gore through all this cost. I mean it is an incurable, malignant condition. We take care of those without any added cost to that patient. Now, that is a catastrophic illness. That is a major medical expense, too, and we do this on this 5-percent basis. Our annual income, as I stated, last year was $986,000, but we hai at least 3 or 4 brain tumors last year. There are a lot of other conditions that are just as major. Cancer of the lung, for example, is just as major as tumor of the brain, ard may cost us as much in the long run; but you can take care of that type of thing under this type of plan. Senator PURTELL. Is your statement-your financial statement-you referred to now, a part of the record? Dr. MCNEEL. It is a part of the record. Senator PURTELL. It is a part of the record. Dr. MCNEEL. It is the last page, as a matter of fact, of the record. Senator PURTELL. Thank you. Dr. MCNEEL. But I think that should be emphasized. That sort of thing is always the bugaboo that is raised in these discussions that I hear all the time, that this type of thing cannot be done, that you have to raise the premium rates, and that sort of thing. It shouldn't have be done, if you cover a big enough sector of the population on a pr payment basis, where you give comprehensive care and try to p up these things early when something can be done early about them. Senator PURTELL. Let me see if I understand you correctly. An you saying that the catastrophic coverage can be given for the sa rate that you could give just the regular health coverage? Dr. MCNEEL. That is what I am saying, Senator. Senator PURTELL. In other words, that you would give coveri♫ where you might have hospitalization bills extending for years, ur to a maximum, let's say, of $5,000, or whatever the sum may be, that you can give that at the same cost? Dr. MCNEEL. Are you talking about long-term illness or are you talking about the catastrophic illness now? Senator PURTELL. Maybe I don't understand what catastrophic illness is. Dr. MCNEEL. What you are actually talking about is long-term illness, where someone gets a hemiplegia and is sick for 5 years or maybe 10 years; do I understand you correctly? Senator PURTELL. Perhaps I am entirely wrong, but it seems to me catastrophic insurance is coverage for a catastrophe. Dr. MCNEEL. Well, would you consider a brain tumor a catastrophe? Senator PURTELL. I would. Dr. MCNEEL. I certainly would, too. Senator PURTELL. And in this job I am beginning to think perhaps stomach ulcers are, too. Dr. MCNEEL. They can be. Senator PURTELL. You hear them pumping around here quite frequently, I'll tell you that. All right; go ahead. Dr. MCNEEL. Well, I was merely trying to make the point that with this type of coverage in a population group-and this is a lowincome group (their incomes are $55 or $60 a week), I mean by present-day standards, and they were lower in 1935-that this type of coverage can be given. The problem of long-range illness, long-term illness, certainly falls in another category. I, personally, think perhaps it could be done on this basis for long-term illness, too. Senator PURTELL. How much can be expended? What is the limit for expenditures? Dr. MCNEEL. For an illness? Senator PURTELL. For an illness. Dr. MCNEEL. There is no limitation. Senator PURTELL. In other words, you do cover catastrophic expenses, what I call catastrophic and what somebody else calls major medical expenses; is that right? Dr. MCNEEL. We certainly do. Senator PURTELL. And you are able to do that covering 15,000 people; is that right? Dr. MCNEEL. Yes. Senator PURTELL. And you are able to cover all that? Dr. MCNEEL. Yes. Senator PURTELL. At rates comparable with what the normalDr. MCNEEL. Well, the actual family rate for 1 of our families would be about $130 a year. That includes the care in the medical center, in the home, and in the hospital. Senator PURTELL. You have got all those figures in the testimony that you are going to incorporate in the record? Dr. MCNEEL. Yes, sir. Senator PURTELL. Thank you. I certainly shall study them. Now, I think that this type of thing should probably be extended to the population. There is a tremendous amount of interest in this, particularly among labor unions and certain segments of the population generally. HIP in New York is doing this same type of thing. I understand they have 500,000 people covered under this plan. There are other plans, but some of these labor unions need some financial assistance now and some of the consumer groups that do this sort of thing need some financial assistance, certainly early in their organizational phases, to get started in this sort of thing. Senator PURTELL. They need financial assistance because actually the premiums are not great enough to cover the cost? Dr. MCNEEL. And they may be building up their membership. They may only start out with a few thousand people and as it grows the cost of building a facility-for example, the cost of building a medical center, say, with all the diagnostic tools that are necessary-is a pretty expensive affair. However, I would like to point out that it isn't nearly as expensive as building a 25,000-bed hospital, and I think maybe you could save some money in your Hill-Burton funds, if this were done. Senator PURTELL. You know under Hill-Burton we propose as a matter of fact, the bill proposes-the extension of medical centers. You know that? Dr. MCNEEL. Yes. Senator PURTELL. You have read the bill. Dr. MCNEEL. That is a good idea. Senator PURTELL. Of course, while we are talking about 3114, you are at liberty to discuss any bills that are pending before this committee. Dr. MCNEEL. Yes. Senator PURTELL. But we were talking about 3114, which is reinsurance. Dr. MCNEEL. The point I wanted to make, Senator, was in all of these insurance forms that the patients almost invariably have to be in the hospital to get attention for this sort of thing. Now, if you had medical centers, where diagnostic facilities that ar ordinarily carried out now today in the hospital because it is more expedient for it and the patient can collect some money for doing so. you could do a lot of this diagnostic work up in the medical centers and actually cut the number of days down. Whether you could actually cut the cost of the number of hospital beds that we now have down is another matter, because maybe we don't have enough hospita beds. Senator PURTELL. You indicate in your testimony--and again I want to make it clear that I am not questioning you at all, except to determine in my own mind--No. 1, your present plan, how it oper ates, and also what you are looking for in the way of assistance; bt if this thing is self-supporting, which you say it is, and which I don't question, then why aren't local banking facilities available to you t› do this building that you speak of? Dr. MCNEEL. Well, I think they should be. Of course, that is what we actually did at Labor Health Institute. We borrowed from bank Now, some banks look with a good deal of skepticism on medica facilities as an investment, and then you are leaving out the fact that you do have some low-income groups that you like to try to get in under these plans that might carry themselves medically. You might actually reduce the medically indigent that we hear so much abort |