to encourage the extension of voluntary, prepayment health plans providing comprehensive medical and hospital care of high quality to the people at reasonable costs within their means;

* to increase the opportunities and facilities by which doctors may ass ciate themselves together in groups in order to broaden the distribution of high quality medical care through general practitioners and specialists working to gether *** and emphasizing preventive medicine, detection of disease and early diagnosis.

The CIO and ACWA accept the bill in principle because they believe that it will probably encourage the organization of prepayment medical care and hospital plans, group medical practice, and the building of medical facilities. The following recommendations which in no way alter the purpose of the bill are presented for consideration-

Senator PURTELL. Of course, we are glad to have any testimony you wish to give, Doctor, but you know, H. R. 7700 is not before this committee. Nor do we have a companion bill before this committee.

Dr. BRAND. I do point it out toward the end of these recommenda tions, but there is, I believe, pending S. 1052, and it may be used to advantage instead of this as a companion bill, that is.

Senator PURTELL. Yes.

Dr. BRAND. 1. Since medical groups with or without prepayment insurance plans usually pass through a most trying financial period in the first few years of operation, it is suggested that the value of the bill would be enhanced if it would provide for a deferment of payments on principal for the first 2 years and then, based on the group income, a gradual increase in payments up to the fifth year, after which a specific and constant repayment would be required.

2. The bill calls for a premium charge up to 12 percent for the insurance. This figure superimposed on a mortgage interest rate up to 6 or 612 percent will cause considerable loading on the subscribers' premiums. However, since the mortgagee's principal is protected by the insurance provided under this bill, the interest rate should be limited to the prevailing rate of interest for mortgage loans to business in the area. The premium charge for the mortgage loan insurance should be eliminated because the expansion of facilities and medical and hospital insurance plans will repay the interest in the form of healthier communities.

3. In section 702 (g) the definition should be broadened to include comprehensive plans established by lay groups, such as labor unions, cooperatives, industries, and citizen groups who may engage individual physicians as well as groups of physicians to provide services to the subscribers. Also, it should not exclude the possibility of a hospital staff establishing a group, medical-practice-facility and prepayment plan.

Furthermore, a group-practice unit as defined in this section states that the organization of physicians must have "more than one specialty represented in the group." It is recommended that in order to estab lish some sense of balance of professional skills in a medical group that this be revised to read, "must have as a minimum a specialist in internal medicine, a general surgeon, and an ophthalmologist otolaryngologist."

4. Section 702 (h) should have included the word "physician" in line 20, page 7, before the words "groups of physicians." This will

permit a health service association to employ or enter into contracts with individual physicians as well as a group of physicians, etc.

5. Section 702 (i) defines "medical care contract" and "hospital service contract" in a manner that does not conform with existing practices. Most hospitals provide for more than bed and board and provide for some of the services as defined in the medical-care contract and it is therefore suggested that legislation should not interfere with present practices so as to force changes which are at this moment controversial.

Passage of H. R. 7700 in the House will be of no value if the Senate does not have a companion bill to consider. The CIO and ACWA, while approving the above bill in principle, notes that failure to pass this bill would not be a handicap to the development of group practice prepayment health service plans on condition that S. 1052 and H. R. 6950 which provide for Federal low-interest loans to group practice prepayment health plans are approved in its stead. The mortgage loan insurance feature should be added to both bills so that it would be available as added protection where a medical group, lay group, or hospital prefers to obtain a mortgage loan from a private commercial source.

I would like to present for the record the first annual report of the Sidney Hillman Health Center in New York City, and a subsequent booklet, and the testimony I presented in behalf of the Amalgamated before the House Interstate and Foreign Commerce Committee. Senator PURTELL. How extensive are they?

Dr. BRAND. Not very extensive, but the first annual report will certainly indicate what can be done and is being done by the labor organizations.

Senator PURTELL. Have you samples of them there?

Dr. BRAND. Yes.

Senator PURTELL. May I look at them? The reason for asking is, of course, we would like to have them and we would like to have enough copies for all of the members of the committee, and additional ones. But as it must be printed in the record I would like to know the

volume of it.

Dr. BRAND. Then in one instance it is quite large, but actually it may not be as much as I think. No, it is not. It could be submitted for your files, of course.

Senator PURTELL. That would be fine. Will you have enough so that each member of the committee will have one?

Dr. BRAND. I am sorry, but I do not have.

Senator PURTELL. We can have that for the file and refer to it then. Dr. BRAND. Very good.

Senator PURTELL. Do you have other information you wish to present?

Dr. BRAND. I have testimony that I presented on behalf of the Amalgamated.

Senator PURTELL. We are very glad to have that report and it will be placed on file.

Dr. BRAND. Mr. Chairman and members of the committee, the CIO and ACWA again wish to express appreciation for the opportunity to present their comments for health legislation.

Senator PURTELL. We are very glad to have had you with us and hear your views.

The next witness is Mr. James Brindle.

STATEMENT OF JAMES BRINDLE, ACTING DIRECTOR, SOCIAL SECURITY DEPARTMENT OF THE INTERNATIONAL UNION. UNITED AUTOMOBILE, AIRCRAFT, AND AGRICULTURAL IMPLEMENT WORKERS OF AMERICA, CIO

Mr. BRINDLE. Mr. Chairman, my name is James Brindle. I am acting director of the social security department of the international union, United Automobile, Aircraft, and Agricultural Implement Workers of America, CIO.

Last week witnessed the burial of the Ives-Flanders bill which despite some weaknesses, would have invested about $800 million annually in a positive program to meet the health needs of the Nation, The transcript of hearings before this subcommittee reports Senator Ives as withdrawing S. 1153 in favor of the administration's program. Withdrawal of the bill was due to—

strong pressure Secretary Hobby

exerted *** by the White House and the Office of

according to the Washington report on the medical sciences.

When Senator Ives was asked whether he would like to have the bi in the record for information purposes, he replied:

I don't think it is necessary—

and concluded with this statement which perhaps sums up healt progress in the present Congress to date:

I don't think we need to waste the paper on it this year.

Let us look at the administration plan for which Senator Ives withdrew his $800 million program. For practical purposes the adminis tration is left with:

(1) A somewhat broadened program for the construction of health. facilities, already passed by the House.

(2) A little more money for rehabilitation on a short-run basis, with the dangerous implication that Federal money and responsibility may later be reduced.

(3) A limited Federal guarantee of loans for certain health fa cilities which, more appropriately, ought to be assisted by subsidies: and finally,

(4) A reinsurance proposal for prepaid health plans which is far more imaginative than substantive in dealing with health needs. The latter two involve no Federal expenditures only money advances, to be repaid ultimately by health service consumers. Witheat real Federal contributions these bills will accomplish little.

which

This leaves the administration and Congress with a program is indeed meager. It scarcely constitutes a significant response to th health problems outlined in the President's message to Congress of January 18, in which he says:

because not always

Not all Americans can enjoy the best in medical care are the requisite facilities and professional personnel so distributed as to be available to them, particularly in our poorer communities and rural se tions even where the best in medical care is available, its costs are often a serious burden.

Nor can this residual administration program qualify as moving us measurably toward the national health goals set forth by the President when he said:

One such goal is that the means for achieving good health should be accessible to all. A person's location, occupation, age, race, creed, or financial status should not bar him from enjoying this access.

Second, the results of our vast scientific research, which is constantly advancing our knowledge of better health protection and better care in illness, should be broadly applied for the benefit of every citizen. * * *

Actually, the withdrawal of the Ives-Flanders-Javits bill is the last in a series of retreats from the principles enunciated in the President's

message.

The budget request for fiscal 1955 was the first indication that the administration's lofty objectives were not to be effectively met.

BUDGET CUT FOR EXISTING PUBLIC-HEALTH PROGRAMS

The 1955 budget for public health services under existing legislation was cut $143 million, a 6-percent reduction from the current fiscal year. Although slight increases were proposed for some services, the $14.3 million cut in estimated expenditures for 1955 was made by paring down such public-health programs as construction of research facilities (by $4.4 million), control of venereal disease, tuberculosis, and other communicable diseases (by $5.9 million), the National Institutes of Health (by $1 million), and by cutting salary and expense budgets for Public Health Service operations. This is no time to cut these programs. The President's Commission on the Health Needs of the Nation recommended

greatly increased expenditures * * * be used to speed the eradication of tuberculosis, syphilis, typhoid fever, diphtheria, and other communicable diseases.

It is still not too late for this subcommittee to recommend to Congress health legislation that would constitute a significant step in the direction of meeting some of the serious health needs outlined by the President in his health message and by Mrs. Hobby at her March 11 press conference.

Perhaps it is vain to expect favorable congressional action on the national health insurance program which is proposed in H. R. 1817, introduced in the House by Representative Dingell of Michigan. The two major labor federations have long been on record favoring this legislation. But there is no reason why this subcommittee should not give serious consideration to some of the components of the IvesFlanders-Javits and other bills, to the well-considered recommendations of the President's Commission on the Health Needs of the Nation, and to expanding some of the programs now under congressional consideration.

At this time we recommend specifically:

1. AID FOR CONSTRUCTION OF HOSPITALS AND HEALTH FACILITIES

The need for augmented hospital construction is well established. The President's Commission on the Health Needs of the Nation reported the need of 226,000 general hospital and 331,000 mental hospital beds. The Commission stated:

In spite of an enormous hospital building program in the past few years, the need for hospital beds in many areas is much greater than the available sup46293-54-pt. 3-22

ply. *** Many people in rural areas are still without needed hospital facilities Mental and TB hospitals in many areas are critically overcrowded and have waiting lists for beds.

With such tremendous gaps in health facilities it would appear obvious that the Federal Government should increase appropriation for such construction to the already authorized level of $150 million per year, rather than reduce it to $50 million, as is proposed in the current budget.

Even more important is the need to gear the program for construction of the health facilities to changing patterns of medical care, ad vances in medical science, and changing population needs.

The proposed Hill-Burton revision (S. 2748) recognizes these needin extending the Hospital Survey Construction Act to include hos pitals for the chronically ill, diagnostic and treatment centers, re habilitation centers and nursing homes. However, we think that the $60 million allocated for this purpose is not nearly enough.

For example, according to administration estimates, the propose $20 million for construction of hospital facilities for the chronically ill will add only an estimated 2,770 beds if matched by $16 million of State and local funds. If we match this proposal against the unmet need for chronic hospital beds-set by the President's Commission of the Health Needs of the Nation at over 250,000-the staggering gap between what is proposed and what is needed becomes all too apparent We suggest that both the need for hospitals and other medical facilities as well as the need for governmental programs designed to provide constructive employment in this critical period would be served by expenditure for hospital construction of the old Hill-Bar ton standard of $150 million a year and expenditures in 1955, an amount for other hospital and medical facilities more in line with existing needs.

2. AID TO MEDICAL EDUCATION

The need for more medical and allied personnel has been thoroughly discussed, documented and proven.

Actually, substantial Federal subsidies are a must to expand the physical facilities and to replace outmoded buildings and equip ment of schools for training physicians and other needed health personnel. Even the American Medical Association, by initiating a voluntary program for support to medical schools, highlights the financial need, although its suggested remedy is inadequate. Operat ing subsidies are also needed and scholarships should be offered to capable young men and women, so that all qualified candidates, not just the children of the well-to-do, can enter the health professions, The special needs of certain types of postgraduate schools is high lighted in the April issue of Medical Economics by Dr. Gaylord W Anderson, President of the Association of Public Health Schools and Director of the University of Minnesota School of Public Heal He says that the Nation's public health schools are in a financial hole out of which they can climb only with the aid of Federal subsides,

A further comment Dr. Anderson made was that there should be a more equitable distribution of the financial burden through a Fed eral subsidy. Dr. Anderson cites United States Public Health Serv ice figures to show that public-health schools are running a deficit of