about $1.8 million a year, and need $16 million to modernize and expand their equipment. In short, we propose that the committee reconsider such measures as title VII, part E of the Ives-Flanders-Javits bill and S. 337 of the 82d Congress, which was favorably reported to the Senate. 3. AID TO LOCAL HEALTH UNITS Approximately 30 million people still live in areas without proper organized local health departments. There must be added Federal money to cover this neglected part of our population. In the 82d Congress the Senate passed S. 445, which had strong bipartisan sponsorship. The Ives-Flanders-Javits bill would provide grants-in-aid which would extend coverage of adequate local public health services. 4. AID TO MEDICAL RESEARCH Instead of the cuts suggested in the budget, there should be expansion of research in the field of medical science, especially in the neglected areas of mental and chronic illness. Attention should also given to research in medical care administration. be 5. REHABILITATION The President's health message indicates the administration's awareness of the terrible social waste and inhumanity of our failure to rehabilitate more than a minor fraction of persons annually disabled. He spoke with feeling on this subject. There are now 2 million disabled persons who could be rehabilitated and thus returned to productive work. Under the present rehabilitation program only 60.000 of these disabled individuals are returned each year to full and productive lives. Meanwhile, 250,000 of our people are annually disabled. Therefore, we are losing ground at a distressing rate. Considerations of both humanity and national self-interest demand that steps be taken now to improve this situation. Today, for example, we are spending three times as much in public assistance to care for nonproductive disabled people as it would cost to make them self-sufficient and taxpaying members of their communities. Rehabilitated persons as a group pay back in Federal income taxes many times the cost of their rehabilitation. There are no statistics to portray the full depth and meaning in human terms of the rehabilitation program, but clearly it is a program that builds a stronger America. But here again, although recognition of the problem is eloquently tated and high hopes are expressed for its solution, the administra tion seems overanxious to limit Federal responsibility and future commitments. Considering that 250,000 people are disabled each year, the stated goal of rehabilitating 70,000 people in 1955-an increase of only 10,000-is not impressive. The President has proposed an added $8.8 million for grants to States for rehabilitation. $7.8 million of this is to be spent in 1955 to construct facilities and train personnel. This is advertised as a "shot in the arm" to encourage State and local initiative. At the same time $3.8 million is being cut from the regular Office of Vocational Rehabilitation budget. Thus, the new added money is largely a onetime expenditure while the amount cut from the regular budget re duces a continuing program. This hit-and-run program may leave the States in a few years worse off than they are now. 6. PREPAID HOSPITALIZATION FOR THE AGED UAW experience verifies a continuing need for the more adequate financing of health protection for retired workers. While it is perhaps not the subject of this hearing, we urge this subcommittee to recommend that hospitalization for retired workers be provided through Old-Age and Survivors Insurance. Many studies ave demonstrated that this is one of the greatest unmet needs of retired workers. It is hoped that the serious problems of unmet health needs outlined by the President and by the Secretary of Health, Education, and Wel fare will get the serious attention they deserve in this Congress. It is strongly urged that this committee reconsider some of the specific legislative actions which we here recommend. Mr. Chairman, there are a couple of other comments I would like to make. Senator PURTELL. We are very happy to have you do so. Mr. BRINDLE. Dr. Brand indicated a grant rather than a loanguarantee program might be advisable. We suggest that perhaps S. 1052, which is very much like Mr. Wolverton's bill, H. R. 6950, ought to receive serious consideration. Senator PURTELL. That is the Humphrey bill? Mr. BRINDLE. Yes, sir. It would provide low interest loans to consumer sponsored prepayment health plans. I think some of the provisions of Mr. Wolverton's bill are broader than Mr. Humphrey's and could be incorporated. Also, we would recommend rather than $5 million for each of the first 2 years about $10 million be made available there. Senator PURTELL. You mean $10 million for each of the first 2 years! Mr. BRINDLE. Yes, sir. Previous testimony has made much of the fact, and before the Wolverton committee also, that a very substantial number of persons are covered by voluntary insurance programs. I think the figure now is something like 90 million. Senator PURTELL. The figures have been quoted as high as 100 million as of today; 90 million, I think, is as of the first of 1953. Mr. BRINDLE. I think that is so. Senator PURTELL. That is, some form of insurance. Not adequate coverage. Mr. BRINDLE. That is the point I wish to make: That actually much of this insurance does not provide the kind of comprehensive prepaid protection we feel is necessary, and we try to bargain for in collectiv bargaining. Particularly much of it covers only hospitalization, ari only part of the cost of hospitalization. Some of it had very serious dollar limitations in it, and, of course, none of it provides the kind of preventive care that in the long run will be the constructive type of medical care we need. Also, much of it has deductible and coinsurance features which to our mind discourage the subscriber from going early to medical care. and are really devices to try to inhibit the amount of medical car received. These particular devices and these inadequacies we wanted to point out to the committee. Senator PURTELL. We are very happy to have it and have any information you have to help us in our deliberations. You did in the early part of your testimony, sir, refer to Senator Ives' appearance before this committee. Mr. BRINDLE. Yes, sir. Senator PURTELL. And I am sure you would not want to do Senator Ives an injustice by just taking out a portion of his testimony and making it appear that was what he said. So I think at this time I would like to enter into the record exactly and completely what Senator Ives said before this committee. Senator Ives explained, and this is his complete statement: I am just coming in to appear in connection with the bill which has been introduced by Senator Flanders and myself, with which I think some of you may be acquainted, S. 1153. This bill or a similar one was put in during the 81st Congress. It was not introduced in the 82d Congress. It was introduced last year by us again as a matter of fact, on March 2, 1953. We feel that the approach contained in this bill is the approach which we should aim for in the whole matter of health insurance. It is entirely voluntary under the terms of the bill, utilizing entirely the voluntary agencies, the local agencies like the Blue Cross and the Blue Shield, and others, and operating from the standpoint of the Federal Government through the States and the States in turn through the localities. The terms in it are carried out in such a way that people are aided in accordance with their capacity to pay themselves. However, we realize anything of this nature And he is referring again to S. 1153, and he said However, we realize anything of this nature is going to cost a considerable amount of money. I have attempted to get from the budget some information, but I haven't yet been able to find out what the cost would be. The administration feels as a beginning we should undertake the program which they have recommended and which I assume is the legislation immediately before you And it was the legislation immediately before us. Personally, I think I can speak for Senator Flanders in this-he may appear himself-we feel that in the circumstances we should get behind the administration bill because we feel it is, to use an old, trite phrase, a definite step in the right direction, the direction in which we desire to go, and for that reason I am here this morning to tell you we are not asking for our bill. S. 1153, but we are recommending the administration program. Senator HILL. Thank you, Senator. Thank you very, very much, sir. They are very polite fellows. Senator HILL. Would you like to have your bill, for information purposes, put in the record, or not? Senator IVES. I don't think it is necessary. Senator HILL. You would not? Senator IVES. I don't think we need to waste the paper on it this year. Senator HILL, We certainly appreciate your coming, Senator. Senator IVES. Thank you very much. But I think we owe it to Senator Ives not to take 1 or 2 sentences out of what he said, but rather to give the whole testimony. Mr. BRINDLE. I think Senator Ives' whole statement reinforces the point I was trying to make, Mr. Chairman. Certainly it is costly. I think Mrs. Hobby's Department estimated its ultimate cost for that program on a going basis as somewhere between 800 million and a billion dollars a year, which is about the cost that the Commission on the Health Needs of the Nation placed on the recommendations they made. I think the labor organizations recognize that actually the health of the American people is worth some kind of investment like that. Senator PURTELL. We have never had any accurate figures submitted to this committee on it. There were some earlier figures sub mitted in the early part of the discussion, but we have not had any accurate figures, to the best of my knowledge, Mr. BRINDLE. I do not think they are precise, but Mrs. Hobby in her testimony of April 13 indicated the cost. I think it would be pos sible to arrive at the prescise costs or reasonable estimates. But the point is, it is worth a significant investment of something like a billion dollars. We would go along with the President's Commission' report, which indicated a sum of something like $1 billion, and I think it is an indication of withdrawing from any substantial amount of health program. Senator PURTELL. Now, we are here because we are trying to find out what the facts are and what the truth is, and what we can do with all the factors considered. Quite often it is most helpful if we do not take just a word or a sentence out of context and present that as evidence of a matter. What you said in your testimony actually was when Senator Ives was asked whether he would like to have the bill appear in the record he replied, and you carefully quote him: I don't think it is necessary. You have that in quotation marks, and then you say— and concluded with this statement which perhaps sums up health progress the present Congress to date. And again you quote him as saying: I don't think we need to waste the paper on it this year. I think the whole testimony of the Senator throws a little differen light on what he said, don't you? Mr. BRINDLE. I don't think it changes the basic idea that actually there is a withdrawal of a fairly ambitious health program. I am happy, of course, you have read Senator Ives' quotation into the record. Senator PURTELL. Of course, I would not have had to do it if you had seen fit to put it in your quote. Mr. BRINDLE. I had the whole thing in there but I was cutt” g down. I don't think I destroyed the sense of it. Senator PURTELL. I think at this time it would be well to have included in the record a report from the Department of Health, Educa tion, and Welfare on this particular bill referred to as the Ives-Fland ers bill, S. 1153, and also include in the record at this time a report from the Bureau of the Budget covering the same bill, S. 1153. (The documents referred to are as follows:) EXECUTIVE OFFICE OF THE PRESIDENT, BUREAU OF THE BUDGET, Washington, D. C., April 13, 1954 Hon. H. ALEXANDER SMITH, Chairman, Committee on Labor and Public Welfare, United States Senate, Washington, D. C. MY DEAR MR. CHAIRMAN: This will acknowledge your letter of March 4, 1944 inviting the Bureau of the Budget to comment on S. 1153, a bill to facilita' the broader distribution of health services, to increase the quantity and imp the quality of health services and facilities, and for other purposes. This bill proposes to achieve a broader distribution of health services throughout the country primarily by laying the basis for a marked expansion of Federal financial assistance to States and the establishment of several new Federal-grant programs. The bill includes provisions: (1) To make grants to States for assistance to cooperating prepayment health service plans, (2) to make grants to States for support of health programs in special-need areas, (3) to make grants to States for support of general health programs, (4) to authorize Federal payroll deductions for prepayment health service plans, (5) to make loans to prepayment health service plans to finance construction and equipping personal health service centers, (6) to make payments to medical and nursing schools on basis of enrolled students, (7) to make grants to medical schools for construction of new facilities and expansion of old, (8) to establish a Federal Health Study and Planning Commission, (9) for the Commission to formulate a 20-year national health plan, (10) for extension of the present hospital construction program, and (11) to make grants to States for assistance of local public health units. The broad objective of this measure is commendable. The President in his special health message of January 18, 1954, to the Congress said: "We must, therefore, take further action on the problems of distribution of medical facilities and the costs of medical care, but we must be careful and farsighted in the action that we take. Freedom, consent, and individual responsibility are fundamental to our system. In the field of medical care, this means that the traditional relationship of the physician and his patient. and the right of the individual to elect freely the manner of his care in illness, must be preserved. In adhering to this principle, and rejecting the socialization of medicine, we can still confidently commit ourselves to certain national health goals." A group of bills has been introduced in the second session of the 83d Congress designed to further the goals of the President. These measures propose to take care of the most pressing needs. H. R. 8356 and S. 3114 would establish a limited Federal reinsurance service to encourage private and nonprofit health insurance organizations to offer broader health protection to more families. H. R. 7397 and S. 2778 would amend the Public Health Service Act and H. R. 7448, the Children's Bureau Act, to provide a simplified formula for all basic grant-in-aid programs which apply a new concept of Federal aid-to-State programs. S. 2759 would provide for a progressive expansion of our rehabilitation resources, and S. 2758 would provide for expansion of the Hospital Survey and Construction Act, and would authorize financial assistance for construction of several new types of urgently needed medical care facilities. Although none of the bills comprising the President's health program include a provision for authorizing Federal payroll deductions for prepayment health service plans, the President's personnel-management program announced on February 24, 1954, does include a recommendation for a program of contributory medical care and hospitalization insurance open to all Federal employees on a voluntary basis. Specific legislation to carry this recommendation into effect will shortly be transmitted to the Congress. Enactment of the President's program for broadening the distribution and improving the quality of health facilities at a reasonable cost to individuals, although not providing for all of the activities proposed in S. 1153, will go far toward accomplishing the broad objectives of this measure without as great an increase in Federal operations and the financial burden on the Federal Gov ernment. In view of the foregoing, the Bureau of the Budget recommends that the bills comprising the administration's program be enacted rather than S. 1153. Sincerely yours, DONALD R. BELCHER, Assistant Director. DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE, April 13, 1954. Hon. H. ALEXANDER SMITH, Chairman, Committee on Labor and Public Welfare, United States Senate, Washington 25, D. C. DEAR MR. CHAIRMAN: This letter is in reply to your request of March 4, 1953, for a report on S. 1153, a bill to facilitate the broader distribution of health |