I thought, Mr. Chairman, it might be well for me to get a few observations on record because this whole question of health insurance has been of very considerable interest to me for a long period of time. When the first health insurance bill was introduced in the Congress and I was at the other end of the Capitol, I recall being summoned to Chicago on invitation to address probably 1,500 or 2,000 doctors and dentists. They had assigned as the subject on that occasion the pending health insurance bills, which were compulsory in nature. I did not go there as an advocate one way or another, but rather to explain what I thought the implications of this bill were. When it was all over we had something of a seminar and it was altogether a very vigorous session. But on that occasion-I forget whether I made these suggestions publicly or to a smaller group-I said, "Sooner or later something must be done in the field of health and the extension of more adequate health facilities to all people in the country, and I sincerely hope that it can be done within the frame of our free-enterprise system."

I said, "If I were you, I think I would seriously consider a program something like this, which in my judgment might conceivably abort the interest that is growing in a so-called socialized health system in this country."

That word "abort" is lifted out of the terminology of the medical profession and seeks, of course, to pass to one side or get around the difficulty.

I made this suggestion at the time. I said in the first place I think every physician might very well give 8 or 10 days of free time in the course of a year for service at a diagnostic center in a community, there not to train people but to examine them and determine what their maladies and ills were; then to send them off to the family doctor with a clinical record and a diagnostic record saying that this man is in need of an appendectomy, or this woman is in need of this kind of treatment, and to talk it over with the family doctor and to see what the cost would be.

Then when the costs had been determined, to have the doctor ascertain insofar as possible how much the patient could pay out of a week's wages, or a month's salary, and then to take notes running for, let us say, 18 months to 3 years, or whatever it might be. Then I said, all of you doctors and dentists might very well provide the capital, everybody subscrbing an equal sum, to set up what for want of another name might be called a medical acceptance corporation. It would be nothing more than an office in probably the largest city of the State, which would be sort of a rediscount office, because when the doctor had performed this operation, and these notes were signed, he would send in the notes to the medical acceptance corporation in which he was a stockholder.

They might discount that 5 percent or 10 percent, or whatever it is, and send him his money. Out of whatever the discount is they would have enough for administrative expenses to run such an office and probably absorb whatever losses might be involved.

I said that you have to set it up on this basis or some comparable basis so that health facilities and the availability of better medicine can extend into every corner. Well, nothing was done. So it was not very long until we were fully at grips with this whole question of compulsory health insurance.

46293-54-pt. 3——-24

Then, of course, came the experience in Britain. It has had some appeal in some sections of this country. It would certainly bother me, because I had long discussions about it with a British doctor who was here. I took a look at it when I was in England. It would involve for us a gigantic bureaucracy that would be as an incubus, I think, on the Government and on all of the health facilities. The ultimate end, of course, would be that all doctors, if they so desired, would be enrolled as civil servants of the Government. All of the incentives would go out and the mistakes would be nicely buried in the cemeteries of the country.

So this is a matter of very engrossing attention, and I am happy to note we are moving in a different direction, that is, in the growth of private plans, such as Blue Shield, Blue Cross, and group hospitalization, with all of the plans that are either in being or are in contemplation, and that are adding constantly to their lists of subscribers and members.

I fancy, without having seen a current figure, that this probably runs into the millions. Well, certainly the one great attribute about it is that it does not have the socialistic taint. It avoids a huge bu reaucracy in the Government, and I think that this bill probably makes it possible for greater incentives and more pioneering in that field, and for other groups to venture into the field of health insurance without bringing the Government so directly into the picture by avoiding that terrible compulsive feature which, in my judgment. should make anybody shudder for the future of the medical profes sion and the health services of the country.

I think this reinsurance approach is quite a good approach. Certainly it is not new, Mr. Chairman. Reinsurance is standard praetice in the whole insurance field and has been for a long time. Wher all is said and done, I presume we can say that the insurance of deposits in banks is in the nature of a reinsurance proposal, because you think of the banker as the first insurer under State and under Federal laws, and under the supervision of the Comptroller of the Currency. But when we came along with the Federal Deposit Insur ance Corporation Act-and I was on the House Banking Committee when that was prepared years ago and helped to usher it into beingit is, after all, in the nature of a kind of reinsurance where your banker is really the first recipient of what the person deposits in the bank. But if through some fortuity or some willful misconduct t is lost, then the Federal Government comes in and insures up to a given amount.

So we have already embraced that principle. We embraced it. I think, in the field of investments abroad. When the first Mar-ha! plan proposal came along, I toyed for a long time with the idea of working out some kind of insurance proposal under which we could say to American industry, "Look. Is it agreeable with your stos holders to invest abroad so as to help people and get us out from under the burden of direct foreign aid? If it is, perhaps the Federal Gov ernment can do something about it." That is because there is always the danger of expropriation of your property first. Secondly, yo have difficulty in getting your money or profits out of the country Thirdly, if you set up a depreciation account, for instance, in Frare. it would have to be set up on your books over there in francs.

But if you need a repair part from Hartford, Conn., obviously the manufacturer of that part will not accept francs in payment. You must pay in dollars. The question is, Can you get your depreciation account out under the laws of the country and convert it into dollars so that you can get replacements and do all the necessary things to make it a good industrial operation?

It was out of those speculations that finally this insurance proposal was born. I authored the amendment under which it was written into the act to provide for a premium that would be established by a Federal agency, and in return for that premium the Federal Government would say, "If you are going to invest in a country and through expropriation you lose your capital, we will reimburse you for the loss of your capital." It is really a sort of reinsurance proposal.

So what you have here is really something that is in good tradition in the whole insurance field. It says in effect for an insurance premium which shall be determined on the basis of experience, that there shall be insurance against loss to those that comply with certain requirements, and who venture into the private health field to give medical services to the people.

Senator PURTELL. It would protect against excessive loss.
Senator DIRKSEN. That's right.

Senator PURTELL. Share the loss.

Senator DIRKSEN. I think as far as I am familiar with the billand certainly I do not pretend to an expert knowledge of all its provisions--but I think the principle is sound. I think in the main its essential provisions are sound and can be worked out.

One other thing we might add to this very informal discussion, Mr. Chairman, is this: There is a constant need for incentive to move into fields of risk and venture, and I think this would do it. Healthinsurance groups operating on a private basis, if they knew there was reinsurance against a loss in case they moved into a field where there was either inadequate data or not enough of an experience factor to determine full well whether there would be loss or not, could with the incentive that is involved in this bill move into that field.

Out of it I think will come greater and greater explorations in the whole field of medicine.

I just add one thought in there which comes back to me constantly of our experience with penicillin. Here were two Oxford doctors, as I recall it, who first came up with this miracle drug. They did not know whether it had any usefulness. The trouble was it could not be manufactured in quantities. So when the incentive of war came on they were brought over and the fruits of their experiments were brought over, and they brought them to Peoria, Mr. Chairman. The reason why they brought them to Peoria was because we had set up there the Northern Department of the Department of Agriculture. It was established there because of the distilleries. Not because of what distilleries make, but, because the distilling process is a fermentation process. So you have scientists and other constantly working there in the fermentation field. Penicillin came out of the fermentation process.

The question then was how to culture it in order to have it manufactured in great quantities at the lowest possible cost. When they came there they moved from a so-called test-tube culture to an open

vat culture. As a result of some of the scientific contributions made there, penicillin came within the pocketbook purview of nearly every family in the land, and it must have saved countless lives not only on the battlefield, but in civilian life. It required some incentive and at least it required some insurance that money could be spent and they could go ahead and see what was at the end of the trail.

In this particular case the results were tremendously fruitful and instructive. So I think here is a plan that will stimulate incentive to move in other fields.

There is still so much to be learned today. Out of it I think wi!! come either greater glory for the medical profession, and. Mr. Chairman, it will be constantly keeping within their free framework, which in my judgment is so essential to the greatest results in the health field. I thank you for your patience.

Senator PURTELL. Senator, your discussion has been not only interesting and illuminating, but it will be most helpful to us. We thank you for coming over here.

The next witness is Mr. Andrew J. Biemiller, member of the nations! legislative committee of the American Federation of Labor. Mr. Biemiller.

I will say again, as I have said every morning-and I think it is important for the witness to understand it, and I am sure you do because you have been here for many years-the absence of my col leagues in no way indicates a lack of interest in your testimony, but they have so many other meetings to go to and so many other official duties to attend to, that unfortunately they cannot be in 2 or 3 places at the same time. However, I can assure you, as I can assure the other witnesses that have appeared or may appear, that your testimony will be given their very careful consideration when they get the report of this meeting.

STATEMENT OF ANDREW J. BIEMILLER, MEMBER, NATIONAL LEGISLATIVE COMMITTEE, AMERICAN FEDERATION OF LABOR

Mr. BIEMILLER. Thank you very much, Mr. Chairman.

Mr. Chairman, my name is Andrew J. Biemiller, and I am a member of the national legislative committee of the American Federation of Labor. My office is located at the AFL Building, 901 Massachusetts Avenue NW., Washington, D. C.

I deeply appreciate this opportunity to present to your subcommittee the views of the American Federation of Labor on the severs! health measures you now have before you for consideration which deal with issues vital to the welfare of the workers of America.

First I should like to present to this committee a summary of the major needs in the health field as they appear to an organization which represents a large number of people who are recipients of medical care and service. These needs fall into two general groups.

The first group deals with the needs of working people, which we observe from our experience in this field. We believe they are not different from the needs of the general population.

1. Preventive care: A constructive progressive medical-care pro gram is one which seeks to improve and to maintain the health of the who are served by it, rather than to merely patch up and repair ther disabilities after they have reached an advanced stage. Every system

or program of medical care should be tested by the attention which it pays to this vital aspect of the total national health problem.

2. Access to facilities and personnel: The principle of free choice should be realistic in its application. It should include the choice of the method or type of medical care to be selected and it should, if it is to be meaningful, include access to the best hospitals and health service centers.

3. Comprehensive protection: Medical care without detriment to its quality cannot be fragmentized. Its component parts must be integrated into a comprehensive continuous whole. Diagnosis cannot be arbitrarily separated from treatment and surgery cannot be isolated from preoperative and postoperative care. Care inside of the hospital cannot be provided as a thing entirely apart from care in the home, office, or clinic. Anything short of a comprehensive, unified health program is to that extent an inadequate program.

4. Full family coverage: This is likewise an essential criterion of adequacy. Many of the plans in existence today cover only the wage earner himself and exclude his wife and children. The contribution which such plans make toward the solution of his health problems is very small, even if these plans were adequate in all other respectswhich they are not-for the medical expenses of the worker himself are but a small part of the total family medical bill.

Senator PURTELL. May I interrupt a moment?

Mr. BIEMILLER. Surely.

Senator PURTELL. Many of these plans, however, that you speak of, where the employee alone is covered-are they not plans, or are they plans to a considerable extent anyway, which he, on a voluntary basis, could cover his family with also, if he so wished?

Mr. BIEMILLER. That varies considerably.

Senator PURTELL. I do not know. Would you say most of them could? Or how would you differentiate it as between those that have the opportunity and do not avail themselves of it to cover their families! I know of plans I am acquainted with where workers could cover their whole family.

Mr. BIEMILLER. We are cognizant of such plans, but I would doubt whether there were any accurate figures available on that matter. But we are familiar with enough plans that are strictly limited to the worker himself so that it bothers us where he does not have the opportunity.

Senator PURTELL. Are those plans where he contributes partly, anyway, to the cost you are speaking of?

Mr. BIEMILLER. No. In most instances they are straight coverage in terms of the employer's fringe benefits.

Senator PURTELL. In which the employee does not in any way contribute?

Mr. BIEMILLER. That is usually the case.

in

Senator PURTELL. But in those same instances are there many stances in that field where the family may be covered by an additional sum paid by the employee?

Mr. BIEMILLER. There are some such plans. Yes.

Senator PURTELL. Would you think that that was the majority? I really do not know and I am looking for information.

Mr. BIEMILLER. I do not know that you could at all find accurate statistics on that point.