tionship between the teaching institution and the hospitals that were delivering the care.

The other program really began the one that you talk about that comes from the grassroots-when it came down to the grassroots from the Governor, and it took a while to take root, but it is, in California, doing equally well with the regional medical programs at the present time.

I believe and I certainly had this intent when I approved of this method of approach-that this will help both programs, and it will be a relief to many people to find that there is some kind of basis on which they can cooperate, and I still feel it is a boon to the regional medical programs.

Mr. NELSEN. Speaking of hospitals-which may be a little apart from the hearing here today-we just completed the conference on the Hill-Burton bill, and the evidence from some of the more sparsely populated rural areas was that a complete hospital was perhaps miles and miles away and that there is a need for smaller units not so expertly staffed. It was indicated that some people could go to such a unit, previous to going to a hospital, for some care and attention. I think something could be worked out, and I think our conference report recognizes a need to move in the direction of recognizing these problems. Do you have any comment about that?

Dr. EGEBERG. When you talk with people in rural areas, they use the distance that they are from the doctor or hospital. If they would transpose that to hours or minutes, they are a lot closer than most people in the city. I think in looking at the overall problem, we are probably going to look at it that way.

Our feeling at the present time is that our most desperate need is to start the education of enough nurses so we can have 200,000 more than we have at the present, enough doctors so we can have 50,000 more, and once we get that, we can look at the distribution problem with some hope of meeting the needs. We also have a committee working on that for rural areas.

Mr. LEWIS. I might add to that, Mr. Nelsen, that actually sometimes this problem is a question, particularly in the rural areas, of involvement of new types of manpower, and one of the programs in this bill is the area of research and development, and in just flipping through my notes, your comments reminded me I have seen something here which I thought bears on the point.

We have, for example, a project in New Mexico which involves the development of nurse practitioners to work in conjunction with physicians, utilizing a facility, not a fullblown hospital but a medical facility which had been constructed, or previously constructed by funds provided through a foundation; by the development of this type of manpower, working in conjunction with what is our scarcest resource-namely, doctors, and we can't produce them fast enough to meet our total requirement-by development of skills for a nurse to work with a doctor and cover a wide area, utilizing the technology of telephones or whatever modern conveniences can provide, we are able to get out and use facilities short of a large hospital and with maximum use of manpower.

Mr. NELSEN. This is a concern expressed by one of the Senators from Colorado who had a real concern about this problem. This is

the reason I brought it up and I thank you for your appearance here today.

Dr. EGEBERG. Thank you.

Mr. JARMAN. Mr. Rogers?

Mr. ROGERS. Should kidney disease be covered in regional medical programs?

Dr. EGEBERG. I would like to see it broadened and lose its specificity. By the time you include kidney disease, with cancer, heart, and stroke, you have covered about 80 percent of the illnesses.

Would you say that?

Mr. LEWIS. Yes.

Dr. EGEBERG. Maybe it is a little more. After that, categorization perhaps loses its beneficial effect. The categorization gives you a chance to focus, but if it is focusing on 80 to 85 percent of the illnesses in man, it might be kinder to let it include the other 15 or 20 percent, so I would favor going all the way.

Mr. ROGERS. Now, you plan to use in your comprehensive Health Planning and Services Act, project grants to carry on OEO projects? Dr. EGEBERG. We are acquiring $30 million worth, but I don't know how many projects that is at the moment.

Mr. LEWIS. The numbers are being negotiated and probably in the area of 30.

Mr. ROGERS. It would be what?

Dr. EGEBERG. We are getting $30 million worth of projects from OEO, but because of the ways the buildings are financed, OEO can finance certain kinds of buildings that we can't because of their law, we are having some problem. It is taking some time to decide which projects should be turned over to us. The concept is that OEO starts things, and they had the original idea with the neighborhood centers, and thus having established them as successful ventures, they should start turning them over to the agency whose job it is to keep things going.

Mr. ROGERS. Are those funds transferred from the OEO budget or to you request them yourself?

Mr. LEWIS. They are included in a budget request for 1971 for HEW. They were eliminated from the OEO budget.

Mr. ROGERS. As of when? 1971?

Mr. LEWIS. Yes, sir, fiscal year 1971.

Mr. ROGERS. How much is that, $30 million?

Mr. LEWIS. The decision was to transfer $30 million of on-going budgetary requirements for the neighborhood health centers. That was a presidential decision. There was no decision as to the number of centers and we have negotiations with OEO as to criteria to be followed in selecting the particular centers and we would assume during this month we will come to final wrapup on it.

Mr. ROGERS. You don't know how much of the $30 million you will transfer yet?

Mr. LEWIS. Yes, sir; the whole $30 million.

Mr. ROGERS. Suppose you don't agree on a particular center?

Mr. LEWIS. One cannot have a Presidential decision without having the agencies come to agreement. The agencies have to come to agreement.

Mr. ROGERS. Iwish that was true.

Mr. LEWIS. The President has decided that $30 million of OEO centers will be transferred to HEW and I am using my full and best efforts to make sure it comes out.

Mr. ROGERS. The committee will be interested in seeing if you are successful and which ones.

Mr. LEWIS. Fine.

Mr. ROGERS. I am sure OEO will, but I thought you said there was difficulty? What is the difficulty?

Mr. LEWIS. There was a basic difficulty, sir, that a number of the centers, a number of the centers that OEO has, were actually located in old buildings and, therefore, there was a new building requirement that was levied by OEO or by the center in its development.

Our present statutory authority is not broad enough to cover the same downpayment, interest payment, mortgage payment, and so forth, possibilities which OEO has in its law. This has been a definite stumbling block in our working out the right centers to transfer. By the "right centers," I am talking about which one OEO would want to maintain and which ones we want to accept. We are in the process of working it out this month and I am confident it will be settled.

Mr. ROGERS. It depends not on how long the program is going when it is ready to be turned over, but how you are going to fund the building?

Mr. LEWIS. That is part of the problem. It could be a center which really ought to be moved over from OEO, but which has, however, a building commitment ahead of it. Therefore, we have not selected that center yet, but we may want to take it over with a delegation of authority, and we would like to have the provision which we asked for here to make our authority as broad as is necessary to cover the downpayment and interest payment requirements.

We have made that request in our legislation.

Mr. ROGERS. In this legislation?

Mr. LEWIS. Yes, sir.

Mr. ROGERS. What section is that covered in?

Mr. LEWIS. It relates to, and I am not sure of the new section, but it is the old 314(e) section.

Mr. MOSCATO. The proposed new section in section 925 of the Health Services Improvement Act. The kind of authority it needs is authority to use 314(e) grant funds for equity requirements, downpayment, and also the authority to assist in the amortization of loans, which is what Mr. Lewis was speaking of here.

Mr. ROGERS. In other words, construction?

Mr. MOSCATO. There may be some construction authority involved. Mr. ROGERS. What about acquiring land?

Mr. MOSCATO. This kind of thing, the acquiring of land, as well as acquiring a building. Frequently OEO neighborhood health centers, rather than build a new building, will acquire existing structures. If only minor renovation is required in an existing structure, existing 314 authority can take care of it and assist, but in terms of cost of acquiring land or buildings, 314 (e) authority is not sufficiently broad. Mr. ROGERS. I think this committee has never approved acquiring of land, I though we just went through that on Hill-Burton again and we feel that local efforts ought to at least provide land.

Dr. EGEBERG. I can tell you about the one in Los Angeles. We had

the land donated by the city, but it was an area, probably a mile and half long, where every building had been burned and it looked like one long skating rink, and all of the concrete slabs were there, but no buildings were to be had in the whole area where we wanted the service. That is one.

So we got the prefabricated buildings which were put up rather quickly, but with the amortization procedure which was allowed under OEO. That is not allowed under HEW.

Mr. LEWIS. That is my understanding.

Mr. ROGERS. Because we do go into construction, for instance, HillBurton, and these types of programs, but I don't recall our approving acquisition of land because we felt that all of the money would go to the land then and we may never get anything done then.

I would think we would want to know your full contingency and all of the authority that would be asked of the committee.

Mr. LEWIS. Mr. Chairman, I would like to be able to follow your request and to amplify it to make sure the record is clear as to what the centers are and what the various building or equity financing problems may be. I am quite sure really that we have land funds. I know we have a number of centers that are good and are really in business on which building commitments have been made and if we are to carry through with the transfer, then this type of legislative amendment would be necessary, of course. I would like to give you a good statement for this record on that.

(The following information was received for the record:)

NEED FOR TECHNICAL AMENDMENT TO SECTION 314(e) To PERMIT TRANSFER OF OEO PROJECTS

The Administration has developed a policy that certain mature neighborhood health centers as supported by OEO will annually be transferred to DHEW for their continued support. This policy will become effective with the FY '71 appropriations. Accordingly, some $30 million has been requested as part of the FY '71 DHEW appropriation to support a given number of OEO neighborhood health centers under 314(e) of the PHS Act. However, while the OEO program has broad authority vis a vis the use of funds for neighborhood health centers, the existing authority of section 314(e) of the PHS Act is not sufficiently broad to utilize 314(e) funds to continue the same degree of support to these transferred neighborhood health centers. More specifically, although many of the projects to be transferred from OEO to DHEW are presently utilizing OEO funds to meet mortgage payments and other equity requirements associated with the purchase of a building, present 314(e) authority does not permit use of grant funds for these purposes. Accordingly, while the Administration has requested $30 million as part of our 314(e) request for FY 1971 to support a given number of OEO neighborhood health centers, existing authority is not sufficient to provide the total support necessary.

Lines 10 and 11 on page 28 of H.R. 15960, the Health Services Improvement Act, would provide, the needed authority, if the phrase "equity requirements" were inserted between the words “including” and “amortization," omission of this phrase was inadvertent. "Equity requirements" is generally understood to encompass a down-payment money and other kinds of liquidity requirements associated with purchasing a building.

Mr. ROGERS. I think that would be helpful. Thank you. What do you plan to do with health service research and development?

Dr. EGEBERG. We look on regional medical programs and comprehensive health care planning and the statistical center as an opportunity to lead the delivery of health care in this country. The research and development part under Dr. Sanazaro would have many possible opportunities.

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The one that I personally envisage it would have, aside from operations it runs on its own budget, is the opportunity to educate this overall committee, which will not be giving out grants, but whose purposes will be the broad trends that they think the programs should follow. It would be involved, as I said, and in addition to its own granting for research projects and delivery of health care, it could be inestimable importance in keeping the committee, which I think will be an extremely important committee, aware of where we might best be going, of things that have been tried and of directions that look promising. Mr. ROGERS. What do you or how do you plan to tie in the environmental health features into health planning and regional medical programs?

Dr. EGEBERG. I think I am going to wait and see what the Ashe committee recommends.

Mr. ROGERS. I just wonder about this.

Dr. EGEBERG. We had that problem to face in southern California when we established the comprehensive health care planning. We involved the health departments of the various counties or cities or whatever municipality might have a health department, in the overall planning, and they had usually the head of the department on the board that helped make the decisions. Their interests were in milk sheds and in small sheds and in sewage disposal and in reconstitution of water and they were brought into the planning, at every level that we could bring them in, including the safety level.

Mr. ROGERS. Well, I would think that we need to move, rather than wait for Mr. Esch and his committee, because I don't know how long we are going to have to wait. We have been waiting in the marine field for some time now. That is to see what we are going to do, that is, whether we are going to have a separate agency there.

But it seems to me we ought to have areawide health planning certainly putting an input on the health factors of the environment and this should have, I would think, a rather high priority and I would hope that that could be done or cranked in.

Dr. EGEBERG. We have input from the extensions of our environmental health services at the regional office level who coordinate with these programs and then, we have the input of the people actively interested in the environment at each level on the advisory committees and in levels where they can ask for money.

Mr. ROGERS. Now I see in your statement on page 16 you say: We are committed to a bold research and development program to deal with, one, rising costs and inadequate financing methods.

What bold research and development program are we really carrying out? That is for health costs? I have not yet seen any and I am concerned and I think the American people are, about the fantastic rise in our costs and I would agree we do need to do something.

Dr. EGEBERG. Dr. Sanazaro has, in his area, a number of projects with hospitals, clinics, with cities, and with other governmental subdivisions, studies as to how one can change the delivery of health care.

Now I don't know that this is the place to speak about it, but we will also be watching the changes in things that we think are forthcoming, changes in medicare, where we have opened up a new option, so that doctors who are practicing and who are certainly in a better position to see how they can be more efficient can come up with their own efficiencies rather than having us try to spell them out in Washington.