think of any other way by which Federal funds could be more productively spent?

And yet the remarkable returns on the dollar which can be realized in this program are being only partially realized at present. The reason that the returns are only partial is that the funds appropriated for the program have not kept pace with the needs. It is recommended that the appropriation for this program be increased by $1 million for fiscal 1970-a rise from $57 million in fiscal 1969 to $58 million in fiscal 1970. This averages about $20,000 for the year per State. It is most certainly the case that in every State the increases in hospital charges, in vendor costs, in salary and administrative costs will more than wipe out that kind of increase. In fact, this almost certainly represents a decrease, since $58 million in fiscal 1970 will buy fewer services for crippled children than $57 million bought in 1969. And so, gentlemen, if it is determined to make an increase only of this size, the result will actually be a reduction of the care and treatment of crippled children. I ask you gentlemen: Is this your intent? Do you wish to cut this contribution?

It may well be said at this point that the States must pick up more of the cost. In my experience, the more the State contribution exceeds the Federal conribution, the less willing the State is to increase its contribution. Federal legislation says that the States must at least match on a dollar for dollar basis in the crippled children's program the Federal contribution. Vocational rehabilitation program, however, provides 80 percent Federal money, and the States makes only a 20-percent contribution. Yet the crippled children's programs must provide expensive surgery and other treatment. We can only make people able to benefit from vocational rehabilitation if we are able to give treatment early. Yet our funding is less than that for vocational rehabilitation. Florida's ratio for fiscal 1970 for the crippled children's program is approximately 3 to 1. That is, the State provides three times as much money as the Federal Government does. The State is more than doing its part, and most States are making contributions far beyond the minimum 50 percent, at the same time that the Federal Government proposes to reduce its real contribution. If his were part of a general transference of responsibility to the States, this might be fully acceptable, but in fact some programs are being greatly increased, while others are not. We in the crippled children's programs believe that there is no more important task than the medical habilitation and rehabilitation of children and we are convinced that vast sums can be saved in the future if we act now to meet rising needs and the rising costs associated with them.

As to the nature of those rising needs and rising costs, I know you are all familiar with the study of rising medical costs. The following three charts will say, better than I could in words, what is happening to medical care costs today. The first chart shows the cost of medical care as against the overall consumer price index. Medical care has been the highest priced item on the consumer index over the past 11 years and has risen at the most rapid rate of any item. The overall index stood at 123.4 last November. Medical care stood at 148.2. In April 1969, it stood at 153.6, up five points in 5 months.

The second and third charts show Florida's experience, but it should stand for the experience of all States, since all have experienced much the same kinds of cost problems.

The second chart shows the total average cost per child treated in Florida between 1961 and 1969, with our best estimates through 1971. The cost has risen from $215 per patient in 1961-62 to an estimated $340 for 1969-71. This is roughly a 50-percent increase, with most of the increase coming in the last 3 years.

The third chart shows per diem hospital costs between 1950 and 1968, and estimates for the period 1969-75. The charge was $6 per day in 1950, is $42 per day in November 1968, is $51 today, and is expected to rise to $90 per day by 1975. Between 1950 and 1968, the rise was sevenfold. Finally, Florida's population has been rising rapidly also, making for increased demands. Florida's population in 1947 was 2.5 million and is estimated at 6.3 million today, two and onehalf times the 1947 figure. Despite steady increases in our appropriations, both State and Federal, the Florida Crippled Children's Commission has had three severe cutbacks in service in the last year because of insufficient funds to meet demands for services.

Source: U. S. Dept. of Labor, Bureau of Labor Statistics

All of this comes at the same time that the U.S. Congress is requiring that we develop plans which show how we expect to increase services to meet all needs by 1975, and to establish processes for seeking out all those crippled children who need our help. It comes at the same time that the U.S. Congress has amended the Social Security Act to require that all agencies receiving funds under title V, which is, of course, the title under which the crippled children's program is funded, must pay reasonable costs to hospitals.

We want to do all these things. We want to expand our services, both in terms of numbers served, kinds of diagnoses accepted, early casefinding, and payment of reasonable costs to hospitals. But it has simply not been possible for us to do all these things at a time when Federal funds have not been available.

In fact, instead of expansion there has had to be a curtailment of services instead of increased early casefinding, we have had to limit the diagnoses we could accept. Yet, has the need lessened? No. The birth rate is steadily increasing, and while poliomyelitis has been virtually wiped out, congenital defects continue undiminished and increase as the birth rate increases. Furthermore, more parents are seeking treatment for defects, as knowledge of what we can do increases and as medical technology improves. Demands, therefore, are rising. Has the cost lessened? Again, no. Everything we purchase has increased in cost and continues to increase in cost.

Yet, at this period of rising demands and rising costs, we face the prospect of a lessened Federal contribution. The Congress has at the same time increased the requirements and proposes to reduce in fact the real contribution of Federal dollars.

Florida is not alone in this experience of rising demands, rising costs, and no increase in funds. Its experience is common. We have asked other crippled children's program managers, and they all find themselves with problems similar to

ours.

I want to dwell for a moment on one especially perplexing problem which involves costs. This is the problem of the requirement of the Federal law that reasonable costs be paid to hospitals. This requirement, as I am sure you know, went into effect July 1, 1967. We are required to have an audit of all hospitals for purposes of establishing a basis for payment of reasonable costs, but hospitals were required first to submit a cost report at the end of their accounting year. To date, we have not received any cost reports. Therefore, the actual audit required has not taken place and cannot take place. The cost of such an audit has been estimated at roughly $80,000 by two recognized auditing firms in Florida. The problem of who is to bear that expense has not been resolved. The audit itself is an added cost, but the real increase will come with payment of reasonable costs now and for the past 2 years, if indeed we have to go back and pick up the difference between our contract rates and reasonable costs charges since July 1, 1967. Most States face this same problem.

In Florida, we have asked the State Budget Commission to allow us to set aside moneys to pay reasonable costs for the 1967-69 period. While the Budget Commission in Florida may be willing to do this, the attorney general of the State has said that any agency with a contract with a hospital on a per diem basis holds a valid contract under Florida law which can only be changed by mutual consent of both parties. The Budget Commission has pointed out to us that while it wishes to comply with Federal law, the State law precludes unlimited contingent liabilities beyond the year in which services are performed. It is an extraordinarily difficult situation which promises to raise our costs even more rapidly than they have been rising all along.

We want to be fair with the hospitals, as we want to be fair with everyone. But it is most difficult to maintain quality service without sufficient funds. Let me tell you what we face if we are to give quality service. We begin with the fundamental concept of the total child, but a child with a handicap. We are aware that the child is an integral part of a family and a community and we understand that the child's needs must be recognized and planned for over a long period of time. We do not give "one-shot" treatment, but rather continue to have responsibility for a child until he is 21. We want to achieve our basic objective with each child, which is to help the child to realize maximum achievement of his abilities and to realize fully his economic usefulness, keeping in mind the physical disability. In the crippled children's program we do only a part of this task, of course. We attempt to overcome the original disability by corrections and by teaching ways of adjustment to handicapping conditions. For example, we teach self care in bed and in a wheelchair. We seek to maximize