INCOMPLETE COVERAGE OF VOLUNTARY PLANS

Fourth. No voluntary organization can be expected to reach all the population. There are many administrative difficulties in the collection of dues for individuals not permitted to enjoy the privileges of pay-roll deductions. The self-employed, persons in rural areas, irregularly employed persons, and Federal Government employees are difficult to reach because their dues must be paid individually, with a resulting high cost of collection.

ADVERSE SELECTION OF RISKS

Fifth. Membership in voluntary plans, because they do not include all the population or a representative cross section, tend to be composed of those persons who most feel the need of protection. This makes for an unfavorable selection of persons covered unless rigid requirements for enrollment are established. Persons with a felt need for medical services are the ones most likely to join. Persons who have little occasion to use the service tend to drop out faster than others. The cost for those who remain is higher than would be true if the membership represented a true cross section of the community. The group of the population that most needs protection against the economic barrier to necessary health and medical-care services cannot expect to pay for this protection through membership in voluntary plans because of prohibitive costs.

In recognition of our own inherent weaknesses we support S. 1606 because we believe that medical care must be assured to all the people as a right rather than a privilege for a few. Attainment of this end depends on removing economic barriers to necessary medical care that exist for the overwhelming majority of people. This can be done only through the universal application under Government auspices of the successfully demonstrated principle of periodic payment. When members of voluntary plans now prepay their medical care, they agree to a voluntary tax on their income. A universal application of the principle of prepaying the costs of medical care is possible only through the exercise of the Government's power to tax, whether it be through the form of pay-roll deductions, through Government taxes, or both.

INADEQUATE CONSUMER REPRESENTATION

Many voluntary plans, particularly those that assume no responsibility for services, do not have consumer representation on the policy-making boards. Voluntary plans, even those sponsored by hospital associations and medical societies, cannot and should not be expected to assume the responsibility of coordinating facilities and professional personnel on a community-wide or State-wide basis. A community plan for health services must integrate the public health activities with provisions for treatment, a task that cannot be expected of the voluntary prepayment plan. A national health program must embrace the health and medical care needs of all the people. Only Government can exercise the responsibility required in the planning, financing, and administration of such a program for health.

ROLE OF VOLUNTARY SERVICE PLANS UNDER S. 1606

If we say that voluntary agencies cannot do the job, does that mean that they have no place in a national health program? We believe that they do. We believe that voluntary health and medical care agencies organized for the purpose of providing health services have a significant and essential place under our form of government in a national health program. Frankly we are not too concerned about what happens to most of the existing commercial plans, nor are we particularly concerned, in the event that the Congress sees fit to pass S. 1606, about the survival of those plans that operate primarily as financial agencies for the collection and distribution of funds. This function should be taken over by the national health insurance fund and the top collection agencies of Government. are concerned, however, that a national health bill shall promote the growth and extension of those consumer and other medical service agencies representing the public interest.

Dr. Elmer Richman, who is medical director of the Labor Health Institute of St. Louis, Mo., speaking at the National Conference of Social Work, on May 21, 1946, expressed this concern of ours in a very blunt fashion. He said, "Over and over again, I would like to emphasize service versus.insurance-medical centers rather than insurance policies-qualified, willing, available, physicians, nurses, technicians, and social workers-where we need them, when we need them, how we need them-on a national plane-not medical indemnities controlled by local cliques. We want hospital beds and doctors when we need them, not the privilege of getting the bills paid if we are lucky enough to receive service of some kind."

Many of our cooperative plans and many of the union-management sponsored insurance plans are torn between a recognition of their weakness and a fear of State supervision. If Government is to assume Government responsibility for meeting the Nation's health needs but at the same time permit freedom of individuals as consumers to organize, own, and maintain an organization of their choosing for the provision of medical care, this opportunity should be protected by legislative action as it now is in S. 1606, and not left. to administrative rule and regulation. As S. 1606 is now drawn, we believe it will foster the growth of and help those service plans already in existence in the following ways:

First. The establishment of a basic public health and maternal and child health and medical care program for the entire community. The voluntary medical care agency cannot function at a point of maximum effectiveness unless there is in the community a comprehensive public health program and a health and medical care program for mothers and children. Preventive and treatment services must be integrated in the interest of continuity of program operation and maintenance of standards of medical service. Title I, parts A and B, together with Senator Pepper's suggested amendments, provides for these essential segments of a national health program. S. 1318, now before this committee, provides the same essential segments of a national health program for mothers and children as part B of S. 1606, with Senator Pepper's suggested amendments. Voluntary plans cannot duplicate or provide the community-wide public health services, including

services for mothers and children, encouraged now under the Social Security Act and which urgently need to be extended to the many hundreds of thousands of individuals not now being reached. For many of the same reasons that we oppose the program only for the needy in the Taft bill we oppose the special program for the needy in part C of S. 1606. It is against our philosophy of government to provide health and social services from public funds for less than the total population.

The individual's need for health services is in relation to his medical requirements and not in relation to his economic status, his color, his creed, his residence, or his occupation.

Second. S. 1606 would establish standards for administration and for care. We would greatly benefit as a vountary prepayment plan from the guidance of Government in the improvement of our standards of care and the extension of the scope of our program.

Third. The establishment of the national health program for the total population will remove from consumer-sponsored health service agencies the burden of collecting payments. The universal establishment of the insurance principle to provide for the costs of illness will make membership in a consumer-sponsored plan open to all who desire to join, not just those who can afford the cost of the prepayment fee. Relieved of financial burdens, medical cooperatives will be able to seek members on the basis of the quality of the medical care they offer and on the principle of consumer participation in the general policies of the agencies. The bill will reduce the turn-over of membership; members who have had little medical need will have no financial incentive to drop out. The cost of services rendered can reflect the savings accomplished through a group of physicians--general practitioners and specialists-working together, jointly using expensive equipment, with full use of auxiliary personnel, and with the improvement in quality of care that results from the professional stimulation of group medical practice. Elimination of the costs of collection and sales would mean a less expensive service with more money for medical care and for special services.

Fourth: The removal of financial worries will make it possible for consumer organizations to concentrate on the quality and scope of their medical services and on the preventive aspects of their program. Consumer policy determination will help make cooperative health plans significant instruments in determining the kinds of medical programs people want for themselves.

Fifth: In safeguarding the right of every individual to free choice of doctor, dentist, or "group of doctors" the bill not only has safeguarded present consumer plans, but has laid the basis for expansion of consumer-sponsored plans. This provision of the bill will protect new group medical plans from hostile and antagonistic community groups. New consumer-sponsored associations, including plans under auspices of labor groups, with the financial protection afforded by S. 1606 and S. 1318 will not be vulnerable to the same type of opposition that was experienced by many existing plans.

Sixth Freedom in designating method of payment is assured physicians and groups of physicians. The bill provides for payment on a fee-for-service basis, on per capita basis, on a salary basis, or

through a combination or modification of these methods. The proper administrative agency may make payments by another method to those doctors who do not favor the method chosen by the majority of doctors in a community. This provision protects consumer organizations in that appropriate methods of payment can be developed. Seventh: The bill should give an impetus in rural areas to the development of medical and hospital facilities of a cooperative nature because the economic barrier to the development of rural programs that now exists would be removed.

For cooperative hospitals the passage of this measure will lessen the strain of meeting operating costs and balancing budgets. They will be assured of payment for services rendered to many patients in their communities who now are unable to pay. The cooperative hospital will be relieved of making the decision of whether to provide free or partially free care to patients. With a substantial part of their operating costs assured, many communities will be encouraged to go ahead with hospital building programs.

The principles governing the financial and administrative responsibility of government must be based on the fundamental economic, political, and social philosophy which guides the action of government. It is only in the light of these fundamental questions that decisions on the extent, character, and methods of administration can be made in the interests of the people.

The two bills, S. 1606, and S. 2143, which your committee now has before it, give distinctly different answers to these basic questions of administrative and financial policy because they are based on two conflicting philosophies. I believe that Senator Taft and those Senators who have cosponsored the bill, S. 2143, have performed a distinctive service by spotlighting two fundamentally different approaches to the problem of government action in meeting the Nation's health needs. However, I cannot agree with the premises on which S. 2143 is based.

I have mentioned why we support S. 1606 as a bill to remove the economic barriers to necessary medical care of our people. Since S. 2143 is not based on this concept of a universal health service, I want to discuss again this important principle in a little more detail.

S. 2143 REJECTS THE PRINCIPLE OF SOCIAL INSURANCE

When Congress in 1935 passed the Social Security Act, there was established for this Nation the principle of social insurance, which enables workers to make regular contributions from current earnings to provide against loss of income in periods of unemployment and old age. As part of the Social Security Act Congress also established the responsibility of Government for certain public health, medical, and social services financed from general tax funds. Even those services, especially those for mothers and children and those that include the basic public health and welfare services, are strikingly restricted because of the serious limitation in funds. In addition, there is an obvious gap in this social-security program which now pays compensation to workers who are unemployed because of a lack of a job but provides no payment when sickness or disability results in loss of

income.

The issue at stake between the two bills now before your committee is whether the principles established in the Social Security Act over a decade ago shall be or shall not be utilized in the extension of medical services.

S. 2143 does not propose to utilize the Social Security Act to extend medical services to our people. It is primarily an extension of the outmoded poor law concepts. Senator Taft and his associates in proposing S. 2143 have asked for the adoption of a Government program that does not assure provision of a well-rounded medical service to any portion of the population; that does not remove economic barriers to care; that essentially makes no provision for safeguarding standards of care; that authorizes delegation of public responsibility to agencies not responsible to the people; and that contains many fundamentally unsound administrative provisions. This measure can hardly be called a national health act.

The Taft bill proposes to let Government agencies, State and local, decide who can and who cannot have the health services they need. It makes necessary a vast network of employees on a system of red tape to investigate the economic circumstances of individuals who need health services.

It is based on the principles of the seventeenth century Elizabethan "poor laws." It is as vicious as the local "poor laws" in this country, which the Social Security Act was designed to replace. We do not want to see the people's money go for salaries of investigators instead of the medical services for the people.

The public agency must establish minimum standards to assure quality of care and must define the scope and extent of service to be provided. The public agency function is to assure to the individual the medical care set forth as his right in legislation. The individual, in our form of society, must always maintain his right to elect to receive his care from the type of agency of his choice.

It is the responsibility of the Federal agency to purchase care in conformity with its standards. Payment for care rendered to beneficiaries of public programs should be related to the cost of rendering such care. If individuals wish to elect a more expensive service than a basic service of high quality which Government has agreed to purchase, they should be required to pay for this care with their own funds. Voluntary agencies providing a medical service have a right to expect Government under a national health program to reimburse them for services rendered individuals who elect to receive care from their agencies. Voluntary health service agencies must be free, under a national health program, to devote their time and energy to provision of a quality of care and to meeting the needs of the persons who wish care under their auspices. A national health program such as that envisioned by S. 1606 would assure this, not only for the beneficiaries of the health-insurance program but for other individuals under other sections of the bill.

The principles governing the relationship between Government and the voluntary agencies must remain the same whatever the plan of financing the public program. It makes little difference whether the medical service plan is consumer-sponsored, medical-society sponsored, or operates under other auspices-the basic relationship between Government and the voluntary plan must be the same if the

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