public purpose is to be carried out and the right of voluntary action preserved and strengthened.

PROPER ADMINISTRATIVE POLICIES FOR A NATIONAL HEALTH PROGRAM

In the national health program the administrative policies must safeguard against the following:

1. Delegation of public responsibility to other than public agencies. 2. Public subsidy to voluntary agencies.

3. Voluntary agency subsidy to public agencies.

4. Destruction of the voluntary health agency structure.

Only agencies responsive to the public will, and accountable to representatives of the people, should be charged with public responsibility.

Delegating public responsibility or granting public subsidy to voluntary plans would destroy their character or make them ineffectual; the purpose for which public funds are to be spent and the reason for the existing of voluntary effort would be defeated. To destroy the voluntary health agency movement in this country is obviously not the intention of the authors of S. 1606.

VOLUNTARY PLANS SHOULD NOT BE SUBSIDIZED

Public subsidy to voluntary agencies, even though it be obscured by such proposals as payment for services to a needy or other special group, or reimbursement for preventive services commonly recognized as public responsibility, will only mean expenditures of large sums of public moneys without the full assumption of public responsibility in the development of the national health program. Any plan using voluntary agencies, such as is contemplated in S. 2143, will result in subsidy for these agencies and will require many decades to disentangle. In the provision of public health and medical care service the Government should not contract with non-Government agencies for administrative services, or delegate to them the organization of medical programs. Such delegation of public responsibility or public subsidy may easily thwart the public purpose because of the following:

1. The management of the voluntary agency, when its interest conflicts with that of the public, will tend to protect the interest of private management of the plan;

2. The people through their representatives cannot directly influence the spread, scope, extent, and quality of service;

3. Unnecessary duplication of costs in disbursements, planning, and execution, and the additional cost of Government supervision, inspection, and audit;

4. A given public program cannot be assured if responsibility for it is delegated to other than public officials responsible to the people; 5. Standards of administration and care cannot be directly applied by government-even though the care provided is made possible through public financing;

6. Articulate minority groups with vested interests are established through organizations made possible in part by public financing;

7. A nongovernment agency cannot, as can government, mobilize all the resources of a community or State; and

8. Nongovernment agencies, by virtue of the fact that they are nonpublic, must have a narrower spread of concern than has government.

VOLUNTARY PLANS SHOULD NOT SUBSIDIZE THE PUBLIC PROGRAM

We are all familiar with the public agency that has asked hospitals and clinics to render service to public beneficiaries at less than the cost of providing that service. This is tantamount to expecting voluntary agencies to subsidize public programs. Public agencies should pay the full cost for the service required by persons for whom it is responsible for assuring care. The National Health Program should not embody the principle that voluntary agencies must subsidize it through provision of service at less than cost.

We want to urge retention of all those provisions of the S. 1606 which provide for representatives of the public in policy making. We feel the public interest should be reflected and protected in the administration at local and State levels as well as in the program planning and development at Federal and regional levels. General advisory groups, as separate from the various technical advisory bodies, should have a majority of representatives of the public interest.

S. 2143, which is primarily a program for the needy, does not offer opportunity for growth and development of medical service plans such as Group Health Association. We feel that it establishes the undesirable principle of public subsidy of voluntary health-insurance plans. It does not safeguard the public interest to the extent essential in a Government health program. It does not provide for the extension of health services to all the people nor does it make possible an immediate extension of the important public health and maternal and child health and medical services. The burden of costs of the program that is provided for the economically needy group is much greater proportionately to the poorer States and the States with the greater need for Federal assistance.

The two bills-S. 1606 and S. 2143-sharply focus for the public and the Congress the basic issues in the great debate now taking place throughout the country on the extent and nature of Government responsibility for the assurance to its citizens of the right to health. This is not the first time we have debated public responsibility for assurance to the people of an essential right; the right to public education was a similar issue.

In a democracy there can be only one answer and that is the people's answer. The people of this country, not just those who lack the ability to pay for care, not just those in rural areas, not just those who are white, not just those who are veterans, not just those in any special category-but all the people want the removal of barriers to the highest quality of care that medical science and research offer. In my judgment, S. 1606 should be made the law of the land.

The CHAIRMAN. Mr. Becker, you have made a very comprehensive analysis of this question of health care for the people, and I am very glad to note you have relied, to some extent, upon a distinguished citizen of Missouri for aid in studying this matter, Dr. Elmer Richman.

Mr. BECKER. Dr. Richman is, incidentally, a very fine person; and has some excellent ideas about this question of insurance versus service. We have a great deal of respect and regard for him.

CONTROVERSY BETWEEN GROUP HEALTH AND DISTRICT MEDICAL SOCIETY

The CHAIRMAN. I understand that a few years ago this organization, which you represent, the Group Health Association of Washington, had some controversy with the District Medical Society.

Could you tell us what that problem was at that time, what the argument was between your organization and the District Medical Society?

Mr. BECKER. Senator Murray, I was not on the board of directors, nor was I president of the Group Health Association at that time. In fact, I was not even a resident of Washington during the beginning of those discussions with the District Medical Society and the AMA. I do not feel that I am as well qualified as I should like to be to discuss that, but a review of the material that is available, my summary of the situation, is something like this:

At the time that the employees of HOLC wanted to collectively pay money into a common fund, and with that money employ doctors on a salary basis to provide the members with medical service, the District Medical Society felt that that was contract practice. The District Medical Society did at that time urge the doctors in Washington not to furnish insurance service to physicians employed by Group Health.

The District Medical Society did deny membership in the District Medical Society to Group Health doctors, and thereby denied membership in the AMA to Group Health doctors.

The District Medical Society did make it difficult for Group Health Association physicians to have the necessary hospital privileges to take care of Group Health patients in hospitals.

This action, of course, on the part of the District Medical Society, made it very difficult for Group Health to recruit well qualified physicians in the early days. It made it very difficult for Group Health to assure its members the quality of care that the members wanted, and were willing to pay for.

I am glad to make a matter of record that that disagreement between Group Health Association and the District Medical Society is now a matter of history, and that our relations with the District Medical Society at the moment are satisfactory. My relations, as president of Group Health, with individuals and with officials of the District Medical Society have been most pleasant.

The CHAIRMAN. But at the time you originally undertook organization, this Group Health Association, the controversy became very bitter?

Mr. BECKER. I understand that, Senator; yes.

The CHAIRMAN. Did it not result in an antitrust suit being brought by the Department of Justice, United States Government, against the Medical Society?

Mr. BECKER. That is true, Senator.

It might be well to submit for the record a brief for the States that was submitted to the Supreme Court of the United States with respect to the case, the American Medical Association versus the United States Government, and also the court decision.

I would be glad to submit this document.

Senator DONNELL. You have it here with you this morning?

Mr. BECKER. Yes.

The CHAIRMAN. You may submit the decision for the record, and file the brief with the committee.

Mr. BECKER. Yes, sir.

(The document referred to is as follows:)

SUPREME COURT OF THE UNITED STATES

Nos. 201-202.-OCTOBER TERM, 1942

AMERICAN MEDICAL ASSOCIATION, A CORPORATION, PETITIONER, VS. THE UNITED STATES OF AMERICA

THE MEDICAL SOCIETY OF THE DISTRICT OF COLUMBIA, A CORPORATION, PETITIONER, vs. THE UNITED STATES OF AMERICA

ON WRITS OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA

[January 18, 1943]

Mr. JUSTICE ROBERTS delivered the opinion of the Court.

Petitioners have been indicted and convicted of conspiring to violate § 3 of the Sherman Act,1 by restraining trade or commerce in the District of Columbia. They are respectively corporations of Illinois and of the District of Columbia. Joined with them as defendants were two unincorporated associations and twenty-one individuals, some of whom are officers or employes of one or other of the petitioners, the remainder being physicians practicing in the District of Columbia and members of the petitioners serving, as to some of them, on various committees of the petitioners having to do with professional ethics and with the practice of medicine by petitioners' members.

For the moment it is enough to say that the indictment charged a conspiracy to hinder and obstruct the operations of Group Health Association, Inc., a nonprofit corporation organized by Government employes to provide medical care and hospitalization on a risk-sharing prepayment basis. Group Health employed physicians on a full time salary basis and sought hospital facilities for the treatment of members and their families. This plan was contrary to the code of ethics of the petitioners. The indictment charges that, to prevent Group Health from carrying out its objects, the defendants conspired to coerce practicing physicians, members of the petitioners, from accepting employment under Group Health, to restrain practicing physicians, members of the petitioners, from consulting with Group Health's doctors who might desire to consult with them, and to restrain hospitals in and about the City of Washington from affording facilities for the care of patients of Group Health's physicians.

The District Court sustained a demurrer to the indictment on the grounds, amongst others, that neither the practice of medicine nor the business of Group Health is trade as the term is used in the Sherman Act. On appeal the Court of Appeals reversed, holding that the restraint of trade prohibited by the statute may extend both to medical practice and to the operations of Group Health.3

The case then went to trial in the District Court. Certain defendants were acquitted by direction of the judge. As to the others, the case was submitted to the jury which found the petitioners guilty, and all the other defendants not guilty. From judgments of conviction the petitioners appealed to the Court of Appeals, which reiterated its ruling as to the applicability of § 3 of the Sherman Act, considered alleged trial errors, and affirmed the judgments.*

We granted certiorari limited to three questions which we thought important: 1. Whether the practice of medicine and the rendering of medical services as described in the indictment are "trade" under § 3 of the Sherman Act. 2. Whether the indictment charged or the evidence proved "restraints of trade" under § 3 of the Sherman Act. 3. Whether a dispute concerning terms and conditions of employment under the Clayton and Norris-LaGuardia Acts was involved, and, if

1 Act of July 2, 1890, § 3, c. 647, 26 Stat. 209, 15 U. S. C. § 3.

2 United States v. American Medical Association, 28 F. Supp. 752.

United States v. American Medical Association, 72 App. D. C. 12, 110 F. 2d 703, 710, American Medical Association v. United States, App. D. C. 130 F. 2d 233.

so, whether petitioners were interested therein, and therefore immune from prosecution under the Sherman Act.

In

First. Much argument has been addressed to the question whether a physician's practice of his profession constitutes trade under $3 of the Sherman Act. the light of what we shall say with respect to the charge laid in the indictment, we need not consider or decide this question.

Group Health is a membership corporation engaged in business or trade. Its corporate activity is the consummation of the cooperative effort of its members to obtain for themselves and their families medical service and hospitalization on a risk-sharing pre-payment basis. The corporation collects its funds from members. With these funds physicians are employed and hospitalization procured on behalf of members and their dependents. The fact that it is cooperative, and procures service and facilities on behalf of its members only, does not remove its activities from the sphere of business.5

6

If, as we hold, the indictment charges a single conspiracy to restrain and obstruct this business it charges a conspiracy in restraint of trade or commerce within the statute. As the Court of Appeals properly remarked, the calling or occupation of the individual physicians charged as defendants is immaterial if the purpose and effect of their conspiracy was such obstruction and restraint of the business in Group Health. The court said: "And, of course, the fact that defendants are physicians and medical organizations is of no significance, for Sec. 3 prohibits 'any person' from imposing the proscribed restraints It is urged that this was said before this court decided Aper Hosiery Co. v. Leader, 310 U. S. 469. But nothing in that decision contradicts the proposition stated. Whether the conspiracy was aimed at restraining or destroying competition, or had as its purpose a restraint of the free availability of medical or hospital services in the market, the Aper case places it within the scope of the statute."

Second. This brings us to consider whether the indictment charged, or the evidence proved, such a conspiracy in restraint of trade. The allegations of the. indictment are lengthy and detailed. After naming and describing the defendants and the Washington hospitals, it devotes many paragraphs to a recital of the plan adopted by Group Health and alleges that, principally for economic reasons, and because of fear of business competition, the defendants have opposed such projects.

The indictment then recites the size and importance of the petitioners, enumerates means by which they can prevent their members from serving Group Health plans, or consulting with physicians who work for Group Health, and can prevent hospitals from affording facilities to Group Health's doctors.

In charging the conspiracy, the indictment describes the organization and operation of Group Health and states that, from January 1937 to the date of the indictment, the defendants, the Washington hospitals, and others cognizant of the premised facts, "have combined and conspired together for the purpose of restraining trade in the District of Columbia, In five paragraphs

the pleading states the purposes of the conspiracy. The first is the purpose of restraining Group Health from doing business; the second, that of restraining members of Group Health from obtaining adequate medical care according to Group Health's plan; the third, that of restraining doctors serving Group Health in the pursuit of their calling; the fourth, that of restraining doctors not on Group Health's staff from practicing in the District of Columbia in pursuance. of their calling; and the fifth, that of restraining the Washington hospitals in the business of operating their hospitals.

After reciting certain of the proceedings and plans adopted to forward the conspiracy, the indictment alleges that the conspiracy, and the intended restraints which have resulted from it, have been effectuated "in the following manner and by the following means"; and alleges that the defendants have combined and conspired "with the plan and purpose to hinder and obstruct Group Health Association, Inc., in procuring and retaining on its medical staff qualified doctors and to hinder and obstruct the doctors serving on that staff from obtaining consultations with other doctors and specialists practicing in the District of

5 Compare, Associated Press v. National Labor Relations Board, 301 U. S. 103, 128-9; In re Duty on Estate of Incorporated Council, 22 Q. B. 279. 293: Maryland and Virginia Milk Producers' Ass'n v. District of Columbia, 119, F.-2d 787, 790; La Belle v. Hennepin County Bar Ass'n, 206 Minn. 290, 294.

6 110 F. 2d 711.

Compare Fashion Originator's Guild v. Federal Trade Commission, 312 U. S. 457, 465, 466, 467.