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experience and technical training in these problems find their time and efforts wasted, and the program will suffer because of their inability to contribute anything to it.

The council is given an approval power in the establishment of Federal regulations and standards. But this power will be exercised upon the basis of technical wisdom arising from the experience and training of its professional and technical members in the practical application of this program to actual working conditions and existing problems.

The Federal hospital council also has a semijudicial function in the approval of State plans for hospital construction; but, again, it is exercised from the standpoint of technical wisdom and experience. In the development of this act it was realized that there should be some provision for appeal from possible arbitrary action on the part of a single administrative officer in the approval or disapproval of State plans. Yet, because of the technical and complex considerations involved, it seems impracticable to provide an appeal to the court because of the difficulties of familiarizing any court with the problems necessary to proper decision.

However, court appeal has been provided in the case of an individual project whose application has been refused by the Surgeon General and in the case of a State whose further funds have been cut off by the Surgeon General and in the case of a State whose further funds have been cut off by the Surgeon General for alleged mishandling. In these cases, a clear-cut legal issue can be developed for a court decision upon the basis of the law. But in the approval of State plans, the question is less a matter of legal right than it is of professional wisdom, and this is a matter for experienced judgment. In fairness to all, such an important decision which may affect the welfare of all of the people of the State should not be confided to one individual; some right of appeal from any possible arbitrary one-man decision is needed. The Federal hospital council, with a membership of persons who are authorities in fields pertaining to hospital and health care, and who will be in everyday contact with the working conditions governing a wise decision, seems to be the appropriate body to hear such an appeal with regard to the approval of the State plan.

It will be observed that the Federal hospital council is not charged with administrative details but will be concerned with the broad policies of the over-all program. It does not initiate positive action at any time. It will exercise an approval power in connection with the standards and regulations governing the program, and will have power to review and reverse the decision of the Surgeon General in his rejection of any State-wide plan. The value of such a council is recognized in a letter written by the Acting Federal Security Administrator to the chairman of the Committee on Education and Labor of the Senate on July 23, 1945, in which he said:

While ordinarily I should doubt the wisdom of placing in a group of nongovernmental persons so large a share of responsibility for the expenditure of public funds, there are in the present instance persuasive consideration in sup part of the arrangement proposed in the bill; accordingly, I do not wish to object to it.

In the development of over-all State plans based upon the detailed information provided by the State-wide surveys, there will undoubtedly be discussion and disagreement between various interests and

groups. The strong Federal Hospital Council will protect the Surgeon General from undue pressure from self-interested groups and enable him to utilize the council as support for objective judgments on the professional matters which will come to him for decision. The two values of the Hospital Council-protection against arbitrary judgments of the Surgeon General, and protection of the Surgeon General from undue pressure from self-interested individuals-make the council an important feature of the Hospital Survey and Construction Act. The Council insures that the over-all program will be administered under standards developed by and with the cooperation of persons whose long experience in hospital work has helped to develop the present quality of hospital service.


The American Hospital Association is apprehensive that Federal funds granted under a public works program might be used for the construction of hospitals and health centers without due consideration for those factors which must be considered if such construction is to lead to more adequate care for all of the people of the country. Federal funds were used for hospital construction in the 1930's. These funds went to public institutions. But in 1944, 58 percent of the average daily census, that is bed occupancy, of civilian general hospitals, was in nonprofit hospitals, 34 percent was in public institutions, and less than 7 percent in proprietary hospitals. Thus, it appears that a large proportion of general hospital treatment is furnished in nonprofit hospitals. This legislation, in its recognition of nonprofit hospitals, may be said to offer its assistance to that class of intitutions which are already carrying the major burden of hospital care.

This act provides that Federal funds may be granted to nonprofit hospitals and to hospitals owned and operated by subdivisions of Government. The voluntary hospitals of this country have played a dominant role in developing improvements in hospital methods and in improving the quality of hospital care for the people of this country. Public hospitals are needed, particularly for the care of mental and tuberculous patients. However, it is f rtunate that in legislation with the broad aims of this act, provision is made for maintaining the best in the present system of hospital service by making possible grants to both nonprofit and governmental hospitals. The act by its definition makes grants available not only to general hospitals, but to mental and tuberculosis hospitals. All of these institutions are important in the formulation of a satisfactory State plan.


Undoubtedly the State-wide surveys will show a need for additional facilities far in excess of the amount authorized for appropriation under this Act, namely $75,000,000 per year for 5 years. It has been estimated that more than 2 billion dollars would be required at this moment to build all of the hospital and health center facilities necessary to provide adequate care for all of the people of the nation. Although this is merely an estimate, it seems to indicate that the $75,000,000 in Federal funds with nearly as much in non-Federal funds will be sufficient to give this program only a good start. The act

provides that the State plan for meeting the purposes outlined must determine the relative need within the State for the various projects included in the State Plan and provide for building those projects in accordance with such determination of need. This assures that Federal construction will follow an over-all pattern and that any Federal appropriations will be devoted to the most pressing need within each State.

The priority of need must be determined by each State administrative agency under standards established by the Surgeon General and the Federal Hospital Council. Obviously, needs will often be greater in rural areas and in economically depressed areas, and in areas which have been affected by war and reconversion. However, it seems wise that this act does not attempt to establish rigid standards of relative need. It is impossible now to make any final decision as to exactly what hospital facilities may be necessary to offer adequate service to all of the people and the act permits a changing definition of need to fit circumstances as they may be found. It may well happen that in addition to hospitals serving rural areas, there may be need for the construction of large teaching hospitals to serve these same areas. Such hospitals might establish the key to adequate quality of care in an entire State, and, in addition, function as training centers for physicians, nurses and other technical workers required to staff outÎying hospitals. The definition of need should, therefore, be developed by the State agency in accordance with existing circumstances under the guidance of Federal regulations and standards:

act provides that even the most needed hospital shall be built only as there is reasonable assurance of adequate financial support for 'maintenance and operation when it is completed. Thus in some communities actual construction will await Federal or State funds for the care of those unable to pay this cost, particularly in areas where the income of the community is at an extremely low level. The possibility of providing such support through this legislation has been carefully explored, but has been omitted because as previously pointed out, it seems to be a separate problem. However this matter does warrant further study and action by the Federal Congress. We believe in a program of Federal grants-in-aid to the States for medical and hospital care for indigents. Only so will hospital care be available in many of the poorer sections of the country.

This country has not yet given sufficient attention to any pattern for the integration of health facilities

. However, the health centers contemplated in this act are of particular importance. The rural areas of this country are, in many instances, the most under-privileged insofar as hospital care is concerned. There is no possibility of providing complete hospital service next door to every rural resident. In these areas often the only hope for proper care is a health center, having a limited number of beds for emergency care and for minor illnesses. Such a unit may also function as a center for the public health activities in the community with offices for the health officer and public health nurses. Depending on larger hospitals for the transfer of patients needing more complicated equipment and more highly skilled professional services, such health centers will also be dependent on these larger hospitals for assistance in professional supervision, particularly in diagnostic services such as roentgenology and pathology. The act now before you specifically states that,

the State agency shall determine the priority of projects based on the relative need of different sections of the population and of different areas lacking adequate hospital facilities, giving special consideration to hospitals serving rural communities and areas with relatively small financial resources.

Mr. WINTER. Do you so understand that these hospitals are not to be built in areas unless the area or the community can show that it can reasonably be expected that they can support and maintain the hospital?

Dr. SMELZER. Yes, sir.

Mr. WINTER. If communities cannot afford to build hospitals, how are they going to support them? It is going to cost more in the long run to support them than to build them.

Dr. SMELZER. The survey may show the need. That, with the State aid, would build the hospital.

Mr. WINTER. It will build it, but what about maintenance ? Dr. SMELZER. If they cannot maintian it, then I presume the Federal Hospital Council would come into the picture and probably advise against it. Is not that right? Mr. BUGBEE. Yes, sir.

Mr. WINTER. That would mean, then, that the poorer sections of the country under this bill would not get any hospitals, would it not?

Dr. SMELZER. I do not think so.

Mr. BUGBEE. I think that is the point made here, that this is a construction loan, not a maintenance bill. It may be anticipated that the fringe area, I do not know how far hospitals will go just with construction aid, but there are some areas that cannot do both who might support a hospital if they had assistance in construction. It is true, as is pointed out in this testimony, that the areas with the greatest need cannot support a hospital and this bill provides that though the need should be shown in the survey, the construction funds should not be granted unless there is a fair assurance of support, and as it is pointed out, therefore, some other legislation is needed to take care of the most needy areas.

Mr. WINTER. There would be no way of financing them, would there, under this bill, or under any law that is now in existence ?

Dr. SMELZER. No, you would have to pass supplemental legislalation, such as States grants-in-aid for the care of the indigents which is spoken of here.

Mr. BUGBEE. It is true that many of the wealthier States have distribution of funds for care of indigents which can be equalized within the States, but that is usually the wealthier States rather than the poorer.

Mr. WINTER. What about the poorer sections of the country? In part of my State and in the South they have no way of financing a hospital, how about them! You make this survey and find the need of the hospital.

Dr. SMELZER. There would, again, have to be supplemental legislation to provide care for the indigent which would automatically support the hospital.

Mr. WINTER. Is it the intention to come back with that request for financial assistance to the Federal Government to do that?

Dr. SMELZER. Very much so, to carry the indigent.
Mr. Brown. This is but one step in the program, in other words?
Dr. SMELZER. Yes, sir.

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Mr. BROWN. It is first planned to get the Congress to go along on the building of these hospitals?

Dr. SMELZER. Certainly, first. Mr. BROWN. And after the construction, and we have built a lot of hospitals for use, you will say, "We cannot support them so we want you to appropriate some money now and put through a new program to take care of the hospitals”?

Dr. SMELZER. I do not think it would be exactly that way. First of all, you would have the survey which is the first part of this act. If the survey shows the need and then the area in which the need is shown is too poor to support a hospital, then there should be legislation whereby there should be Federal grants-in-aid to the States to care for the indigent. That, to us, is logical.

Mr. Brown. And you think, then, that the Federal Government should take care of the indigent rather than the States and the local communities?

Dr. SMELZER. I think they should help. I think such legislation might be on a matching bàsis again.

In fact, you are doing that in some instances now in your EMIC program, and so on, are you not?

Mr. Brown. Of course, the final result of that would be the same thing that has happened in many other situations where the Federal Government has taxed the people generally, and then distributed the funds, and that would be the higher income States would be taxed for this purpose, with the larger proportion of the money that is obtained from such taxation not be returned to those who pay it, but instead to go to other States and on a national basis.

Dr. SMELZER. I do not think it would go to another State any more than it would under this program.

Mr. BROWN. That is true, but you are carrying it one step further.

Dr. SMELZER. You see, you have got that in your new Rehabilitation Act. You have a Federal grant-in-aid to States. We are talking now about civilian rehabilitation. That is on a 50-50 basis, irrespectve of that.

Mr. BROWN. Yes; but there the State puts up half the money.
Dr. SMELZER. That is right.
Mr. Brown. Of course, here they will put up a portion of it?

Dr. SMELZER. If the in the Federal proportion—the wealthier States are putting up more than the poorer States. I think that seems fair.

Mr. WINTER. In other words, you are proceeding on the theory that every person in the United States, regardless of where he lives is entitled to hospitalization!

Mr. WINTER. That is about what it comes down to?

Mr. HARRIS. But you do go further and say that this program does not propose to give everyone in the United States hospitalization, but is one step toward that objective?

Dr. SMELZER. Does not propose to give it to them, provides the facilities whereby they can have it.

Mr. WINTER. I find I am not in disagreement with you. I think that the hospitalization of the country should be on about the same basis as the schools where I am individually concerned.


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