We are not paying any salaries at our clinic, or have anyone working at our clinic now. They are still practicing in private practice here in Washington.

The CHAIRMAN. Has there been any difficulty with respect to practicing physicians or organizations such as the American Medical Association or the county or district associations, with respect to your plan? Dr. BAILEY. We have had no definite, to-our-face comments adversely, so far as we are concerned ourselves. We have had no connection with the American Medical Association at all and have heard nothing from them relative to our project. Of course we have heard many comments. We have heard of many comments. As I stated before, a lot of the comments have been adverse and, in other words, many have been very encouraging toward us from the medical profession. The CHAIRMAN. Are you a member of the AMA?

Dr. BAILEY. Yes, sir; I am.

The CHAIRMAN. Are the other doctors that are associated with members of the AMA?

you

Dr. BAILEY. All of the other doctors are members of the AMA. The CHAIRMAN. When do you expect to get in operating position? Dr. BAILEY. The work program set up by the builders at the present moment calls for completion of the building around the end of October this year, so we hope to be in operation sometime in the latter part of this fall.

The CHAIRMAN. Now, what will be your plan of obtaining revenue? Will there be an overall charge for all services, or will it be based entirely upon individual services to patients?

Dr. BAILEY. The revenue from the patients?

The CHAIRMAN. Yes.

Dr. BAILEY. The patients, of course, the fees of the patients will depend upon the services rendered to that patient for that individual thing.

The CHAIRMAN. Now, for instance in the general practice of medicine there is a pretty general feeling, and I think it is well recognized, that the patient frequently pays according to his ability and that will range all the way from nothing up to very substantial sums, at times. In other words, a gall bladder sometimes takes on very much more value when the individual is wealthy than it does if he is poor.

Now, do you contemplate the recognition of that kind of ability to pay or do you have fixed charges?

Dr. BAILEY. No; I think that no one, regardless of the charge-I would like to say this first, regardless of the patient, whether he has 1 cent or $100,000, the quality of medicine received by all will be of equal value.

The CHAIRMAN. I have not said anything, I hope, that intimates that there would be a difference in the quality of services, even where there is no charge made.

Dr. BAILEY. That is right.

The CHAIRMAN. I am speaking of it solely and entirely as to the method of payment. That is all.

Dr. BAILEY. Well, the payment, so far as we anticipate that the fee for service, as you pointed out, for the removal of a gall bladder, would depend-they will be there will be a middle of the road, so to speak, and I think this middle of the road-and that fee varies upward and downward, depending upon the ability of the patient.

The CHAIRMAN. Now, let me give an illustration of what happened in some places that I have in mind, and which I think is general.

There seems to be a growing tendency to specialize, and where the doctor, in years gone by, was a general practitioner and could do just about anything that came into his office that required attention, at the present time it would seem as if the appearance in the doctor's office is merely a starting point as to where the patient is to go and where he will finally wind up. So that he may be sent to Dr. So-and-So, who makes a specialty of the stomach, and when he gets that report maybe it requires some specialist in heart to pass upon the patient's condition.

Now, how is that taken care of in your organization? Is it one where the patient comes in and goes through for the whole treatment, or is he sent on a merry-go-around, so to speak, with a charge to each one of the doctors?

Dr. BAILEY. We feel, No. 1, that we think specialization of medicine is absolutely necessary. The field of medicine has grown far and beyond the individual that can do all of the things necessary as the so-called general practitioner has done in the past. However, in our medical section we have the specialty of what we call internal medicine. Now, all of our doctors in internal medicine will do medicine.as a whole. In other words, they not only do one individual thing. Those men at the same time will have sub-specialties or interests in other fields, that they may be versed in, and in the other field we will have specialists and therefore consultations can be had relative to a particular field of medicine and that can be readily had from one of the other men in the clinic.

The CHAIRMAN. Well, what I have in mind, Doctor, is this. I merely want you to illustrate, if your would, because I am very much interested in this group practice of medicine and that it holds forth that which would prove beneficial to the public.

I go in, we will say, and it is determined that I have a gall-bladder condition. I do not know what steps you would be put through on a matter of that kind, because I have never had the experience; but when you go in you probably require several tests of one kind or another, diagnosis, and that sort of thing. Does that come out in the form of one charge for the service that was rendered in your clinic or is it made up of individual charges that are made by any number of doctors in the clinic that would ordinarily pass on the subject?

Dr. BAILEY. I think I can well explain to you, sir, if I carried through one patient, briefly.

The patient enters the clinic. He either has or has not a particular doctor that he wants to see. If he has not any particular doctor he wants to see, he is assigned to one doctor. That doctor is in charge of this man's case. He does the complete physical; evaluation of this individual. He then orders all of the laboratory tests that he wants for that individual. That patient only sees that initial doctor, original doctor. The patient returns to the doctor after all tests are completed. If that patient has some involvement, for instance, gall bladder, for instance, and the doctor at home base, so to speak, the man that has followed the case through, advises the patient that his gall bladder should be removed, the surgeon is then called to see that patient, with the medical man in the room, the medical man's room

and whether or not arrangements are made for or against surgery is decided then.

At the termination of the patient's visits to the clinic and in the event of him having operative procedure, that patient is rendered one bill, a solid bill, one bill for all of the services he has received.

In other words, he does not get a bill for laboratory; he does not get a bill for examination; he does not get a bill for surgery. He gets one single final bill.

The CHAIRMAN. The answers that you have given to my questions give me a very full understanding of the method that you have for operating your clinic and it would seem to me not to be dissimilar to what usually takes place in the practice of law, in large law firms with many different partners participating either under their individual names or under the firm name, or under many names. Dr. BAILEY. That is right.

The CHAIRMAN. So that the application it seems to me in the practice of medicine, whether or not it becomes general, is recognized as in the practice of the legal profession and I certainly am indebted to you for the information that you have given, and I hope you can discern from my questions and my manner of questioning that they have been solely and entirely based on a desire to understand how this is being operated.

Are there any questions, gentlemen?

Well, we thank you very much, Doctor.

Dr. BAILEY. Thank you.

The CHAIRMAN. And I would like for you to feel free, as the result of your interest and your experience in this matter, to make known to the committee any views you have with respect to it, and if we can call upon you or your associates for some advice at times, that we may desire to have.

Dr. BAILEY. Thank you. We will be glad to cooperate at any time. The CHAIRMAN. Pardon me. I have just one further question. Is the Mayo Clinic, where you were engaged, operated very similarly to the plan that you have adopted for this clinic?

Dr. BAILEY. We have tried to set our program up and our plan of operation as similar as possible to the Mayo Clinic.

The CHAIRMAN. I suppose there is a more widespread difference, because of the greater number of doctors that they have, and the greater facilities that they have, including hospitals and other facilities.

Dr. BAILEY. Well, the Mayo Clinic actually has no hospital.

The CHAIRMAN. I thought that they had hospitals under their supervision.

Dr. BAILEY. Well, they staff the hospitals, but the hospitals are privately owned institutions, which the Mayo Clinic merely staffs. They actually do not have any hospitals themselves.

The CHAIRMAN. So that there is very great similarity between your clinic and the Mayo Clinic or the plan which the Mayo Clinic opeartes under.

Dr. BAILEY. We have no in-an-out patients, and we will use the various hospital facilities throughout the whole area.

The CHAIRMAN. Are there any further questions, gentlemen? If not, that will be all, Doctor.

Dr. BAILEY. Thank you, sir.

The CHAIRMAN. Now, the next witness will be Dr. Edwin P. Jordan, of the American Association of Medical Clinics, Charlottesville, Va., and Dr. Wallace M. Yater, director of the Yater Clinic, Washington, D. C.

Doctor, you may proceed.

STATEMENTS OF DR. EDWIN P. JORDAN, AMERICAN ASSOCIATION OF MEDICAL CLINICS, CHARLOTTESVILLE, VA.; AND DR. WALLACE M. YATER, YATER CLINIC, WASHINGTON, D. C.

Dr. JORDAN. Mr. Chairman and gentlemen, we are grateful for the opportunity to present our views to your committee on H. R. 7700. The following comments, therefore, are submitted by the legislative committee of the American Association of Medical Clinics on behalf of the association.

The CHAIRMAN. Now, pardon me for interrupting.

Dr. JORDAN. Yes.

The CHAIRMAN. I think that the committee would be interested in having you inform us as to the makeup of the American Association of Medical Clinics; what it is; how extensive it is; the number of members, and so forth, before you proceed with your regular statement. Dr. JORDAN. I shall be very glad to do so, sir.

The Association is about 5 years old and at the present moment consists of it is a volunteer medical association of 82 clinics. Two of those are in Canada and the other 80 are in the United States. It is a North American organization.

The CHAIRMAN. In what section of the country?

Dr. JORDAN. In practically all sections of the country, in nearly every State.

The CHAIRMAN. In other words, Doctor, I want you to give us just as complete a picture as you can. I do not want to interrupt you with questions, but it will be helpful to us to know just what the American Association of Medical Clinics consist of.

Dr. JORDAN. Interrupt me at any time you want to, sir.

The CHAIRMAN. That is not our practice to do that. It is our practice to let the witness proceed, but in view of the fact that your prepared statement as I have it before me does not go into this detail, I thought it would be well to do so before you gave your statement. Dr. JORDAN. Surely.

There are members in all but 16 States.

There are members in

Hawaii, Puerto Rico, District of Columbia, and Canada, as well as

the other States.

The purposes are best defined in the bylaws:

1. To elevate the standards of practice in medical clinics.

2. To foster and improve graduate medical education in such clinics.

3. To promote medical research in such clinics.

4. To give mutual help by the interchange of ideas and experiences of member clinics.

5. To disseminate scientific and medical knowledge particularly as the same pertains to the practice in medical clinics.

We hold an annual meeting. We publish a bulletin six times a year. We publish a director of members with other information, and I would be glad to leave this directory with the committee, if it so desires.

Dr. JORDAN. There are many problems connected primarily with group practice in which we are interested, but primarily the purpose is, I think, to improve the standards of practice in groups.

Is there further information concerning the association?

The CHAIRMAN. No; I will just ask the clerk to bring that book up that you have used.

You may proceed.

Dr. JORDAN. Shall I proceed with the reading of this brief statement, sir?

The CHAIRMAN. Yes.

Dr. JORDAN. This is comment on H. R. 7700 by the Legislative Committee of the Association.

The purpose of the bill which is to amend the Public Health Service Act to provide mortgage loan insurance for hospitals and medical facilities used in connection with voluntary prepayment health plans is, in our opinion, laudable in some respects and undesirable in others. We feel that there is sometimes a need for more readily available mortgage funds at a high percentage of structural cost and low interest rate in connection with certain medical facilities. Whether this is true of hospitals, however, we are unable to say since few of our members are directly involved with hospital construction and main

tenance.

In our opinion the easy availability of mortgage funds whether of private or governmental origin would accelerate the construction of physical facilities for the care of ambulatory patients outside of hospitals.

We are dubious concerning many features of the bill: the restriction in the title to "Voluntary Prepayment Health Plans" is in our judgment discriminatory and undesirable, the sentence on page 2, line 13, states a position, in our judgment, which is hypothetical rather than established; we are in sympathy and endorse sections (c) and (d) on page 5. With regard to item (g) on page 6, we are not in agreement on the definitions either of "group practice" or "group practice prepayment health service plan" which, in our opinion, are too narrow and are certainly not applicable to a great many active institutions at the present time. We are uncertain concerning (h) on page 7 and feel that this also is a discriminatory feature of the bill.

The statement under (b) on page 13 referring to $1 billion indicates that the contemplated program is not a pilot study and we question the evidence justifying the setting up of a mortgage insurance program of the proposed magnitude at this time. Finally, we are opposed to item (d) on page 18 which in effect would eliminate all but an extremely small percentage of successful group medical practices now providing high quality medical service throughout the Nation.

That is the item referring to the 60 percent prepayment requirement. In summary, our position on H. R. 7700 is that there is much to be said for a device which would make it possible for physicians either singly or in groups to obtain mortgage funds more readily at a higher percentage of cost and reasonable interest rate in the form of a revolving fund.

The subject, according to our judgment, should be further studied and the discriminatory features of the present bill deleted. Our recommendation would be that a bill be drawn which would constitute a much smaller trial study and permit the Federal Government, the