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PUBLIC HEALTH SERVICE ACT
(Mortgage Loan Insurance)
FRIDAY, APRIL 30, 1954
HOUSE OF REPRESENTATIVES,
Washington, D.C. The committee met at 10 a. m., pursuant to adjourment, in room 1334, New House Office Building, Hon. Charles A. Wolverton (chairman) presiding.
The CHAIRMAN. The committee will please come to order.
STATEMENTS OF ANDREW J. BIEMILLER, MEMBER OF THE
NATIONAL LEGISLATIVE COMMITTEE, AND NELSON K. CRUIKSHANK, DIRECTOR OF SOCIAL INSURANCE ACTIVITIES, AMERICAN FEDERATION OF LABOR, WASHINGTON, D. C.
The CHAIRMAN. Before introducing Mr. Kaiser, I notice Mr. Biemiller and Mr. Cruikshank have just come into the room. I have been waiting for you and hoping you would be the first witness this morning. Are you prepared to testify now? Mr. BIEMILLER. Yes, Mr. Chairman.
The CHAIRMAN. Who will testify; you, Mr. Biemiller, or Mr. Cruikshank?
Mr. BIEMILLER. I will, Mr. Chairman.
Mr. BIEMILLER. I am sorry, Mr. Chairman. I understood that we were going to go on after Mr. Kaiser. We would have been here earlier.
The CHAIRMAN. My thought was that you should go on first and then Mr. Kaiser and his organization will follow, so that we will have a better continuity of the program. I think, without any introduction being made by me, to the members of the committee, that we are all familiar with the services of our former colleague, Mr. Biemiller, who was also a member of this committee.
It is very encouraging to the chairman and the other members of the committee that are interested in our health program, and in the studies and inquiries that we have been making, to have the wholehearted support of Mr. Biemiller and Mr. Cruikshank, representing the American Federation of Labor. We consider their assistance to have been not only very considerable but very valuable, and we are very appreciative of the interest that they have taken and will continue to take in the work of the committee in matters of this kind. Mr. Biemiller.
Mr. BIEMILLER. Mr. Chairman and members of the committee, my name is Andrew J. Biemiller, and I am a member of the national legislative committee of the American Federation of Labor. My office is located in the AFL Building, 901 Massachusetts Avenue NW., Washington, D. C. I am accompanied by my colleague, Mr. Nelson H. Cruikshank, director of social insurance activities of the American Federation of Labor.
We appreciate the opportunity to present to this committee the views of the AFL with respect to the specific measure now before you-a bill 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, which was introduced by the distinguished chairman of this committee, Representative Wolverton, H. R. 7700.
We have had the privilege on three previous occasions to present our views to this committee in the course of the committee's extensive explorations of the health needs of the people of this country and the possible constructive steps that appropriately can be undertaken by the Federal Government toward meeting these needs and the assistance that might be given to local governmental agencies and voluntary groups.
On January 15 it was our privilege to appear before the committee in the course of its broad and general exploration of health problems. At that time we presented an analysis of these problems as viewed by an organization representative of some 10 million wage-earners and their families. Members of the committee will recall that we introduced in the record at that time the position of the American Federation of Labor as expressed in resolutions most recently confirmed by the 72d Convention of the AFL in September 1953. This official position was consistent with our historic position in support of a program of national health insurance. We also stressed that, while these resolutions expressed the major objective of the American Federation of Labor, our organization had also consistently held to the view that any constructive steps that could be taken that would meet part, if not all, of the need merited the support of organized labor. We emphasized the fact that the position of the AFL is not an all-or-nothing position.
Again, on February 5, we were privileged to appear before this committee in support of H. R. 7341, a bill designed to broaden the scope of the Hill-Burton Hospital Survey and Construction act. We expressed our conviction that the assistance provided in this measure to the States and localities in improving their integrated hospital and health facility construction programs represented another constructive step in meeting an important part of the health needs of the Nation's citizens. You may recall, however, that at the conclusion of this testimony we made reference to two other measures, H. R. 6950, the Health Service Facilities Act, and H. R. 6951, the Mortgage Loan Insurance Act, and pointed out that the objectives of these measures merited the favorable consideration of this committee because, in our opinion, their enactment would add impetus to the development of such comprehensive programs of the kind which your committee had been analyzing and studying during the several weeks prior to the hearings you were then conducting on the extension of the HillBurton program.
Finally, on April 1, it was our privilege to present the views of our organization on the administration proposals for the reinsurance of voluntary health insurance programs as they were embodied in H. R. 8356, a measure also introduced by the distinguished chairman of this committee, Representative Wolverton. At that time, we reviewed what we felt to be the six areas of major need experienced by working people and their families, dependent upon wage income. We indicated also that these needs were generally characteristic of the vast majority of the population. Without at this time repeating the description of those needs, we should just like to recall that they were as follows:
1. Preventive care.
In addition, we outlined four needs that were more of a community nature, which were as follows:
1. Care for the chronically ill and the indigent aged. 2. Expansion of local public health units. 3. Aid to medical education. 4. Expansion of hospitals, health centers and other physical facilities.
We reported at that time, that, upon review of the principles contained in this proposal, the social-security committee of the American Federation of Labor had taken a position that the basic principle of reinsurance was not to be disregarded in the development of a broad health program. Our major objection to the reinsurance proposals as presented at that time was not so much to the specific provisions of the bill, but to the context in which it was presented. We pointed out that, in our opinion, it could not properly be presented as a national health program. As we have followed the testimony presented by various groups in relation to this measure, we have come to the conclusion that there is general agreement with this position. We note that the administration representatives seem quite aware of the fact that it leaves many questions unanswered. In our opinion, these unmet problems are among the most important, as we indicated at that time.
We note that the representatives of some nonprofit organizations, notably Blue Cross, felt that the reinsurance provisions might enable them to extend the limited protection which these plans offer to some groups presently outside the scope of their coverage. To whatever extent this is true, we feel that it is a worthy objective. We further noted, however, that representatives of comprehensive prepayment plans operating on a group practice principle reported that there would be little, if any, value to them in the reinsurance proposal.
In this connection, I should like to cite for the information of this committee a declaration of policy adopted at the St. Louis Convention of the American Federation of Labor last September:
In the absence of a comprehensive program of national health insurance, we are encouraged to note the continued growth of union health and welfare plans throughout the country. While many, if not most, of these programs have serious gaps and deficiencies, they all help our members in some measure to meet the heavy costs attendant upon sickness and disability. We are particularly gratified to note a growing interest on the part of many unions in the establishment of truly comprehensive direct medical service plans, making use of the advantages of group medical practice in health centers and clinics, serving trade-union members and their families in the community. Such plans represent a long step forward in improving the quality and scope of health care available to working men and women and their dependents.
The committee will observe the emphasis in this declaration in support of direct medical service plans incorporating group medical practice and based on the prepayment principle. We submit this statement of principle adopted by the American Federation of Labor at this time because it appears to us to have a very direct bearing on the proposals contained in H. R. 7700.
As we observed in previous statements presented to this committee, there is a rising tide of interest in the development of such voluntary comprehensive plans in a number of centers throughout the country. Your committee has had presented to it the description of the operation of some of these plans that are already underway.
Mr. Hal Gibbons presented a very comprehensive description of the operation of the Labor Health Center in St. Louis. Mr. Fred Umhey described the very extensive program of the various centers that are now operating under provisions of collective bargaining agreements between employers and the International Ladies' Garment Workers' Union. Dr. George Baehr, in a statement submitted to the committee, described the operation of the Health Insurance Plan of Greater New York, and, more recently, presented his views in respect to this particular measure growing out of his experience as medical director of that comprehensive plan. There is a relatively new plan in operation in the city of Philadelphia, where 22 unions affiliated with the American Federation of Labor have developed such a comprehensive prepayment plan.
You are also acquainted with the plans operated by the Permanente Foundation on the west coast. A considerable number of our local unions, under terms of collective bargaining agreements, are participating in these plans, and the experience with them represents one of the must successful developments to date in meeting the needs of the local membership.
There are a number of other areas today where such plans are in the early formative stage. In the city of Milwaukee, for example, there is a recent announcement of a plan that is just getting started. Proposals are under way in Chicago, as well as in a number of other areas.
In all of these plans there has always been the problem of the considerable capital outlay that is necessary to get the plan started. On the west coast, the participants in the Permanente plan were fortunate to have the financial backing of the Kaiser industries. In St. Louis, without detracting from the notable achievement of that plan, we observed that there was a particularly favorable collective bargaining situation which enabled the employers and the labor union which developed the plan to meet the necessary outlay at the start of the program. In New York, the original expenses of organization were met in part by grants from a number of foundations. There was also the important factor of the city government bringing into participation in the plan many thousands of municipal employees, which provided a certain guaranty of financial support. Even here, however, the plan was somewhat hampered in its early stages by the lack of capital for the construction of facilities which would have made it possible for the plan to meet more expeditiously its growing needs.
We are of the opinion that, if enacted, this bill would encourage private lending institutions to provide funds to voluntary associations, including cooperatives and labor unions, which undertake to offer hospitalization and medical care on a prepayment basis. The availability of such loans would certainly help stimulate further experimental developments of these voluntary plans set up by these organizations, as well as by community groups, groups of physicians and others. We trust, however, that this committee will also give further consideration to the possibility of a supplementary source of funds to be provided by direct Government loans to these groups, as proposed in the earlier bill introduced by Senator Humphrey, S. 1052, and in H. R. 6950, introduced by Chairman Wolverton last January.
We are aware that this committee is still giving most careful consideration to the reinsurance proposals contained in H. R. 8356, as well as to the various other proposals which have been presented to you. It is our view that, if the committee should see its
clear to report out the reinsurance proposal designed to underwrite the extension of even a limited type of voluntary health insurance by both commercial and nonprofit organizations and combine with that the proposals contained in the measure now before you which would enable and encourage voluntary consumer groups to develop comprehensive group practice prepayment service plans, the combination of the two measures would constitute a genuinely constructive approach to important elements of the total health problem. It is in line with this approach that we urge the adoption of H. R. 7700.
And now, Mr. Chairman, when Mr. Cruikshank and I appeared before your committee on April 1, we submitted several specific changes, mostly dealing with definitions, which we proposed be incorporated in this bill. At that time, you asked us to suggest language which would implement the changes that we recommended. We are just completing the drafting of that specific language, and will very shortly have it in the hands of your technical staff.
Again, we wish to thank you, Mr. Chairman, for the opportunity you have afforded us to present the views of the American Federation of Labor with respect to these proposals, and to again complement you on the introduction of such far-reaching and forward-looking bills.
The CHAIRMAN. We thank you, Mr. Biemiller.
With reference to your previous appearance before this committee, particularly with your reference to the appearance on April 1, are important, because of the suggestions you made at that time, and which statement this morning indicates that you are engaged in working out and will give the committee the benefit of, as soon as they are finished.
Mr. BIEMILLER. You will have them the first of the week, Mr. Chairman.
The CHAIRMAN. In addition to that, if I remember correctly, you did make statements with respect to H. R. 7700. If you would care to examine those statements, it might be that they could be appropriately made a part of the hearings on this bill, as well as on the other bills.