Whatever scholarship program is adopted, service whether in the Public Health Service or the National Health Service Corps, provided it is in a health manpower shortage area, should satisfy the obligations incurred under the program.

Present law apparently does not authorize NHSC programs in the trust territories, and it would appear entirely appropriate to amend the statute to include all territories under the jurisdiction of the United States as potential eligible areas subject to other requirements of the

act.

Methods of payment for services and reimbursement arrangements should be made flexible for a variety of reasons, including the need to develop innovative approaches to health services delivery.

These should not be linked to fees for service. Prepayment plans, capitation methods and innovative economic approaches should be authorized and encouraged.

The present statutory language has been interpreted to suggest that fees for service are to be the principle model for payment mechanisms in this program.

Clarifying language which authorizes other methods of payment or reimbursement should be provided.

The present language of section C still retains an apparent emphasis upon payment and recovery of costs because it is stated first as the enunciation of the economics of the program.

Inability to pay is described as an exception in this language, rather than as an irrelevant criterion, notwithstanding the amendments which give priority to need rather than ability to pay.

It is hoped that language can be incorporated into these amendments to emphasize in this section also that money or fees is not a prerequisite for the furnishing of care or services under this act. These or their equivalent are to be provided only when the economic ability of the program or the individual makes this possible.

Such a revision would give priority to services rather than pay

ments.

Finally, the provisions that provide for a regular report by the Secretary, improved liaison and assistance to communities, and liaison efforts with professional schools, will all contribute to strengthening efforts of the National Health Service Corps.

The administration request for only $8.4 million is inadequate for the program for the present fiscal year.

In addition, the program is presently unable to carry over funds that have been unexpended. Such authority is needed to permit the orderly growth of the program, to avoid hasty end-of-fiscal-year expenditures, and to retain program support within the bureaucracy.

It is recommended, therefore, that the program be authorizeď $20 million for fiscal year 1972, and at least $30 million for the fiscal year ending June 30, 1974, with appropriate authority for these funds to be available until expended.

In addition, it is hoped that the program's length can be clearly extended through June 1976 to assure continuity and stability during this development period.

The most serious restrictive encroachments upon the National Health Service Corps have come from the Office of Management and

Budget through a variety of requirements which Congress did not intend.

Although Congress specifically directed that the Secretary would establish the program's policy with the advice of the National Advisory Council, in practice OMB has played a dominant role in key policy issues.

I believe these amendments can strengthen the program's develop

ment.

In addition, I urge that the subcommittee consider appropriate language to eliminate the interference of the Office of Management and Budget with the National Health Service Corps programs that Congress has created.

To immunize the program economically from OMB, it is suggested that Congress mandate that these appropriations shall be expended for the National Health Service Corps in the amounts and solely for the purposes specified.

Finally, I want to reiterate my support for the proposed amendments and my personal appreciation for your efforts to enhance the opportunities for American families to obtain needed health services in their own areas.

Thank you very much.

Senator KENNEDY. Thank you very much, Doctor.

That is a splendid statement, as always, and a very authoritative one, based on a good deal of experience, and covers most of the areas of interest.

I do have a couple of thoughts. We were thinking about what might be done with the equipment which is purchased and made available to the personnel that goes to the underserved area. Should we give that equipment to a nonprofit group in the community at the time the corpsman ends his service?

Do you have any feeling about that?

Dr. NOLAN. I think it would be helpful, Senator, to make it possible for that equipment to be vested in title in a nonprofit organization, that would retain control of it.

Senator KENNEDY. Some local public agency?

Dr. NOLAN. Yes.

Otherwise, I imagine some of the communities would be putting out $50,000 or $100,000, and it might serve to inhibit some of them from participating.

Senator KENNEDY. You covered a number of different aspects of the program.

Can you tell us about how it relates to the West Virginia situation? The ability to pay, that issue, the scholarship issue, the import of local planning groups on any kind of hospital action, the payment of reimbursement of issues: can you tie them together in terms of real live experience of the West Virginia Appalachian community?

Dr. NOLAN. You are asking a lot of questions, but just very briefly, the West Virginia communities with which I have had experience and some other Appalachian communities have found it very difficult to develop a proposal on their own, to get attention for it, not because of any lack of sympathy in the National Health Service Corps, but because it requires a certain amount of expertise and money, experience

in putting things together, in a way which poorer communities, in isolated areas, generally do not have experience.

Senator KENNEDY. Should we require that HEW conduct these surveys rather than depend on local groups to come in and make application?

Dr. NOLAN. In some way, Senator, I believe we should reach down into these communities to make available to them our expertise and our resources and make known to them availability of programs like this and other programs as well.

We have not done that. The general posture of the Federal health agencies is to respond to applications which come from outside.

There is very little directive effort to the isolated areas in this country with great need to apprise them of opportunities for the development of programs, and to give them technical assistance in developing such proposals.

I concur in the direction you suggested.

In addition, I think that the scholarship program, the development and flexibility in payment methods, the other amendments which you have incorporated in S. 3858, particularly those which eliminate any priority based on ability to pay.

Senator KENNEDY. Why is that important?

Dr. NOLAN. That is important because in these isolated communities they are less likely to qualify, even if they are able to put together a proposal, they do not have the money for a building, or for equipment, and they therefore under current regulations are less attractive as applicants.

They are less likely to be funded, and furthermore, they are less likely even to complete an application, because the personnel and the agency will have already advised them of the regulations and guidelines which indicate a need to have these resources, as a prerequisite in most cases, for the granting of an application, so for all of these reasons, I think the amendments you have incorporated, and the other matters that you have referred to at the hearings so far, would enhance the ability of the isolated areas to qualify for this program.

I would hope the subcommittee might give further attention to the idea you have expressed, reaching into the communities to make known the availability of Federal programs in which communities could qualify.

In a related proposal before this subcommittee last year, I suggested that there be an active Federal ombudsman program for isolated, rural areas, perhaps some approach if not of that magnitude, at least an approach which clearly requires a continuing compact with the needy communities, which would help resolve some of these issues.

Senator KENNEDY. Just finally, why is it important to get the input of these local planning councils and State planning councils, in consideration of what we ought to be doing for the Public Health hospitals?

Dr. NOLAN. Well, we are engaged nationally, and statewide in a wide variety of jurisdictions in an effort to try to coordinate health services and facilities to avoid duplication, and to concentrate our efforts in the areas of actual need, rather than relying on enterprise developments of duplicated health facilities.

The State and local health planning agencies which are created by statute are in a position to make a contribution to identifying those needs and to avoid such duplication of efforts, and to the extent they might participate in an advisory way with regard to public health services hospitals, but I would say as it relates to closing down public service hospitals, they might be given veto power to prevent such closings, if the Congress itself cannot prevent it.

Senator KENNEDY. Well, I want to thank you very much for coming. I understand you came all the way from California to be here with us this morning, and went to considerable inconvenience to join with us.

You have been enormously invaluable to us and to this committee, and I think your practical experience and your knowledge of the subject has been of great value to the development of legislation.

Dr. NOLAN. Thank you, Senator. I want to tell you how much I have enjoyed working with your capable staff from time to time and for your efforts. Thank you.

Senator JAVITS. Thank you very much.

On the request of the chairman, Senator Kennedy, I will stand in. I welcome to the committee the National Health Service Corps Panel, Bruce Block, M.D., Monique Viglotti, R.N., and Joseph Viglotti, M.D. I welcome you to the Committee.

STATEMENT OF BRUCE BLOCK, M.D., MONIQUE VIGLOTTI, R.N., AND JOSEPH VIGLOTTI, M.D., NATIONAL HEALTH SERVICE CORPS, A PANEL

Senator JAVITS. I gather you as a panel will respond to questions on this legislation.

Senator KENNEDY. Let me thank Senator Javits for assuming the Chair.

The antiwar amendment is just up now, I have to excuse myself. Perhaps there may be some comments you would like to make in the areas covered earlier, and of course you are welcome to make any other comments which you would like to make.

What we would like to find out is your motivation, why you are interested in the program, why you feel young people would continue to be interested in it, what aspects you find most attractive, what you would like to see included to make it more appealing for young people to go to underserved areas.

We can hear the administrative point of view of what is best in the development of the administrative program, but we are interested in knowing what you would do in legislation to motivate young people like yourselves, who really would go into these areas.

I hope you touch on these points.

Senator JAVITS. Would you like to start, Dr. Viglotti?

Dr. VIGLOTTI. Let me start by saying. I think the program is a very good one, and I think my experience so far, which has been 3 months at the Public Health Service hospital in Boston, and then transferring to Jackman, Maine, as a National Health Service Corps assignee, and I must say I personally derived a great deal more satisfaction from

serving in Jackman than I did serving in Boston, primarily because I feel PHS hospital system delivers the type of care to individuals who have other types of health care available to them.

In other words, the people in Boston had other physicians, and most of them, at least in my personal experience, had other types of thirdparty payments. Some of these were able to get other types of health

care.

In Jackman, the people we are serving oftentimes had to drive 50 to 100 miles to receive health care over very difficult roads.

Senator JAVITS. What induced you to join this particular Corps? Was it a desire to do something of welfare character, other than for underprivileged people, or some other motivation?

Dr. VIGLOTTI. I must tell you frankly, the primary motivation, and I am sure the primary motivation of at least most of the people I have been in contact with in the Public Health Service has been the draft, and I think by the discontinuation of the physician draft, it will really seriously inhibit people from joining the service. I will tell you, at least in my own opinion, first of all, medical school is a long, arduous type of situation, and when a person enters medical school, and when he leaves, and particularly when he finishes a specialty training, he is a different person, so a person who might sign up for a scholarship in the first year may feel he is better off finishing, and paying off on that loan; and also, the fact that there are other loans available at lower interest, at least there were to me when I was in medical school, so I do not think that there are going to be many people who wil go for this scholarship program, at least in my personal experience.

There is nothing like the incentive of the draft, and I personally feel there will always be a doctor draft for the military.

How else will the military get doctors in?

I think the same mechanism used to get military doctors should be used for national health doctors.

Senator JAVITS. So you would really draft doctors for the domestic purposes, as there is no other way, in your opinion, that you can create incentives which would be great enough to take the doctor from Boston, Mass., to Jackman, Maine?

Dr. VIGLOTTI. Apparently there has not been any in the past. Senator JAVITS. Now, what do you find about the administration of a Corps?

Dr. VIGLOTTI. Well, I think that we were the first assignees, so we were essentially administrative guinea pigs.

There has been some chaos, but I think it is ironing out.

There is a program that most physicians are independent type people, and do not particularly like to be told what to do, or to follow administrative patterns, which they themselves feel goes against their own independence.

If a person receiving a 2-year draft obligation, this is part of his duty; otherwise, I think there might be some problems.

I cannot give you particular instances, because I think our administrative problems are running very smoothly.

Senator JAVITS. Was it one of the problems with the local profession: that is the profession in the community in which you are serving, or professional society in Maine, let us say, or in that area? Dr. VIGLOTTI. No; there were no problems.