Dr. YATER. We do not challenge the principle of the voluntary health insurance at all. It is the way it is applied that we are questioning.

Mr. HALE. What is that?

Dr. YATER. The way it is applied through the bill. It limits it to insurance plans of a particular clinic. Now, that would eliminate the free choice of physicians unless the patient wanted to go in and pay his own fees. Within the Blue Shield plans as they exist today, a patient may go to practically any doctor or clinic he wants to and have his bills paid, which is an entirely different thing from these closed panel groups. Like for instance, the one you referred to, the RossLoos. They have a wonderful insurance plan. They have a good staff, but in order to get the benefits of their insurance, the premiums they have been paying over the years, they have to go to the physicians in that clinic. They cannot go elsewhere, the way they can in the Blue Shield plans. The Blue Shield applies to any doctor.

Mr. HALE. Of course, the committee wants criticism of the bill and I personally can readily see the objection to what you call the closed panel or fixed panel plan, but singling out that particular sentence for criticism does not seem to be correct.

Dr. YATER. I think it is unfortunate that we did not qualify it. That is what is wrong with that. It is not the statement itself that is at issue.

Mr. HALE. Because certainly it is my understanding that a voluntary health plan, whatever the provisions are, does offer an effective way for the better distribution of health service and costs. It does not say that it is the only effective way. It says that is an effective way.

Ďr. JORDAN. I think it is unfortunate that we worded that by taking that sentence out of context without modifying it.

Dr. YATER. You may have many different conditions of control plans, that will not all be good.

Mr. HALE. Well, the sentence does not say that. I have not even read all of this bill. I have read very little of it. Certainly that sentence in the bill does not say that all voluntary health plans are good or all prepayment health plans are good, and I realize that any generalization of that kind would go entirely too far.

That is all, Mr. Chairman.

The CHAIRMAN. I have only one further question, or suggestion. Mr. Hale has, I think, very appropriately pointed out the impropriety, if I may put it that way, of the statement that brought forth the uncertainty as to what was meant when you took exception to the lines 13, 14, and part of 15, on page 2 of the bill. The question, however, in order that we may better understand it both from your standpoint and our own, and we hope you do from ours is, now, having the same thought in mind with regard to another statement that is rather skeleton in form, he referred to that portion of your statement in which you say in next to the last paragraph on page 1.

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.

I merely direct your attention to that so that you may feel free to submit to us what change there should be in the definitions to carry

out the thought that you have in mind. In other words, you have objected to the language used on the basis that it is too narrow. We will be pleased to have your suggestions as to what you think should be contained in those definitions to give the effect that you think they should have.

Dr. YATER. Thank you, sir.

Dr. JORDAN. Thank you.

The CHAIRMAN. And I want to add to what has already been said in appreciation of your attendance here today and also the attendance of Dr. Bailey, because you folks have come representing the clinics, or as we in political campaigns speak of it as the grassroots. We are getting firsthand information when individuals such as yourselves, representing organizations such as you do come before us and give us the benefit of your thoughts based on your experience. And, that is a thing that can be extremely helpful to this committee, or any other committee of Congress, and I want you to feel that the door is open to come back and make such suggestions as you see fit.

The committee will stand adjourned until 10 o'clock tomorrow morning.

(Thereupon, at 1:35 p. m., the committee adjourned until 10 a. m. the following morning, Thursday, April 29, 1954.)

PUBLIC HEALTH SERVICE ACT

(Mortage Loan Insurance)

THURSDAY, APRIL 29, 1954

HOUSE OF REPRESENTATIVES,

COMMITTEE ON INTERSTATE AND
FOREIGN COMMERCE,
Washington, D. C.

The committee met at 10 a. m., pursuant to adjournment, in room 1334, New House Office Building, Hon. Charles A. Wolverton (chairman) presiding.

The CHAIRMAN. The committee will come to order.

STATEMENT OF HON. JACOB K. JAVITS, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NEW YORK

The CHAIRMAN. We are pleased to have with us this morning as our first witness our distinguished colleague from New York, Mr. Jacob K. Javits.

During the time that Mr. Javits has served in the Congress he has given an abundance of evidence of his interest in those matters that pertain to the welfare of our citizenship, as well as the welfare of our country. There is nothing, however, that has occupied more of his time than the interest he has in matters of health.

It is very encouraging for us, however, who desire to promote the health problem to have the active participation of Mr. Javits and the fact that he is present today attending this hearing, and giving of his time on a very busy day for him, we feel is additional evidence of his interest in this very important subject.

We are indeed glad to have you present, Mr. Javits, and will listen with a great deal of interest to the views that you have expressed with respect to H. R. 7700.

Mr. JAVITS. Thank you very much, Mr. Chairman, for your gracious introduction. You have overstated very much, with great kindness, my own role in this matter.

The chairman of this committee has set us all an example which it will be hard to follow, in devotion to the idea of improving American health and the ability of the American people to cope with their health problems and I think that the chairman has made his place very secure in history, in the history of our country, on this major subject.

Now, Mr. Chairman, I am here to testify in support of H. R. 7700 this morning, which I think is a highly desirable and important step forward in respect to caring for the people's health.

59

The CHAIRMAN. On account of the noise outside it will be neces sary, Mr. Javits, to speak just as loud as it is possible for you to do so. I can scarcely hear what you have said.

Mr. JAVITS. I think I will try, Mr. Chairman. We are all so spoiled by these microphones that we forget that for many hundreds of years men did without them.

Mr. Chairman, as I stated, I am here to testify in support of H. R. 7700. I would like to say that though I am in favor of it and I should say why, I do not believe that it represents the answer to the problems of the people's health, for, with due respect to the authors of this bill, and, I believe, H. R. 8356, that is, the reinsurance bill, upon which this committee took extensive testimony, represents either the answer to the problems of the people's health.

Both measures are necessary steps toward discharging the Federal Government's obligation in that field.

I believe that even the step forward would be completely inadequate, if we concentrated on the reinsurance bill and did not include H. R. 7700, which I think is necessary to make this a step of substance. But, I think that the committee should still consider, as it is considering, the whole health picture, and I know it is, for a comprehensive national health program, and the approach that it wishes to take to that program, and having decided upon the approach, then to go forward to implement that approach.

Now, first, let me say why I am for H. R. 7700 and then I would like for a few minutes to go into the broader aspects of the problem. I believe that the reinsurance bill helps the volunteer plans, like the Blue Cross and the Blue Shield, and helps the commercial carriers, but all this deals essentially with insurance which covers catastrophic illness, hospitalization and other illnesses, in which there is a very heavy expense suddenly. I believe that this leaves untouched an enormous field in the health field.

As I said, the reinsurance bill leaves untouched or substantially untouched, the whole problem of preventive medical care and the normal day-to-day office patient relationship with physician and patient, which accounts for probably the bulk of the expenses for medical care in our country.

H. R. 7700 seeks to do something about that.

The whole answer to bringing down the cost of medical care, if it can be brought down, to such an extent as to make it readily available to all our people without distinction as to class or economic status, is in mutualizing the proposition upon an actuarial basis. Everybody is not sick all at the same time, and yet everybody is called upon to help bear the burden of what it costs to be sick.

The same principle which attains for hospitalization attains also in preventive medical care. If you mutualize that, you will bring cost down too, and spread the risk, and the responsibility among many more people.

Therefore, if you are going to be consistent in this principle, I think that you are taking half a step with the reinsurance scheme and you have get to complete it by adding 7700, which gives us an opportunity to do something by way of a beginning on endeavoring to mutualize the cost of preventive medical care.