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Senator PEPPER. And I believe the State prescribes the compensation, does it not, that they receive?

Mr. KINGSLEY. Yes, sir, the only provision restricting personnel so far as the State is concerned is that they shall be applied under a merit system. I would like to say in respect to Senator Taft's last comment that the Federal Government would regulate everything having to do with medicine.

It seems to me that quite the contrary is true, that the basic things. having to do with the provision of the medical services are regulated by the local community and by either the local administrative officer or the local administrative board, whichever a State plan provides for. It is at that point where determinations are made as to the local supply of services and as to the methods by which physicians are going to be paid, and where local complaints are heard and so on, that the real administration occurs so far as the provision of medical services is concerned.

Senator PEPPER. Well, now just to emphasize that point, to let it come from you, there is no authority in the Federal Government that has anything to do with the application of professional treatment? Mr. KINGSLEY. None whatever.

Senator PEPPER. The Government of the United States has nothing to do with the kind of treatment or the lack of treatment that a qualified physician or technician prescribes?

Mr. KINGSLEY. Absolutely not.

Senator PEPPER. The other thing is, it is very clear in the intention of this act, is it not, that there is no intention on the part of Congress or desire to grant the authority to interfere with the free choice of doctor or other technician that the patient may make?

Mr. KINGSLEY. No, sir; it is quite specifically provided that there shall be no such interference.

Senator PEPPER. And the doctor also or the technician is also allowed a free choice with respect to the patient he serves?

Mr. KINGSLEY. That is correct.

Senator PEPPER. And doctors and other technicians determine voluntarily whether they will come into the plan or not, do they not?

They may come partially in or they may stay out altogether or they may agree to accept the fees, the standard and scale of fees that the agency pays?

Mr. KINGSLEY. That is correct.

Senator TAFT. But as to the provision in section 717, I notice it says that each agreement that is made with doctors or hospitals or anybody else

made under this part shall specify the class or classes of services to be furnished or provided pursuant to its terms, shall contain an undertaking to comply with this title and with regulations prescribed thereunder—

that is by the Federal Government—

shall be made upon terms and conditions consistent with the efficient and economic administration of this title, and shall continue in force for such period and be terminable upon such notice as may be agreed upon.

Every agreement made is subject to the regulations issued by the Surgeon General.

Mr. KINGSLEY. That is every agreement made under section 716, agreements with voluntary health insurance and other organizations.

Senator TAFT. Also 715, agreements with individual practitioners, hospitals and others. 717 applies to both, also 714, auxiliary services. Senator PEPPER. Mr. Kingsley, if there should be any doubt, if there should be any reason at all for anyone to believe or fear that this power to make regulations interfered with these freedoms that we just discussed a moment ago, why you would have no objection to it being written into the law in clear terms that those freedoms cannot be interfered by regulations or any other way?

Mr. KINGSLEY. None whatever. In fact, more specifically the rulemaking authority of the national board is spelled out, the better it is administratively.

Senator TAFT. And does the act require the payment of this money per service, not per capita, not on a salary basis?

Mr. KINGSLEY. No, sir. It provides three alternative methods on page 117 of section 718. The local community can decide, the doctors and the patients.

Senator TAFT. Having once started a per capita system, does not this business of your selecting your doctor and having the doctor select you go out the window the moment you have a per capita pay system? Mr. KINGSLEY. No; because you can change it at any time. Now it is limited in this sense.

Senator TAFT. As a practical matter has not the experience been in England that where you have a panel of that sort, that right practically disappears? You get away from the payment per service

basis.

Mr. KINGSLEY. I do not think so, Senator. Now it is limited in this sense. You have a very popular doctor in an area, obviously he is going to have to limit the number of people he can take, but he does it already. He does it under the present system. He refused patients, and to that extent I cannot go to him if he is all filled up. The same thing would be true under this.

Senator TAFT. You never have gone to him. The claim is if you have a doctor, you can keep him. You have never been to that doctor under the present system. If he has had you as a patient, he will always take you back, but under the panel system, he cannot.

Mr. KINGSLEY. You can always keep the same doctor under these provisions if, (a) you wanted to, (b) he was in the system, and (c) he wanted you. If those three conditions were met, you could keep the same doctor.

Senator PEPPER. But if he wants to get you off of his panel as soon as you can get on some other panel, he can get you off of his panel? Mr. KINGSLEY. Oh, yes; just as now he can say, "I do not want to treat you any more."

Senator PEPPER. And if you do not like him and want to get off of his panel, you can transfer to another?

Mr. KINGSLEY. Yes, sir.

Senator MURRAY. We will have no hearing this afternoon. This will go over until tomorrow morning at 10 o'clock.

Senator TAFT. I assume that the Federal Security Administration will be back later on the details of the bill?

Mr. KINGSLEY. I expect so; yes, Senator.

(Whereupon, at 12:05 p. m., the hearing was adjourned to reconvene on Tuesday, May 24, 1949, at 10 a. m.)

NATIONAL HEALTH PROGRAM OF 1949

TUESDAY, MAY 24, 1949

UNITED STATES SENATE,

SUBCOMMITTEE ON HEALTH OF THE

COMMITTEE ON LABOR AND PUBLIC WELFARE,

Washington, D. C. The subcommittee met, pursuant to adjournment, at 10:00 a. m., in the committee hearing room, Senator James E. Murray (chairman), presiding.

Present: Senators Murray, Pepper, Humphrey, Taft, and Donnell. Senator MURRAY. The hearing will come to order.

Yesterday S. 1679 was explained and discussed briefly. Today we expect to receive explanations of S. 1581, S. 1456, and S. 1106. We will hear testimony on S. 1581, from Senator Taft and Senator Donnell, on S. 1456 from Senator Hill and Mr. Bugbee, the director of the American Hospital Association, and on S. 1106 from Senator Lodge.

Our first witness this morning will be the distinguished Senator from Ohio, a member of this committee, and Senator Donnell, who has been very active and cooperative with me for several years. We are very glad to have you both here this morning.

STATEMENT OF HON. ROBERT A. TAFT, A UNITED STATES SENATOR FROM THE STATE OF OHIO

Senator TAFT. Mr. Chairman and members of the committee, Senator Donnell and I appear here today to present to the committee and explain Senate bill 1581, which we introduced in common with Senator Smith of New Jersey. Senator Smith is, unfortunately, ill at home and is unable to appear with us at this time.

Mr. Chairman, I think we all realize the general situation and the problems which this committee has been trying to meet in a number of different ways. We have today a very extensive medical system in the United States. We feel that it is a good system and that the problems which arise out of it are problems which would arise under any circumstances and which should be met by constructive study and by the adoption of measures which may effect a steady improvement in that system, not by throwing away the system and beginning over again.

In the first place, of course, we have the problems of public health, research, and preventive medicine. That field has been and is today the field of Government primarily. There is, of course, some very important private research in that field, particularly in basic medical problems. There is a good deal of scattered work in the field of public health among private charitable institutions. But in general, of

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course, it cannot be done on a commercial basis at all and it is and should be the function of Government.

This function includes the diagnosis and inspection of the health of school children and other general measures directed to preventing the development of disease. The Government has a wide field in which those functions can be increased and improved. I think it is the first and primary function of Government to bring about that improvement.

The second feature of our general medical system is that of providing medical care. It has always been assumed in this country that those able to pay for medical care would buy their own medical service, just as under any system, except a socialistic system, they buy their own food, their own housing, their own clothing, and their own automobiles.

Obviously, many families have difficulty in providing food, housing, clothing, and automobiles, but no more difficulty, certainly, in providing medical care.

The general appeal in this country has always been for those who are unable to buy medical care, unable to pay for their own expenses in the medical field. We have brought about, in order to meet that situation, a great development of private charity throughout the United States. Those charities have then been supported by Community Chest organizations throughout the States, which lay a tremendous amount of their appeal to the people for funds on the necessity for providing adequate medical care for those who are unable to pay for it.

That work has been supplemented by the States and local communities through their general hospitals, free nursing and medical service in hospitals, services of preliminary and preventive nature through public health units, so that medical care has already been made available to a large proportion of those who are unable to pay for it in the United States.

Undoubtedly, in that system there are gaps, particularly in rural districts and poorer districts in the cities, and we have a very definite interest in trying to fill up those gaps.

There also developed the realization that illness may be concentrated; that illness in the case of families who can pay for medical care may be concentrated in a single year and, thus, assume the nature of a catastrophe.

This has ordinarily been met in the past by the furnishing of the same kind of free medical care as that furnished to those who could not pay for it at all. But it was conceived that that problem could be met by providing medical insurance that would take care of extreme cases of illness, just as fire insurance takes care of the destruction of a single building by fire and the tremendous loss, which may occur at one time but which through the insurance system can be spread over a great number of people and a great length of time. This insurance has been gradually developing on a private basis and a not-forprofit basis in the United States until it is fairly generally available to the people.

In general, we believe that the present system has done an excellent job. I disagree entirely with Mr. Kingsley's statement on page 7 of his report that:

It appears to be agreed that our present system of payment for medical care is totally inadequate,

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