The methods proposed by the national plan do not vary the payment in accord with the benefit or the risk, which is spread over all the insured. They do vary the payment in some degree with the income of the insured. However, each person is guaranteed whatever service he may need, within certain maximum limits. In this way national health insurance differs radically from any of the usual voluntary plans. Those who can better afford it will pay part of the cost of medical service for those who can afford less. The service will be rendered according to need; the payment will be made, in larger or smaller degree, according to means. This accords with the principle of sliding scales now general in noninsured payments to private practitioners and hospitals. Methods of distributing the cost Three methods are proposed. Any one of these methods might be used alone, but the probability is that they will be used in combination. How they are combined will determine the degree to which payment is adjusted in accordance with ability to pay. Pay-roll taxes on employees The first method is to charge the cost to the incomes of the insured by deducting a flat percentage of wages and salaries up to a specified amount-($4,800 a year being proposed). Persons with incomes above this figure would pay the tax only on $4,800. A somewhat larger rate of tax would be levied on the selfemployed. The pay-roll tax, implied by the bill, would be about 11⁄2 percent on employees, another 12 percent being charged to their employers. That part of the tax deducted from the employee's pay would thus be directly proportional to his income within the range of zero to the ceiling figure enacted ($4,800). (About three-quarters of American families fall below that figure.) The pay-roll tax would not, however, be adjusted to ability to pay to as great a degree as by income taxation, which exempts the lower incomes entirely and assesses progressively higher rates up to the top brackets of income. On the other hand, since persons even of low income spend on the average 3 percent or more of their incomes for medical care, the 12 percent would not be a new burden. Pay-roll taxes on employers The part of the pay-roll tax which employers pay would have different effects at different times or in different circumstances. Many authorities believe that employers' taxes under social insurance are likely to be shifted to consumers in the form of higher prices. This is particularly true at periods of relatively full employment, when consumer demand is high. In a highly competitive industry or during a depression, the employer's share of the contribution might not be passed on to the consumer. In that case its effect would be to reduce profits or increase losses. In such circumstances, there might be a tendency for the cost of insurance to reduce the level of employment. But such an effect would probably be minor. Insofar as the cost is passed on by employers, the employer contribution acts like a general sales tax. It raises the cost of any given article equally to all consumers, regardless of their incomes. This bears more heavily upon consumers with small incomes. Contribution from general revenues Part of the cost will be met by contribution from the Federal Treasury; this is likely to be small, according to the provisions of the law. When the Federal budget is balanced, this cost will rest chiefly on the taxpayers, and will be apportioned exactly like any other governmental cost paid out of general revenues. Since the Federal Government derives the greater part of its revenues from the income taxes on individuals and corporations, the burden of the cost would be adjusted to ability to pay to the degree embodied in those taxes. Any part of the cost borne by Federal income-tax payers would be more fully adjusted to ability to pay than any part of the cost borne by pay-roll taxes on either employee or employer. Yet the part of the cost met out of pay-roll taxes would not increase the burden met at present by families in the lower brackets of income, since they already pay as much or more for medical care as the payroll tax would amount to. VIII. SUMMARY What costs are to be met? National health insurance as proposed in the pending bill would cover the costs of general physicians' and specialists' services, of hospitalization up to 60 days a year per person (except in cases of mental disease and tuberculosis), of laboratory services, appliances, and the more expensive medicines prescribed by physicians; and of limited dentistry and home nursing (p. 5). Estimates of these costs The most reliable estimate of the total cost to be met for the first year of the plan is about $5,500,000,000 or $37.39 per capita of the population (pp. 6-8). Higher estimates, which have been made by opponents of national health insurance, would require that there be more doctors, hospitals, dentists, nurses, and other health-service personnel than now exist, or else that payments to these persons would be far above their present earnings (pp. 8-12). How much addition to present costs? The actual money cost of the plan to the Nation would be the amount by which the insurance payments would exceed the present costs of the same kinds of services. This excess cost would be about $1,100,000,000. This amount is less than half a cent of every dollar spent in 1948-i. e., it is one-half of 1 percent of the gross national product (pp. 12-13). How much cost in manpower and in goods? In terms of demands upon manpower or upon other resources, there would be only very slight cost during a period of full employment (pp. 14-15). Ability to pay future cost? The increase in manpower (including all kinds of health-service personnel) which it is estimated would be required in order to supply fully adequate medical services to everybody, would be about 1 percent of the Nation's labor force. The chances are that this number will be more than counterbalanced by the numbers released from the production, transportation, and distribution of material goods, assuming that technical progress makes headway in the future as it has in the past (pp. 19-22). Measured in terms of national product rather than in manpower, the same increase in personnel and facilities would require less than one-tenth of the expected increase in national product per person during the next 5 years, or less than one-twentieth of the expected increase in the next 10 years (pp. 16–20). What would happen in bad times? Health insurance tends toward stabilizing purchasing power among the mass of the people. It tends to emphasize larger spending and smaller saving during depressions, and this is desirable because employment is thus bolstered (pp. 20-22). Who would bear the cost? National health insurance would distribute the costs of medical service so that, during any given period of time, those who are ill would pay little more than those who remain well. The effects of unpredictable sickness costs upon families are thus removed. The pay-roll tax levied upon employees, if of 12 percent or even somewhat more, would not be a new burden, since families even of low incomes now spend on the average 3 percent or more of their incomes for medical care. 1 The 12-percent tax levied upon employers would usually be passed on to the consumer, and would be proportional to the amount spent by the various consumers. The minor part of health insurance costs which it is expected might be met by appropriations from general governmental revenues would be largely adjusted to ability to pay, since the greater part of such revenues are derived from the income tax (pp. 23–25). Senator MURRAY. Dr. Carl O. Flagstad, representing the American Dental Association. Will you take the stand, doctor, and state your name and official position with the American Dental Association? STATEMENT OF DR. CARL 0. FLAGSTAD, MINNEAPOLIS, MINN., ON BEHALF OF THE AMERICAN DENTAL ASSOCIATION Dr. FLAGSTAD. My name is Dr. Carl O. Flagstad. I have been engaged in the private practice of dentistry in the city of Minneapolis, Minn., for 38 years, during which period I also have been a professor in the school of dentistry at the University of Minnesota, where I have served as chairman of the department of denture prosthesis for many years. The council on legislation of the American Dental Association, of which I am chairman, is elected by the house of delegates and charged with the responsibility of representing the American Dental Association before the Congress of the United States on legislation of interest to dentistry. It is my purpose today to present the views of the association concerning the National Health Insurance and Public Health Act. Senator DONNELL. That is S. 1679; is that right? THE AMERICAN DENTAL ASSOCIATION AND ITS OBJECTIVES The American Dental Association, with its predecessor society, has been the national organization of dentistry for nearly 100 years. Today there are more than 69,000 members of the American Dental Association, or approximately 85 percent of the dentists registered in the United States; in addition, 70 percent of all dental students in schools of dentistry throughout the United States are student members. The association has 53 constituent societies, which represent each of the 48 States, the District of Columbia, each Territorial possession, and dentists employed by the Government of the United States in the Army, Navy, Public Health Service, and the Veterans' Administration. Within the constituent societies there are 433 organized district societies. Each constituent society sends delegates to the annual meeting of the house of delegates, where the policies of the association are established through official actions by the house. This extensive dental organization was not created to be a dental pressure group. It provides a working medium through which the dentists of this country may study problems relating to dentistry, and to the dental health of the Nation, and through which they may mutually contribute to the advancement of dental knowledge. The American Dental Association and its component societies are dedicated to the improvement of the dental health of the people of America. That the objectives of the association have been adhered to by the membership is demonstrated by the fact that the United States has the best dental health and the finest dental care for its people of any country in the world. The association has taken its professional obligation seriously. It has annually expended a goodly portion of its own funds for dental research. It has created and maintained fellowships at the National Bureau of Standards and at the National Institute of Health. It maintains a research commission at the Army Dental Museum, and through its council on dental therapeutics, devotes considerable time and effort to the study, evaluation, and dissemination of information with regard to dental therapeutic agents. Through its council on dental health it continually studies the oral health needs of the public, develops plans to meet such needs, and stimulates programs for promoting oral health. It maintains a comprehensive program of oral health educational services, which are available to the membership and to the public. 1 Dentists devote considerable time each year in attendance at the meetings of their various dental societies, for the purpose of attending clinics and lectures designed to improve their professional knowledge and skill so that they can more efficiently serve the dental needs of their patients. Dentists, as individuals, and as a profession, have demonstrated their interest in promoting the better health of the people in the community, in the State and in the Nation. Through the efforts of the dental profession and its associations the dental health of the public of this Nation has constantly improved, and with such improvement in dental health there has been also an improvement in general health. Dentistry has recognized its obligations. It has developed, fostered, and expanded dental schools for the training of more dentists; it has contributed its funds and time to research projects in an endeavor to better the health of the population; it has encouraged and promoted the establishment of dental health programs for children and adults in hundreds of cities and counties throughout the country. Through its efforts and encouragement, dental divisions have been established in nearly every State health department. The dental profession has consistently examined legislative proposals relating to dental health and has endorsed what it deems good for the dental health and welfare of the people. It has vigorously opposed legislative proposals that it considered not in the best interest of the people. DENTISTRY'S RESPONSIBILITY This preliminary statement has been made to assure the Congress that the dental profession is keenly aware of its responsibility in matters pertaining to the dental health of our Nation and to indicate that the American Dental Association has continually stimulated its membership to discharging this responsibility with unselfishness and efficiency. The dental profession believes it is the rightful guardian of the people's dental health and that the profession is best qualified by training and experience to judge the value of a dental health program for the United States. The dental profession believes it would be derelict in its duty if it did not oppose health legislation which in its judgment is detrimental to the health and welfare of our people. The American Dental Association believes this committee and the Congress of the United States will understand that the association, in its opposition to the philosophy of compulsory health insurance, is motivated by the sincerest desire to protect the Nation against a system which the association believes will deteriorate the health services afforded to our people. The National Health Insurance and Public Health Act is a proposal for a health program which dentistry considers to be unwise legislation. The association believes that the responsibility for providing dental care must be borne in the same manner as the responsibility for providing food, shelter, clothing, or any other essential of life. It is the American custom and tradition for an individual to attempt to supply these for himself. If he cannot do so, the responsibility falls on the family, the community, the State, and the Nation successively. If each assumes an equitable share of the responsibility, the problem of better dental health in this country is on the way to solution. There is no more reason for the Federal Government to assume the primary responsibility for providing health care than there is for it to assume the primary responsibility for providing food, shelter, and clothing to all. Although it is necessary for the community and Government to care for the health needs of its indigent and to aid those unable to meet the expense of protracted illness, it is a fallacy to assume the collection of money at the Federal level to be channeled into health care will make available adequate health service to everyone and guarantee an improved level of health to our people. Undoubtedly those who are familiar with the problems surrounding the distribution of health care are aware of the limitations of a nationalized health program, but unfortunately the general public believes the proposed compulsory health-insurance legislation is a panacea for the difficulties of the care and expense associated with illness. If the Congress should enact this proposal it will saddle the Government with a gigantic task which it cannot possibly discharge in the manner the people have been led to believe. LIMITATIONS OF THE PROPOSED ACT This bill infringes on the rights of the individual. It compels persons to contribute to the cost of a program which cannot be effectively carried out, and which will not improve the health of the people of this country. It appears that the bill fails to recognize the ultimate results which must flow from its enactment; that by its very terms it sets up conflicts which cannot be resolved without repudiating some of the promises which the bill makes. IT IS NOT A TRUE INSURANCE PLAN The proposed legislation is termed national health insurance but it is not actually insurance, because there is no sound actuarial basis to serve as the foundation of the program; nor is there any relationship between the proposed benefits and the ratio of premiums to be collected. Actually, even the proponents of the bill cannot give a clear estimate of the amount of funds which the proposed appropriation would provide in relation to the probable costs of offering the various health services; nor do they present a convincing forecast as to the probable immediate demand for various types of services proposed to be paid for in relation to the probable cost of these services. In considering the so-called insurance aspects of the bill, it is necessary to examine the method by which a person would become eligible for benefits. In an ordinary policy of insurance he becomes eligible when the company accepts his contract and immediately upon the payment of his premium. Under the system proposed by the bill it must be assumed that the beneficiaries would contribute out of their wages. A formula is borrowed from the old-age and survivors insurance program to be used as the guide to eligibility. The bill provides that a person will be covered if he or she earns $150 per quarter in each of four of the first six quarters prior to the commencement of a benefit year; an alternative formula is provided for those who earn less than $150 a quarter. It is difficult to comprehend what consti |