costs and loss of income. While attempting to approach the problem through providing insurance and at the same time attempting to avoid the universal coverage that is attainable only through compulsory insurance, this provision departs from a basic concept; namely, that the insurance must be taken out in advance of the need. The wording of this section indicates a kind of vague recognition of the fact that you cannot make it possible to take out fire insurance after the building has caught fire and at the same time recognizes that the safeguard against this possibility will not always be possible.

Secondly, it fails to take into account that the so-called voluntary insurance plans offer only limited protection. Very few of them provide for the payment of the entire medical and hospital bill even in catastrophic illnesses. If the individual has been found to be in such financial straits that he cannot pay the monthly charges for insurance protection how is he to pay those additional costs which are not covered under almost all these plans now in existence without being "identified as a person accepting assistance at the time of receiving care"?

There are a number of other serious deficiencies in this bill.

It would subsidize private agencies with public funds. As yet unspecified amounts would be turned over to private organizations with no provision for public accountability for standards of service and of administration or for any public supervision to maintain standards or to require reasonable economy. While the organizations to whom these funds would be turned over are nonprofit organizations, there is no safeguard, for example, against their contracting advertising or other acquisition activities to profit-making concerns. There are at present also six States in which the approved medical-service plans operate entirely through a list of private-insurance companies. While the medical-service plans themselves are nonprofit, the insurance companies through which they operate are far from being nonprofit organizations. The bill provides no safeguards for the use of public funds in such activities.

At several points this bill recognizes that it fails to meet important areas of the medical problem but dismisses these problems by calling for studies and surveys. Section 713 (a) (18) requires that the State plan provide for a survey of existing diagnostic facilities.

Subsection 19 requires the State agency to make a survey of the facilities, services and financing for the care of mental, tuberculous, chronic disease, and other patients hospitalized for a long period of time.

The problem of distribution of medical personnel is met—or rather avoided-in the same manner. Subsection 20 requires a survey of areas in the State which are unable to attract practicing physicians and calls for recommendation on methods of encouraging physicians to practice medicine in such needy areas.

We submit that the essential need today is not for more surveys of the problem. Study after study has revealed that the real nature of the problem of the distribution of facilities and of medical personnel is related to there being an effective demand for the services the provide. Such an effective demand can be provided only through a comprehensive insurance system supplemented where necessary by direct aid.

In contrast to the timorous, half-hearted and in many respect illadvised approaches to the problem set forth in these two bills, Senate bill 1679 presents a complete and comprehensive program to meet the health needs of the nation, resting on the firm foundation of the proven principle of contributory social insurance. The health insurance program established in title VII of this bill is based on the principle that people should pay their way in proportion to their means, in this case by small regular payments into the insurance fund, and should therefore have needed medical services as a right not as a Government charity. This is an economically sound approach and consistent with our American principles and in line with the desire of every true American to maintain himself in decency and selfrespect.

This program provides insurance against the cost of medical care for practically everyone. It provides for sound administration with proper representation from those who pay the costs and receive the services. It would be administered with Federal, State, and local participation with emphasis on local responsibility. While compulsory in terms of coverage and requirement for contributions it preserves the freedom of individuals to choose their own doctors and respects the freedom of doctors and hospitals to accept or reject patients. We submit that of the three proposals this is the only practical one. It is practical because it has taken into account all the many phases of the complex problem of providing medical care and services. There are those who agree with the principle of comprehensive health insurance but who would tell us that it is impractical now because there are not enough trained professional personnel. This bill does not deny the need for training additional doctors and other medical personnel. The answer to those who say that we cannot have a health insurance program because of these shortages is found in title I where an adequate program of Federal aid to medical education is provided. It meets the needs of the medical schools, the dental schools, the schools of dental hygiene, schools of nursing, schools of public health, and schools of engineering.

Another provision of this title provides direct assistance to qualified students training for service in the medical field. Since the costs of modern medical education are necessarily high, under present circumstances very few can enter the field except the sons and daughters of the rich. Students of medicine and allied fields should not be selected on the basis of the financial means of their parents. When this program has been in effect for some years we look forward to there being not only more doctors, but more doctors who understand the problems of working people as some sons of working men would then have a chance to enter the profession.

There are others who say that the method of payment provided in a health-insurance program does not meet all of the problems because there is much work to be done in the field of medical research. We have never claimed that health insurance alone meets all of the needs. The need for additional medical research in the diseases which so far have baffled even our advanced medical science is recognized. The answer to those who would have us wait for the further development of research is found in title II, where aid to such research is provided, through the setting up of continuously financed institutes of research in special fields.

While I recognize that title III of S. 1579 is not specifically before this committee at this time, one aspect of it bears so directly on the program envisaged in title VII that I ask the permission of the committee to comment briefly on this interrelation.

In March 1946, testifying on behalf of the American Federation of Labor before a congressional committee in support of the Hill-Burton Act, I presented the following statement:

It is not only possible but entirely likely that the areas showing the greatest needs for health facilities will also be the areas where it will be most difficult to provide funds necessary for the operation of such facilities. We feel therefore that this program will be incomplete until there is some provision for funds for maintenance and operation.

The position of the American Federation of Labor is that the soundest method of providing funds for the operation of health facilities is through a national system of health insurance as proposed in President Truman's health message to Congress.

While notable progress has been made under the operation of the Hill-Burton Act toward meeting the need for more hospital facilities we note that seldom has any prophecy been more clearly borne out than the one we made 3 years ago. The report presented to the Federal hospital advisory council at its last meeting in November 1948 showed that the State plans which had been submitted under the act showed a need for 865,682 new hospital beds-almost doubling the number of approved beds in existing facilities. Under the program operation for the fiscal year 1948-49, 467 projects for general hospitals had been approved. These provide a total of 23,327 beds.

Startling facts are revealed, however, by a study of the distribution of these projects by categories of need. These categories are set up under terms of the act in relation to priorities from A to F. Out of the 467 total approved projects only 253 or 54.2 percent were in A priority, corresponding to the areas found to be in greatest need. In terms of the number of beds in approved projects 10,691 or only 45.8 percent of beds are in the areas of greatest need as against 12,736 beds approved for areas of lesser need. In the State of Alabama there are 9 approved projects but only 1 having an A priority and that a small one of 82 beds. This is 8.3 percent of the total of 981 beds approved for that State. Other States representing recognized areas of need show a similar type of distribution.

This again points out there is a vicious cycle operating in the whole health field. Illness follows low income and is related to lack of facilities; low income in turn leads to a higher rate of illness and results in further lack of facilities. This vicious cycle must be broken by a concentrated united front attack on the whole problem. The program of health insurance contemplated in title VII of S. 1679 would provide the means for paying for the use of the facilities that are contemplated in title III and which are also proposed in Senate bill 614 and in title IV of S. 1581. While we do not recommend that capital expenditures be made out of the insurance fund and this need is met by the liberalized proposal for grants-in-aid under title III, it is in title VII that the all important problem of funds for operation of these facilities is met. It is not met in any other proposal which is before your committee.

Senator TAFT. Why not? That is just exactly where the money is going, the $300,000,000 a year we are giving the States is to go for the

support of those people who are unable to pay for medical care and presumably will go to a large extent to the hospitals in the poor districts.

Mr. CRUIKSHANK. It does not meet it on anything like the comprehensive scale or approach.

Senator TAFT. That is true, but then maybe $300,000,000 is enough for that particular purpose. These are areas where the people are simply unable to pay for medical care. Therefore hospitals cannot be supported.

The money we give in our bill goes to those people and they are able then to pay for it and support the hospitals in those areas, or the State is authorized to buy voluntary insurance for them if they want to, or provide it in some way or pay the hospitals directly for their care, if they want to. It is just a question of the amount. Is $300,000,000 enough?

Mr. CRUIKSHANK. I think you will find that $300,000,000 was not anywhere near enough.

Senator TAFT. Incidentally, in these rural districts, you will get very few people who will qualify under the Murray-Wagner-Dingell bill. Most of the poor people there will not qualify at all, and there will not be any support therefore for their hospital care out of the insurance. Mr. CRUIKSHANK. There are other provisions of the bill, however, that relate to that.

Title V of S. 1679 offers further evidence of the practical nature of this comprehensive program. It does not call only for the survey of the special problems of rural and other shortage areas, but provides a program of action. In response to the recognized needs for additional personnel and facilities it provides grants or loans guaranteeing income to doctors and dentists and others who would practice in such areas. It meets such practical problems as the costs of travel for such persons and their families who are willing to respond to these needs. For those areas of sparse population mobile clinics and ambulance services are provided. There are also loans to supplement inadequate local funds for construction and grants for the maintenance of hospitals, group practice units, health centers, clinics, diagnostic and treatment centers. We recommend such a program in connection with the original Hill-Burton Act and experience under that act has likewise proven the practical need for such supplemental aid.

Part B of this title is in accord with our long-established policy that groups such as labor unions and cooperative organizations who establish adequate medical service plans should be encouraged and should be permitted to continue in operation as service agencies under a health-insurance program.

We commend the enlarged program for aid to States for maternal, child health, and crippled children services, provided in title VI. The American Federation of Labor was one of the national organizations that sponsored the creation of the Children's Bureau. Through the years the position that the Children's Bureau has always taken with respect to the welfare and health of children has been one activated only by a concern that the conditions under which children live and grow shall be the best. The Bureau has shown courage and leadership in carrying out its functions in the interest of all children.

This position is supported by the following action of the Sixtyseventh convention of the American Federation of Labor:

We believe that all children regardless of race, residence, or family income have the right to whatever health and welfare services and medical care they need for wholesome growth and development and that is the responsibility of the Federal Government to help the States and communities meet these requirements. We favor raising the amounts available for payments to the States to whatever sum is needed to meet the requirements of an adequate maternal and child-welfare program.

The American Federation of Labor fully supports Senate bill 1679 in its entirety as it is the only proposal which has been brought forward which provides a way by which the American people through their Government can meet the many-sided problem of providing for their health needs and we urge favorable action on the measure by your committee and by this session of the Congress.

Senator MURRAY. Mr. Cruikshank, I understand that the A. F. of L. engages in extensive bargaining with employers with the view of securing the kind of medical care and hospitalization that they need. Would they consider that a complete and sufficient answer to the problem of medical care?

Mr. CRUIKSHANK. No, Senator, they would not. As nearly as we can tell now-it is a very difficult statistic to work out-in our unions there are somewhere between a million and a million and a quarter people who are covered with some kind of health-insurance program under collective bargaining. There are only two or three centers, however, in the United States where they can get anything like complete coverage. One is in New York and there is another in St. Louis. As I say, there are very few centers. Most of them include in collective bargaining some of the coverage under Blue Cross, and some of them under cash indemnity programs with private insurance carriers, some under the medical service plans, but all of these have such limitations.

Well, it is quite interesting to us to note that some of the strongest representations and the support for compulsory health-insurance programs come from the unions that have the present inadequate coverage. Their experience with them is not satisfactory.

Senator TAFT. It is fairly hard to work out a coverage in a thing like the building trades, it is not, I mean the contractors are so scattered, they come and go?

Mr. CRUIKSHANK. Quite correct; yes, sir. You have to have for that kind of protection a combination of circumstances such as a relatively immobile type of labor such as you have in the mines or you have largely in the needle trades, or lacking that, a large metropolitan area where the shifts between employers are absorbed and the agreements are made with an association of employers such as the Government workers of New York City, and then of course you have to have strong bargaining power.

Where you lack either of those factors-now in the building trades you have strong bargaining powers, but you lack the other factor. Therefore the building trades unions are among the strongest supporters of compulsory health insurance because it was the only way that these transfers could be automatically worked out.