Senator DONNELL. That is what this language is, at any rate, and whether or not it is justified is a matter, of course, for argument. Now Mr. Cruikshank, we have thus far developed the fact, with your concurrence, as I understand it, about the support of this system coming from governmental funds arrived at and derived in the manner indicated; the fact that the national health insurance board is to be created, that it in turn is under the direction and supervision of a Federal official, the Federal Security Administrator.

Now you have said there are certain limitations and so forth. I have quoted the language and you have agreed that this language is in the act, whether or not you arrived at the same conclusion that I did, being another question.

Mr. CRUIKSHANK. Well, I certainly do not.

Senator DONNELL. All right. Now I call your attention at page 118 of the act, section 718, to this:

Agreements for the furnishing of medical or dental services shall provide for payment

You see that in the act?

Mr. CRUIKSHANK. That is right.

Senator DONNELL. And among other payments are the basis of fees for services rendered, on a per capita basis, on a salary basis, on such combinations or modifications of these bases as may be approved by the State agency. You observe all that?

Mr. CRUIKSHANK. Yes, sir.

Senator DONNELL. Now I call your attention to section 717 (a), the section immediately preceding, which says:

Each agreement made under this part

I take it we would agree that section 718 (a) is under the part mentioned in section 717 (a); is it not?

Mr. CRUIKSHANK. Yes; it is.
Senator DONNELL (reading):

Each agreement 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.

You observe that, do you not?

Mr. CRUIKSHANK. Yes, sir.

Senator DONNELL. So that I take it you would agree the agreements stand for the furnishing of medical or dental services other than specialist services which appears under section 717-718 (a) is to be made and contain an undertaking with regulations prescribed under this title. That is right; is it not?

Mr. CRUIKSHANK. That is correct.

Senator DONNELL. Do you think, Mr. Cruikshank, that where you raise the money from the Government, where a Government board operates, where that board operates under the direction and supervision of a governmental official, where it is provided that the agreements for the furnishing of the various professional services which I have indicated here shall be made subject to the regulations which shall be made under this title of the bill, do you think that that is free from the idea of socialization of medicine?

Mr. CRUIKSHANK. Completely free from it; yes, sir. That is the way the American people operate. In back of some of these ques

tions there is a kind of concept about the Government being removed and different from the people themselves.

We have had many experiences with various kinds of Government agencies. Some of them are rather arbitrary like those that operate under the Taft-Hartley Act. Others are very responsive to the needs of the people whose interests they represent, and we see in this measure every attempt to keep these programs and these regulations directed toward the purposes as stated in the bill.

Now in that very section that you cited on 718 there is even the provision following those which you cite that—

another method or methods of payment (from among the methods listed in this subsection) to those medical practitioners or to those dental practitioners who do not elect the method of such majority, when it is found that such alternative method of making payments contributes to carrying out the provisions of section 735 of this title or otherwise promotes the efficient and economical provision of medical or dental services in the area.

That is even after all the local participation and the recommendation of these rules and recommendations at the local level of administration, if there is a group that finds that it is not acceptable, then they are required to include those in the plan, so there is every bit of elasticity that can be devised in a Federal statute incorporated in this for the participation of the practitioners and the people who are covered by the act.

Senator DONNELL. You read the language "when it is found that such alternative method of seeking payments contributes," and so forth. Who makes that finding?

Mr. CRUIKSHANK. Well, it would have to go through the State plan; yes, sir.

Senator DONNELL. Do you think it would have to go through the Federal plan also, through the National Health Insurance Board? Mr. CRUIKSHANK. It finally would; yes.

Senator DONNELL. And finally through the Federal Security Administrator. That is correct, is it not?

Mr. CRUIKSHANK. That is right.

Senator DONNELL. Now turn, while you are on that page, to page 119, Mr. Cruikshank, if you will, please.

Senator MURRAY. Before you leave that point, I would like to point this out. Do not the other bills that undertake to provide a more or less comprehensive system of medical care have similar provisions? I note that the bill which is to be filed in the Senate today and is known in the press as the Republican bill, contains language somewhat similar to this. Here is section 1711 (a):

The Surgeon General is authorized to make such administrative regulations and perform such other functions as he finds necessary to carry out the provisions of this title. Any such regulation shall be subject to the approval of the Administrator.

(b) Administering the provisions of this title the Surgeon General with the approval of the Administrator is authorized to utilize the services and facilities of any executive department in accordance with an agreement with the head thereof

and it goes along in other provisions of the act along the same line. Mr. CRUICKSHANK. You have to place final responsibility, do you not, Senator on an administrator if you are going to place any check on the program at all?

Senator DONNELL. Mr. Cruikshank, the point that I am getting at is this. You say that this is not a socialization of medicine. You say that the executive board says that—

We have no desire to socialize the practice of medicine.

Mr. CRUIKSHANK. That is right.

Senator DONNELL. Yet we have a governmental plan worked out here for the raising of revenue with which to pay the expenses of what is termed here "prepaid personal health insurance benefits," all operated by the Government.

I understand about the local participation, but I pointed out the fact that the regulations of the local administration must be subject to and in harmony with the bill, and likewise I think are governed by the regulations made by the national administration heading up into the Social Security Administrator.

Now what I am trying to do is to point out in this record-whether you agree with it or not, and I doubt if you do agree with it: I do not think you do, from what you have stated, but I want to point out in this record as having something to do with the statement of the American Federation of Labor, that it has no desire to socialize the practice of medicine, what seems to me very clear, taking over functions that are now handled by doctors and hospitals themselves and are to be taken over under this bill by the Government itself acting under these various agencies.

Now you may be quite.right that ultimately somewhere the authority has to rest. I am not questioning that point, but the point is that this bill very clearly does invest ultimate authority in the Government in the management of this whole plan.

I referred to the hospitals a little while ago. I did not go into detail on that, but if you will turn to page 119 to which I was about to direct your attention when Senator Murray asked his question, you will not down on the bottom of that page:

Agreements for the furnishing of hospital services as benefits under this title shall provide for payment on the basis of the reasonable costs of hospitalization furnished as benefits: Provided, That the Board

now that is this National Health Insurance Board, as I understand it

after consultation with the advisory council and with representatives of interested hospital organizations

the Board

may by regulation prescribe maximum rates for hospitalization furnished as benefits under this title, and such maximum rates may be varied according to causes of localities or types of service.

That is the language, is it not, in the bill?

Mr. CRUIKSHANK. That is right.

Senator DONNELL. Now without debating as to whether that justifies the conclusion that that is another step toward socialization, I simply want the record to show at this point these successive steps, and I will not burden you by going into other steps which I have developed in somewhat greater detail a few days ago by another witness.

Mr. CRUIKSHANK. Well, Senator, may I just comment on that, because I think your comments and questions are related to this quoted. section from the statement of the executive council?

Senator DONNELL. Yes, sir.

Mr. CRUIKSHANK. And this quotation is taken without the break, incidentally. The second paragraph of the quotation is without break from the first paragraph.

They had before them S. 1606 which had this identical provision. in it, and they pointed out; that is, with those provisions before them it is quite apparent that they did not consider that those were steps toward socialization because what they are saying here is, "We have no desire to socialize the practice of medicine, but we agree that it is entirely feasible to spread the risk of the cost of illness," and so forth, and they then go on to give this approval of S. 1606 which had this same provision in it.

Now it is not only my opinion but it is the opinion of my organization that that is not a socialization of medicine.

Senator DONNELL. Very well, I understood it in this report of the executive council, just as you say, that they say, “We have no desire to socialize the practice of medicine."

The points that I desire to bring out are certain facts which it seems to me very strongly demonstrate the fact that this bill, S. 1679, contains step after step after step after step of a nature that justifies he view that this is a socialization of the medical services referred to in the bill. Now you do not agree to that.

Mr. CRUIKSHANK. That is your position, Senator, that it does.
Senator DONNELL. I think it does.

Senator MURRAY. Well, did not Senator Taft here the other day say that he had no objection to socialization except that he does not want it to go beyond the 20 percent?

Senator DONNELL. I do not recall any statement of that kind by Senator Taft about having no objection to socialization. At any rate, each one of us has his own right of expression and his own view.

Do you think what you might justly term socialized medicine exists today in England?

Mr. CRUIKSHANK. Yes, I think the present program in England is a part of their whole nationalization program which is socialization in one sense. You always have to be careful how you use that term, but I think it could be said that it is a socialized program to some

extent.

Senator DONNELL. In what respect do you think that the English system at the present time contains elements that makes it socialized medicine, whereas this bill, S. 1679, would not in your opinion be socialized medicine?

Mr. CRUIKSHANK. Because the English system at the present time has gone away from the contributory insurance system, and it is supported completely out of the general revenues of Government. Senator DONNELL. You think the support out of the general revenues makes it a socialiation, is that it?

Mr. CRUIKSHANK. I think the support out of general revenues, the complete support out of general revenues and the departure from the contributory system of social insurance makes a very important difference.

I am sure that my organization has never endorsed a program remotely approaching that of the English program today. I do not think that this program is completely socialized in the sense that,

91626-49-pt. 1- -22

for instance, they have contemplated socializing the steel industry in England because there is too wide a variation allowable for private differences in income of the doctors. They have not put them on a direct salary basis as they have their coal board, the transportation board, and as they contemplate the steel board.

Senator DONNELL. Have you read the law in England under which their system is now operating?

Mr. CRUIKSHANK. Yes.

Senator DONNELL. Very well, that is all, Mr. Chairman.
Senator MURRAY. Thank you, Mr. Cruikshank.

We will recess now until 2 o'clock.

(Whereupon, at 12:50 p. m., the hearing was recessed to reconvene at 2 p. m. this same day.)

The subcommittee reconvened at 2:45 p. m., at the expiration of the

recess.

Senator MURRAY. We will proceed now, and you may take the stand. STATEMENT OF PAUL R. HAWLEY, M. D., CHIEF EXECUTIVE OFFICER, BLUE CROSS-BLUE SHIELD COMMISSIONS

Dr. HAWLEY. Mr. Chairman, I am Dr. Hawley, from Chicago, associated with Blue Cross and Blue Shield Commissions.

I appear before you as a representative of the Blue Cross Commission of the American Hospital Association and of the Blue Shield Commission of Associated Medical Care Plans. However, I shall speak primarily as a citizen who has long been interested in good medical care for our people.

Mr. E. A. van Steenwyk, the executive director of Associated Hospital Service of Philadelphia, will follow me and speak upon the contributions of Blue Cross to the health of the Nation, and of the advantages of the voluntary over the compulsory method of approach to our citizens. Mr. van Steenwyk is one of the most experienced administrators in the field of voluntary prepayment of the costs of health care, and an elder statesman of Blue Cross.

As regards S. 1679, this bill proposes a long leap into the welfare state. I am not saying that this is either right or wrong. This is a decision that each citizen must make for himself. But no one should be deceived, either by himself or by others, as to the nature of the program presented in this bill.

I cannot help being disturbed by the glib statements that appear in the declaration of purpose and declaration of policy in this billstatements that cannot be supported by any facts known at the present, and some that are palpably untrue.

To select only a few, the statement that the "vast majority" of our people are unable to meet the shattering cost of serious illness is contrary to well-known facts. If this were true, there would be a small market for automobiles, for refrigerators, for tobacco, for moving pictures, and for many other luxury items that are purchased regularly by the great majority of our people.

The charge for protection against the cost of serious acute illness for an entire family, regardless of size, is not more than the cost of one package of cigarettes per day. That Government must subsidize, in whole or in part, the care of illnesses of long duration has been recognized for generations.