I believe there was a question raised by you, Mr. Chairman, where some people indicated this was just a trial balloon, if this newspaper quotes Dr. Paul Petersen correctly, who is PHS Deputy Surgeon General, and this is the issue of U.S. Medicine which is an independent newspaper for physicians dated December 1, 1970, they put quotes around Dr. Petersen saying that the PHS hospitals are going through "an agonizing reappraisal." Those words are in quotes.

He said that this reappraisal was ordered by the Office of Management and Budget as part of the effort to tighten the Federal fiscal belt.

He indicated that the study is being conducted by people in HEW. He gives some statistics in terms of the operation of the hospitals.

There is one other question that I think Mr. Richardson or his representative should be asked in this regard. When the Detroit hospital was being closed, one of the big reasons given in testimony before Senator Yarborough's committee was the size of the hospital in Detroit which I think had 120 beds or something like that.

The smallest hospital on the list today is 160 beds and it goes all the way up to 636. The average is well over 300. The question of contracting, I think, comes into this because the question of costs in contracting is involved, and if it is more expensive to contract or if it is necessary to contract outside and if, as was indicated in the hearings before Senator Yarborough's committee, that it costs more to run a small hospital per patient and I assume that is correct-where fixed costs. are allocated over fewer people, then the question becomes what size hospital will be contracted with in order to get cost savings under the proposed procedures.

If it costs more to run a small hospital, does that mean that we are going to be unable to, or the PHS will be unable to contract with smaller hospitals, and if so, wouldn't this already then overburden those large hospitals in the major urban areas that we know are overburdened?

We can go to some small communities and find some hospital beds, but if they are larger hospitals, we are not going to be able to contract with them on a reasonable cost basis.

I would like to refer you back to that figure of $39.13 for 1968 that I gave you for the PHS hospitals. Those figures included the Detroit hospital and the Savannah hospital which have since closed. The Detroit hospital, when the average was $39.13, was running at $54.73 per day, and the Savannah hospital at $42.92.

So we have removed now the two highest, two of the highest cost hospitals from the figure of $39.13. That should have had a depressing effect on the average costs since then.

This goes along with my previous comment of why have PHS costs gone up at more than double the rate that VA costs have gone up for hospital care?

The CHAIRMAN. Thank you very much. We hope to keep in touch with you between now and the time we have our next hearing, which we hope will be next Monday.

Mr. GOTTLIEB. Thank you very much.

The CHAIRMAN. Our colleague from Florida, the Honorable Claude Pepper, would like to give a very brief statement. Congressman, we welcome you.

STATEMENT OF HON. CLAUDE PEPPER, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF FLORIDA

Mr. PEPPER. Mr. Chairman and distinguished members of this committee, I wish to express my dismay over the proposed closing of Public Health hospitals, and clinics across the country by the Secretary of Health, Education, and Welfare.

Last week on December 23 I sent a telegram to the Honorable Elliot Lee Richardson, calling his particular attention to the inadequacy of Public Health facilities in the Dade County, Fla., area. Should the Public Health clinic located in the Federal Building, Miami, be closed, 50,000 U.S. Coast Guard, American seamen, military and Federal personnel and their dependents would be deprived of vital health services. These people would have to go to the Veterans' Administration hospital or to Homestead Air Force Base both of which are already tremendously overburdened.

The Miami Public Health clinic is only one example. I can assureyou that HEW's proposal to deny proper and speedy health services to these Americans who have labored and are laboring in the service of their country is unconscionable.

The CHAIRMAN. Thank you very much, and the committee is adjourned, subject to the call of the Chair.

(Whereupon, at 12:05 p.m., the committee adjourned, subject to the call of the Chair.)

PUBLIC HEALTH SERVICE HOSPITAL CLOSINGS

WEDNESDAY, DECEMBER 30, 1970

HOUSE OF REPRESENTATIVES,

COMMITTEE ON MERCHANT MARINE AND FISHERIES,

Washington, D.C.

The committee met at 10 a.m., pursuant to call, in room 1334, Longworth House Office Building, Hon. Edward A. Garmatz (chairman of the committee) presiding.

The CHAIRMAN. The meeting will please come to order.

The committee today will continue its inquiry into widespread reports that the Department of Health, Education, and Welfare, and the administration, are planning to close U.S. Public Health Service hospitals in Baltimore, Staten Island, Boston, Norfolk, New Orleans, Galveston, San Francisco, and Seattle.

Our first hearing on this question was on December 22, 1970, immediately following published reports that the administration was planning to close these hospitals. The Secretary of Health, Education, and Welfare, the Honorable Elliot L. Richardson, was to be our witness at that hearing.

Unfortunately, he could not appear at that time, but he did advise me in a telegram that no decision had been made concerning the future of the Public Health Service hospitals, and that he would tell me of any decision that had been reached before it was made public.

In my subsequent letter to the Secretary, I made it clear that I did not wish merely to be advised about the decision before it was made public, but that I, and other committee members, wanted to participate in any decision that must be made concerning the future of the Public Health Service.

I am most pleased that the Secretary has agreed to appear before the committee this morning to tell us about the administration's plans for the Public Health Service. I am sure he is as concerned as we are about the medical needs of the beneficiaries of that Service.

These beneficiaries include merchant seamen, the Coast Guard, and certain personnel of the National Oceanic and Atmospheric Administration, all of whom fall within the jurisdiction of this committee.

Before we hear from the Secretary, I might say that we have already received testimony from representatives of the Labor-Management Maritime Committee, the Transportation Institute, and the Seafarers International Union, all of whom roundly condemn the reported plans to close the Public Health Service hospitals.

In addition, the Secretary will want to know that I have received many letters, telegrams, and telephone calls, which, without exception, oppose action by the administration to close these hospitals without

adequate opportunity for the Congress to participate in making any decision concerning the Public Health Service.

Among those from whom I have received word opposing unilateral action by the Department and the administration to close these hospitals are: The chairman of the Committee on Veterans Affairs, Congressman Olin E. Teague; the American Legion; the Veterans of Foreign Wars; the Disabled Officers Association; the Maryland Hospital Association; the American Hospital Association; the International Organization of Masters, Mates, and Pilots; the National Maritime Union; the International Longshoremen's Association; the City Council of the City of Galveston; and many individuals too numerous to list who have also opposed the closing of these hospitals for the reason that the beneficiaries of the Public Health Service program would suffer great hardship if these facilities were not available to them.

I should also note that the congressional delegations in each of the States in which a Public Health Service hospital is located is presently acting on a petition to the Secretary of Health, Education, and Welfare, opposing the closing of these hospitals because merchant seamen, coastguardsmen, and their families, and others, are extremely dependent on the health care provided by these Public Health Service hospitals.

It is clear from the information received so far that upward of onehalf million beneficiaries who are dependent on the Public Health Service program will be adversely affected if these hospitals are closed, and that the Congress should review very carefully the status of the existing program, with the possibility that the program should be improved, rather than eliminated, along with other alternatives that may be under consideration by the administration.

Before hearing from Secretary Richardson, the committee will be pleased to hear from some of our colleagues who have asked for an opportunity to give us their views. We welcome, therefore, Congressman William S. Mailliard, who is the ranking minority member of this committee. He will be followed by Senator William B. Spong, Jr., of Virginia, and Congressman Jack B. Brooks, of Texas.

I recognize the gentleman from California, our ranking member, Mr. Mailliard.

STATEMENT OF HON. WILLIAM S. MAILLIARD, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA

Mr. MAILLIARD. Thank you, Mr. Chairman.

In addition to all the arguments that were presented at the last hearing of the committee, I presume that these hospitals in various parts of the country have a very vital function in the communities in which they are located.

One of them is right in the heart of my own district. In addition to the service that it performs, and even if those services for the beneficiaries could be performed in some other manner, this hospital is an integral part of the whole medical community.

It participates in the medical teaching function, cooperates with the veterans' hospital which is also in my district, the University of