care for the present Department of HEW beneficiaries, we would assure that a patient was admitted to facilities that would provide appropriate care. If he needed renal care or if he had suffered a coronary attack, we would assure that we maintained responsibility for care at whatever facility could best provide this needed type of care.

I think there needs to be made another point in this connection, or rather in response to what you have just said, and that is that the truth of the matter is that we are having great difficulty in attracting career professionals into the Public Health Service hospital system now. It is fair to say that if it were not for the draft, we would be unable to maintain anything like the required level of PHS personnel. Mr. ROGERS. Would the gentleman yield at that point?

Mr. MURPHY. Yes.

Mr. ROGERS. Isn't it true, Mr. Secretary, that you have seven applications for every one that you are able to fill, at least?

Secretary RICHARDSON. Yes; for the reasons just stated, yes.

Mr. ROGERS. I don't care what the reasons are. The applications are there. If you wanted to build a health service, it could be done easily. I am sure you are aware that the Congress just passed a bill to expand the Public Health Service under the Emergency Health Manpower Act.

Now whether you recommend that the President sign that or not, I don't know. I would hope you would. The fact remains that there are seven applications for every one you fill.

Secretary RICHARDSON. Yes; but more than 90 percent of all present recruits to the Public Health Service enter it for purposes of satisfying their military service requirement, and only 5 percent or less of them remain in the Service.

Mr. ROGERS. Nevertheless, you have all the manpower you need.

Secretary RICHARDSON. Yes; but we are seeking, and as you well know, Congressman, I think neither the administration nor the American people in general, and I am sure the Congress does not, look forward to maintaining a system of required military service.

And when this ends, it will end the principal means whereby Public Health Service officers are recruited today. Now this is not to say that they could not be recruited. But it is to say, if you are referring to the legislation you just mentioned, that if it is to be done, it is much more likely to be done through the enlistment of idealistic public health professionals into forms of service that involve them in the provision of services in areas such as the inner city or remote rural areas where there is an inadequate supply of medical personnel today. It is not, however, at all so clear that they are likely to be drawn into serving in a system of obsolescent hospitals which could only be replaced at great expense and, indeed, which would not be replaced in the light of any sensible medical judgment as 150- and 200-bed hospitals.

The best of the younger men who would like to serve in a hospital are not likely to want to serve in that type of hospital that cannot be other than inadequately equipped.

Mr. ROGERS. Of course they are inadequately equipped because you have not modernized them. So this gets down to a "chicken and egg" situation. You can always blame the present situation on the hospitals,

but it is simply because you have not done an adequate job in keeping them up to date. But I won't get into an argument over that.

Secretary RICHARDSON. Well, I would just emphasize, Congressman Rogers, that to put the amount of money required into a small facility and combine with it all the elements of a modern, fully equipped acute care hospital is, by definition, an inefficient use of resources. This is one of the factors we have to consider.

Mr. ROGERS. Now, if I may, your Department just came to the Health Committee this year saying you didn't want to build any hospitals. What you wanted to do is go out and have all outpatient clinics, clinics that you are now proposing to close here. So you are taking a completely inconsistent view in presenting testimony to the Congress where you say you did not even recommend we continue building hospitals in this country, as you recall-you were not the Secretary at the time, but your immediate predecessor came to the Congress and said, "We don't want to build any more hospitals."

Now you are saying, "We are going to close these, and we will depend on the hospitals that are in the community.'

Secretary RICHARDSON. There is no inconsistency involved, really. I could broaden my statement and say that in terms of investment in health resources today we in HEW would not put the construction of acute care beds at the head of the list anyway.

I was simply making the point that if we were to replace the total Public Health Service hospital system, we would be disinclined to do so on a basis involving the construction of eight small acute care hospitals, too small in terms of dollars of investment and facilities provided to be efficient.

Mr. ROGERS. I think this is questionable. I am not convinced that this is necessarily true.

Let me just ask this, if I may, if the gentleman will permit.

The CHAIRMAN. I yielded to Mr. Murphy, and Mr. Murphy yielded to you. I don't think Mr. Murphy has any more time.

Mr. ROGERS. I am sorry.

The CHAIRMAN. Mr. Mailliard.

Mr. MAILLIARD. Mr. Chairman, I have one or two questions.

I have been looking back to the report that the committee made in 1965, when a similar situation prevailed. At that time, it was said that certain of the smaller and less efficient facilities would be closed, and I gather some of them have been closed, but that the others would be enlarged and modernized in order to meet some of the problems you are talking about.

But my impression is that that has not been done. Is that correct? Secretary RICHARDSON. That is correct.

Mr. MAILLIARD. So the decision that was taken at that time after a good deal of controversy just was never carried out.

Secretary RICHARDSON. That is correct.

Mr. MAILLIARD. It seemed to me and it seemed to the committee at that time that it was a pretty logical decision to recognize the problem that you are talking about now, that trying to maintain modern facilities with all the technical advances that have come in recent years at very small institutions is a terribly expensive proposition.

It would seem to me that somewhere in your consideration you might see whether the 1965 decision was not a pretty good one.

Secretary RICHARDSON. This, of course, is one pole of the broad range of alternatives that faces us. It would be essentially to proceed on that basis, or at the other pole, to seek by contract and otherwise some other means of meeting our responsibility to the present beneficiaries of the Department.

What we are looking at now essentially is the question of whether in the light of today's costs, in the light of our more recent thinking with respect to the relative priorities among types of health care facilities and placing of acute care beds in that scale of priorities, whether it any longer makes sense to go forward on the basis decided in 1965.

Had that been done, of course, we would not now be facing the decision we now face. But the costs would be substantially greater now. The relative need for acute care PHS beds is less, and the problems of recruitment are greater. The need for qualified health professionals in all the other existing facilities outside of the Federal Public Health Service hospital system is more acute than ever.

So in the light of all these things, then, the question is, since the 1965 decision was not implemented, do we wish to reinstate it now or do we wish to reexamine it completely and move in another direction? Mr. MAILLIARD. I have one more question, Mr. Chairman.

As for the facilities themselves, they vary in size and state of repair, age, and in every other way. But some of them are really very, very good physical facilities.

In your investigation of this, if the decision should be made that the Public Health Service was no longer operating particular hospitals, then they might be utilized by the Veterans' Administration or somebody else?

Secretary RICHARDSON. Yes; very much so. I touched on this briefly, Congressman Mailliard, in my statement, in the next to the last paragraph on page 2, which touches on the alternative uses that could be made of these facilities.

As you say, many of them are physically sound, well-designed structures, although the costs of the kinds of renovation that are required to make maximum utilization of them as acute care hospitals would be very considerable.

But as long-term care facilities, nursing homes, or as the focal point for the ambulatory diagnostic outpatient and inpatient occupancy for purposes of diagnosis and testing and so on, as the center for health maintenance organizations, they could serve very well.

Mr. MAILLIARD. I am a little intrigued. In my own district, there are plans going forward right now for considerable expansion of the veterans hospital which is about a quarter of a mile from the Public Health Service hospital which we are proposing to close.

Mr. BROOKS. Mr. Chairman, would it be an imposition if I ask for permission to ask a question?

The CHAIRMAN. I yield to Mr. Brooks.

Mr. BROOKS. You are very gracious, all of you on this committee, to give me this opportunity.

Mr. Secretary, who originated this effort to close these hospitals? Did that come out of HEW or the Bureau of the Budget?

Secretary RICHARDSON. The Department of HEW began even before

I arrived there in June to consider the question of closing some hospitals, and to consider this in the light of various of the other points that have been touched on here today, including costs of bringing them up to really first-rate quality. In subsequent discussions involving the Office of Manpower and Budget, the question came up of whether the same set of considerations that would justify closing some might not justify closing them all. So there has been involved essentially a continuing dialog within the executive branch on this question. Mr. BROOKS. By "executive branch," you mean at the Bureau of the Budget or HEW?

Secretary RICHARDSON. Both.

Mr. BROOKS. I am trying to distinguish which really thought it was a great idea to close them.

Secretary RICHARDSON. Well, this is a very old question. As you know, when I was in HEW in the 1950's, I spent a lot of time then on this subject, including a lot of time at the Bureau of the Budget.

Mr. BROOKS. It is a fascinating training ground for hatchetmen. Secretary RICHARDSON. Well, of course, there are a great many taxpayers out there who would like to cheer on a little more vigorous operation of the hatchetmen in the Bureau of the Budget.

Mr. Congressman, I would say to you in this respect that the problem is the problem of the most effective utilization of resources in manpower and funds.

I noted you touched in your statment on the question of whether the Administration gave sufficient priorities to the needs of health. I think this is a question that will be answered more fully in the unfolding weeks of the new Congress. but I can assure you that we start out with the premise, very familiar to Congressman Rogers, that there are not enough trained people, and certainly the costs of health care have been subjected to pressures arising in part out of the inefficient utilization both of resources of manpower and of facilities.

Pressures have been placed on the costs due to the overuse of acute care hospitals. We are approaching this question in this broad context as well as these narrow considerations.

Mr. BROOKS. Mr. Secretary, one short observation and I will yield. I hope you utilize your study, which has been going on since 1967, when you started the study-it did authorize HEW to evaluate these hospitals. That study is still in your office, I believe. Is that correct? A study on the proposed modernization and evaluation of public health facilities.

Secretary RICHARDSON. A study, I believe, was completed, at least to the extent of determining what would be required in terms of the updating of the physical facilities.

Mr. BROOKS. You have not made any decision as to modernizing those that they indicated they would modernize in 1965 and again in 1967?

Secretary RICHARDSON. There has been, as you know, a slowdown generally in capital outlays and construction projects throughout the Federal Government. I just don't know the history.

Mr. BROOKS. I understand you have not been there long, but I would suggest you take a look at that study and see if in good faith the Government should not, whether it is run by Democrats or Republicans,

follow through on that study and make the modernization efforts that had been pledged by this Government to those communities that need it.

One other thing. When you are talking about recruitment, in Galveston you have a very fine medical educational facility which is now working with the Public Health Service and which does provide some input of personnel and some back-up for training as well as staffing. I think this is a factor that certainly you should consider.

I might add that the VA hospitals, while they do a good job, have a tremendous job to do now and in the future, and that the combination of merchant marine personnel and other eligibles under the Public Health Service in a VA hospital might create some very serious problems of conflicts, understandable conflicts, as to the priority of care.

I would think the existing institutions certainly should be improved in accordance with the general thrust of what the Government and the Congress hoped they would do. I am not saying that you have not been in good faith, but we have been working on that since 1967.

That study should be culminated before long, and they ought to make a decision. I am here to encourage you to consider all of the positive factors for the continuation, for the modernization and utilization of the Public Health facilities now so badly needed by many people. Mr. ADAMS. Would the gentleman yield?

Mr. BROOKS. Yes.

Mr. DELLENBACK. May I ask a question at this stage?

When is the Secretary going to have to leave?

The CHAIRMAN. At 11:15; but I understand he will leave the other gentlemen here who will be in a position to answer.

Mr. DELLENBACK. So far as asking questions of the Secretary himself without cutting any of our colleagues short, some of us are interested in getting some answers to certain questions.

Mr. ADAMS. I just have a brief question which at some time I hope would be answered. It seems from the experience we have had on the Interstate Commerce Committee dealing with health facilities and in my own city of Seattle, where we have one of these public health facility hospitals, that we have inadequate facilities, people who cannot get service in hospitals. If you shrink the number of physical facilities, how, Mr. Secretary, can you do anything except either increase the cost or have somebody who can't get care? This is a matter of simple economics.

Mr. DELLENBACK. I repeat my question, Mr. Chairman, do we know when the Secretary has to leave?

The CHAIRMAN. I think he said 11:15.

I would like the record to show that we have Congressman Burke of Massachusetts and Brock Adams from the State of Washington.

Secretary RICHARDSON. Mr. Chairman, may I comment briefly on Mr. Brooks' observations? First, I think my colloquy with Congressman Mailliard made clear we are studying the question of what we should do in the light of the recommendations that were made as to what would be necessary in order to modernize these hospitals. As I said in my statement, the total bill would be at least $140 million. So we have to consider whether to make that investment in these hospitals is as sound a way of meeting our obligations to the beneficiaries involved as to do it in some other way.