Secretary CELEBREZZE. The aging program is assigned to the Department of Health, Education, and Welfare for the purpose of coordinating all of the separate facets in the other departments, too. It is run by the President's Council on Aging, primarily, of which the Secretary of Health, Education, and Welfare happens to be Chairman. These other departments are also involved. Part of it is handled under Agriculture, part of it is handled under FHA. We are the coordinating effort on it.

Mr. YOUNGER. When it comes to the insuring of those facilities, the housing facilities and all that in connection with insurance, it is still under the Housing and Home Finance Agency?

Secretary CELEBREZZE. Yes, it is under HHFA, the same as public housing authority is.

Mr. YOUNGER. They have their offices all over the country and they have the facilities, the builders, the contractors, they are used to dealing with them.

Secretary CELEBREZZE. We have offices all over the country, too. We have regional offices and then we have specific offices, too, Congress

man.

Mr. YOUNGER. Maybe we had better reduce some of those, rather than turn out lights in the White House for savings. Maybe we can save more money by combining some of them. That is what I had in mind. It seems to me that we go quite far afield when we start setting up another agency of insurance.

Secretary CELEBREZZE. You are not setting up another bureau. As I say, two-thirds of what will be required we are already doing. As a matter of fact, two-thirds of the job we are already doing. So you are saving three-quarters; in the insured mortgage program. HHFA is handling the total program now.

Mr. YOUNGER. I am not questioning the two-thirds or one-third. We will take your figures for it. But even then, the question of having the insurance, the accounting of the insurance program, under the experience of people that are accustomed to handling the insurance seems to me to have advantages.

Secretary CELEBREZZE. That is nothing unusual. Under the new education legislation, the Office of Education is going to provide loan features, too. There again, they work in cooperation with the HHFA. I think we are in a better position in a health province of centralizing all facets dealing with that health problem insofar as money is concerned.

Mr. YOUNGER. Mr. Secretary, where in the education program do they insure mortgages?

Secretary CELEBREZZE. There is no insurance of mortgages, but there is a loan feature under the educational bill. It seems to me that a direct loan program as compared to an insurance program is much more complicated.

Mr. YOUNGER. That is entirely different. That is out of the field of HHFA. They do not make direct loans. We have direct loans under the VA. But that is outside the field of insuring loans. It seems to me that when we start in insuring a structure, whether it is a hospital or an old folks home, a rest home, housing, we ought to concentrate it in one place, so long as it is insurance.

True, you can set up your standards, the type of buildings, and so forth, which will probably have to be approved by you and your Department. But so far as the actual insuring of it, the supervising of the construction and all after it is insured, and seeing to it that the specifications are lived up to, and all that ought to be concentrated in one department.

Secretary CELEBREZZE. We do all that now under our grant program. Whenever we make a grant for a construction purpose, we have to supervise that construction purpose. We are doing that phase of it. Mr. YOUNGER. Under your grant program, yes.

Secretary CELEBREZZE. Yes.

Mr. YOUNGER. That is right. But that is a different thing than under the insurance program.

Secretary CELEBREZZE. It is still a process of supervision. It is a construction program and this other is a construction program, just as well.

Mr. YOUNGER. I can see we are not getting very far. Apparently you are determined that that kind of insurance ought to be in your Department.

Secretary CELEBREZZE. No, the point I am trying to make, Congressman, is that I think the determination and the help on all health matters ought to come under a central organization, the same as in your State. Then you can take a look at the total picture required, both as to whether to make grants, or whether to make loans. I think it ought to be brought under one umbrella.

Most of this comes out of State recommendations, again. I just wanted to make the point that I think if you are going to deal with a health program, and you have half of it under HHFA and half of it under the Public Health Service, very often and strictly because of the magnitude and responsibilities of separate departments, HHFA may not know what the Public Health Service is doing. No. 2, if they come in under this new bill, under the modernization, for a grant, and at the same time they are over at HHFA for a guaranteed loan, we say under the Harris bill and under the administration proposal that the grant plus the loan can't exceed 75 percent. So if it is under one roof, you will find it out in a hurry. If it is under two roofs, you will have difficulty.

Mr. YOUNGER. There is no question of it being under one roof to that extent. But when it comes to the extent of insuring a loan, once you have approved it, it is, in my opinion, an entirely different situation. No one is asking to take away anything that you have. But to start up another insurance fund, under the Surgeon General, when you already have an insurance fund and you already have years of experience in insuring mortgages, and you throw that all away, it seems to me to be a waste.

I have one other question. Are all the expenses, everything that is included in this bill of every kind and nature, including the repairs, renovation, everything that is called for, provided in the budget for 1965?

Secretary CELEBREZZE. Dr. Graning can explain that to you.

Dr. GRANING. Sir, as we testified, the President made reference to this in his health message, but when we actually testified before both the House and Senate Appropriations Committees, both committees

were cognizant that the authorization for construction expired on the 30th of June. Therefore, we were not permited to testify at the time we had our regular hearings for the construction amounts. Both committees are conversant with the amounts contained in the proposal. We expect to go before them after this piece of legislation has been passed, if it is passed.

Mr. YOUNGER. That is not the question. I am asking, did the President in his budget for 1965, anticipating this bill, include all of the money in this bill?

Dr. GRANING. Yes, sir; he has.

Mr. YOUNGER. Of every kind and description?
Dr. GRANING. Yes, sir.

Mr. YOUNGER. It is in the Presidential budget?
Dr. GRANING. Yes, sir.

Mr. YOUNGER. That is all, Mr. Chairman.

The CHAIRMAN. Mr. Pickle.

Mr. PICKLE. Let me ask you, does any of this money go for administration and personnel in a hospital once there has been construction?

Dr. GRANING. No, sir.

Mr. PICKLE. And you have no control over personnel?

Secretary CELEBREZZE. No control. The only difference between the existing legislation, which may affect administration, is that under the Harris bill and the administration proposal, and Senator Hill's bill, we are authorized to set aside 2 percent for the State, but not to exceed $50,000, for the purpose of administration over and above what they are doing now. Whatever sums are allocated to them are deducted from the total allocation to the State.

But otherwise, there is no money whatsoever that goes for the administration of the program. That is on a straight State basis.

Mr. PICKLE. Assuming that there would be an amount in terms of $50,000, there would be no control over the administration of personnel?

Secretary CELEBREZZE. The $50,000, as I understand it, is for State administration. There is no control over the personnel, except for the general merit system requirement for the State employees.

Mr. PICKLE. There would be control over planning purposes?
Dr. GRANING. No.

I assume you are referring to the State agency and not the hospital?
Mr. PICKLE. The hospital.

Dr. GRANING. No. In the State agency there is no control over the personnel.

Mr. PICKLE. They would not have to abide by a merit system in operation?

Dr. GRANING. Yes, the States have to.

Mr. PICKLE. The State agency, but would the hospital?

Dr. GRANING. Not the hospital, but the State agency must, by legislation.

Mr. PICKLE. I noticed in your planning section that you set a maximum of 75 percent for grants, for planning purposes, except that you made one exception; that the Surgeon General could exceed that if he thought it was in the best interest of the country. Give me an example as to why you would give him authority to exceed that amount.

Secretary CELEBREZZE. There may be a case where the community has made every effort it possibly can and there is such a drastic need for planning that he would grant them over the 66% percent. Let's assume that there is a community in really a critical need, and all they can raise would be some 20 or 15 percent. Under that criteria, which would be very seldom used by the Surgeon General, the Surgeon General, because of the need factor, could in this rare case give them up to 85 or 80 percent, where there has been an honest but unsuccessful effort on the part of the community to raise the 25 percent.

Mr. PICKLE. Do you think it is this important to have that in there, to give him that exception?

Secretary CELEBREZZE. I think it is important. I think that the Surgeon General will have to use a great deal of diligence, and I am sure he will.

Mr. PICKLE. Let me ask you one other question, which may have been covered by Mr. Rogers. In the preparation of your chart, which I assume has not yet been prepared or completed, I hope you show the comparative costs, but in addition show the difference in language between these bills.

Secretary CELEBREZZE. Yes; that will be furnished to you. I will give you the difference in language between them. I will give a comparison of the three bills and where they differ. I should amend that to say the two bills and the administration proposal. Where they differ, I will indicate it; and where they are the same, I will indicate it.

Mr. PICKLE. And the charts to show difference in cost as well as mortgage insurance and modernization, and other places where they differ.

Secretary CELEBREZZE. Yes. We will provide that for you.

The CHAIRMAN. Mr. Brotzman.

Mr. BROTZMAN. Thank you, Mr. Chairman.

How many hospitals are there in this Nation now?

Secretary CELEBREZZE. Well, 6,700 to 6,800. That is total hospitals. Mr. BROTZMAN. Does that mean that all hospitals have been constructed by Hill-Burton?

Secretary CELEBREZZE. Not that all, but many of them come in two and three times, as you know, as they add a wing or make an addition. One hospital, the same hospital, may have participated two or three times.

Mr. BROTZMAN. Your statement says, "as of June 30, 1963, a total of 6,810 Hill-Burton projects have been approved

Secretary CELEBREZZE. That is all kinds. That includes nursing homes and the other categories, too. That doesn't just include general hospitals.

Mr. BROTZMAN. So your answer is that that there are approximately 6,800 hospitals in this country; is that right?

Secretary CELEBREZZE. Yes. That is the information that we have. Mr. BROTZMAN. Containing how many beds?

Secretary CELEBREZZE. 289,489 beds in Hill-Burton approved proj

ects.

Those are the total beds. I have broken those down already for Mr. Rogers a while ago. Do you want me to break them down again? Mr. BROTZMAN. No; that is not necessary. I just wanted to get that figure in my mind.

Secretary CELEBREZZE. I can furnish for the record the breakdown of the 6,810 projects. I can submit that for the record, give you the figures, how it is broken down between general hospitals, mental hospitals, tuberculosis hospitals, chronic diseases, et cetera.

Mr. BROTZMAN. I have no desire to put that into the record. I am just trying to get a little background.

I would assume that part of this 6,810 Hill-Burton projects, which is the overall total, includes also modernization of some hospitals; is that correct?

Secretary CELEBREZZE. Yes. Very little.

Mr. BROTZMAN. One thing I am not quite clear on is how you presently handle this modernization factor. I realize that the doctor was answering that a moment ago, but I am not quite clear on what percentage of the moneys are presently used for that purpose.

Secretary CELEBREZZE. Are you referrring now, Congressman, to under existing law?

Mr. BROTZMAN. Yes.

Secretary CELEBREZZE. Under existing law how do we apply money for modernization?

Mr. BROTZMAN. Correct.

Secretary CELEBREZZE. I will have the doctor answer that.

Dr. GRANING. Sir, in a number of instances, when a hospital is in a geographical area where it can be reached on a bed-need basis, the hospital in thinking about its need has, in many instances, both added additional beds and taken care of the renovation needs within the hospital incidental to the additional beds.

In those situations where they have added both beds and made some necessary changes within the hospital, we do not have a breakdown of how much of the money went for the new bed portion and how much of it was for modernization; but the important element or important thing to remember is that as of the present time it has not been possible to help a hospital unless it was in an area that needed additional beds.

Once you can reach a hospital on a bed-need basis, then you can also help them renovate, if there is a need for renovation or modernization. But the States have not been able to be helpful to many areas within the State. In the State of Colorado, for instance, where the bed-need situation in Denver is more adequately met than in some of the rural sections of Colorado, there have been hospitals that have needed to have things done that could not be reached under the formula, in terms of the bed-need situation. But once you have an opportunity to reach them, you can modernize.

Mr. BROTZMAN. This term "modernization," does that mean to maintain the capital improvement, or does this mean something in addition thereto? This is a word that is perhaps bothering me the most. I do not know if you are trying to keep the plant going or if you are trying to build something new for new ideas and new techniques.

Dr. GRANING. It may be, for instance, that the laundry is just all wornout and needs to be replaced. We are talking about physical or functional obsolescence.

Mr. BROTZMAN. Let me ask you another question:

If they find-and it is pretty hard for a lawyer to give too good a hypothetical case in this area-let us assume they find a new method