LF OF THE B HEALTH IN solely on fiscal attractiveness. Planning here is for people-not profits. ANTED BY ALTH ASS the comm Health anization Even for programs that do not involve prepayment, there are areas such as New York City where it is very difficult to attract numbers of highly qualified physicians into practice. I think Harlem is one of the instant areas. The agonizing trials of Group Health Association of America affiliates in securing adequate financing is repeated several times in documents presented to the Committee on Interstate and Foreign Commerce in its hearings on H.R. 2987 conducted last year. They can be Voorhis found in the record of the 1965 hearings at pages 313-317. Ameria ofit org quality pecialt plans подруже tice applie The expressed need today is greater. The Medical Foundation of Bellaire, Ohio, is a nonprofit community health organization whose affiliated 16-physician Bellaire Medical Group serves seven Appalachia counties in Ohio and West Virginia. This foundation now reports need for financing $1,230,000 of construction, compared with $500,000 to $800,000 reported at the time of last year's hearings. sion. Group practice plans in St. Paul, Minn., and San Diego, Calif., which reported no construction financing needs last year now state they need respectively $750,000 and $625,000 of financing for needed expan Starting a new plan depends on adequate financing. Just this week was in New Haven, Conn., where there is a vigorous, movement for the development of a group practice facility. This project is unusually important because, although primarily for comprehensive patient care on a prepayment basis, it would operate in the Yale-New Haven Medical Center, where it would also serve as an education center to train future physicians in family type medical care in a group practice setting. The project is sponsored by the Greater New Haven Central Labor Council and other consumer groups and has been assured of cooperative participation by the joint board of the Yale University School of Medicine and the Yale-New Haven Hospital. They are confronted with the immediate need for financing of $750,000 for a new facility and an additional $500,000 for later expansion. Appended are copies of statements from these and other organizations regarding needs for financing. They represent, gentlemen, a story of lost time and dollars, of dedicated men having to pay exceedingly high interest and amortization rates when loans were gained and of men tapping their operating capital to secure as much as two-thirds of the total loan. That has been our own experience in New York City. A brief note was sent by me, as president of the Health Insurance Plan of Greater New York, at that time. In it I noted that after great difficulty in securing any financing in our early days-between 1945 and 1955-we are now able to get a certain measure of facilities financing. But only up to about one-third of the capital cost. This has forced HIP and its affiliated group partnerships to use assets to carry the other two-thirds of all construction costs. Further, under New York State insurance law, there are serious limitations on HIP's ability to use funds for facilities. To operate in this financial straitjacket has meant that at times we have had to settle for less than adequate facilities and locations for our medical group. We have been delayed for years in relocating, mod ernizing, and expanding our medical centers to meet the demand in certain areas. This year we need new facilities urgently. Within the next 2 or 3 years we will require another five centers providing comprehensive medical care. Passage of this legislation will bring these medical care units into being faster and with less difficulty. The sick want and need our attention. We wish to provide it. We cannot-for the lack of available financing under reasonable terms. That is one reason why we urge favorable action on this bill. A second key phrase pertaining to group practice is "comprehensive health care." This embodies utilizing as extensively as possible the virtual explosion of medical knowledge and equipment that have, dur ing the past 30 years, vastly increased the power of modern medicine to save life and restore and preserve health. Yet this explosion of medical knowledge has produced fragmentation of service to the patient among an increasing array of specialists and the family physician. Group practice plans eliminate this fragmentation and provide essentially "one-stop" medicine. The comprehensive, nonprofit group health programs have been hailed by many as a significant means of delivering medical care to those in need. President John F. Kennedy, in his health message to the Congress in 1962, said: Experience in many communities has proven the value of group medical and dental practice, where general practitioners and medical specialists voluntarily join to pool their professional skills, to use common facilities and personnel, and to offer comprehensive health services to their patients. Group practice offers great promise of improving the quality of medical care, of achieving significant economies and conveniences to physician and patient alike, and of facilitating a wider and better dstribution of the available supply of scarce personnel. President Johnson, in his health message to the Congress this year. noted that: Group practice benefits both physicians and patients. It makes expert health care more accessible for the patient. It enables the physician to draw on the combined talents of his colleagues. May I add that it also requires substantial investments in specialized buildings and equipment. The very cost of complex equipment needed for diagnosis and treatment, together with the specialization demanded by the exploding volume of new knowledge in the medical field, has made the nonprofit group health movement a growing necessity for informed consumers The U.S. Public Health Service reports a substantial increase since 1946 in the number of medical groups as well as in the number of doc tors participating in group health practice. However, the growth of consumer-sponsored group practice prepayment plans has been impeded by the difficulties they face in raising the capital necessary build and equip their facilities. to Because of the heavy emphasis on preventive medicine, and the con trols inherent in these consumer-oriented plans, the 5 million Ameri cans enrolled in GHAA-associated organizations spent, on the aver age, 40 percent less time in our Nation's crowded hospitals in 1962 and 1963 than did patients covered by Blue Cross-Blue Shield or indemnity plans. Obviously this represents an economic and social gain, on a national scale, which deserves recognition and support. meet the us er as p ent cat modem this ens Serve the fi A major barrier to the extension of this nonprofit comprehensive health care to many more millions of Americans is provision of capital loans that can be made available only through Government guarantees and a standby Government loan program when mortgage money is not available through private sources. Gentlemen, you are well aware of the medical squeeze that our Nation is facing. Elderly people will be utilizing the coverage provided by the Government's supplementary medical insurance plan. Our population is increasing at a rate far outstripping the flow of new doctors. Prosperity and scientific advance are engendering a demand for more and better care. The increasing level of education is making millions more Americans aware of both the symptoms of illness and of the availability of treatment. The war on poverty, furthermore, will generate massive and welcome advances in each of these areas. We of GHAA want very much to help, and our affiliated plans want tatto be in a position to help the people achieve better health care. As Churchill said, "Give us the tools." rams bas medis to the l We do not want a handout. We are not asking to be federally supported. Citizens who want our kind of group health care know its value, and have shown they are ready to support it with their membership fees. What we do want, and what we vitally need, is access to adequate financing. Our experience has taught us that we can gain it only with the assistance of the Federal Government. That is why we in GHAA ask that you provide for guaranteed loans for terms of 25 years. We will show-as we have shown beforethat our plans will provide economical care and will generate the income needed to maintain fair amortization rates as well as reasonable interest rates. Your help will act as a catalyst to other nonprofit plans which have been patiently waiting in the wings ready to start when they can get needed financing. And I believe we will find that organization funds, foundations, and labor unions, when they can get a Federal Government guarantee, will feel it is possible to make the investments in health care that they wish to make. Gentlemen, our purpose is to serve the people through prepaid group health care on a comprehensive, nonprofit basis, at a time when private practitioners of medicine as a group have achieved unprecedented financial prosperity. The group health plans, while 1.king remarkable progress, have been handicapped in their growth by a relative inaccessibility of new capital. The passage of H.R. 9256, I sincerely feel, will contribute to the solution of this pressing financial problem which has had serious impact on millions of our citizens. Thank you. (The attachments referred to follow :) WESTERN UNION TELEGRAMS RECEIVED ON GROUP HEALTH PLAN NEEDS FOR MEDICAL FACILITIES (Addendum to testimony, H.R. 9256, by James Brindle) Dr. THOMAS WALKER MEMORIAL HEALTH FOUNDATION, Beckley, W. Va. Need so desperate that we have moved ahead and obtained loan of half million from three local banks. Pledge support (not written) from UMWA welfare retirement fund plus our "Going Operation" made the loan possible. We break ground within 30 days. Good luck. JAMES P. BLAND, Administrator. Group Health Plan currently seeking $750,000 to construct two 10,000-squarefoot medical centers, one West Minneapolis, other East St. Paul. Financing chief obstacle. Loaning agency consider medical center high risk special purpose building. Urge support of H.R. 9256. MAURICE J. MCKAY. ** HARLAN, KY. Construction and equipment funds needed currently for Daniel Boone Clinic, Harlan, $950,000, Middlesboro $145,000, Whitesburg $145,000; total $1,240,000. * HERB ENRICH. Present growth and development of program severely limited through inability to obtain adequate commercial loans. Current needs: 1. 1966, emergency and research wing $440,000 to match $100,000 Hill-Burton grant; 2 $150,000 for acquiring and renovating nurses residence; 3. 1966, $1,200,000 for building and equipping 30-physican treatment and diagnostic center; 4. 1967, $857,000 to match Hill Burton and community fund support for chronic care unit and community mental health center; 5. 1967, $1,200,000 for additional 30-physican treatment and diagnostic center; 6. 1968, $1,200,000 for additional 30-physican treatment and diagnostic center. * CALDWELL B. ESSELSTYN, M.D. SAN DIEGO HEALTH ASSOCIATION, San Diego, Calif. San Diego Health Association current needs for financing new and additional clinic facilities plus equipment as follows: Expansion La Mesa Clinic $66,000. Furnishing and equipment $54,000. Two satellite clinics $400,000. Equipment $125,000. F. W. TENNANT, General Manager. * * * SOUTHWEST VIRGINIA COMMUNITY HEALTH SERVICE, INC., Wise, Va. Projected dollar cost for current extension needed Wise Clinic, Wise, Va., is $288,000 and Dante Clinic, Dante, $72,000. If additional information is needed please advise. ROBERT DANIEL, Business Manager. PLAN NEIN Brindle) FOUNDATI Beckley, loan of half Om UMWA possible. We D, Admini EALTH PLA St. Pi two 1000 HEALTH INSURANCE PLAN OF GREATER NEW YORK, Needs about 5.2 million for branch centers, renovation, and enlargements. JEFFERSON HEALTH FOUNDATION, INC., Our estimated dollars cost needed for financing new and additonal clinic facilities and equipment is $400,000. JACK G. MONROE, Administrator. GROUP HEALTH COOPERATIVE OF PUGET SOUND, Current projected need for hospital expansion $3.5 million and diagnostic and treatment center additions $1 million. Total $4,500,000. Paul Fr isk special H. F. NEWMAN, M.D. * GROUP HEALTH ASSOCIATION, Washington, D.C. GHA long range plan envisions need for four regional medical centers. Construction and equipment cost estimate is $12 million for each center. Medical Foundation of Bellaire, nonprofit, tax exempt community health organization operates in conjunction with 16-physician Bellaire medical group three clinics serving seven Appalachia counties in Ohio and West Virginia needs over the next 2 to 5 years to replace and expand antiquated and inadequate present facilities include when financing is available, $1,080,000 for central health center, $100,000 for branch clinic, $50,000 for expansion of other branch clinic. YALE UNIVERSITY SCHOOL OF MEDICINE, There is now a vigorous movement for the development of a group practice facility in New Haven to serve people in this metropolitan area, and shortly it will be confronted with the problem of raising funds to meet construction and equipment costs. The plan here is unusually important because though primarily for comprehensive patient care on a prepayment basis, it would operate in the Yale New Haven medical center complex, utilizing specialty and inpatient hospital services already available, and would also serve as an education and training center to prepare future physicians for general and family type care in a group practice medium. The plan is being vigorously sponsored by the Greater New Haven Central Labor Council and other local consumer credit groups, hopes also to serve welfare agency clients, and is warmly supported by Mayor Richard C. Lee as a community project. It has been assured cooperative participation by the joint board of the Yale University School of Medicine and the Yale-New Haven Hospital. My preliminary estimate is that land acquisition, construction, and fixed equipment for the primary group practice will cost about $750,000, and that secondary facility developments for regional-type expansion of the plan over the following 5 to 10 years will cost about $500,000 more. Since the plan would utilize Yale Medical Center specialty ambulatory services and hospitals and possibly other community hospitals, it has no apparent need to meet hospital construction costs. I hope you can utilize this information for the congressional committee. DR. I. S. FALK. Mr. BARRETT. Before the next witness, I just want to note that our distinguished colleague, Mr. Henry Gonzalez asked me to extend his |