Chairman HUMPHREY. Yes

Chief KING. The appropriations made by the Government have never been enough to cover all the trouble we are in-not only the Sioux but other tribes as well. We are hoping that the Government understands that it is time that it does something for the Indian people.

He says he is hoping that the people who are running for office will understand the Indian problems and that they will try to help them some way so that Mr. Indian can stand on both feet again.

He says we don't want liquor on a reservation. We never had liquor; that is, we have a law prohibiting the sale of liquor on the Indian reservation. That law has never been rescinded and we would like to readopt that provision, which is in the Treaty of 1851, 1868, 1877, 1889, and different other treaties. As we said, the philosophy of the white man's life is different from the Indian philosophy. That is one thing the Indian cannot handle that is liquor. On the Indian reservation we want to be free of liquor so that we can become a nation and become human beings again.

We are not condemning the sale of liquor but we don't want it on the Indian reservation, the Indian country. Anyone who wants to drink it would have to go among the white people and drink all he wants there.

Chairman HUMPHREY. And they do.

Chief KING. I never use liquor, Chief Crow says, in any form and I am still living.

Chairman HUMPHREY. He looks pretty good for 86 years old. He looks pretty healthy. I think that is a good ad for temperance.

Chief KING. I believe the only way we can solve many of these things, Chief Crow says, is to cooperate and have a better understanding of the situation that the Indians are involved in because of being forced to follow the white man's philosophy of life, which is forced upon our Indian people. And we want to live like Indians. We want to live our own way. We want to run our own government our own way just the best we know how. And Chief Crow says he hopes he can take some good news back home from this room.

Chairman HUMPHREY. Well let's go on to the other witnesses and then we will want to have some questions for the chief. We will take each witness in line and then we will come back for some questions. Is that agreeable?

We will now turn to Mr. Murphy, president of the Police Founda

tion.

STATEMENT OF PATRICK V. MURPHY, PRESIDENT, POLICE FOUNDATION, WASHINGTON, D.C.

Mr. MURPHY. Thank you very much, Mr. Chairman. I am honored by the invitation to appear before this distinguished committee and I congratulate the committee on its efforts to examine the social costs of unemployment.

From my earliest days in police work 30 years ago, I became aware of the social costs of unemployment. Where there was a high rate of long-term unemployment, there was degradation and dislocation of the individual, the family, and the neighborhood. And with degrada

tion and dislocation, particularly of the family, are found those conditions which encourage crimes, especially homicide, rape, street robbery, and burglary-the type of crime which has turned many city neighborhoods into warrens of fear.

As the chief police official of New York City, Detroit, Washington, D.C., and Syracuse, N.Y., I found that wherever census tract data showed areas of high unemployment there were also rates of crime 50 to 100 times as high as in other parts of these cities. Look at the map of any sizable city. In areas where there is a high rate of long-term unemployment, there is also an intensive concentration of social problems: alcoholism, drug abuse, mental illness, violenceridden schools. In the parts of cities where unemployment is the highest, education is usually poorest. Where the map shows high unemployment rates, there are often hostilities flowing from centuries of racial discrimination and the greatest number of victims of economic injustice and exploitation.

From what I have observed during my years in policing, social and economic problems are interrelated. And the manifestations of chronic unemployment and these other problems are despair, violence, frustration and high crime rates.

I am not suggesting that unemployment in every instance causes crime, or that life is so simple that we can observe a direct correlation between unemployyment and the commission of crimes. But it is clear to me that unemployment is a condiiton that is related to high crime rates.

Make no mistake about the high rates of crime in our cities. Crime is tearing our cities apart. This is evident in the crime-devastated sections of the South Bronx and Bedford-Stuyvesant areas of New York City and in parts of many other major cities. And always, where the effects of crime are most damaging to our urban landscapes, there are rates of unemployment, particularly among minority young people, of 30, 40, and 50 percent.

The effect of chronic unemployment is to rob able-bodied men and women of the dignity of work. To tell a person who wants to work that there is no path available to him or her toward dignity in this society is to condemn taht person to a prison, without walls, of degradation and defeat.

In this modern-day social and economic prison, idleness is enforced not behind walls but in the alleys and hallways of the central cities and in backwater pockets of rural poverty. For many of the longterm unemployed, there is idle time to consider their condition which has been described as being "unemployable in the industrial State." For these unemployed, there is idle time to watch television and see portrayed all the material objects they cannot obtain. For these unemployed, there is idle time to consider venting their frustrations in crime or obtaining by criminal means the material things they lack.

Who particularly is condemned to this prison of unemployment? Its primary victims include the young, blacks, Puerto Ricans, Mexican-American Indians. In varying degrees, these groups, particularly black and Spanish-surnamed youths, simply do not have the opportunities for jobs that are open to others. Our unemployment

rate may have decreased during the past few months, but there are still vast and stagnant pools of unemployed minority young people in all our big cities. Without the prospect of work, where are they to find the dignity of self-sufficiency?

I do not suggest that with employment comes the certainty that the person with a job will not commit crime. Indeed, the past few years have disclosed the extent of what might be called full-employment crimes-white collar crimes in the board rooms and sales offices of industry and the highest reaches of Government. But without the guarantee of work for those who want work, it seems both obvious and certain that the rate of crime in areas of chronic, high unemployment will continue to be worse than the crime rate in other areas where the unemployment rate is low.

There are two approaches by which this Nation can seek to attack crime where crime rates are the highest. We can sic the police in heavy platoons on neighborhoods with high crime rates. This approach supposes that the police, one part of our fragmented system of criminal justice, alone can be effective in reducing crime. But there is relatively little that the police alone can do to control crime. There first must be a well-meshed and effective system of criminal justice which this Nation does not now have.

But even if the police and the other component parts of the criminal justice system worked productively, the degree to which the criminal justice system can be effective is limited. A police officer cannot stand on every street corner where a robbery may occur nor can we afford to have the police monitoring each potential site of violent crime. The costs, both monetarily and in terms of civil liberties, are clearly unacceptable.

Unfortunately, too many police officers and police leaders believe that the solution to crime lies in a law and order approach that suggests repression. Because of political or social pressures, some police leaders who know better are afraid to speak out against the social injustices that their officers must deal with every day. They worry that citizens will not tolerate a police chief who correctly attempts to attribute crime to its root causes.

I am often frustrated by the fact that many police officers who work in areas with high crime rates do not see more clearly the relationship between crime and the social and economic ills in these areas. I am saddened that leaders of policing and other areas of Government often do not muster the confidence to explain the enormous and stupid price we pay for crime. The price is staggering in terms of lives, human suffering, property and the polarization of our people.

I believe this Nation's citizens would support a second approach to dealing with crime if they understood the true cost of crime. As a first major step toward a reduction in the crime rate, this approach would guarantee each employable person a decent job.

To sum up, we have two choices in dealing with crime. The first is to indulge in loud, futile law-and-order tantrums against crime such as we observed in the 1968 and 1970 political campaigns. We know the results: Crime rates are higher than ever.

Or we finally can begin to deal systematically with one of the root causes of crime unemployment-by guaranteeing every employable person a decent job.

Thank you.

Chairman HUMPHREY. Thank you very much, Mr. Murphy. Next Dr. Jonas.

Senator JAVITS. Mr. Chairman, before we call on Dr. Jonas may I just say that I take great pride in the testimony that the former police chief of New York, Mr. Murphy, gave and the way in which his knowledge, skill, and experience has developed and then was placed at the disposal of the city and of the Nation. I have a question or two but I will wait of course.

Chairman HUMPHREY. Fine. We will move right along here and get to the questioning. Dr. Jonas.

STATEMENT OF STEVEN JONAS, M.D., ASSOCIATE PROFESSOR, DEPARTMENT OF COMMUNITY MEDICINE, STATE UNIVERSITY OF NEW YORK, STONY BROOK, N.Y.

Dr. JONAS. Thank you. My name is Steven Jonas. I am a physician with degrees in medicine and public health. I am a fellow of the American College of Preventive Medicine, the New York Academy of Medicine, and the American Public Health Association. I am an associate professor in the Department of Community Medicine, Health Sciences Center, State University of New York at Stony Brook. My major forthcoming work is a textbook on health care delivery which I am writing and editing for the Springer Publishing Co.

The social cost of unemployment is a matter of great complexity. Meeting the costs of health care for unemployed persons is one aspect of it. There have been proposals made earlier in this Congress to establish some kind of health insurance program for the unemployed on a national basis. Such a program could be expected to have an important influence on the shape of any future comprehensive national health insurance program. Thus I would like to concentrate today on several major questions related to economic policy which I think are crucial in the debate on national health insurance. The first has to do with rising health care expenditures.

We are all concerned with the well-known rising costs of health care. Currently released figures for fiscal 1975 from the Social Security Administration show that health care now consumes 8.3 percent of the GNP, up from 7.7 percent in the previous year. This sharp rise is apparently due more to a fall in the rate of increase in the GNP than to a rise in the rate of increase in health care spending, but it is still very significant and very worrisome. We spend a higher percentage of our GNP for health care than almost any other country in the world. We must be concerned with the possible effects of any NHI plan on health care spending.

NHI could make total health care spending go up, go down or remain unchanged, depending upon its approach to health care system reform and cost control. The important word here is total. In considering the possible effects of any NHI plan on health care costs one cannot simply look at the amount of money to be spent through the plan, but at what effect it will have on all health care spending. It is very possible that a plan which appears to be "cheaper" because it covers a low proportion of total expenditures, is actually more expensive than one which covers a large proportion, since the latter would perforce

have the capability of implementing cost controls much more broadly because it would be handling payments for more services.

Although some observers would have us think otherwise, spending for health care services is not like spending for ice cream and automobiles. After having made the first choice to seek medical attention, it is the rare patient who retains significant decisionmaking power in health care expenditure, except of the negative sort forced upon people who have neither money nor insurance nor an available public facility. Most primary decisions on health care spending are made by physicians. Furthermore, when a decision is made by a physician to put a patient into the most expensive sector of the health care system, the hospital-a decision made much too frequently in this country—a patient cannot shop around for the "best buy" in hospital care or the most efficient one. The patient goes where the physician tells him or her to go. Once in the hospital, the patient loses any chance of control over expenditures. That is entirely between the physician and the hospital.

A recent study by Ms. Nancy Worthington published in the November issue of the Social Security Bulletin shows that the biggest factor in the rise of hospital costs in recent years has been technological advance and the addition of expensive services. For physicians' fees it has been the proliferation of specialism, so that unit prices have been going up. Thus, if one is interested in cost control under NHI, one must have a system which has some way of getting control of these factors. I think that it is very important to consider these issues when we are looking at the question of health insurance for unemployed people.

There are many other policy issues in NHI: Benefits, coverage, number of plans, cost controls, quality control, consumer participation, eligibility, roles of the various levels of government. To my mind, there is one overriding one: the role of the private insurance industry, particularly the commercial companies. Most plans presently before Congress give a very significant place to them. For reasons of cost control, as well as many others, I would recommend that very careful thought be given to this question.

In a paper published in the British journal The Lancet in 1974, I estimated, based upon data available from the SSA, Social Security Administration, that in fiscal 1973, American commercial insurance companies made a profit before taxes but after underwriting losses of about $2 billion on $11 billion in premium income, by investing premium income while they had it. That represented about 1.5 percent of total corporate profits at the time. The United States is the only country in the world which the commercial insurance industry plays a significant role in the health care delivery system. It is obvious what expanded premium income, under an NHI system in which they would have a prominent place, would do to their profit structure.

However, I think that the money-handling role would only be the first step for these companies. Interms of assets, the insurance companies are the largest in the country. Through exchanges of directors, and capital financing they play a very significant role in the manufacturing sector. American capital is always looking for new ways to make a profit, which is in fact right and proper under capitalism: