Senator MORSE. Do you feel that the taxpayers of the District of Columbia and the Nation should have some assurance on the part of the District of Columbia Board of Commissioners and the District of Columbia Public Health Department that actions taken by local hospital boards to curtail or eliminate certain facilities in a given hospital do not impair medical treatment and quick access to the neighborhood general hospitals, particularly in view of the fact that in almost all these cases the hospitals are the beneficiaries of Federal funds. Would you like to supply an answer to that?

Dr. GRANT. Yes, sir.

Senator MORSE. We will be very glad to receive it.

Do you feel that a hospital alone should decide whether it is going to close a department or departments without a determination being made on the part of public health officials that the public health interest is or is not protected? Another memorandum?

Dr. GRANT. Yes.

(The information requested is as follows:)

A community hospital should consider itself a public service institution. Decisions as to closing or curtailing certain facilities should be made by these hospitals, first under the principle of what is good for the community, and, second, under the consideration of what is required to provide a better service to the community.

It follows that a community service oriented hospital, and particularly that one which happens to be the beneficiary of public funds for the construction and operation of its facilities should function at all times for the public interest. Unfortunately, this is not always the case.

Existing regulations for licensing the operation of hospitals for human beings within the District, do not contain provisions requiring hospitals to submit for review and approval, by the D.C. Department of Public Health, proposals for curtailing or closing out a particular hospital service. The majority of these hospitals in the District and throughout the Nation are nonprofit voluntary institutions already built, being built, or being expanded and modernized with financial help from the Federal Government, through the Hill-Harris Hospitals Construction Acts. Therefore, in order to make them legally responsible to the public interest in matters pertaining to the curtailment or closure of their facilities, these construction acts could be amended to state that hospitals and related medical facilities already built, expanded or modernized under the provisions of these acts, and those that may be built, expanded or modernized in the future under the provisions of these acts, are for the purpose of having obtained or for obtaining Federal funds under these Acts, considered inter-state public service institutions, subject to the surveillance and control of the State Department of Public Health, in all matters pertaining to the services offered and provided by said hospitals and, particularly, in matters pertaining to the curtailment or closure of their services and facilities.

Senator MORSE. You wrote me on August 19, 1966:

We cannot at this time determine whether the announced closing of the Maternity Department at Sibley Memorial Hospital will bring this institution in conflict with the above article of the D.C. health regulations.

The regulation to which you referred is, chapter H-1, "Private Hospitals and Clinics," of the supplement to the additional 1965 edition of District of Columbia regulations.

You further advised me:

I am informed that there is underway a legal study to define the course of action that the D.C. Department of Public Health and D.C. Government should take in this matter if warranted.

Would you please advise me as to the status of that legal study, and do that by way of memorandum, too?

Dr. GRANT. Yes.

Senator MORSE. And last, what do you see as District of Columbia General Hospital's future role in the community after the enactment of the medicaid bill?

Dr. GRANT. That will require a long answer, Mr. Chairman.

Senator MORSE. The counsel will supply the press with a copy of these questions in order that the press will know that they have been asked and when we get the memorandum in answer to them, we will turn them over to the press. We thank you very, very much, Doctor. Commissioner, do you have anything further to add?

Commissioner DUNCAN. I have nothing further, Mr. Chairman. Thank you for this opportunity to testify.

Senator MORSE. Thank you very much.

Our next witness will be Dr. Paul Peterson, Deputy Director, Bureau of Health Services, U.S. Public Health Service. Very happy to have you, Doctor, and your associates.

STATEMENT OF DR. PAUL Q. PETERSON, DEPUTY DIRECTOR, BUREAU OF HEALTH SERVICES, U.S. PUBLIC HEALTH SERVICE; ACCOMPANIED BY WILLIAM BURLEIGH, ASSISTANT DIRECTOR, DIVISION OF HOSPITAL AND MEDICAL FACILITIES, U.S. PUBLIC HEALTH SERVICE

Dr. PETERSON. My associate is Mr. William Burleigh, Assistant Director of the Division of Hospital and Medical Facilities, Public Health Service.

Senator MORSE. Glad to have you. You gentlemen may proceed in your own way.

Dr. PETERSON. Thank you, Mr. Chairman. I am pleased to appear before your committee today to present the views of the Department of Health, Education, and Welfare on S. 1228, a bill to authorize project grants for the construction and modernization of hospitals and other medical facilities in the District of Columbia.

The bill embodies legislative recommendations submitted to the Congress by the District of Columbia. We are in accord with its objectives and principal provisions, and, as the agency responsible for administering the proposed grant assistance, we recommend its favorable consideration by the Congress.

Since the views of our Department on the bill, and on the general concepts underlying its provisions, are contained in the report to your committee, I should like with your permission, Mr. Chairman, to devote the remainder of my statement this morning to the presentation of a major portion of this report, starting with the last paragraph of the first page and continuing through the remainder of the report. Senator MORSE. That certainly will be satisfactory.

(The report referred to has been introduced into the hearing record and may be found on p. 7.)

Dr. PETERSON. The responsibility of the Federal Government to provide financial assistance for the construction of hospitals and other medical facilities in the District of Columbia has been recognized by the Congress for a number of years. In 1946 Congress enacted the Hospital Center Act, which authorized the appropriation of Federal funds for the construction of the Washington Hospital Center as a replacement for three independent nonprofit hospitals and

required the District government to repay 50 percent of the net cost to the Federal Government.

In 1951 the Hospital Center Act was amended to authorize grants of up to 50 percent of the cost of constructing or renovating hospital facilities in the District. The District of Columbia was required to repay 50 percent of the Federal contribution. This was lowered to 30 percent in 1958 with respect to grants made after that time. Under the 1951 and subsequent amendments, grants of $17,420,453 have been made for projects having an estimated total cost of approximately $44,400,000. This act expired in 1962.

In 1962 legislation (Public Law 87-460) was enacted authorizing grants of up to $2.5 million for 50 percent of the cost of constructing an addition to George Washington University Hospital. Funds for this purpose were appropriated by the Congress in fiscal year 1964 and the project is now complete.

In addition to the Hospital Center Act and Public Law 87-460, both of which applied solely to the District, Federal financial assistance has been given for the construction of hospitals and other medical facilities in Washington through two generally applicable Federal programs the wartime defense housing and public works program, commonly referred to as the Lanham Act, and the program authorized by title VI of the Public Health Service Act, commonly called the Hill-Burton program. Under the Lanham Act, two hospitals in the District received a Federal contribution of $5,655,000. Under the Hill-Burton program, a total of $7,194,000 in grants was approved through fiscal year 1966 for 27 projects in the District.

As the special Federal aid previously given for construction of District medical facilities indicate, the Hill-Burton, mental retardation, and mental health center construction programs provide only a partial answer to the problem of financing the construction of such facilities in the District. First, sponsors of projects for such construction in the District of Columbia experience serious difficulty in raising the non-Federal share of the cost thereof. Second, the allotment of funds to the District, which takes into account per capita income and population, is low in relationship to the facility construction problem. Nonprofit medical facility groups seeking contributions in Washington do not have available to them much of the important support from corporate gifts which is available in other communities. Corporate gifts often make up 60 to 70 percent of the total private funds subscribed for constructing hospitals in cities the size of the District; and more than half of these corporate gifts come from manufacturing corporations. The District, however, has only about 14 percent of the per capita potential of metropolitan areas of comparable population for receiving contributions from such manufacturing corporations.

Senator MORSE. I want to interrupt at this point, Dr. Peterson. I think this is powerful testimony. I cannot reach any other conclusion but that the particular special circumstances that exist in the District of Columbia call for a substantial increase in Federal funds to be of assistance to the medical services of the District, and I shall dwell on that at greater length when I present a bill before the Senate. I hope the bill will reach the Senate and I think it will. You not only point out the fact that we do not have the financial resources to tap that they have in the great industrial cities comparable in size or larger

than the District of Columbia. We have a somewhat different population, too, than exists in a good many other cities, and we have a population which is entitled to much more public assistance than it is getting from the Congress in connection with supplying it with the medical services that it needs in order to maintain a high level of health.

We also have a city in which a very large segment of the population are Federal employees helping run the Federal Government, and I think that places an additional obligation on the Federal Government from what exists in cities of comparable population elsewhere in the country and with larger population. Also, as you may have heard me say, in connection with my work in the field of education, and my work in connection with the long-standing battle for home rule in the District of Columbia, we have a population in the District of Columbia that is larger than the population of 11 different States in this country, which many people do not seem to be aware of.

That is a pretty vital statistic when you start translating all of its implications into a subject matter such as we are considering in this bill this morning. And therefore, I think Congress has got a responsibility in this matter along with the taxpayers of the District of Columbia. It takes money to build these hospitals and it takes money to maintain the service as that service is made available to thousands and thousands of Federal employees as well as non-Federal employeesas well as citizens who are non federally connected as far as employment is concerned.

We have got to face up to it. And that is why you find me and always have found me very sympathetic to a complete change in the budgetary setup here, complete change in the fiscal relationship between the Federal Government and the citizens of the District, and it is even more important-I do not mean to argue the matter but just to see to it that some reference to it is made in the hearing record because it. is involved in all of our District of Columbia problems in the field of supplying the citizens those services that we recognize ought be to made available to citizens in any city in this country.

The difference is that in other cities in this country there is a matter of self-government and that self-government is related in turn to the State constitution and the State statutes where, of course, there is a residual power always in the legislature in case a city follows a policy that the legislature recognizes ought to be checked. There is that power, of course, stated in the Constitution of the United States vis-avis the District of Columbia as far as the duty of the Congress to protect Federal interests, but you just cannot get away from the fact that, no matter where you touch a District of Columbia problem that involves the interest of the population as a whole, you have to take note of the fact that we restrict this population in the District of Columbia from the rights of self-government and local determination, local policy that relates to the government of their people in an assumed democratic system of government which is nonexistent in the District of Columbia.

So, with that broad brushstroke of what I consider to be the relationship between the anomalous governmental setup in the District of Columbia and the needs of the people in relationship to the subject matter we are discussing this morning, I want this hearing record to show as far as this chairman is concerned, I think there is an

unfulfilled obligation on the part of the Congress of the United States, and it has existed for years and years, to do more than we are doing in regard to seeing to it that we provide a balanced program here for our citizens.

It is awfully hard to get this idea across. I have tried for 22 years but I do not mean to say we have not made progress. I think with the President's reorganization program which as you know, I supported only because I think it paves the way in the near future to a better resolution of the problem I am now raising again-that unless you are willing to give them first class citizen rights or until they get first class citizen rights, then the Congress, I think, has got to do a better job in providing them the services to which they are entitled as American citizens.

Now, with that little sermon out of the way, which supports all of the implications of what I think you have said up until this moment, you may proceed in your own way.

Dr. PETERSON. Mr. Chairman, I wish to personally applaud your position

Senator MORSE. I only want to add off the record. (Discussion off the record.)

Dr. PETERSON. Certainly, insofar as health affairs are concerned, it is the observation of the Public Health Service that your remarks and your position in the past have been most appropriate. And, I certainly hope the testimony we are providing today will clearly indicate our wholehearted endorsement of the legislation which is pending before the committee in S. 1228.

Another reason for the difficulty experienced by project sponsors in the District in securing funds to meet the non-Federal share of the cost of construction of hospitals and other medical facilities is that, although the average income here is among the highest in the country, a large proportion of those on the upper part of the income scale are temporary residents who do not feel an obligation to support capital improvement drives to the same extent that permanent residents here or elsewhere do, or indeed, to the extent that these same temporary Washington residents feel in relation to their own "home" communities. This factor has made it very difficult to raise money for these facilities in the amounts which might be expected if the average income alone were used as a guide.

A unique medical facility utilization and construction problem exists in the District because of the large number of patients from other"States" who occupy general hospital beds in the District. A survey conducted in 1958 showed that approximately 40 percent of the patients in District hospitals at that time came from outside the District, primarily from the Maryland and Virginia counties in the metropolitan area. A study of the residence of patients admitted to general hospitals in the District during the week of February 25-March 3, 1962, showed similar results; only 58 percent of those patients were District residents.

If District of Columbia General and Freedmen's Hospitals were excluded from this latter study, a significantly higher percentage of patients from outside the District would be found, ranging up to nearly 60 percent in the case of Georgetown University Hospital.