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ment for, health care provided to indigent persons. Our board of trustees has stated that the AMA could support "a public assistance program, including Federal funds, to cover those citizens who, on the basis of local determination, are considered indigent for the purpose of receiving health care benefits.” Our board of trustees has concluded that a liberalized public assistance program of this type, designed to aid not only the needy but the near-needy, administered by the States, with eligibility and benefits determined locally, is a proper and reasonable Government responsibility, supplementing other activities in this area.

2. Facilities.—Better facilities for the treatment of long-term disease, especially for aged patients, are needed. The AMA supported the FHA amendment providing for Government-guaranteed mortgage loans for the proprietary nursing-home industry. The AMA is working closely with the American Hospital Association and other groups to improve the quality of institutional care and to reduce its cost. At the same time, the AMA has participated with other organizations in the development of home-care programs and homemaker services.

3. Voluntary health insurance.—The AMA is providing leadership in promoting the expansion of existing prepayment and health insurance plans and the development of new and more effective methods of providing coverage against health care costs of catastrophic nature.

4. Attitude toward the aged.-A revolution in the Nation's attitude toward our older citizens has to occur, if the aged are to take care of themselves rather than become wards of the Federal Government. The most urgent present need is the elimination of mandatory retirement at 65 and discriminatory employment practices against those over 45.

Let me repeat that the American Medical Association is entirely in favor of helping those who need help. But the association does not believe this necessitates the creation of massive Federal machinery to help those who neither need nor want help, and who are capably handling their own problems at the present time.

The question is, who should provide whatever help is needed ?

At the annual meeting in June of the American Medical Association, the following statement was adopted by our house of delegates as the policy of the AMA. I should like to quote it to you.

“Personal medical care is primarily the responsibility of the individual. When he is unable to provide this care for himself, the responsibility should properly pass to his family, the community, the county, the State, and only when all these fail, to the Federal Government, and then only in conjunction with the other levels of government, in the above order. The determination of medical need should be made by a physician and the determination of eligibility should be made at the local level with local administration and control. The principle of freedom of choice should be preserved. The use of tax funds under the above conditions to pay for such care, whether through the purchase of health insurance or by direct payment, provided local option is assured, is inherent in this concept * * *"

It is clear that the policy of the American Medical Association is in no way incompatible with the principles upon which title VI is based.

Regrettably, the financing of medical care for the aged has produced violent controversy both in and out of Congress. There are two schools of thought on how it should be handled.

On the one hand are the proponents of OASDI health care amendments, who propose that a radical change be made in what is essentially a cash benefit program. Disregarding the fact that such a course can lead only to State medicine, the advocates of this approach call for Federal intervention via compulsory social security taxation for the financing of medical benefits for all OASDI beneficiaries—regardless of need.

This is paternalism at its worst.

It would compel the nonneedy to accept Federal medicine rather than buy medical care voluntarily, through their own resources. In fact, the proponents of this plan oppose the right of individuals to pay voluntarily for their own health care, for they insist that the Federal Government assume this responsibility for everyone eventually—beginning with the aged.

This is the outright socialization of the financing of medical care, and we are strongly opposed to it for reasons which we have detailed at some length in this testimony.

In contrast to the OASDI approach is the Federal grant-in-aid program for the medical care of the near-needy, to be administered locally for locally determined beneficiaries who are eligible. This is the method adopted by the House

of Representatives by an overwhelming majority. It is a method which pre serves voluntaryism; which permits the nonneedy to take care of themselves. This follows the traditional Federal-State organizational structure of our Nation.

It is the economical method, which maintains local autonomy. It is, therefore, the antithesis of the centralized, socialized, statist approach of the Forand-type proposals.

While helping those who need help, it preserves the right of self-reliant individuals to finance their own health care, and bases its approach to the problem on family and community responsibility.

This program has been criticized as “modest,” presumably because its effect would be confined to the needy and near needy, instead of to millions of older people who neither want nor need Federal Government help.

To those critics who call this program modest, we say that fiscal irresponsibility, unpredictable cost, and maximum nationalization are not the accepted criteria for good legislation.

We believe that title VI merits the support of everyone familiar with the problem.

We believe that the House Ways and Means Committee is to be commended for its wisdom and statesmanship in developing so sound a proposal.

We urge this committee to accept the carefully considered conclusions of the House, based, as they have been, on months of intensive study.

In conclusion, let me repeat that we physicians believe in helping those who need help. We have bent our efforts toward providing this help for as long as our profession has existed. We are resolute in our determination to continue in this course.

Dr. LARSON. Because the committee's time is limited, my oral testimony will deal very briefly with the matters discussed in this document.

I would hope if action is to be delayed on this bill that the AMA and others who are interested in the bill and other matters pertaining to health will have an opportunity to present further testimony.

Now there is no subject outside of national defense and the budget that has caused as much concern as the subject of the care of the aged. We find ourselves in a position in which we are unable to ascertain all the facts.

In other words, we don't know and we doubt that anyone else knows, just what the problem of the aged is. We hope that after the White House Conference on Aging in January of 1961, that there will be information which will certainly be of value to everyone concerned and especially the Congress.

Now, from what we read, we understand that there is a possibility, at least, that some sort of legislation for the aged is going to be passed by this Congress. If so we are prepared to endorse title VI of H.R. 12580.

Now we do that for three main reasons:

First, it is designed to help those who really need help. It does not make the mistake, in our opinion, of treating over 15.5 million older people as a homogeneous group requiring an across-the-board approach. By providing aid only to those who need aid, it preserves the right of the nonneedy to take care of themselves.

Second, title VI, by limiting its effect to the near-needy minority, allows the majority to continue its use of the voluntary method. The measure is in no sense compulsory.

Third, title VI makes the State primarily responsible for administration of the program-not the Federal Government. We are convinced that the health care costs of the needy and the near needy can best be determined and met locally.

Any legislative proposal which seeks to meet the problem confronting the aged should be considered with these things in mind : The economic status of the aged is a great deal better than it is customarily pictured to be, with the vast majority of our 15.5 million people over 65 capable of meeting the cost of health care without undue difficulty; contrary to popular misconception, the majority of our aged are in good health-neither sick nor debilitated.

The needs of those who are sick or disabled are being met at the present time primarily through private resources, health insurance, and prepayment plans; under voluntary efforts of their families and private citizens working together at the community level.

We should, therefore, concern ourselves not with the majority which is neither disabled nor destitute, but with the minority. There

are,

of

course, many persons over 65 who have serious problems. Two and one-half million are now in old age assistance, and an undetermined additional number, although able to finance other costs of living, find it almost impossible to withstand the additional burden of the cost of illness.

Even here, however, the picture is not discouraging. In 1950, 22 percent of all persons over 65 received old age assistance. In 1959, it has been reduced to 15 percent, and Government figures indicate that this percentage should drop to 11 percent by 1970. Thus, the improving economic status of the aged is reflected in a continuing reduction in the number of persons who receive old age assistance. It is the needy and near needy which title VI would help effectively.

The American Medical Association emphatically favors helping those who need help. But the association does not believe this necessitates the creation of massive Federal machinery to help those who neither need nor want help, and who are capable of handling their own problems at the present time.

This brings us to the question of who should provide whatever help is needed.

At the annual meeting in June of the American Medical Association, this past time, the following statement was adopted by our house of delegates as the policy of the AMA. I should like to read it to you:

Personal medical care is primarily the responsibility of the individual. When he is unable to provide this care for himself, the responsibility should properly pass to his family, the community, the county, the State, and only when all these fail, to the Federal Government, and then only in conjunction with the other levels of government, in the above order. The determination of medical need should be made by a physician and the determination of eligibility should be made at the local level with local administration and control. The principle of freedom of choice should be preserved. The use of tax funds under the above conditions to pay for such care, whether through the purchase of health insurance or by direct payment, provided local option is assured, is inherent in this concept. * * *

It is clear that the policy of the American Medical Association is in no way incompatible with the principles on which title VI is based.

Regrettably, the financing of medical care for the aged has produced violent controversy both in and out of Congress. There are two schools of thought as to how it should be handled.

On the one hand are the proponents of OASDI health care amendments, who propose that a radical change be made in what is essentially a cash benefit program. Disregarding the fact that such a course can

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lead only to State medicine, the advocates of this approach call for Federal intervention via compulsory social security taxation for the financing of medical benefits for all OASDI beneficiaries--regardless of need.

Such a program would compel the nonneedy to accept Federal medicine rather than buy medical care voluntarily, through their own resources. In fact, the proponents of this plan oppose the right of individuals to pay voluntarily for their own health care, for they insist that the Federal Government assume this responsibility for everyone eventually—beginning with the aged.

We think this is the outright socialization of the financing of medical care, and we are strongly opposed to it for reasons which we have detailed at some length in the written statement attached.

To mention just a few of these reasons briefly, such a program would be unpredictably costly; it would unnecessarily cover millions of people; it would substitute service benefits for cash benefits; it would lead to a poorer—not better-quality of medical care; it would overcrowd our hospitals; it would lead to the decline, if not the demise, of private health insurance; and it would interfere dangerously with the doctor-patient relaitonship, which is the solid foundation upon which effective medical care must be based.

In contrast to the OASDI approach is the Federal grant-in-aid program for the medical care of the near needy, to be administered Iocally for beneficiaries whose eligibility is also determined at the local level.

This is the method adopted by the House of Representatives by an overwhelming majority. It is a method which preserves voluntarism; which permits the nonneedy to take care of themselves.

This follows the traditional Federal-State organizational structure of our Nation.

It is the economical method we believe which maintains local autonomy.

It is therefore the antithesis of the centralized, socialized, static approach of Forand-type proposals.

While helping those who need help, it preserves the right of selfreliant individuals to finance their own health care, and bases its approach to the problem on family and community responsibility.

This program has been criticized as modest-presumably because its effect would be confined to the needy and the near needy, instead of to millions of older people who neither want nor need Federal help.

To those critics who call this program modest, we say that fiscal irresponsibility, unpredictable cost, and maximum nationalization are not the accepted criteria for good or adequate legislation.

We believe that title VI merits the support of everyone familiar with the problem. We believe that the House Ways and Means Committee is to be commended for its wisdom and statesmanship for developing so sound a proposal.

We urge this committee to accept the carefully considered conclusions of the House, based, as they have been, on months of intensive study.

In closing, let me repeat that we physicians believe in helping those who need help. We have bent our efforts toward providing this help

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for as long as our profession has existed. We are resolute in our determination to continue in this course.

Thank you.

The CHAIRMAN. Thank you very much, Doctor. As I understand it you favor the House bill; what is your comment with respect to the so-called administration proposal, which has not been introduced but was presented to this committee by Secretary Flemming yesterday.

Dr. LARSON. I have not seen the latest material on the administrative proposal. As I understand it, no bill has been introduced, so it is difficult to say. Now from what we have read and heard about the proposal that was made before the House Ways and Means Committee sometime back, we were not in favor of that approach.

The CHAIRMAN. Secretary Flemming presented a copy of a bill which he said would be introduced and was made a part of the record of the hearings yesterday, and it might be advisable for you to get that copy

Dr. LARSON. Yes, sir, we would like to see it.

The CHAIRMAN. And then express to the committee your opinion pro or con.

Dr. LARSON. Yes, sir.
The CHAIRMAN. On those recommendations.
Dr. LARSON. Yes, sir.

(The opinion and recommendations were not submitted for the record by Dr. Larson.)

The CHAIRMAN. Any questions?

Senator DOUGLAS. Mr. Chairman, I think that the Doctor should know that the administration bill provided for meeting the cost of physicians' services for those over the age of 65 primarily by means of State and Federal appropriations, whereas the McNamara bill is restricted to hospital, nursing home, and home nursing care.

Now I wondered if you would like to express yourself on your attitude toward the provision of physicians' services paid for ultimately through a State subsidy.

Dr. Larson. Well, there are many instances, Senator Douglas, in which physicians do accept moneys through State subsidy.

Senator DOUGLAS. That is for the needy?
Dr. LARSON. Yes, that is right.

Senator DOUGLAS. But this would be a provision not merely for the needy but for virtually all those over the age of 65.

Dr. LARSON. We have not taken a definitive position on that.
That is a very difficult situation so far as we are concerned.

There is violent difference of opinion amongst our members on that very issue, and I would prefer, sir, to give you the statement letter based on the provisions of the administration bill.

Senator DOUGLAS. You don't have the letter ready.

Dr. LARSON. No, no... We were not aware that this bill was ready for introduction or was prepared.

I can tell you very frankly, that we know of some of the thinking of the administration through conferences that were held.

Senator DOUGLAS. That is you participated in the formation of the administration plan?

Dr. LARSON. No, no. We were told what the administration was thinking and I can tell you that we did not agree with it. Now, the

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