In consideration of the scope of this matter and because of the number of alternative proposals, we feel there is need for all facts to be assembled before conclusions are drawn.

On the above-mentioned title VI there were no hearings conducted by the House of Representatives. Only limited hearings have been conducted by the Senate. Title VI is a departure from the traditional concepts of social security in that it would provide to the eventual recipient service benefits. The philosophy of social security is based on cash benefits.

Further, because of the divergent nature of the several programs recommended to provide health care for the aging; because of the lack of statistics on persons over 65 who are medically indigent, and because of the forthcoming White House Conference on the Problems of the Aging in early January 1961 we urge avoidance of hasty action. We believe that further study of the entire subject is fully warranted.

From statistics available, it would appear that about 2 million persons over 65 are now indigent and receiving assistance. In addition it is roughly estimated there are approximately 1 million medically indigent which title VI would take care of on a needs basis. Subtracting these numbers from the estimated 151⁄2 million persons over 65 in this country there remain approximately 12 million. Latest indications point to the fact that voluntary insurance will have by the end of 1960 more than 8 million of this total covered. Voluntary insurance with programs now operative and those being designed can and will solve this problem. Group insurance is being employed in three significant ways to provide benefits for older persons and their dependents: 1. Continuation of insurance acquired during active employment in period of retirement. 2. Continuation of insurance coverage to those who remain in active employment past normal retirement age. 3. Conversion of group coverage to individual insurance at retirement.

Additionally, a significant number of persons have been covered and thousands more will be protected through mass enrollment techniques being employed by a number of companies. Two companies alone now have more than 2 million persons over 65 protected by health insurance fulfilling the particular needs of the individual. Furthermore, employers and insurance companies are working together on programs of funding welfare and benefit programs during the active life of employees, so there will be money available to pay for health care needs after retirement.

We question the wisdom of enacting permanent legislation to solve a temporary problem. G. Warfield Hobbs, vice president of the First National City Bank of New York and chairman of the National Committee on Aging warns that if sentiment of politics carries us overboard on a permanent basis to solve the temporary financial problems of a segment of the aged population, "we may find in the future that we are providing perhaps more than necessary for a very large and self-supporting aged group at the expense of other age groups.” As proof that the new generation of older citizens is attaining better financial independence, Hobbs cites current old-age assistance figures.

"In 1950 the number of over age 65 receiving public assistance reached a high of 2,789,000," he said. "By December 1959 there was a decrease to 2,394,000 despite the fact that there were 3 million more in the aged group. The reduction continues at a rate of about 3,000 a month in spite of a net gain in the number of aged of about 30,000 a month."

Dr. Willard C. Rappleye in his report as president of the Josiah Macy, Jr., Foundation said, "planning for the long-term future under conditions which exist then should be given more consideration rather than creating permanent legislation for a temporary phase of our economy."

Representing the interest of many small businessmen who are insurance agents and producers comprising an army of salesmen who have helped to bring health insurance coverage to more than 130 million Americans, we are unalterably dedicated to the goal of providing health care insurance in adequate amounts at reasonable prices to the overaged American public. As businessmen working toward the continued development of our great economy, we willingly pay taxes for the operation of the services and facilities of Government which all acknowledge cannot be provided in a private and voluntary way, but where there is an alternative, we are irrevocably committed to the course of individual and personal responsibility over and against the intrusion of Government.

Again we urge extensive study of this problem. This is too serious a subject for hasty action. The 1961 White House Conference on the Problems of the Aging will bring to light much information on the subject hitherto unrevealed.

STATEMENT OF IRVIN P. SCHLOSS, LEGISLATIVE ANALYST, AMERICAN FOUNDATION FOR THE BLIND

I appreciate this opportunity to state the views of the American Foundation for the Blind, the national voluntary research and consultant agency in work for the blind, on H.R. 12580, the Social Security Amendments of 1960.

The American Foundation for the Blind believes that H.R. 12580, except for one serious shortcoming, generally advances the programs provided for under the Social Security Act. We are particularly pleased with the proposed change in the disability insurance provisions which would make it possible for an individual with the requisite quarters of coverage to be eligible for monthly cash benefits at the age at which he becomes disabled. This is a logical and desirable extension of the program, and we respectfully urge this committee's approval. Although there are certainly many desirable improvements in the various provisions of the Social Security Act which are not included in H.R. 12580 and which should be considered by the committee such as prohibition of residence requirements in the public assistance titles; addition of a general assistance category to the public assistance titles; alteration in the formula for Federal payments to the States to provide for equal treatment of Puerto Rico, Guam, and the Virgin Islands; increased Federal payments to the States; extension of partial exemption of earnings in some of the public assistance titles; and alteration of the definition of disability in sections 216 and 223 of title II for certain types of severe disabilities-we would urge the committee to give priority consideration at this time to devising a sound and effective program of medical care for persons 65 years of age and over within the old-age, survivors, and disability insurance system.

The provisions for medical care of the aged presently incorporated in title VI of H.R. 12580 are wholly inadequate from the standpoint of the need which must be met and unsound and impractical from a fiscal standpoint. The program now provided for in the bill would not begin to meet the real need for adequate medical care of the millions of persons living on social security retirement pensions. Many States are not able to take full advantage of existing Federal-State matching fund programs in public assistance and vocational rehabilitation, and it is completely unrealistic to expect them to be able to provide even a minimal medical care program for their aged residents with the system of financing required in the bill.

On the other hand, there are a number of bills pending before the committee which do provide for adequate, comprehensive medical services for persons 65 and over and which also provide for sound financing through the OASDI mechanism.

The concept of these OASDI bills is sound, practical, and in the best interest of the American people. By making it possible for persons to provide during their optimum years of employment through a contributory insurance plan for their medical care needs after retirement age, when their income is substantially curtailed, such legislation would enable our senior citizens to receive adequate medical care for which they themselves have paid. At present, many older persons must do without the medical care they need because they cannot afford it; or else they must seek it on a charity basis-a demoralizing prospect for an individual who has spent his productive years as a typical independent American, contributing to the growth and development of our national economy.

The typical retired worker finds himself in a difficult position today. Steadily increasing living costs force him to make every penny of his social security retirement pension stretch as far as possible. He and his wife begin to do without many small pleasures they enjoyed a few short years before the retirement he had so keenly looked forward to. He views with alarm the steadily increasing payments for doctor bills and medicines as the chronic ailments which attend the aging process become more persistent and frequent. An acute health situation requiring surgery or hospitalization for a period of 2 or 3 weeks arises and virtually wipes out his savings; and as a result, he and his wife live in dread of another similar occurrence because they do not have the financial resources required for today's medical care.

I know that the situation I have just described is duplicated many times over in our country today. With an adequate medical care insurance program under the social security system, it need not happen.

According to the Social Security Administration, more than half a million old-age pension recipients are also receiving public assistance under title I of the Social Security Act, providing for grants to States for old-age assistance. Similarly, approximately 25,000 recipients of retirement pensions and disability insurance payments have found it necessary to go on the public assistance rolls in the aid to the blind and in the aid to the permanently and totally disabled categories, titles X and XIV of the act. There can be no question that the high cost of medical care is a highly significant contributing factor. How much better it would be for the country economically and for the individual psychologically if he received adequate medical care because he had insured himself for it and no longer needed public assistance to make ends meet.

Approximately 175,000 blind people-nearly half of our blind population—are over 65. Many are blind from cataracts and other conditions which frequently accompany aging. An adequate medical care program under the social security system would make many operations for sight restoration possible-operations which just are not being performed because the people concerned cannot afford them.

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The American Foundation for the Blind respectfully urges the Committee on Finance to replace title VI of H.R. 12580 with a comprehensive medical care plan for the aged which uses the social security mechanism for financing and administration. By so doing, the committee will assure our senior citizens of adequate medical care in a psychologically wholesome and economically sound

manner.

TESTIMONY OF THE PHYSICIANS FORUM ON H.R. 12580, SUBMITTED BY DR. ALLAN M. BUTLER, PROFESSOR OF PEDIATRICS, HARVARD MEDICAL SCHOOL, AND CHAIRMAN, THE PHYSICIANS FORUM

The Physicians Forum is a national organization of physicians in existence for more than 20 years. Our members, who number over 1,000 and are mainly' private practitioners, also belong to their county medical societies or other recognized professional associations.

The Physicians Forum appreciates this opportunity to present its views on the medical care section of H.R. 12580. As we have not had an opportunity to read H.R. 12580, our recommendations at this time will be limited to basic principles derived from our experience as physicians and our deliberations on the several proposals submitted earlier to the Congress. We will shortly forward to you a supplementary statement which will compare and evaluate H.R. 12580 and the other current major proposals for medical care of the aged.

The years of medical practice of our members and professional associates give us extensive personal knowledge of the great medical needs of the aged and the frequently insurmountable obstacles they encounter in attempting to get good medical care. More often than we wish to recall, we have seen our patients, on reaching retirement, fail to receive necessary hospitalization, diagnostic procedures, and other medical services, and forced to give up their personal physicians.

From our experience we also know that currently available health insurance has not eliminated the financial obstacle to good medical care for the aged. Many do not have health insurance, particularly those needing it the most, while those covered still suffer considerable financial hardship because benefit payments are usually so inadequate.

Our elderly patients with Blue Cross policies are also the hardest hit by the current wave of increases in Blue Cross rates; as a result, many find it difficult to pay the premiums and some have had to give up their policies. We are deeply. worried about the unfortunate predicament these patients will face when they require hospitalization.

It is clear to us that currently available health insurance must be bolstered by the Federal social security system to assure universal coverage of the aged regardless of their limited and usually shrinking economic resources.

In the 25 years of the Federal social security system, we physicians have witnessed with gratitude the financial help it has provided to our patients. For many, this was sufficient to maintain their personal dignity without which mental and physical health rapidly deteriorates. For some, it made possible the con

tinuation of important doctor-patient relationships or the purchase of necessary medical services. To the best of our knowledge, the benefits of the Federal social security system have been provided with a minimum of redtape and without political interference.

More recently, the Federal social security system has worked directly with the medical profession in administering the disability freeze and the disability benefits programs. Practicing physicians who have participated in this work have found the same rational approach that has characterized the entire system. In particular, there has been no interference with professional judgments, no loss of professional integrity, no lowering of the quality of care.

As physicians, we are distressed and ashamed that our principal professional organization should continue its anachronistic and unscientific opposition to the addition of medical care benefits to the Federal social security system. This is the only financially sound way to give everyone basic insurance against the costs of medical care in old age. We are deeply disturbed that some of our fellow physicians are so callous as to advocate instead extension of charity medicine to further large segments of the population.

Charity medicine is not conducive to high quality medical care, is not compatible with good doctor-patient relationships, and is often not adequate to the medical needs. Moreover, the prerequisite means test is distasteful to the American people. We are confident that most physicians have a higher regard for their elderly patients and a sounder understanding of what is good for the health of the aged.

The medical profession would legitimately benefit in an economic way from the addition of medical care benefits to the Federal social security system. Judging from the effects of voluntary health insurance, extension of coverage to a large new group of people with modest or low incomes, means full payment to physicians for many services previously provided on a charity or semicharity basis.

It is important for physicians to realize that such a program would not significantly alter the present pattern of providing medical service. Rather, it is primarily a mechanism for improving the method of financing medical care for the aged.

Thus, as practicing physicians we believe that the social security approach to medical care of the aged would be welcomed by the vast majority of the medical profession if they were adequately informed and if they were not intimidated by the American Medical Association. They would recognize, as we do, that the social security approach would give all our elderly patients the financial possibility for personal, continuous, and high quality medical care. During the present congressional debate on medical care for the aged, little attention has been given to the means available in legislation for protecting and promoting care of high quality. As physicians, we must emphasize that any legislation on this subject will affect quality of care. It would be a great disservice to the aged and to America's health services to enact legislation which ostensibly ignores quality considerations and consequently, in practice, finances and extends services of poor quality.

First of all, we strongly urge that the legislation call for effective Federal, State, and local advisory councils which would assure carefully considered and professionally guided advice on quality issues, including the formulation of sound standards for participating personnel and institutions.

Second, we strongly urge that participation be limited to hospitals which are accredited by the Joint Commission on Accreditation of Hospitals (American Medical Association, American College of Physicians, American College of Surgeons, and American Hospital Association). Most hospitals have met the minimum standards of facilities, services, and organization required for accreditation. Accreditation is universally accepted in the health field as a well functioning, fair, and necessary mechanism for protecting the public against poor quality of hospital care. The aged are no less deserving of such protection. Similar protection against poor quality nursing homes is also imperative. Most nursing homes, unlike hospitals, are privately owned and receive limited payments from existing welfare programs for many of their residents. Although State licensure laws set forth minimal requirements, adequate medical and nursing care in nursing homes is the exception rather than the rule. Moreover, some nursing homes have little or no concern for the welfare of their patients and are primarily profitable businesses exploiting the financial resources of aged and chronically ill individuals. To make Federal funds available to these types of nursing homes would only perpetuate and expand inadequate nursing home

care. To limit Federal funds to accredited nursing homes would be a strong and much needed stimulus to the development of good nursing home care.

Third, we strongly urge that from the start, the medical-care benefits be as comprehensive as possible--especially that they include all necessary services of specialists and general practitioners, and diagnostic laboratory and X-ray procedures for nonhospitalized patients.

In order that services of poor quality can be eliminated and systematic improvement of quality can be promoted, administration at all levels must be medically oriented. We, therefore, recommend that the U.S. Public Health Service and the State health departments should share the governmental administrative responsibilities.

We also recommend that the financial resources of the program be utilized for improving quality of care. Among the ways this can be done is through encouraging group medical practice and professional audits, acknowledging tuition and educational leave costs as proper components of professional compensation, financing demonstration and research on quality improvement, and rewarding recognized high-competence ratings and high levels of performance.

Speaking for the many thousands of physicians who favor the addition of medical-care benefits to the Federal social security system, we sincerely hope the Senate Finance Committee will formulate and approve of a program of medical care for the aged, based on the right of each aged person to necessary medical care, available with dignity, without financial barriers, and with good quality assured.

REPORT OF THE NATIONAL LAWYERS GUILD ON HEALTH INSURANCE BENEFITS FOR THE AGED THE FORAND, McNamara, and Javits BILLS AND THE ADMINISTRATION'S "MEDICARE PROGRAM FOR THE AGED"

Our country, 25 years ago, determined, as a matter of national policy, that it was in the interest of the Nation that old-age security should be provided for. The old-age and survivors' insurance system, created by the Social Security Act, does not, however, provide sufficient income to enable aged beneficiaries to purchase or otherwise obtain the medical and hospital care which they need. This has led to a widespread demand for amendments to the Social Security Act or other provisions which would meet this need. Currently, the Congress is considering a number of measures which are concerned with this problem. This report is intended to review the most important of these measures.

I. THE NEED

Rising costs for medical care, especially hospitalization, have seriously affected the health and economic security of persons of all ages. The aged have been particularly hard hit because their advanced age and the infirmities usually accompanying it, while interfering with the ability to pay for more medical care, at the same time creates the need for more medical care. Since 1947-49, the overall consumer price index has increased about 24 percent. Medical-care costs have risen about twice as fast, or 49 percent.1

Hospital room rates have increased 71.2 percent from 1948 to 1956, while all medical care costs increased 31.7 percent. Private expenditures for hospital services have increased from 1 percent of per capita disposable income in 1948 to 1.16 percent in 1952, 1.33 percent in 1954 and 1.43 percent in 1956, a 43 percent increase from 1948.2

Seventy-four percent of the aged (those over 65) have annual incomes of $1 to $1,000; 11 percent have annual incomes of $1,000 to $2,000, and 15 percent incomes of $2,000 or more.

1 Department of Health, Education, and Welfare report dated Apr. 3, 1959 (hospitalization insurance for OASDI beneficiaries); statement of Wilbur J. Cohen, representing_the American Public Welfare Association submitted July 15, 1959, to the Committee on Ways and Means of the House of Representatives, hearings on H.R. 4700, July 13-17, pp. 310-347.

2 Department of Health, Education, and Welfare report and statement of Wilbur J. Cohen. See footnote 12.

3 New York Times, Mar. 20, 1960; see also statement of Arthur S. Flemming, Secretary of Health, Education, and Welfare, before the House Ways and Means Committee of the U.S. House of Representatives, Wednesday, May 4, 1960.