Senator MURRAY. What I am afraid of is that under your bill, if you are going to provide socialized medicine for 20 percent of the people, that the other 80 percent, observing that situation, are going to begin to demand that socialized medicine be extended to the rest.

Senator TAFT. One great trouble about all welfare service is that you may gradually lead the people to think the Government should support them all and to pay all their expenses. If you get to that point, you have lost the whole system of liberty in the United States, because when the Government supports them all, it will tell them how to live, and that is the reason I am opposed to extending it further than we have already.

We have extended it pretty far already. In a way we are now taxing about 25 percent of the people's income, and to that extent we have taken away their freedom, and they have got 75 percent of it left, to spend their money the way they want to spend it. I hate to see the taxes go further in any substantial amount.

I think we can afford $300,000,000 for this job and probably, I would say, in health, housing, and education that for $2,000,000,000 you can fill up and improve the present system to a tremendous degree and that in the course of 10 years it may get up to that figure, that is, the Federal assistance. Of course, already the States are spending much more than that on those three services. We hope, of course, that the Federal Government may get rid of these foreign expenses; $22,000,000,000 out of the $42,000,000,000 is for the Army and ECA, just those two things take more than half the total Federal budget; and there is reasonable hope that with restoration of peace in the world, you can get that 2212 down to 11, for instance, and if you can then expand your welfare services a couple of billion dollars for health, education, and housing, or do it before in coincidence with a decrease in military expense, I think you will have a tax burden you can reasonably bear and still keep the incentive alive that increases the production and employment.

Senator MURRAY. I think, Senator, that the other 60 or 80 percent of the people who will be observing this socialized medicine that you are providing are going to move in and demand that it be extended to the country.

Senator TAFT. You may be right, but that does not make the demand right.

Senator MURRAY. Already the labor organizations of the country are beginning to demand that their health be taken care of and the health of their families through increased wages and provisions for health and security, so that it does seem to me that our bill is the more reasonable bill, the bill that is going to provide a system of medical care in which the people pay for it.

Are there any other questions?

Senator HUMPHREY. I do think, Senator, that a pay-roll tax is a restriction and is an impediment to the ever-increasing demands of people for more and more services.

Where you can take a lump sum out of the General Treasury, there is no doubt in my mind that is a greater inducement to people thinking they do not have to pay for it, but when they see it deducted from their check every week, they know they are paying for medical care.

Senator TAFT. They go in at the time of the next bargaining settlement and make the employer pay that much more, and they usually will. He has to look at it as take-home pay, just as they do.

Senator MURRAY. Does that conclude your statement?
Senator TAFT. Yes, sir.

Senator MURRAY. Thank you for your very able statement.
We will hear next from Senator Hill and Mr. Bugbee.

STATEMENT OF HON. LISTER HILL, UNITED STATES SENATOR FROM THE STATE OF ALABAMA, ACCOMPANIED BY GEORGE BUGBEE, EXECUTIVE DIRECTOR, AMERICAN HOSPITAL ASSOCIATION

Senator HILL. I would like to say that I have with me here this morning Mr. George Bugbee, the executive director of the American Hospital Association, who has made a great contribution in the drafting and the work on this bill that I shall discuss.

Mr. Chairman and members of the committee:

Through the Senate Committee on Labor and Public Welfare, of which we are all members, the Senate and the Congress of the United States can have the opportunity to enact legislation and do more for the health of the American people than any Congress in our history. Upon us rests the responsibility to give the Senate a legislative program that can be put into operation promptly and effectively and meet the urgent health needs of the Nation.

We can give recognition to the importance and complexity of the health problems of our modern industrial civilization by creating a Federal Department of Health and Welfare. The Secretary of Health and Welfare would give new direction and new coordination to the functions of our Federal agencies for health. He would provide the leadership and speak with the authority of a member of the President's Cabinet.

With the passage of the Hospital Survey and Construction Act of 1946, the Nation undertook for the first time a Nation-wide program of planned and coordinated hospital construction. Today nearly 800 hospitals, health centers, nurse homes and other hospital facilities are being built or have been approved for construction under the

act.

Recent hearings on S. 614 to amend that act, held by the subcommittee of which I am chairman, have revealed that even this program of construction must be enlarged to meet the need for hospitals and health centers. Unless the program is enlarged Federal participation will not keep pace with the rapidly expanding programs of the States. Our subcommittee plans within the next few days to submit to the full committee a favorable report on S. 614 to double the amount of Federal aid, increase the aid to individual projects and permit the States to channel greater aid into their low-income or rural counties and communities.

Preventive medicine through the public health services is a basic part of any modern health program. Yet last year some 40,000,000 Americans had no public health service. Another 85,000,000 had only doubtful protection from inadequately financed and understaffed health units. And only 10,000,000 of our 146,000,000 people had the protection of full-time, professional health departments.

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Hearings on S. 522, the bill to provide increased Federal aid to local public health units which our subcommittee plans to report favorably within the next few days, have convinced the members of our subcommittee that the ramparts of national health begin in the local health offices. Yet only 1 in 10 of the local health offices is staffed and financed to carry on a reasonably adequate program. The strategic and vital importance of local health offices to the Nation's health was emphasized at our hearings by Dr. James E. Perkins, managing director of the National Tuberculosis Association. Dr. Perkins declared:

The National Tuberculosis Association has long held the opinion that effective tuberculosis control can be achieved only if there are adequately staffed and adequately financed full-time local health services. We know enough about tuberculosis today to rid our Nation of the disease if there were local health officers and public nurses in the field to follow up each case and assure treatment. The chief function of our association is educational. But education falls down if there are no X-ray machines and other facilities and not enough people in the local health agencies to actually do the work.

The Senate, as we know, already has passed and sent to the House the school health services bill reported by our committee, the Committee on Labor and Public Welfare, which provides for medical and dental examinations for every school child and, in some cases, medical and dental treatment. Through this measure and S. 522, the local public health services bill, we can carry to the grass rootsfarm and cross-roads, town and city-protection against tuberculosis, malaria, typhoid and undulant fever, syphilis, infantile paralysis, and the epidemic diseases. We can discover and correct many of the physical defects and ailments in our children at the all-important school age.

Medical research is health protection for tomorrow. The medical colleges, the privately-endowed foundations, and many private industries are carrying on great research work. The Federal Government is lending its support to research through the National Institute of Health, the National Heart Institute, the National Institute of Dental Research, the National Mental Health Act and the Atomic Energy Commission. I think we ought to go forward and in many other fields that is a challenge for the Federal Government to help and do research work.

The Senate Committee on Labor and Public Welfare reported to the floor and guided through the Senate the National Science Foundation bill. This bill must be passed by the House and signed by the President, and provide a single agency for correlating and coordinating the vast research of the Nation.

The success of our health programs is ultimately dependent upon the training and experience and qualifications of the people who direct the programs. The finest hospitals and health centers, the ultimate in medical knowledge are useless without doctors and nurse and trained workers.

America is suffering a manpower shortage in the field of health. There are less than 200,000 active physicians for a population of some 146,000,000 people. The shortage of dentists, nurses, technicians, and public-health workers is equally as serious. I strongly urge a comprehensive program and this committee has before it as one title in this bill that matter, and I hope they will bring forth a separate

bill on this question of Federal aid for scholarships, for grants to the schools and colleges for additional teachers, and grants to the States for expansion and construction of medical schools to train the doctors, dentists, nurses, sanitary engineers, technicians and health workers of all kinds that are so badly needed.

Surely, as the Senator from Ohio said in his statement, a bill of this character should be reported to the Senate by this committee so that the Senate can act on it in this session of Congress, looking to its enactment at this session of Congress.

Our committee should not forget that the underlying foundation of the health of any nation is the soil and the food we obtain from the soil. I believe the committee will agree that an essential part of any health program must be steps to restore and maintain the healthgiving minerals and nutrients of the soil-the objective of the national soil fertility bill, which some of use are sponsoring in the Senate.

There is a further step necessary to a comprehensive program of health for the American people-the provisions of adequate hospital and medical care for the individual.

This is the objective of S. 1456, the voluntary health insurance bill sponsored by myself and Senators O'Conor, of Maryland; Withers, of Kentucky; Aiken, of Vermont; and Morse, of Oregon. You are familiar with the Hospital Survey and Construction Act and its program. The voluntary health insurance bill will perform the same initial service in providing hospital and medical care that the Hospital Survey and Construction Act is now providing in the building of hospitals and health centers.

The bill will not do this through a strange and untried system of compulsion. The bill strengthens and builds upon our existing medical institutions-the tried and tested methods of American medical practice and the voluntary prepayment health insurance plans which more than a third of our people have found effective and trustworthy. The sponsors of the bill believe that the present system of medical care has been too valuable, too effective and too useful through the years to throw it aside for a new system which might not work. We very sharply disagree with the statement of Mr. Kingsley yesterday that this present system is totally inadequate for the American people. We believe it is the course of wisdom first to examine our existing health and hospital and medical resources. Then to strengthen and build upon them. This the bill will do.

The purpose of S. 1456 is to bring adequate hospital and medical care within the reach of every American through the system of voluntary participation in prepayment health insurance plans. The bill will provide Government supported membership in health insurance plan for those who cannot pay. It will stimulate and encourage participation by self-supporting persons. It provides for surveys which will be the basis for programs to meet the shortage of doctors, especially in rural areas, and to determine the need for additional diagnostic facilities and the need for additional facilities for treatment of mental illness, tuberculosis, and chronic diseases.

The Federal phases of the program will be administered by the Surgeon General of the United States Public Health Service. Within 6 months after enactment of the bill the Surgeon General shall issue broad regulations-these are broad regulations such as we have today

under the Hospital Survey and Construction Act, and the committee knows these are really broad, laying down broad policies, with the real control and administration in the hands of the States. These broad regulations establish:

The general standards of eligibility of persons unable to pay subscription charges for health insurance.

The general types of hospital and medical care to be provided under the program.

The general standards for participation by voluntary prepayment plans.

The general standards for participation by nonprofit prepayment plans.

The general methods of encouraging and assisting in popular enrollment in the prepayment plans within the States.

A Federal Hospital and Medical Care Council composed of 10 persons-2 doctors, 2 hospital administrators, 2 prepayment plan officials, 4 representatives of consumers-will share responsibility with the Surgeon General in developing these broad policies of the program. In the States the program will be administered by a State agency, which may be the same agency now administering the hospital survey and construction program in the State. This agency will have a council with representation similar to that of the Federal Hospital and Medical Care Council.

Within the States-and I want to emphasize this-regions will be designated in which complete hospital and medical services should be made available. In many cases these regions already have been estblished under the operation of the Hospital Survey and Construction Act. Within each region a Hospital and Medical Care Authority will operate as a unit of the State agency. The regional authority will be composed of persons residing within the region and shall include representation from as broad a segment of the population as possible. The regional authority will encourage coordination of all health facilities and services in the region and will recommend means for their effective use in serving the areas.

I cannot overemphasize that matter of coordination. As Senator Taft recalls, we had testimony as to what has been done in Rochester, N. Y., and that area in the coordination of hospitals and facilities in and around that outlying area. We also had testimony about certain coordination down in North Carolina, all of which was most interesting and challenging, showing what can be done if you tie those hospitals, those diagnostic facilities, the clinics, and these other facilities together so as to provide a well-rounded medical-care program available for all the people.

The voluntary health insurance program will be financed through Federal funds and a variable percentage of funds provided from State and local sources under the formula used in the Hospital Survey and Construction Act. This formula allocates a greater percentage of Federal funds to the States with lower per capita income.

The immediate aim of S. 1456 is to provide protection for people of limited income by giving them service cards in voluntary prepayment plans which will entitle them to the same kind of hospital and medical care as those who are able to purchase such protection on a voluntary basis.