Senator MURRAY. In New York they have an insurance system that many members of the A. F. of L. belong to, the greater New York Insurance plan, I believe they call it.

Mr. CRUIKSHANK. That is right, yes.

Senator MURRAY. How does this plan work out so far as the workers are concerned?

Mr. CRUIKSHANK. Well, that works out quite satisfactorily. There you have a large metropolitan area. You have the health facilities available. The health insurance plan of greater New York now has contracts with I think 26 group health units.

You have even with the building trades the flucuations contained pretty much within the metropolitan area, so that some of our building trades unions like the painters have gone into the health insurance plan, hotel and restaurant workers and others, and there you have a quite comprehensive complete program of medical care.

The only program of medical care that I know of where the coverage corresponds to the coverage contemplated in S. 1679 is in that plan, or corresponds very closely to it.

Of course that is a new plan, but so far their experience has been quite satisfactory with the health insurance plan of New York. It is costly. It cost a lot of money to start it. I understand that about $750,000 was put in by private endowments to prime the pumps of that plan, and to get it so that it is almost impractical to think of that kind of a program working outside of perhaps San Francisco, Chicago and New York.

Senator MURRAY. Do any other cities have a similar plan?

Mr. CRUIKSHANK. There is no city that I know of where there is a plan anything like as comprehensive as the H. I. P. plan in New York. St. Louis has a plan that is quite comprehensive, but does not go as far as the H. I. P. plan, and it is a health-center plan for a number of units rather than a contracting plan for services of group-health units as the plan in New York is.

Senator MURRAY. Under the Government's program of medical insurance, there is considerable propaganda today in the country to the effect that this will take a too large slice out of the pay check of the workers. What is the attitude of the workers in regard to that?

Mr. CRUIKSHANK. Our unions have consistently supported the contribution system in the social insurances. In old age survivors insurance, it was interesting to note the resolutions that came in at the convention in Cincinnati last fall. As many resolutions came in for raising the contribution rate as came in for increasing the benefits. I think that indicates that our membership is quite well aware of the fact that you do not get something for nothing in any of the social insurances.

The resolutions that come in from cities, States, and the national conventions almost invariably carry the recognition of the necessity for the pay-roll deduction. Our people recognize that this would not be a net reduction in income; that it would take money out of the pay envelope as it comes in, but that it actually would represent a saving in expendible wages.

Senator MURRAY. The A. F. of L. has been interested in this problem for a great many years, as I understand it. They started agita

tion for a program of this kind some 10 or 12 years ago, is that not true?

Mr. CRUIKSHANK. That is right; yes, sir.

Senator MURRAY. At that time their proposals were considered extremely wild and socialistic and communistic, as I understood you to say in your statement, but that attitude is completely changed in the country today. Now it has come to be recognized that there is a serious need for some program to meet the problems of the great masses of our people in regard to health care.

Mr. CRUIKSHANK. I think that is very true, Senator, and we believe that we discern, and we believe we discovered we are pleased, there is less talk about socialized medicine and socialistic approach than there was 2 or 3 or certainly less than there was 7 or 8 years ago. I mean the people who differ with us on the method of meeting this believe the public has come to accept our proposal as not being a socialistic approach

Senator MURRAY. And the very proposals that are offered instead of it are socialized programs themselves.

Mr. CRUIKSHANK. Quite true, they are much more socialistic in their concept and approach, unwittingly so, than our approach.

Senator MURRAY. And will more likely result finally in a complete socialized system of medicine in this country.

Mr. CRUIKSHANK. I am quite sure they would. In fact we have had that experience for a long time. I am sure that Senator Taft will remember this.

I was raised in Ohio and my earliest recollections of any social program is the blasts that we used to get in the newspapers that were delivered to our home about the socialistic approach of workmen's compensation in Ohio.

Well, we stuck with it, and I do not think anybody calls workmen's compensation socialistic, and I hope that the Senator and I will both live to see the day when this will be accepted just like workmen's compensation is, and the bogie of socialism is long since buried.

Senator MURRAY. I notice by the press this morning that the Republicans have offered a new bill or program of medical care. Are you familiar with that?

Mr. CRUIKSHANK. Only what I see in the press, Senator. I read the reports in the New York Times this morning.

Senator MURRAY. You would not be able to discuss it at this time? Mr. CRUIKSHANK. No, I think it would not be appropriate for me to discuss it. I have some ideas, but they are purely my own. I would have to submit that to our committee and the policy makers in our organizations.

Senator MURRAY. Well, as I understand it, it has been developed as a result of the agitation that has been going on in the country for the last 10 or 12 years, and that it goes much further than any program yet offered by the opposition to the national health insurance

program.

Mr. CRUIKSHANK. As I understand it that is quite true, Senator, and it is quite cheering to find that there is an approach suggested there that avoids the whole needs basis, if I understand it correctly, and still proposes, I believe, to work through the existing voluntary insurance agencies, but not to do it on the basis of proven need.

Now I had better not comment any further on it because, as I say, I have only seen the newspaper reports on it, and it has not been submitted to my social-security committee, and we have no official position on it.

You asked about this health insurance plan of New York. I have here some charts which they prepared which show the relative costs and the relative coverage of the United Medical Service in New York, and the insurance plan, and also some comparisons between the group health insurance in New York and the health insurance plan.

The costs are considerably higher for the health-insurance plan. For example, the monthly charge is $7.25 for a family of three or more persons in the health-insurance plan, as against only $1.80 for the united medical service, but then when you look into the provisions of the coverage you find I will not go into them in detail here, but there are 17 important excluded items. That points up the problem.

If you have a program that is inexpensive enough to be within the reach of the ordinary person, you have the risks that you want to cover excluded, and if you extend the coverage to include the risks with which working people are actually confronted, then the cost goes up to the point on a flat-rate basis where it is beyond the reach of the person of average income.

Senator TAFT. Who pays for it? Who pays the difference?
Mr. CRUIKSHANK. In which plan, sir?

Senator TAFT. In the low-rate plan. Somebody must pay for it. Mr. CRUIKSHANK. Well, in our proposal it is rated on a percentage of income so that it becomes a social insurance.

Senator TAFT. But it is generally agreed for instance that the cost of medical care is $100 a family at least throughout the country. In fact, the Murray-Wagner-Dingell bill contemplates more than that, $6,000,000,000 over 40,000,000 families. That is $150 per family. Who pays the difference? Where does it come from if you pay $1.80 a month per person?

Mr. CRUIKSHANK. Well, first let me say that it is just not the difference between $1.80 and the $7.25. These people have to dig into their pockets for the costs against which they are not protected. They have to do without all kinds of things, and society pays for it. For example, if a worker has to take his child out of school in order to pay that difference, society pays it.

Senator TAFT. I thought you said $1.80 was UMI.

Mr. CRUIKSHANK. The $1.80 is United Medical Service in New York, but there are 17 exclusions of important risks.

yes,

Senator TAFT. That is a private plan for just certain things?

Mr. CRUIKSHANK. That is right.

Senator TAFT. Even hospitals, because hospital-insurance costs around $3 a month for a family, does it not?

Mr. CRUIKSHANK. Yes, that is right. The hospital alone would cost more than $3.

Senator TAFT. Senator, Senator Donnell and I would like to question Mr. Cruikshank. I wonder if Senator Lodge would be permitted to make his statement.

Senator MURRAY. Yes. We will continue with Mr. Cruikshank after Senator Lodge has presented his statement.

STATEMENT OF HON. HENRY CABOT LODGE, JR., A UNITED STATES SENATOR FROM MASSACHUSETTS

Senator LODGE. Thank you for this opportunity to appear with reference to S. 1106. This bill embodies a thought which I have cherished for a long time and which I first advanced in a different form back in 1940, reintroduced in a quite different form in 1947, and to which I subsequently made further revisions, as I received criticisms and suggestions from interested parties.

Let me say at the outset that this bill does not pretend to be a panacea for all ills, or to be a comprehensive approach to the subject. It is a limited and practical approach which I believe could do a great deal of good in a very direct way. It is perhaps something which could be quickly enacted at this session whereas the rare, complicated, and far-reaching schemes certainly cannot be. Of course, the bill which I propose is in no sense of the word a substitute for these comprehensive insurance schemes.

This bill seeks to provide certain free medical services and drugs to needy people. There are at present a considerable number of medicines and drugs the manufacture of which has become thoroughly standardized and which are properly regarded as specific remedies for well-defined diseases. These particular medicines, unlike the majority of medicines, are so expensive that they are beyond the reach of many persons. For example, big hospitals will make gifts of small quantities of most types of medicines. For these hospitals, however, to give away the medicines to which this bill refers would strain their finances to a point which they could not bear.

Some of the drugs and medicines which fall into the category of being utterly necessary but quite expensive are: (1) Sulfa drugsthese are used now for many illnesses, including pneumonia, streptococcus infections, and other types of infections; (2) insulin-which is used for diabetes; (3) liver extract-used for pernicious anemia and occasionally for other anemias; (4) mercury diuretics-used for patients with congestive heart failures; (5) endocrine products-most of these except thyroid gland are expensive; these are used for glandular and nervous disorders; (6) vitamin_preparations-thiamine chloride, nicotinic acid, viosterol, vitamin K; these are used for a variety of conditions, but especially for nutritional deficiencies; (7) typhoid vaccine used to prevent typhoid fever and already is compulsory in some States; (8) penicillin and streptomycin-used in the treatment of a variety of infectious diseases.

The above list is, of course, by no means complete, but gives you an idea of the type of drug and medicine which I have in mind. The same philosophy, of course, carries over into the field of medical services. There are a number of diagnostic services and remedial treatments which in many cases are utterly necessary for health and even for the preservation of life, but which, because of their cost, are in many instances beyond the financial capacity of many American citizens. Among these services would be the use of respirators, the socalled iron lung; and, very conspicuously, large-scale X-ray facilities. I believe that it is not disputed that countless instances occur every day ir which X-ray examinations are desirable-yes, even essentialbut they are not given because of the prohibitive cost. The same is true of other services necessary to diagnose obscure or difficult ill

nesses. Complicated and expensive procedures are often necessary for even the most qualified physician before he can capable, reasonably, and certainly diagnose the trouble.

An unestimated number of people every day are forced to do with less effective remedies, whether by way of medicine, services, or diagnosis, for the simple reason that they cannot afford them. The effect of this situation on the health of the Nation is too obvious for extended comment. This bill seeks to meet this issue.

S. 1106 is definitely not designed to provide a complete Federal subsidy for free medicines and free services for all diseases. In this bill, I have attempted to be selective and to restrict it to those drugs and services which fall into the categories just described. The health problem in this country is far too vast and far too complicated to solve all at one time. You have to do it piecemeal. Last year I appeared before a subcommittee of this committee with reference to a bill providing certain medical services for school children. This year legislation of this type has already passed the Senate. That is one piece of the whole picture. The bill upon which I testify today is another piece-but a very important one.

Now to the bill_itself. Fundamentally, as stated in its title, the bill amends the Public Health Service Act so as to provide assistance to the States in furnishing certain medical aid to needy and other individuals.

(a) The sums to be made available under this bill are to be used for making payment to States which have submitted plans for furnishing medical aid. These State plans are to be submitted to and approved by the Surgeon General of the United States. This approach is similar to that used in other legislation on the general health question.

(b) The State plan for furnishing medical aid must meet certain standards:

(1) It must provide that the medical aid will be available to all political subdivisions of the State;

(2) It must provide for financial participation by the State;

(3) The State plan must also provide for the designation of the State health agency to administer the plan.

This provision together with several others, was inserted in the bill at the specific recommendation of the Surgeon General. When I first introduced this bill, the Surgeon General was kind enough to give it his very careful study. As a result of that study, he made many constructive and helpful criticisms which I will mention from time to time as I come to them here in the bill. I might also add that many changes in this bill were suggested by experienced private practitioners.

(4) The State plan must also provide that the State health agency will make the necessary reports from time to time to the Surgeon General and that the State health agency will comply with such provisions as the Surgeon General may prescribe regarding these reports;

(5) Lastly, the State plan must provide that the administration within the State will be on a merit basis subject to regulations promulgated by the Surgeon General must approve any State plan which fulfills these five conditions. He will not, however, approve any plan which imposes as a condition precedent to receiving aid under