of education. The justification for Federal action to correct the inequities rests in the final analysis on whether or not America needs and wants citizens equipped with the qualities I have just named. The contribution to an expanding economy is an important byproduct of good education, but the fundamental reason for democratizing educational opportunity lies in our belief that it is morally wrong and pragmatically indefensible to deny any person his birthright as an American citizen.

2. Child health and welfare

More than education is needed, however, if the millions of children in lowincome families are to grow up to be healthy, productive, well-adjusted adults and good citizens. The general health and social-security programs which are described elsewhere in this statement will be of major benefit to children directly, through improving the health and economic status of those on whom they depend, and through giving them a better environment. Special programs are necessary, however, in order to meet the problems of children. In recognition of this fact, under title V of the Social Security Act, Congress appropriates each year $11,000,000 to extend and improve maternal and child health services, $7,500,000 to extend and improve crippled children's services, and $3,500,000 for child-welfare services.

These grants have been of great value in establishing programs in areas lacking them and in strengthening programs in areas where they have been insufficiently financed. Such services are nowhere adequate, however, and additional Federal funds are necessary. For the promotion of good health, additional maternity clinics, child health and pediatric clinics and other facilities are essential. There is urgent need for expansion and improvement of health services and medical care for children of school age. Community resources for medical care of school children are insufficient to meet the requirements. To cite one example, in December 1948 the States advised the Children's Bureau of the Social Security Administration, Federal Security Agency, that more than 30,000 children were awaiting care under crippled children's programs because of lack of State and Federal funds. These children must not become the handicapped, dependent adults of tomorrow.

Extreme shortages exist in the supply of social workers who are able to deal helpfully with the problems of children in broken families, other disorganized homes, and institutions. Approximately four out of five counties in the United States do not have the full-time services of a child-welfare worker. No Federal funds are available for the care of children in foster-family homes, except for a few temporary projects.

Other community services essential for the best development of children and young people should be expanded, both in facilities and personnel. If children are to have creative and desirable outlets for their energy after school hours, enlarged and enriched programs of recreation and leisure-time activities under the leadership of qualified workers should be available. Employment counseling and placement services for youth should be multiplied and strengthened. At the same time, there should be a tightening up of Federal and State child-labor laws. Such legislation protects the children and also the adult earners whose standards would be threatened by a supply of cheap labor.

This brings me to a final remark on the subject of children and their needs. There is a great need, to which I hope Congress will give appropriate recognition, for basic research in child life. The White House Conference of 1950 will focus the Nation's attention on the problems of children and on the areas in which there should be more knowledge about children. Besides studying families as consuming and producing units in our economy, we should examine in detail the effects of our economy on the welfare of families and children. The outlines are clear of the major steps to be taken immediately but from a long range standpoint our educational, health, and welfare programs can grow in effectiveness only if there is much more research in all of these fields and in the basic problems of child development.

B. THOSE IN POOR HEALTH

1. Prevalence of illness in low-income families

Low family income in the majority of cases reflects low productivity and earning power of the family breadwinners. Such low productivity and earning power are often associated with frequent or prolonged illness and depleted energy which make it difficult, if not imposible, to get and hold a full-time job. At the same

time low income makes it difficult for a family to pay for a nutritious diet, decent housing, adequate medical care, and the other living conditions which are necessary for good health. The high incidence, frequency, and severity of illness and impairments among persons in low-income families in the United States lead to the inescapable conclusion that ill health is a major handicap to adequate earning power and that low-earning power is a handicap to health.

Surveys that have been conducted and analyzed over the past twenty-odd years substantiate the fact that low productivity and earning power are both the result and cause of illness. Furthermore, experience under the public-assistance programs of the Social Security Act indicates that illness of a family breadwinner is a major reason for requesting and receiving public aid. Low-income families have more frequent, longer, and more serious attacks of illness than do families in more comfortable circumstances.

A special analysis has been made of data by income status from the National Health Survey of 1935-36. The following results are based on information which pertains to urban families for the most part, although some rural residents were included. Both white and nonwhite were covered. In terms of today's prices the nonrelief families who then had an income of less than $1,000 may be regarded as roughly equivalent to those under $2,000 today. The frequency of illness disabling for a week or longer among these families was 21 percent higher than for the families with $5,000 or more per year. Among the relief families the rate was 59 percent higher. Although there have been general improvements in health during the past 15 years we may be sure that several million people in low-income families are unable to work for several days at least once during each year.

Equal in importance to the higher frequency of disability is the fact that disability lasts longer in low-income families. Other studies support the findings of the National Health Survey on this point. That survey showed that the number of days of disability in groups with family incomes over $1,000 was 7.3 per person while in nonrelief families under $1,000 it was 11.6. Among those on relief, the number of days of disability from all causes was about twice the figure for the higher income groups.

The same study shows the proportion of workers who were not employed and not seeking work because of some chronically disabling disease or impairment. The percentage of such chronically disabled persons among those on relief was 13 times the percentage among families with incomes of $5,000 and over; while among nonrelief families with incomes of less than $1,000 the percentage was six and one-half times the percentage for the $5,000-and-over group. Although the chronic diseases strike most heavily in the oldest age groups, 54 percent of all of the chronic cases occurred in the ages 25 to 54.

The Nation-wide pattern confirmed the results of earlier, intensive spot studies in Birmingham, Ala.; Pittsburgh, Pa.; Detroit, Mich.; and other localities and the information obtained by observation of several generations of families in Hagerstown, Md.

2. Where low-income families live

Low-income families tend to live in areas with poor environmental sanitation and housing conditions, factors that introduce additional health hazards. Control of the infectious diseases that are spread by insects, filth, contaminated water, and the like, is by no means Nation-wide. Some rural areas and city slums still serve as breeding and transmitting foci of many of the infectious diseases that are rare or almost unknown in wealthier parts of the United States that have adequately staffed, equipped, and financed local public-health services. Many of the diseases that take serious toll of health and working capacity are related to the population density, overcrowding, inadequate housing, and the low economic status that perpetuates these living conditions. As the Surgeon General has pointed out in a recent address before the National Association of Housing Officials, "The slums and blighted areas are not only the homes of the poor-they are the homes of preventable disease, preventable death, and untold human suffering."

The National Health Survey revealed that the percentage of persons disabled for a week or longer in a year was higher in households with more than 1% persons per room than in less crowded houses, and the congested households had relatively more persons with acute illness. Specific examples of the correlation are furnished by several studies of individual cities. In Cincinnati, Ohio, a study of cases of rheumatic fever admitted to hospitals in 1930-40 found definite relation between the incidence of the disease and very low rentals, overcrowd

ing, and proportion of Negroes in the census tract. Birmingham, Ala., found that the rate of communicable diseases per 1,000 population was 65 percent higher in the slum areas of the city than elsewhere.

There are also strong indications that health varies according to economic conditions as between cities as well as within cities. In a study of the 92 cities of 100,000 population or more in 1940 it was shown that low-income cities tended to have higher death rates. The results follow:

Illness or disablement of the applicant for public assistance or of some other person in the applicant's home is a major cause of the dependency which makes persons eligible for public assistance. For the 6-month period, January-June 1949, State reports indicate that about one-third of the assistance cases added to the rolls for old-age assistance, aid to dependent children, aid to the blind, and general assistance were accepted for public aid because of the recipient's loss of employment or decreased earnings resulting from illness or disablement. In the same period, illness or disablement of the applicant or a member of his household, occurring within 6 months of the date assistance was granted and causing loss of employment or decreased earnings, was the reason for adding nearly 70,000 cases of old-age assistance to the rolls in 42 States. These cases represented 31 cases per 1,000 on the old-age assistance rolls in these States. Of the half-million families on the aid-to-dependent-children rolls, 160,000 are dependent because of the incapacity of one or both parents. Rehabilitation, adequate medical care, or preventive measures to forestall illness or disability might have enabled many of these families to maintain their economic independence. When that independence is lost, the Nation's productive capacity is reduced and the costs of public assistance rise to progressively higher levels.

4. Significance of public-health programs

Few communities, States, or Nations could boast a healthy citizenry, high average life expectancy, and highly productive labor force if each individual family had to finance through its own efforts the facilities and services needed to assure a sanitary environment, safe water supply, and protection against communicable and insect-borne diseases. Instead of relying on individual effort and resources to provide these services, public funds have been used to spread the costs among taxpayers, so that rich and poor alike may have equal defense against certain health hazards that threaten all members of the community if any families remain unprotected. Although it is clear that the incidence of illness is more severe among low-income families, we all realize that disease germs know no class lines and that the most effective protection against disease is secured through the advancement of the health of all.

Some States and localities have established and maintained, with Federal aid. programs for maternal and child health, control of communicable diseases, industrial hygiene, and environmental sanitation that have paid enormous dividends in the reduction of mortality and prolongation of life expectancy. Other communities and other States have lagged behind in these health achievements. Because of these variations within and among States, health indexes of the United States as a whole are below the records set by some more homogeneous but less wealthy nations.

Communities and States have also undertaken to finance through public funds certain other health services which are too costly for the majority of individuals and families to bear but which are essential to the health and safety of all members of the community. These services are the long-term institutional care of persons suffering from tuberculosis and severe mental disorders. Public provision for the treatment and cure of venereal diseases is a similar measure to protect the health of the nonulation as a whole.

as

With the rapid extension of medical knowledge and techniques, health facilities such as hospitals and their out-patient departments have become institutions that are expensive to construct and maintain and hence have been concentrated in the wealthier communities. These institutions serve not only facilities to provide medical care for the residents of a single community and its environs but also as training centers for nurses. interns, doctors seeking intensive instruction in some special branch of medicine, and many other members of the health professions, who, after their training, in many instances settle and work in other communities. Through the Hill-Burton Act, the Federal Security Agency distributes grants to States for the construction of hospitals and related facilities in areas that need them most, thereby helping to raise the health resources throughout the Nation to the standards established as necessary for adequate medical care.

Now that impressive victories have been won in the war against typhoid fever, malaria, and the communicable diseases of childhood, public attention has centered on the chronic diseases that, as more and more people reach maturity and middle and old age, constitute the major threats to health, productivity, and life itself. Recognizing the importance of these diseases to the national economy, the Congress has given the Public Health Service, Federal Security Agency, funds to conduct and support research in cancer, heart diseases, mental hygiene, and dental health. Federal funds are also made available for Federal and State programs for training personnel, case-finding, demonstrations, and control measures in the diseases which now rank high as causes of disability and death. Through grants to States administered by the Children's Bureau and the Public Health Service, Federal Security Agency, the Federal Government is thus stimulating greater and more uniform State and community efforts to reduce health hazards and to improve the physical and mental health of the American people.

As has been previously noted, the States vary greatly in their fiscal capacity to support needed public services. The variation is also extreme within States. In Pennsylvania, for example, a 1948 study indicated that the average spendable income per person per year in the richest county was over four times that in the two poorest counties, while in Alabama the ratio was 5 to 1. The lowincome areas tend to have the most serious health burdens and at the same time that is where the shortages are most acute of facilities, of personnel, and of services.

The existing public-health grants are allocated as between States on a basis which gives partial weight to varying fiscal capacity. I believe that in future programs the variable matching principle should be strengthened and extended ind that it should be supplemented by requirements which would result in greater equalization of federally aided public-health services within States. Administration would, of course, remain in State and local hands.

The administration's recommendations for a major expansion of publichealth services, therefore, are designed to stimulate the building up of adequate, standard public-health services in every community as rapidly as possible. Both private medical care and public-health services are severely handicapped by shortages of doctors, nurses, and other key personnel-and again the shortages in rural and other low-income areas are especially acute. The administration's recommendations for aid to medical education, therefore, are supplemented by provisions for encouraging the location of adequate personnel in such areas. Per capita grants to training institutions would also help to overcome the disadvantages of schools located in low-income regions.

A considerable part of the success in controlling and nearly eradicating infectious diseases and preventing their drain on the productive capacity of the Nation can be ascribed to the knowledge gained of the environmental and family factors which caused their spread. To gain similar control over chronic diseases, laboratory and clinical investigations must be supplemented by further studies of the relation of these diseases to living conditions, occupations, health habits, and hereditary or other familial factors. The Agency endorses current recommendations for intensive and extensive study of the factors which cause illness. There should be an expansion of the work of research centers which would concentrate on family health problems in various parts of the country. Periodic health inventories paralleling the National Health Survey of 1935-33, or based on smaller samples of the population, are also needed to provide current information on the health status of the Nation.

5. Significance of health insurance

The foregoing proposals should go far to equalize the ability of States and localities to deal with the common hazards to health and to create the conditions and the facilities which encourage good health and good medical practice.

They leave untouched, however, the economic problem facing every family in paying for its medical-care costs. Most illness in this country is paid for as it occurs, by the individual or family affected. This is a satisfactory arrangement for the very few persons whose means are sufficient to meet the most expensive illness. It is not satisfactory, however, for the great majority of persons, who are reluctant to seek medical advice if heavy costs may be involved, and often delay obtaining medical attention when it can be most effective, and for whom serious illness generally means a severe strain on family finances, if not exhaustion of savings and heavy debts. Except in the very lowest income groups, which are relieved of this burden to some extent by free or part-pay medical care, the effort to pay for necessary medical care out of their own pockets places a significantly heavier burden on the low-income families than on the middle- or high-income groups. This situation has been revealed repeatedly in family expenditure studies in every part of the country.

The fact that the problem is especially acute for low-income families has led some people to propose that governmental action in the field of medical-care costs be confined to such families, who would be identified by a means test. I do not believe that this is a solution, first because it is undesirable to subject people to a means test when they can pay for medical care on an insurance basis, secondly, because the eligibility test will be extremely difficult to administer in view of the large variations throughout the country in the definition of need; and thirdly and primarily, because medical-care costs are a problem for the population as a whole rather than for low-income families only.

Medical-care costs represent a risk to income in the same way that disability does or the death of the family earner. As with these risks, the individual incidence cannot be predicted in advance, but the incidence in the population as a whole can. That is to say, no individual knows when he will fall ill and how severe and how costly his illness will be. On the other hand, we do know approximately how many people will fall ill during the course of a year, how much medical care they will receive, and how much it will cost. These two characteristics of illness and its costs-the impossibility of predicting its individual incidence and the availability of information on its total incidence-make it an appropriate problem for solution through social insurance.

Voluntary insurance plans-the Blue Cross, Blue Shield, etc.-it is true, have been useful in enabling many people to purchase medical care on a planned prepaid basis. They have been useful in demonstrating the feasibility of the insurance approach to medical-care costs. They have developed a body of experience in the administration of such plans. They have accustomed millions of Americans to the idea of meeting medical-care costs not on an emergency basis but through periodic budgeting. They have acquainted large numbers of persons with the value of having access to medical service as needed, without the barrier interposed by cost.

Such plans cannot, however, meet the full needs of the country. They cover fewer than half the population, reaching least effectively those who need it most. They have done little to raise the medical purchasing power of people in lowincome areas, where medical facilities and personnel are sparsest. To persons who have enrolled, most of the plans offer at best only a partial protection against medical-care costs, confined in most cases to a maximum number of days of hospital care and to surgical and obstetrical treatment for hospitalized cases. The lack of voluntary plans which offer truly comprehensive protection is indeed striking. A national health-insurance plan, financed by contributions by employers and employees and decentralized in administration, would bring comprehensive medical care within the reach of virtually all workers and their dependents, encourage increases in medical personnel and facilities and their availability in areas now inadequately served, and provide continuity of protection to persons moving from job to job or from one area to another. Through appropriate arrangements with social-insurance and public-assistance agencies, these same services could be extended to the millions of persons outside the labor market and dependent upon these programs for income. Health insurance would thus ease the burden of medical costs and at the same time assure adequate medical care for low-income