such as attainment of the 65th birthday, to trigger the provision of treatment, readjustment aid, or Government intervention or assistance.

In this connection for example, innovations in medical care, which are being applied more and more extensively in current programs and existing institutions, encompass advances in the field of prevention and the avoidance of the need for curative care which would otherwise be necessary. These reduce the hospitalization time and disablement confinement required. Increasing attention is also being given to means of reducing or avoiding the isolation of individuals in specialized wards or institutions and moving them back into the community as rapidly as they can be prepared and the essential conditions can be arranged. This envisages the use of intermediate institutions which are or can be allied with hospitals but which provide only convalescent and recovery facilities.

PURCHASING POWER PROTECTION

In view of the past record of declines in the purchasing power of the dollar for essential goods and services set forth in Chapter II and the prospect of a continuance or recurrence of the inflationary economic causative conditions, offsetting action of as automatic a nature as can be achieved might well be planned to protect the intent of payments to aging veterans.

The uncertainty of the exact rate and timing of the various developments leading to such inflation precludes precise advanceplanned adjustments. As has been indicated in Chapter V in connection with veterans' compensation and pensions, providing for such payment rates in terms of constant dollars, to which the actual current dollar payments can be adjusted periodically as required, affords one reasonable approach to the protection of the objective of such payments.

As applied to advance budget estimates, such as for physical plant maintenance or expansion, the same method would give a sound base for revised subsequent supplementary appropriation or allocation of funds in the light of the changed costs owing to monetary developments beyond the planning and budget-makers' control.

THE COST OF MEDICAL CARE

Advances in the quality of medical care and in health standards and facilities, to which the Veterans Administration has made noteworthy contributions,* have brought increased numbers into the aging group and maintained them in better health. The generally increased demand for more of these improved health services, including those of physicians, hospitalization, geriatric

*See "VA Prospectus, Research in Aging" Veterans Administration, 1959, and "Survey of Medical Research in the Veterans Administration," National Research Council, Washington, June 1960.

domiciliation, nursing care, medicines, and medical supplies, have led to a greater rise in the cost of medical care than in the average of all cost of living items.

The result of these advances and their cost, particularly in the field of geriatrics, has been to raise the expense proportion of the medical care item in the budgetary requirement of the aging veteran. Some of the economic support problems that have appeared with this development are currently under consideration by the Congress and the Executive Branch of the Federal Government. More precise determination of their special significance to the increasing number of aging veterans, apart from the inflation aspect previously indicated, will require further study.

INCENTIVES TO SELF-SUPPORT

Looking to the future it would appear that as the various programs under way and being actively considered to have the Government assume responsibility for the economic maintenance of a basic living standard by the aging population, including veterans, are adopted or modified to this end, the incentive to self or family support might be diminished.

Consideration is being given to some aspects of this outlook at present. For example, the possibilities of providing incentives to aging individuals including veterans, and their employers, to delay their retirement beyond the age 65 are under study. One inducement that has been suggested is decreasing such taxes as Social Security on both employer and employee who continues working after reaching the age 65 and adding increases to the benefits subsequently paid. This would be done in recognition of the savings involved if payments are reduced or not made from the fund while the aging are still employed and receiving adequate income from this and such other sources as they may have. Proposed legislation dealing with this type of incentive was introduced in the 86th Congress. Advocates are urging a start of some sort although it is recognized that up to the present only preliminary exploration has been made of the possibilities and effects on the sources of the financing, particularly of private industry and individual retirement financing programs, as well as upon the recipients.

The above example of a move in this direction depends for success on major developments in the expansion of suitable employment and income producing opportunities.

Clearly the implications of all programs of economic assistance to the aging population, which will be increasingly composed of male veterans and women dependents, on their incentives, capacities and opportunities for self and family support merit increasing attention in the foreseeable future.

Mr. DORN. Any further witnesses, Counsel?

COUNSEL. No, sir.

Mr. DORN. Do you have any other witnesses?

COUNSEL. No, sir. The representative of the American Legion is the last witness.

Mr. CORCORAN. Mr. Chairman, before we close I would just like to say again we appreciate very much the subcommittee's consideration in accommodating itself to our meeting in Indianapolis.

Mr. DORN. We appreciate the fine work all of you are doing and this is a very excellent presentation here today.

Just one moment. Mr. Hagan, we are about to adjourn. Do you have any questions on the American Legion concerning any of the legislation of the subcommittee?

Mr. HAGAN. Not at this time. I was at a delegation and could not be present.

Mr. DORN. We will record that you are present.

Mr. HAGAN. I am sorry, sir, I didn't hear the report personally. I shall certainly read the statement.

Mr. CORCORAN. If you have any questions, Mr. Hagan, we would be glad to answer them at a later date.

Mr. HAGAN. I will get in touch with you.

Mr. DORN. If there is no objection, I would like to insert in the record at this point an article published by Industrial Medicine and Surgery entitled "United Kingdom: Determination, Evaluation, and Rating of Disabilities." We appreciate the courtesy of the author of this article, Dr. C. G. Magee of the British Ministry of Pensions and National Insurance, and of the publishers of Industrial Medicine and Surgery in permitting the reproduction of this article in these hearings.

(The article is as follows:)

[From Industrial Medicine and Surgery, February 1961]

UNITED KINGDOM-DETERMINATION, EVALUATION, AND RATING OF DISABILITIES (C. G. Magee, C.B.E., F.R.C.P., Ministry of Pensions and National Insurance, London, England)

The comprehensive title to this paper invites no limitation of prospect and is interpreted literally as inclusive of all forms of disablement arising spontaneously as in sickness and aging, arising from the violence of industrial accident or war, or from the noxious attributes of industry. On this conception it is clear that the horizon is not bounded solely by scalpels, splints, braces, and plaster of paris and, indeed, it has been my experience in practice that in fact the medical manifestations of illness, physical or mental, provide by far the greatest load of disablement. Yet for this occasion the restrictions of time enforce a narrower view, and I shall deal in this paper only with disablement which results from the hazards of war or civil occupation.

Further to consider the title I would say that

To determine is to establish that disablement in fact exists and that it it in causal relationship to occupation or war service;

To evaluate is to take cognizance of the total effect of disablement, not only on the physical and mental processes of the individual but also on his way of life, his work, home, family, the increased burden on his wife, the education of his children-the hidden costs of dissablement;

To assess is to express in terms of universal understanding and acceptance the extent of the handicap resulting from injury or disease. This assessment is estimated by reference to the physical and mental capacity for the exercise of the necessary functions of a normally occupied life which would be accepted in a healthy person of the same age and sex. The assessment is expressed as

a percentage which represents the extent by which the disablement has reduced that capacity and is a matter for decision by doctors.

HISTORY OF DEVELOPMENT

The world has never known freedom from illness and injury and even at the time of the Exodus in the ancient laws and ordinances of Moses we read: "And if men strive together and one strike another with a stone or with his fist and he die not but keepeth his bed, if he rise again and walk abroad upon his staff then he that smote him be quit; only he shall pay for the loss of his time and shall cause him to be thorough.y healed." In England, as in other countries, the function of healing from the earliest times was inseparable from religious practice and superstitious rites. It was not until the early Middle Ages that the foundation of hospitals engaged the attention of kings, bishops, merchants, and municipalities. The ravages of disease, plagues, and wars left a considerable residue of maimed and poor and destitute and a gradual development of interest in these as a social problem led eventually, in England, to the intervention of the state and the passage of public health acts which placed statutory duties on the local authorities and townships, from which eventually developed the health service as we know it in England today, and which, if to be given a specific date for its modern structure, could reasonably be said to have begun with the Health Insurance Act in 1911.

Alongside these developments in the general health and welfare service of the country there gradually evolved and developed two other services. The first of these provided for compensation for workmen injured while at work: a landmark here was the passage in 1897 of the Workmen's Compensation Act. The second was concerned with compensation for war wounds and disablement and had been developing gradually over a hundred years until receiving the special impulse excited by the phenomenal mutilation of the 1914-18 war. The imperative need then for an organization to provide treatment and compensation for the wounded led to the establishment in the United Kingdom of the Ministry of Pensions, which has occupied a special place in the minds of those concerned with disablement and rehabilitation from that day onward. The common purpose of these three schemes, viz, the care of the sick and injured, became more obvious with the passage of time, and when the new national insurance acts were introduced in 1946, the sickness and injury benefit schemes were dealt with as one responsibility of the state. By 1953, war pensions and industrial injury benefits were seen to serve another common purpose and were similarly placed under one minister.

It will be seen then that the benefits provided for the disabled in the United Kingdom flow in three broad streams:

A. From the national insurance fund, to which everyone between 16 and 60 contributes by the purchase of stamps (with certain minor exceptions), to those insured persons medically certified as incapable of work because of bodily or mental sickness.

B. From the industrial injuries fund, to which all persons engaged in insurable employment and the employees-contribute, to the injured in industry, either by accident or by industrial disease.

C. From money voted by Parliament and noncontributory to all ex-servicemen and women whose disablement is due to or aggravated by war service.

As already indicated, in this paper I shall deal only with the two last-named groups.

FRAMEWORK OF THE INSURANCE SCHEME

The scheme having been agreed in the British Parliament as likely to meet the needs of a population seeking this kind of insurance cover, there could be no point in being niggardly or obstructive in administration. The people destined to benefit are often ill, harassed or impecunious. Immediate settlement of their claims means relief from their anxieties and will tend to shorten their illness. It is therefore essential that even a large and impressive government department must go out into the highways and byways. Decentralization is the keynote, and in the United Kingdom we have over 900 local offices engaged in the determination of claims and the disbursement of compensation. The recipients are beneficiaries by right, and the Ministry's staff must act as their friend and ally in insuring that they reap the full benefits to which they are entitled. Behind this simple design is an elaborate organization of great complexity, financial, legal, medical, welfare, under the control of a Minister responsible to Parliament and employing over 30,000 staff.

It is noteworthy that, among the many advantages enjoyed under the British scheme, men working abroad for a British employer in the following countries are covered:

Belgium, Denmark, Finland, France, Irish Republic, Israel, Italy, Jersey, Luxembourg, Malta, Northern Ireland, Norway, Sweden, Switzerland, the Isle of Man, the Netherlands, and Yugoslavia.

THE SCHEME IN OPERATION

Although the arrangements for the determination and evaluation of disablement, whether arising in war or industry, follow broadly a common path, there are certain variations in detail which are imposed by the different circumstances in which the disabled person finds himself. In the case of the soldier, he is usually still in the army, paid and catered for, and the march of events need not be hastened. In the case of the breadwinner injured at work, faced not only with incapacity but also with the cessation of his wages, urgent action is necessary. The arrangements for this situation are by now well tried, and it has been found that a lay official, the insurance officer, is well able to deal expeditiously with the claims to industrial injury benefit. The procedure is as follows: The injured man reports his accident to his employer and consults his doctor or the hospital surgeon, who gives him a medical certificate of unfitness for work. This certificate is sent to the insurance officer who, on confirmation from the employer that the accident did arise out of and in the course of insurable employment, can award compensation to the injured person. Long experience of a multitude of cases allows the insurance officer to reach a conclusion on the interpretation of the medical aspects in most cases, but if he is in doubt there is at hand a Ministry medical officer to advise him.

The first compensation paid to the injured civilian is called injury benefit and as this payment is a fixed weekly amount for a period not exceeding 26 weeks, neither evaluation nor rating considerations apply at this stage. The need now is for the determination of the status of the injury as an industrial injury, i.e., one arising from an accident or a prescribed disease (a disease recognized as a special risk of a particular occupation) while the injured person is doing what he is employed to do in the course of insurable employment, and all employment in the United Kingdom under a contract of service is insurable under the Industrial Injuries Act. (There are approximately 22 million people in the United Kingdom insured against industrial injury.)

The second phase of compensation is known as disablement benefit and may be claimed if, as a result of an industrial accident (or disease), a person suffers a loss of faculty which persists beyond the initial period of injury benefit. Disablement benefit may take the form either of a pension or, for less serious disablement, a gratuity or lump sum. At this stage both evaluation and rating become important considerations. The time for assessment of the residual disablement has arrived and the rating is undertaken after examination by a medical board.

MEDICAL BOARDING ACTION

The medical boards play a vital part in the system of adjudication and assessment of disablement, and the same boards examine both claimants to war pension and claimants to industrial injury benefits. As a rule they consist of two doctors, one of whom acts as chairman, appointed by the Minister and recruited from the local general practitioners in the vicinity of the hundred or so medical boarding centers in the United Kingdom. Similar arrangements are in operation overseas. The main questions they decide are the relevance of the disablement to the accident or industrial disease, whether the claimant suffers any disability apart from that claimed and, finally, the assessment of the degree of disablement and the duration for which the incapacity is likely to persist.

What is the basis of assessment in the United Kingdom? For all injuries, whether war or industrial, and for all the diseases prescribed as connected with industry, the criterion is the same. It is a comparison of the disabled person with a normal healthy individual of the same age and sex. No regard is had for occupation, for earnings, or for individual factors-the violinist losing his forefinger is no more favorably treated than a laborer with the same disablement. But while the whole system of assessment is based upon the principle of comparison with the normal healthy person, provision does exist for augmenting the pension awarded by certain supplementary allowances, e.g., a constant attendance