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(6) Proposal for the inclusion of corrective therapy in this bill. The present wording of the bill includes the terms “physical, occupational, and speech therapy.” It is proposed that the term "corrective therapy” be included to insure authorization of their services by the physician under the specific terms of the bill.

(7) Correspondence and contacts.-Senator Yarborough, through correspondence with Mr. Ball, Commissioner of Social Security, has aided our association in presenting our views as to the wording of this bill. These communications can be summarized as follows:

(a) It is the contention of the Association for Physical and Mental Rehabilitation that the present wording of this bill excludes corrective therapy, since it mentions only physical therapy, occupational therapy, and speech therapy, and omits corrective therapy.

(6) In reply, Commissioner Ball stated that the words “physical and occupational therapy" are generic terms and, as such, include corrective therapy.

(c) Commenting on this assertion, the Association for Physical and Mental Rehabilitation called attention to the fact that the terms "occupational therapy" and “physical therapy” are job description titles and as such denote the specific professions of physical and occupational therapy, that a person in a hospital situation or in the community when hearing the term “physical therapy,” for example, would not think of corrective therapy or of a corrective therapist.

(8) Summary.-In a broad sense, we feel that this legislation poses a problem challenging our democratic beliefs and principles. The problem can be illustrated by the small business attempting to find an opportunity for development of its distinctive service. The need at this time is to mention not only the older established therapies but to include and utilize these new forces and elements that are attempting to find their rightful place in the professional world. The Association for Physical and Mental Rehabilitation requires assistance in promoting opportunities to meet the growing national need, as well as to be able to compete with the larger organizations which in various ways are able to restrict the growth and development of the small organization. It is extremely vital to our existence that we receive recognition in the statutes of State and Federal legislation. Commissioner Ball contends that we are already included in the bill since the definition for physical therapy found in medical dictionaries indicates that it is an inclusive term which encompasses corrective therapy. Therefore, there is no valid reason to refuse to mention corrective therapy by name in the bill, S. 880. Respectfully submitted.

JULIAN VOGEL, President, Association of Physical and Mental Rehabilitation.

ATLANTA, GA., January 22, 1964. LEO H. IRWIN, Chief Counsel, Committee on Ways and Means, House Office Building, Washington, D.O.:

Re H.R. 3920 the International Chiropractors Association realizes that this proposed legislation does not propose to pay for professional services of doctors of chiropractic or medicine. The heading "free choice by patient" is a misleading one because it relates only to institutional services which are directly under the control of the medical profession. The International Chiropractors Association requests an amendment to section 1702 which would give the beneficiary of this health service care legislation the free choice of any duly licensed practitioner.

“Sec. 1702. An individual entitled to have payment under this title or any other title of the Social Security Act for health services furnished him may obtain such services from a provider of health services duly licensed to render the same by the State in which the service is performed and who is willing to accept compensation for such services at the rate which is in effect for providers of similar services."

Dr. GRADY V. LAKE, Chairman, Legislative Committee, International Chiropractors Association.


Washington, D.C., December 19, 1963. Hon. WILBUR D. MILLS, Chairman, House Ways and Means Committee, House Office Building, Washington, D.C.

DEAR MR. CHAIRMAN : The purpose of this letter is to present the views of the Phamaceutical Manufacturers Association with respect to H.R. 3920, 88th Congress, a bill now under consideration by the House Ways and Means Committee. As the national representative of the major drug firms in the United States which produce over 95 percent of the total output of prescription drugs, our association is vitally interested in this bill.

The pharmaceutical industry is aware of, and concerned about, the health needs of the aged as well as other segments of the public. It is our belief, however, that for the most part the medical requirements of the aged are being, or can be, met through personal and private efforts and existing governmental programs.

The position of the Pharmaceutical Manufacturers Association concerning this bill stems from a serious concern with respect to the certain basic inadequacies of the proposal as well as the belief that, if adopted, the measure will result in poorer health care for old and young alike. The remainder of this letter outlines in more detail the bases for our position. Provisions concerning drugs

Certain provisions of H.R. 3920 specifically concern the pharmaceutical industry. Reimbursement would be made for eligible drugs on a “reasonable cost" basis. Those eligible would be those drugs and biologicals (1) which are furnished to patients for their use while in-patients in hospitals and skilled nursing homes, and (2) which are listed in the U.S. Pharmacopoeia, National Formulary, or New and Non-Official Drugs. The relevant provision, section 1709(b), states “the amount paid to any provider of services with respect to services for which payment may be made under this title shall be the reasonable cost of such seryices, as determined in accordance with regulations establishing the method or methods to be used in determining such costs * * *."

It is our feeling that the Department of Health, Education, and Welfare could, under the "reasonable cost” reimbursement standard, set unreasonable limits on the amount of payment allowable for specific drugs thus limiting use to low cost and possible inferior products. Such a result would, of course, discourage rather than encourage the provision of the high-quality medical care and would discriminate against manufacturers whose products reflect higher manufacturing standards and important research.

The provisions restricting reimbursable drugs to those listed in the U.S. Pharmacopoeia, National Formulary or New and Non-Official Drugs, are also objectionable. Many useful drugs are not included in such compendia either because they are (1) new drugs which are not yet widely used, (2) older drugs which are no longer widely used, or (3) mixtures not listed in such compendia. Inasmuch as suppliers of medical services would not be reimbursed for such useful drugs, the bill would, with respect to the choice of drugs for eligible recipients, effect an economic restriction of the physicians' free choice in prescribing drugs, which restriction would, of course, adversely affect the manufacturers and distributors of those drugs and biologicals not listed in the above compendia.

Since the bill draws an arbitrary line in financing some, but not all, useful drugs it, in effect, restricts the physicians choice in prescribing the most suitable drugs. Such a restriction is inconsistent with the bill's disclaimer of interfering with the practice of medicine. Clearly the physician is the person best qualified to judge his own patient's drug needs.

In addition to the objections above stated which specifically concern this industry, there are also many general objections to this bill which are the concern of all citizens. Some of these are broadly stated as follows: Freedom of choice

The right to choose a physician, hospital, or nursing home without interference would be denied the aged by the bill in relation to their demands for medical care. If they are to receive governmental help, under the bill, they would be compelled to take the same uniform package of benefits irrespective of their individual needs and wishes.

Medical care invloves an intensely personal relationship between the physician and his patient. It involves the care and treatment of the personal ills of an individual by a physician, bringing his own highly skilled services to bear. It may also involve the utilization of facilities and many other important services of other members of the health team. Medical care, as a consequence, deteriorates with compulsion or with regimentation.

Up to the present, social security benefits have only been provided through cash payments. In this form, the recipient may spend the money for whatever purpose he desires, whether it be for food, clothing, medical care or anything else. But under H.R. 3920, the Federal Government would provide services and decide how and under what conditions medical benefits would be received. Hence, the individual's right to spend a part of his benefit, for example, to buy a health insurance policy which he might feel was suited to his own individual needs would be denied him. Once the Federal Government's authority is established to prescribe a specific use to which part of the social security benefit must be put, there is no reason why additional legislation could not dictate other uses until the entire benefit was earmarked, committed and, in effect, placed beyond the control of the recipient.

Medically, this bill would relegate our aged population to the role of secondclass citizens. They would not have an unconditioned right to choose freely the source of their medical care. Instead, they could go only to those institutions contracting with the Secretary of Health, Education, and Welfare, which have agreed to meet all of the conditions of participation imposed by the Secretary. A further limitation would exist if the physician of choice did not hold staff privileges in such institutions. Deterioration of quality

Through the imposition of administrative controls, inherent in the operation of a Government medical program of the magnitude suggested, individual initiative for excellence in health matters would be weakened and ultimately lost. Meeting minimum Federal standards would become the objective, not service to the individual.

The proposal would place in jeopardy our medical care system, the superiority of which is universally recognized today. America's foremost position in medicine is convincingly shown by the fact that physicians from every corner of the earth want to enter this country to be trained. If one seeks evidence of the kind of deterioration in the quality of medical care which would inevitably result, he need only look to the very foreign health systems which this bill would so largely imitate. Competition with private enterprise

Intentionally or otherwise, the bill would place the Federal Government in direct competition with private enterprise. It would not only weaken the incentives for the continued growth and expansion of voluntary health insurance, but at least for the aged, would undoubtedly bring it to an end. This legislation could have a direct and adverse effect on each and every American seeking to protect himself and his family against the costs of medical care through the purchase of a health insurance program of his own choice.

It is our understanding that currently over 50 percent of those persons over 65 have some form of health insurance and that 90 percent of the aged, desiring coverage, will have it by 1970. In the meantime, those in need will continue to receive their care through programs provided by the Kerr-Mills Act, the Veterans' Administration, old-age assistance legislation, county welfare, and other public and private efforts.

It is also estimated that by 1970 there will be 20 million people over 65. Of these, 90 percent will be covered by social security. By that time only 11 percent of the population over 65 will be receiving old-age assistance, down from 22 percent in 1950, and 15 percent in 1959. As the percentage of needy aged declines, advocacy of the social security approach is made all the more illogical. Elimination of local responsibility and inevitability of a total national compul

sory health system This Nation has traditionally considered the provision of health care as a personal or family responsibility. When the individual or the family has not been able to provide this care, the local community, then the county, then the State, and finally the Federal Government, has been looked to for aid. This legislation moves to the last step without any showing that the aged in need of care are not eligible for or receiving it at the family, local, or other non-Federal level.

Once enacted, this bill would create a condition which would be, for all practical purposes, irreversible. Moreover, in light of past experience under social security, in relation to eligibility for retirement or disability benefits, the process has been to continually liberalize the eligibility criteria and to lower the age limit. This bill has pressures built into it which would lead to the same result. And inevitably, through piecemeal extension, it would eventually become a total Federal compulsory health program for the entire population. Advantages of Kerr-Mills approach

Two years ago, the Congress wisely passed the Kerr-Mills medical aid for the aged law which enables individual States to guarantee to every aged American in need the health care he requires. The benefits of the Kerr-Mills Act are not limited as to type or extent of care, but are based on need and local determination. Under it, payment can't be made for the care of people who are financially able to pay their own bills. In comparison, H.R. 3920 would provide limited benefits for limited periods of time for many people well able to pay their own way.

Other important advantages of the Kerr-Mills law: It is voluntary, not compulsory; it encourages, not supplants, individual voluntary health insurance; it reserves to the States the right to set up their own programs, assuming that each knows the particular problems of its citizens better than does the Federal Government; it is a program for the indigent, not for everyone over age 65, and it does not endanger the quality of medical care as would the social security approach.

In the relatively short period during which the Kerr-Mills law has been in effect, its progress has been good. As of this date, under Kerr-Mills, 29 States and 4 territories—i.e., Guam, Puerto Rico, Virgin Islands, and District of Columbia, have their programs in operation. Another six States will start their programs on or before July 1964. And, of course, all 50 States, plus the 4 men. tioned territories, have operating OAA programs. Prior to Kerr-Mills, many of these States did not have such programs. Others, as a consequence of it, have been able to make substantial improvements. In light of this encouraging prog. ress, it would seem only logical to permit the Kerr-Mills law sufficient time to fully demonstrate what it can do. Costs

Cost estimates of this and other similar proposals have differed widely. From such differences have risen serious misgivings that the proposed scope of benefits could be financed without increasing the social security base, the indicated social security tax rate, or both. In fact, during the current hearings, proponents of the bill have suggested that an increase in the base to $5,000 may be necessary. A predominant view has emerged that the proposed tax rate increase might have to be doubled.

All of this uncertainty as to costs is further convincing reason for not embarking on this program. The costs of operating existing Government programs already impose a significantly heavy burden on the American taxpayer. With international conditions as fraught with danger as they are and with our space age commitments ever growing, the American public should not be asked to shoulder the unpredictable and uncertain costs inherent in this proposal. Conclusion

For the foregoing reasons, the Pharmaceutical Manufacturers Association is opposed to the enactment of H.R. 3920, 88th Congress. It is requested that this letter be included in the record of the current hearings of the House Ways and Means Committee on this bill. Sincerely yours,

AUSTIN SMITH, M.D., President.



Washington, D.O., July 23, 1963. Hon. WILBUR D. MILLS, Chairman, Ways and Means Committee, Washington, D.C.

DEAR CHAIRMAN MILLS: I have today received a resolution from the North Dakota Pharmaceutical Association, in Bismarck, N. Dak., in opposition to H.R. 3920, the Hospital Insurance Act of 1963.

Mr. Al Doerr, secretary of this Pharmaceutical Association would like to have this resolution brought to the attention of the members of the Ways and Means Committee. I am enclosing a Thermo Fax copy with the request that their views be printed in the committee hearing report, if it is at all possible to do so. With kindest regards, I am, Very sincerely,

Don L. SHORT, Member of Congress.


Whereas the North Dakota Pharmaceutical Association bas, in the past, gone on record opposing medical care for the aged through the social security system; and

Whereas there has been introduced in the U.S. Congress H.R. 3920 and S. 880, which are similar to the King-Anderson bill, which was defeated last year; and

Whereas pharmacists have historically opposed compulsory programs; and

Whereas the fedicare program would not apply to those people not covered by social security; and

Whereas the Kerr-Mills program gives aid to all people in need and guarantees good medical care to all people over 65 years of age, and is a voluntary program: Therefore be it

Resolved, That the North Dakota Pharmaceutical Association reaffirm its stand opposing passage of H.R. 3920 and S. 880; be it further

Resolved, That copies of this resolution be sent to the North Dakota congressional delegation and to Chairman Mills of the House Ways and Means Committee.


(By Haden E. McKay, M.D., and James H. Sammons, M.D.) The Kerr-Mills Act in Texas, making use of the principle of voluntary health insurance, is providing medical benefits to more than 227,000 needy aged persons. These persons are receiving medical and hospital care with dignity; like thousands of other who have purchased Blue Cross insurance, they simply show their Blue Cross insurance cards when they enter the hospital. The mechanics of the principle of voluntary health insurance as provided under the Kerr-Mills Act enables these aged persons to enter and leave Texas hospitals in a dignified manner.

Texas physicians in Texas hospitals have cooperated in the administration of the Kerr-Mills program.

In Texas, too, Blue Cross-Blue Shield and commercial companies are offering basic and major medical policies; the Texas 65 plan and the Senior Texan Service plan are examples. More than 70 percent of the aged persons are covered by health insurance in Texas.

Since the Texas Legislature in 1961 voted to implement the first portion of the Kerr-Mills 1960 Act, and the Texas Department of Public Welfare was designated to carry out the program, 18 months of very satisfactory operation have been experienced. The aged have received the program extremely well as have their families, physicians, hospitals, and State officials. Blue Cross reports it has paid more than 80 percent of the total hospital bill for more than 83,000 hospital admissions during the past year. We sincerely believe that the remaining 20 percent of hospital charges have not resulted in hardship for the patient or the patient's family. Frequently, recipients have health insurance policies of their own to supplement the Blue Cross policy.

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