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I commend the chairman and the committee for their patience, their fairness and determination to hear and probe every aspect of this subject. I trust it will result in the approval of a broad, equitable program. The entire Nation will owe the committee its thanks if such is the result.

Senator LONG. The committee will stand in recess until 2:30.

Mrs. GOTTLIEB. Thank you very much and I will look forward, and I want that bill passed. Please vote for it.

Senator LONG. Dr. Caldwell B. Esselstyn will be the first witness at 2:30.

(Whereupon, at 12:25 p.m., the committee recessed, to reconvene at 2:30 p.m., the same day.)

AFTERNOON SESSION

Senator BENNETT (presiding). The committee will come to order. We will continue with the testimony of Dr. Esselstyn.

STATEMENT OF DR. CALDWELL B. ESSELSTYN, CHAIRMAN, PHYSICIANS COMMITTEE FOR HEALTH CARE FOR THE AGED THROUGH SOCIAL SECURITY

Dr. ESSELSTYN. For brevity, it might be well if we could put this statement in the record.

Senator BENNETT. Yes; and if you and I could have a conversation, if you could summarize it, that would be well. You may put your entire statement in the record.

Dr. ESSELSTYN. My name is Caldwell Blakeman Esselstyn, and I am a practicing surgeon in a rural part of the country.

The purpose of this statement is, in general, to talk about principle, and not to talk about a lot of detail.

The committee that I represent, which is the Committee for Financing Care of the Aged through Social Security, is very deeply indebted for this opportunity to present this statement before the Senate Finance Committee.

We are a committee of 35 physicians who represent different specialties and who come from different parts of the country. We represent both political parties, and we do feel that the most practical method of financing care of the aged is through a payroll tax, and we also feel this is a moral issue rather than a political issue.

In addition to our committee, it might be said that there are many doctors throughout the country who are in favor of this mechanism. Among are some 1,000 who have been in touch with us, the entire membership of a separate but fairly large membership of the Physician's Forum.

I think it is interesting to note that in the poll taken at random by the magazine known as Modern Medicine, some 10 percent of the sample that was taken of the physicians in the country, were in favor of financing the care of the aged through social security.

We have been working here for the last 7 years since the establishment of the Forand bill, and during this time there are several things that have happened that I am sure you are aware of.

The over-65 population is certainly growing out of proportion to the rest of the segments; and the proportion of people over 65, who are over

75, it is also increasing, and this is the segment which, obviously, has the greatest need and also has the lowest percentage of coverage of insurance.

We also know that the people over 65 have less insurance than the other segments of society, and that the insurance that they do have covers less of the total bill.

In spite of that, during this time, the Consumer Price Index has gone up to 123 if we use from 1947 to 1959 as 100 percent, and I think one of the most striking figures is the fact that a hospital day, a day of hospital care in 1951, which cost $17, in 1964 is costing $40.

Blue Cross premiums, as we know, have gone up some 83 percent in the last 12 years, and there are many programs around the country today which are asking for increases in substantial amounts, between 20 to 32 percent.

The burden of paying for the care of the aged continues to threaten the life of Blue Cross which, in 1962 collected some $200 million in premiums, and was obliged to pay out some $375 million in benefits for the same gruop.

Blue Cross, as you know, feels that it has to have extra financing if it is going to be able to continue.

The other thing is, I think, to realize that the over-65 programs which have been started are all in trouble and need more premiums because

Senator BENNETT. Wouldn't you think, Doctor, we could expect the same thing to happen to the King-Anderson program if it is adopted?

Dr. ESSELSTYN. I think the broader the baseline, the less opportunity there is for this to happen. I think the over-65 programs are denying the very basic principles of insurance which, after all, are simply things to spread the risk, and if we are going to spread

Senator BENNETT. You heard the discussion this morning, I think. This is not insurance, this is a tax, plus an unrelated program of benefits. I have been on this committee for 11 years, and I have watched the committee regularly every 2 years increase the benefits without actually being sure that it was covering the cost by increasing the

taxes.

Dr. ESSELSTYN. Let us say that it is a mechanism for spreading the risk, and it is a mechanism for enlisting the force of numbers in the aid of the individual. This, I think, we all admit is true.

Senator BENNETT. There are a lot of us who feel that this program, the whole social security program, has its limit, too, and that as we approach 10 percent of payroll we are approaching the limit.

Dr. ESSELSTYN. I think we would all admit that.

Senator BENNETT. Now, you are starting this new program as we approach the limit. You are not starting it from scratch, you are starting it at a point where we are just about to bump our heads against the ceiling or at least the theoretical ceiling, of the total cost of this type of social benefit.

Dr. ESSELSTYN. Our committee has never held that this should be the only source of financing. We feel that part of the source of financing should come through the social security mechanism for reasons I would like to outline later.

Senator BENNETT. When you say the social security mechanism and then say the social security mechanism should not be the only source of financing, aren't you contradicting yourself?

Dr. ESSELSTYN. I did not say it should not be. It does not necessarily have to be.

Senator BENNETT. Where else would you get further financing? Dr. ESSELSTYN. From the general tax revenue.

Senator BENNETT. And yet-well, go ahead. In other words, you are more or less agreeing with me that at this point there is some doubt, at least, that the social security mechanism will finance the program. Dr. ESSELSTYN. If it is corrected, the social security mechanism should for some reason pass 10 percent, and on the baseline on which it is levied should pass its present limits, then I think it is obvious to all of us that somewhere along the line there must be additional financing.

Senator BENNETT. And yet the proponents of the King-Anderson approach insist they are going to finance it through social security in order not be a burden on the general revenue.

Dr. ESSELSTYN. But not solely, but not solely. Those who are for King-Anderson, such as our committee, have never said that we should have King-Anderson to the exclusion of Kerr-Mills, for instance. This is another mechanism.

Senator BENNETT. You want Kerr-Mills to come along and pick up the problem that King-Anderson cannot finance?

Dr. ESSELSTYN. We have always maintained this very strongly. Senator BENNETT. You feel that it is humiliating or, as Mrs. Gottlieb said this morning, degrading, for people to be required to face a means test?

Dr. ESSELSTYN. I think to ask people at any time in life, people who have been hard working and diligent, and then because of something which is unpredictable and unpreventable, to have to have these people admit inadequacy, I think in the later years of their life, is a very, very unfortunate method.

Senator BENNETT. Then you are now saying again that you want King-Anderson, but it has got to be backed up by Kerr-Mills which has the means test. You cannot avoid the means test, can you?

Dr. ESSELSTYN. I think we can have medicine as a right with no means test attached.

Senator BENNETT. Then we should eliminate the means test in KerrMills.

Dr. ESSELSTYN. I think there are a great many people who would go along with this.

Senator BENNETT. Then there is no limit.

Dr. ESSELSTYN. One of which is the New York State Medical Society.

Senator BENNETT. There is no limit then to the drain on the Public Treasury that Kerr-Mills could produce?

Dr. ESSELSTYN. As it now stands, I think it is an unlimited program, and I think it is a very dangerous program.

Senator BENNETT. It is limited by the willingness of the States and by the regulations that the States make.

Dr. ESSELSTYN. That is right.

Senator BENNETT. So what you are saying, in effect, is that you think there should be complete medical care either through one system or the other, with no restrictions on it, so that anybody could present himself at the door of a hospital and say "I want to be taken care of," and be taken care of.

Dr. ESSELSTYN. We are talking about the people over 65.
Senator BENNETT. Over 65.

Dr. ESSELSTYN. Right.

Senator BENNETT. No limits on the rights of people over 65 to get any kind of hospital care for any duration.

Dr. ESSELSTYN. That they need.

Senator BENNETT. Well, who is going to decide whether they need it or not?

Dr. ESSELSTYN. The same person who is going to decide whether they go to the hospital and are admitted.

Senator BENNETT. You heard the lady this morning, I guess, Mrs. Gottlieb, give us the sad story reported by the woman who didn't go to a doctor, she just took the patient in her car and went around the agencies and said, "Will you take care of this person?"

Do you think that was the right way to take care of that person? Dr. ESSELSTYN. I think there is only one person who can admit a patient to a hospital, and that is a State physician.

Senator BENNETT. I am sorry, I did not realize that when I was questioning her this morning, and I am glad to get that in the record this afternoon. You do not take a publicity-seeking individual who goes from one agency to another trying to get help for a sick person and never goes to the doctor in the first place.

Excuse me. I am using you to straighten the record out. I should have straightened it out with Mrs. Gottlieb this morning.

Go ahead.

Dr. ESSELSTYN. Well, I just want to make the point, as I have made it here, that the pioneering Kerr-Mills program, while still helpful for the present, and needed for the future-and we may have always said this right from the start, and I want to emphasize it in case you do not feel that we have before this-we do not want King-Anderson instead of, but in addition to.

Senator BENNETT. But you want Kerr-Mills modified so that there is no means test?

Dr. ESSELSTYN. Right.

Senator BENNETT. So this means

Dr. ESSELSTYN. The Kerr-Mills program, as you know, has been ineffective, and I have listed the reasons here, and I do not think we have to go over them. I am sure you have heard that many times. Senator BENNETT. That is right.

Dr. ESSELSTYN. However, I think that we have got to realize that in spite of all this today the No. 1 cause of dependency is still disability, and for this reason, I think we have got to pay more and more attention to it.

During the past years the opposition has come from the sources that you are well aware of, and I would like to mention some of these. A major element in the AMA's campaign has been an attempt to instill in the older people of this Nation the fear that the social security system is about to go bankrupt, totally ignoring all of the evidence to the contrary, including the most recent report of the Advisory Council on Social Security.

Then we suddenly find the AMA in the role of speaking for labor, and we see the old arguments come up about its being socialized medicine, and that there is a threat of the doctor-patient relationship, and

there is a threat of the Government getting into medicine, and there is the element of compulsion.

Well, I think all of these things should be faced very squarely. First of all, when it comes to who speaks for the AMA, I think it is important for your committee to realize that within the AMA that democracy stops at the county level, and beyond this there is no twoparty system, and there is no minority report, and there is no effective platform from which the minority may speak.

This is one of the reasons why our committee was formed. I think the result is that people feel that the president of the AMA speaks for the AMA, which is a monolithic kind of a structure.

I would draw your attention to the fact that in the New York State Medical Society, when a study was made 3 years ago, it was found that 18,000 out of the 26,000 doctors in New York State belonged to the AMA, and at this point, membership was made compulsory, but this same kind of a figure applies to Massachusetts, and I am told it applies to many States around the country, although I do not have the figures. So the AMA does not represent all other doctors of the country by any manner of means, and it does not speak for all of the doctors who are members of the AMA.

Regardless of that, speaking about the inequitable burden, it seems to me that labor is in a position to speak for itself. The thought that, perhaps, somebody might say you did not have to pay, I think, is a very, very limited argument simply because of the fact that only threetenths of 1 percent have incomes of over $50,000, and only 3 percent have incomes of over $10,000.

About the question of socialized medicine, I am sure that this committee is sophisticated enough to realize the extent to which the Government participates in our medical programs today, and at whatever level it is we have the United States in medical care, is largely due, thanks to, what Government participation we have and, as I say here, I feel the time has come when we can no longer have the great force of private enterprise in mortal combat with the resources of the Government. I think the good of society demands that the antagonism be replaced by synergism in an integrated program which alone can achieve the best in medical care for the American people.

And, this business about the change in the doctor-patient relationship because the bill that made the pay from social security, it seems to me depends entirely on what you consider the doctor-patient relationship to be.

But whether the bill is paid for by the person himself or out of his savings, or from his Blue Cross or insurance company or mortgage on the farm or borrowing from relatives, it still, it seems to me, does not interfere with the basic ingredient of what it is that constitutes a doctor-patient relationship which, after all, is the willingness and the ability of the doctor not only to give of his knowledge and of his time but of himself. This is not in any way, it seems to me, interfered by the source of payment of the hospital bill.

Senator BENNETT. Well, I would agree with you with respect to the King-Anderson bill because that does not give any assistance to the person who only needs medical care in his home and for whom it is not necessary to arrange for hospital treatment.

But I think it is not too unreasonable to suspect that this is just the opening step, and when people find they cannot get Federal assistance

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