There are several other factors at work which should tend to bring about even more favorable results, and thus reduce the problem of health care costs even further. Expanded social security coverage means more individuals will be eligible for benefits and the higher benefits being paid means a better ability to finance health care. The higher earnings during recent years means future beneficiaries will have accumulated greater savings than did those retiring in the past. Private pension plans have grown markedly in scope and in benefit amounts. More employers are helping their employees to pay for medical care after retirement. Insurance companies, Blue Cross and Blue Shield, and the medical profession are sharply intensifying their efforts to provide more health care protection for the aged on terms more in keeping with the requirements of the aged. Thus, it would be a mistake, in our judgment, for the Congress to enact a permanent Federal program of health care benefits to meet what is admittedly a temporary problem. For these reasons, we believe it is unnecessary to sharply alter the philosophy underlying the social security program by adding the provision of health care benefits. Furthermore, we believe this would be most inadvisable for it could produce results that in our opinion would be highly undesirable. It would constitute the first provision for services, as distinguished from cash benefits under the Social Security Act. This is a sharp change in philosophy. In effect, Congress would be deciding how a part of each social security beneficiary's monthly benefit should be spent. A federally controlled program under social security would violate and alter the basic concept of OASDI. OASDI covers three risksold age, death, and total and permanent disability-that occur only once, are easily identified, and involve substantial but fixed liabilities. The need for medical care can recur innumerable times, cannot be easily determined and the liability, therefore, is almost without limit. Therefore, it is patently untrue and unsound to say that OASDI provides a tried and true precedent for the socialization and federalization of medical care. It is significant that other recurring risks such as workmen's and unemployment compensation, temporary disability insurance and medical care under categorical assistance programs are provided under State programs rather than a federally controlled program. Also, in connection with recurring risks of medical care there is a vast range of individual preference as to desirable coverage and the way it is obtained. A federally controlled program would stifle such individual preferences. A federally controlled program has been advocated on the ground that the cost of health services contemplated are modest, predictable, and controllable. The initial benefits suggested under H.R. 4222 are modest-understandably so-because the immediate objective is to establish such a program. In our opinion, the current cost estimates of the initial program are understated. For example, the maximum estimate for nursing home costs of the Department of Health, Education, and Welfare apparently is based upon the utilization of nursing home care by about 1 in 40 or 50; whereas in the State of Washington, 1 in 6 of the old-age assistance recipients avail themselves of nursing home care. Irresistible pressures or greater benefits and services and for the expansion of such coverage to the working population under age 65 and to those over age 65 who are not eligible for OASDI benefits would make the future extension of the program unavoidable and even more costly. It should be noted that surgical and nursing services have been omitted from H.R. 4222 even though coverage of such costs had been contemplated in prior legislative proposals. We feel that they were omitted in order to make the proposal more palatable from a cost standpoint and more acceptable to those who fear socialized medicine. Further, in the matter of costs, the incidence of illness or the utilization of medical services is not as precise and predictable as is longevity and death. The experience of public medical care programs in other countries indicates that the full costs of such a program invariably are considerably understated when the program is conceived. Any provision for hospital or nursing home care is not a simple matter, and the characteristic that makes this kind of program so impractical for the Federal Government is the nature of the risk involved. In hospital and nursing home care, there is no objective test of when such care is needed. Almost anyone beyond 65 with any infirmity could be given better care in a hospital or nursing home. In retirement or survivorship, the eligibility conditions are largely beyond the control of the claimant, whereas hospital or nursing home care depends to a substantial degree upon the volition of the claimant and the decision of the attending physician with control or regulation of the latter specifically disclaimed by H.R. 4222. Once eligibility to retirement or survivorship benefits is established, the cost of benefits is specified in dollar amounts in the statute. In hospital and nursing home care the cost of benefits would depend upon charges and the decisions made by medical personnel, again, with a disclaimer of control or regulation. We question whether it would be feasible for any Federal agency to administer this program in its present form with its prohibition against any "supervision or control over the practice of medicine or the manner in which medical services are provided" and with its offer to everyone of hospital and nursing home care "from any provider of such services with which an agreement is in effect." The administration of the program and the attendant control of costs by a Federal agency would inevitably lead to efforts to regulate hospitals, nursing homes and the attending physicians who certify their patients for such care and result in intrusion by a Federal agency into the personal medical problems of the individual aged. Such a program would lead to massive Federal instrusion into all phases of medical care. It would affect adversely three important personal and private relationships: the doctor-patient, the hospitalpatient, and the doctor-hospital relationships. Standards and controls for both medical administration and medical services which would be centrally promulgated and administered by nonmedical and nonprofessional individuals could only lead to serious deterioration in the quality of medical care made available. Such a program with a single standard for medical administration and medical services would disregard geographical or regional differences in costs. This could lead to excessive benefit costs, excessive administration costs and to the overutilization of free medical services. The foregoing reasons demonstrate that a federally administered and controlled program is not the best approach in solving the problem age medical care. of old We believe that the States and local communities are better judges of the needs of their citizens and how these needs should be met. We therefore support the Kerr-Mills approach as the appropriate and superior solution to the problem. It covers those who need protection and it permits greater and fuller medical care coverage. It goes beyond the basic needs of the destitute and recognizes the problems of the medically indigent aged persons. It does not provide a single system of benefits with attendant controls and standards. It provides for local judgment as to need and as to protection affordedit permits a State program to be tailored to fit the needs and resources of the individuals, the community and the State. It provides the stimulus for continued expansion of private insurance coverage. It provides the opportunity for greater economy and the prevention of abuses. It is the best possible solution in avoiding disadvantages pointed out above. We believe that Congress was wise in selecting this course of action last year and we are greatly impressed with the quick action taken by the States to implement this program. We know of no other FederalState grant-in-aid program which has had such speedy approval in such a limited period of time. Just 9 months after the Kerr-Mills approach was adopted, 21 States have passed implementing legislation to establish a program of assistance for the medically indigent aged. These States have 9.3 million aged persons or 56 percent of the total aged population. In all but two of these States, the bills have been signed into law. (Legislation in Illinois has not yet been signed by the Governor of that State and in Texas a referendum is required before its law becomes effective.) This is a phenomenal record of performance-one of which we are justly proud. There are 8 more States having 1.6 million aged persons where no legislation is required and a number of other States have legislation pending. Based on the action already taken by the States and other action contemplated we foresee a potential coverage of 75 to 80 percent under the Kerr-Mills approach this year. We believe that the States are measuring up to their responsibilities, and that the problem of old-age medical care will be satisfactorily solved through the operation of existing law. And the country can gain experience in the solution of medical care problems without irreversible legislation embodynig past mistakes such as encouraging hospitalization in order to establish eligibility for benefits. In conclusion, let me emphasize that we are not here in opposition to health care for the aged. However, we do oppose the provision of health care benefits under the OASDI program. We support the Kerr-Mills program as an adequate and appropriate solution to the problem of medical care for the aged. With its diversity as between States, it permits accommodation of regional differences. With its case-by-case administration, it permits consideration of individual needs and greater control over costs. Also it permits a greater control in respect to overutilization of medical personnel and facilities. More adequate individual care can be provided at lower total cost because of the smaller number involved. Private insurance and prepayment programs will not be curtailed or supplanted. Thank you very much, gentlemen, for permitting me to render this statement on behalf of myself and the member organizations listed in my statement. (The following is a list of endorsing organizations:) The organizations endorsing this statement are: (New York) Alabama State Chamber of Commerce Empire State Chamber of Commerce merce Delaware State Chamber of Commerce merce Ohio Chamber of Commerce The State Chamber of Commerce of Pennsylvania State Chamber of Com merce South Carolina State Chamber of Com- Greater South Dakota Association Salt Lake City, Utah, Chamber of Com merce Virginia State Chamber of Commerce Missouri State Chamber of Commerce merce Mr. GREEN. I would just like to say that Mrs. Schatz is a constituent of mine, and I want to compliment her on the fine work she is doing in the northeast section of Philadelphia in connection with the senior citizens. I know that the chairman of your legislative committee is with you, and I want to compliment Fred, too. STATEMENT OF MRS. DORA N. SCHATZ, PRESIDENT, SENIOR CITIZENS CENTRAL ASSOCIATION OF PHILADELPHIA Mrs. SCHATZ. Honorable chairman and members of the committee, my name is Mrs. Dora N. Schatz, 6703 Glenloch Street, Philadelphia, Pa. I am president of the Senior Citizens Central Association of Philadelphia and vicinity, which is an independent legislative action organization representing close to 8,000 older persons drawn from golden age clubs, unions, and the general public. The association meets the third Friday of each month at Gimbels Club Women's Center, Eighth and Market Streets, Philadelphia, Pa. I am also founder and secretary of the Northeast Community Geriatric Clinic, which is the only free diagnostic clinic of its kind in the United States. It is located at Disston and Hegerman Streets, Philadelphia, Pa. In our 2 years of existence, we have examined over 610 persons. Through the advice of our wonderful doctors, we have prolonged many lives. The Honorable Congressman William Green, Jr., thought so well of our clinic he had its story inserted in the Congressional Record for Thursday, August 20, 1959. As a widow and older person, I wish to speak for myself and all those whom I represent. We support the President's health insurance proposal H.R. 4222 though we consider it far from adequate to the basic needs of older people and I am here to speak in its favor. 1 The Kansas State Chamber of Commerce is opposed to the provisions of H.R. 4222 or similar legislation but abstains from the portion of the statement relating to the Kerr-Mills Act approach because it has taken no position on it. Facts, figures, and statistics I will leave to others that are testifying before this committee. As far as we are concerned, the absolute need for health insurance legislation through social security has been proven a thousand times over before today. I would like to concentrate on the economy, good sense, and overall humanity of practicing prevention rather than cure in our country today. Many older people in the low and lower middle income groups become ill mentally and physically many years before they should because they are obsessed by terrible fears. Agonizing questions poison their days and nights. They ask themselves: Now that death is not too far away, who will take care of me in my last illness? Will I spend long months in a hospital ward, or end my days in a miserable, rundown nursing home? Suppose I have an accident tomorrow and am incapacitated and need rehabilitation services, where will I get them? I may require surgery, blood transfusions, a long period of convalescence; where will I stay? Will I be forced to leave my home, precious to me above all things, at a time when I need it most? Homemaker care is scarce and very expensive. Will I have to depend upon my children who are struggling to support their own families? Could I stand the noise and lack of privacy in their small home? One of the most popular solutions proposed by professional groups to the high cost of medical care for older people is financial assistance from children. Unless the children are comfortably fixed, there can be no greater fallacy. A son has a wife. A daughter, a husband. These mates are not always sympathetic. Their own children come first. Let us face life as it is, not as it should be. Arguments ensue. Family harmony is shattered. What we really have is heartbreak for the elderly parents which is just the opposite of the health they are supposed to receive. These are the thoughts and problems that bring on periods of depression and premature senility. This is why our mental institutions and hospitals are overcrowded with elderly people. I would like the members of this committee to remember that ours is the generation that supplied the husbands and sons for three terrible wars to save democracy. We are the folks who went to work at 14 years of age in the mills, sweatshops, and mines and railroads and worked a 12-hour day. We had little chance for even a high school education. We have contributed in building the economy and prosperity of this country. And therefore, I ask the members of this committee, if they were in our place, would they feel they deserve decent medical care in their old age? Thank you for your kind attention. Mr. KING. Thank you, Mrs. Schatz. Mrs. SCHATZ. May I have permission to include the brochure from our in-clinic in the record? Mr. KING. If there is no objection, you may. (The brochure referred to follows:) |