Federal money. We have some of the most magnificent hospitals and charity wards of any town in the United States.

Mr. KING. Thank you, Dr. Layne.

Dr. LAYNE. Thank you, Mr. Chairman.

Mr. KING. Dr. Peters.

Mr. ALGER. Our colleague, from North Dakota, Don Short, wanted to be here but because he is forced to be on the floor of the House during the debate on the agriculture bill, where I am sure we will shortly be summoned, he asked me to welcome Dr. Peters and tell him how glad we are to have him before our committee, and he would have done this had he been here.

Mr. KING. In other words, Doctor, it is not unusual to find absentees among the farm States on this committee this day?

Mr. CURTIS. Mr. Chairman, I am going to have to go over on the floor on this thing.

I do not know whether the doctor has anything in his statement in regard to the adjacent area of Canada, Saskatchewan, but I understand you have information in regard to the Saskatchewan situation. Dr. PETERS. Very extensive information.

Mr. CURTIS. Is that in your statement?

Dr. PETERS. Yes, it is.

Mr. CURTIS. Otherwise, I was going to ask you to supply it for the record. I apologize for not staying to listen to you but I will read your statement.

Mr. KING. You may proceed.

STATEMENT OF CLIFFORD H. PETERS, M.D., ON BEHALF OF THE NORTH DAKOTA STATE MEDICAL ASSOCIATION

Dr. PETERS. Mr. Chairman and members of the committee, I am Dr. Clifford H. Peters of Bismarck, N. Dak., representing the North Dakota State Medical Association, and am the secretary of the council of the association and vice speaker of the association's house of delegates.

I am a specialist in internal medicine and associated with the Quain and Ramstad Clinic in Bismarck.

With me is Lyle A. Limond, executive secretary of the North Dakota State Medical Association.

Policy and activities of the North Dakota State Medical Association: The North Dakota State Medical Association is a voluntary membership organization founded in 1887 in order to extend medical knowledge and advance the medical sciences and to direct public opinion in regard to the great problems of medicine.

The association will celebrate 75 years of continuous operation in June 1962. Almost 100 percent of the physicians licensed by, and practicing in, the State are members of the association.

Our association has been active over the years in promoting improvement of the general health of the people of North Dakota through educational programs, preventive medicine programs, and by making provision for emergencies and major disasters.

We provide services to our members and the general public through

1. A physician placement service;

2. An annual scientific program;

3. Sponsorship of a nonprofit voluntary prepaid health plan; 4. Liaison with State government agencies;

5. Liaison with voluntary health agencies;

6. Liaison with other professional associations;

7. Legislative activities;

8. Counseling and advising communities and individuals on problems in the general area of health;

9. Cooperation in an active program of medical school improvement; and

10. A promise to the public that every person in North Dakota will receive needed physicians' services regardless of ability to

pay.

The association has long been concerned with the quality and quantity of medical care available to all North Dakotans, not just the indigent, and the near indigent.

We have supported efforts to best use tax expenditures in behalf of the needy and the near needy.

Implementation of the Kerr-Mills law in North Dakota: The association believes that North Dakota has one of the better old-age assistance programs, if not the best, in the Nation and further believes that the needs of the oldsters have been met since the inception of the program in 1935. The citizens of North Dakota have willingly accepted next to the highest per capita taxload in the Nation to help further these programs.

With the implementation of the Kerr-Mills law in North Dakota on July 1, 1961, we now believe that we have two programs which cover those aged persons who need care.

We feel that there is no need for the King proposal (H.R. 4222) to be passed by Congress because our implementation of Kerr-Mills law provides the following:

(1) There is only a $50 deductible for the previous 12 months for all types of medical services received, or a combination thereof.

I might digress a moment. This $50 deductible is $50 paid or incurred. It does not necessarily have to have been passed. This was put into this legislation at the suggestion of the North Dakota Association and concurred in by the North Dakota Hospital Association and Pharmaceutical Association.

It is our endeavor by such a deductible clause to prevent overutilization and we are assuming the responsibility of tightening those bills, if possible.

If not, the risk is obvious. I think that is one area where medicine has demonstrated this sincerity in this program.

(2) Hospitalization will be provided as long as medically needed, regardless of the number of days.

(3) Physician services are provided for the recipients. These services are provided under free choice and on the local level with local determination.

(4) There is no time limit on nursing-home care, if needed.

(5) There is free choice of hospital, druggist, physician, dentist, et cetera, without any contracts or agreements with the State or Federal Government.

(6) This care will be provided on the basis of need.

(7) Local and State standards and regulations will apply and payment will be one the basis of the usual and customary fee for that economic group in the community.

(8) Unlimited hospitalization, nursing home, dental, medical drug therapy, physiotherapy, home services, et cetera, are all provided if medically determined to be necessary.

(9) The program is locally determined and locally controlled by individuals who know the needs of the recipients and will be in keeping with individual dignity and with the type and quality of care that is needed in North Dakota.

(10) This is a catastrophic program as well, covering catastrophic illnesses, injuries, and disease.

(11) This program is supported by taxes and is not misnamed a health insurance benefits plan. Our program is supported by money from our dedicated fund provided by five-twelfths of 2 percent State sales tax, Federal funds and county funds (taxes). A copy of the North Dakota statute is attached for the committee's study and consideration.

Pertinent statistics on the old-age assistance (OAA) and medical assistance for the aged (MAA) programs in existence in North Dakota:

(1) The 1960 census reveals 58,591 persons of 65 years and over. (2) Approximately 8,000 have been on OAA during the fiscal year, July 1, 1959, through June 30, 1960. Of this number, about 6,000 use medical care.

(3) Approximately 20,000 of our aged are covered by prepaid medical plans.

(4) It is estimated that approximately 11,500 of this age group, exclusive of OAA, will qualify under our MAA program. Of this number, it is estimated that approximately 8,000 will avail themselves of these services.

(5) It is interesting to note that only 558 persons out of the 7,098 on OAA during April 1961 were receiving social security benefits. (6) It is anticipated that only 900 individuals will be transferred from the OAA program to the MAA program.

(7) The expenditures for OAA medical care for the biennium of 1959-61 amounted to $5,626,890. The North Dakota Legislature has seen fit to budget and appropriate for the fiscal period 1961-63 a total expenditure of $14,445,744 for medical services under both OAA and MAA. This figure includes Federal moneys authorized by Congress. This means an increased expenditure of $8,818,854 more for medical services for this age group than in the last biennium.

Thus, under our present prorams, those in need will be receiving needed medical care.

(8) Our eligibility criteria under MAA, with a net income of $1,200 for a single person and $1,800 for a couple living together, have been deemed adequate by the North Dakota State Legislature for living in reasonable comfort and dignity provided that their medical care is assured them.

(9) Those individuals under MAA will not be pauperized in view of the fact that they may own their own home or homestead regardless of value. Likewise, they are allowed $2,500 in net value of personal property and this figure excludes household effects, wearing apparel,

or personal effects. Within this amount ($2,500), a single person may have $500 in cash or a couple may have $1,000 in cash. Furthermore, the value of gifts or services contributed in kind are not subtracted their net income or assets.

(10) For the 1961-63 biennium, the total appropriation for the Public Welfare Department of North Dakota is $39,443,462. Of this amount, $22,887,956 is Federal money and $16,545,506 will come from State and county funds.

It is interesting to note, however, that funds for medical care under all of the welfare programs supported by North Dakota taxes will exceed the amount to be received from Federal moneys.

For instance, the total medical care budget is $16,530,374. Of this amount, $8,014,022 will be Federal funds and $8,516,352 will come from the State of North Dakota.

Comparative data for Saskatchewan and North Dakota (1959): I wish to draw the committee's attention to the situation as it exists in the Province of Saskatchewan in Canada as part of our supportive evidence in opposing H.R. 4222, since it is the belief of the doctors of North Dakota that the King proposal (H.R. 4222) and the Saskatchewan program are compulsory Government-controlled plans and do not provide medical care for the needy and near needy through a voluntary Federal-State program.

Saskatchewan borders on North Dakota and in 1947 the socialist government started a provincewide hospitalization plan as a step toward a health program that eventualy would "free" Saskatchewan citizens from all medical expenses, including such items as drugs and eyeglasses.

I wish to make the following comparisons between this Canadian Province and North Dakota in order to show the relative costs and utilization between compulsory and voluntary programs. To point out further the differences between the two programs, it should be stressed that the North Dakota Blue Cross plan has the third highest utilization rate in the United States.

(1) Saskatchewan residents admitted to hospitals at a rate of 210 per 1,000 per year compared to 183 for North Dakota.

(2) Saskatchewan residents stay in hospitals 10 days per admission compared to 7.2 days for North Dakota.

(3) Saskatchewan residents use 2,083 days inpatient care per 1,000 per year compared to 1,318 days for North Dakota.

(4) Costs of hospital operation in Saskatchewan are about 80 percent of costs in North Dakota.

(5) Total dollar cost of inpatient hospital care per capita in Saskatchewan was $36.21 compared to $33.09 for North Dakota. Applying cost differential, the value of inpatient hospital service to Saskatchewan residents in terms of North Dakota dollars is $45.26 compared to $33.09 for North Dakota.

(6) Per capita hospital tax (payment for hospital benefits) by Saskatchewan residents is $17.50 per year, with a maximum of $35 per family.

(7) The per capita tax provides about $9 million. The program costs $32 million. General funds of the Dominion and Providence must be appropriated to pay the $23 million deficit.

(8) The per capita tax will go up to $24 per person with a $48 per family maximum January 1, 1961.

(9) The Government estimates that there will be additional $4 million received from the increased tax.

(10) The Government estimates that the doctor fees added to the program will cost an additional $25 million. This will create a deficit of about $43 million to be appropriated from general funds.

To keep the record straight, please be informed that I have not visited Saskatchewan personally in order to research these statistics. These figures were gathered by a special group, including the then president of the North Dakota State Medical Association, which visited Canada in the fall of 1960 for the express purpose of studying the Saskatchewan program.

The statistics on the Province's plan came from the Office of the Health Miter, Mr, J. Walter Erb, of Regina, for purposes of comparison win North Dakota statistics from our Blue Cross plan.

SUMMARY

In summary, it would appear to the doctors of North Dakota that H.R. 4222 is definitely not needed, since we have good old age assistance and medical assistance for the aged programs now in existence.

(1) Ninety-one percent of North Dakota citizens under old age assistance at the present time are not covered by social security; therefore, they would not be cared for under H.R. 4222.

(2) Present North Dakota programs of old age assistance and medical assistance for the aged provide unlimited medical care services for the needy and near needy aged.

(3) The Kerr-Mills law implementation in North Dakota provides voluntary participation by the recipients and vendors of medical

care.

(4) It has been shown that voluntary Federal-State programs in North Dakota are less costly than the compulsory Saskatchewan

program.

We are firmly convinced that meeting the cost of medical care for all the aged under social security is not practical and under H.R. 4222 will result in fewer services for those in need, as has been shown to you in my presentation.

We are further convinced that nonessential inflationary burdens our citizens must bear, particularly during these years of international crisis.

We also believe that H.R. 4222 is the wrong prescription for an ailing nation.

(The following material was received by the committee:)

REPORT OF INFORMATION OBTAINED BY NORTH DAKOTA BLUE CROSS PERSONNEL IN VISITS TO CANADIAN GOVERNMENT HEALTH INSURANCE PLANS IN WINNIPEG, MANITOBA, AND REGINA, SASKATCHEWAN, ON SEPTEMBER 19-22, 1960

(By Mayo S. Christianson and Truman C. Wold)

The following report was presented to the lay advisory board, St. Joseph's Hospital, Dickinson, N. Dak., November 23, 1960, by Mr. Christianson and Mr. Wold.

A little background in regard to our visit to Canada: Dr. Carroll M. Lund of Williston, N. Dak., came to Fargo one day and asked if he could have a meeting with Blue Cross and Blue Shield representatives. We had no idea what he had in mind, but we met with him, very glad to, and he mentioned a concern regarding socialized medicine and the possibility that legislation might