where they are needed. More public health services, including maternal and child care services, must be provided. Medical education must be expanded to train the personnel needed to carry out the program. And, additional medical research should be made possible to aid in the prevention of the many painful and costly diseases which now take such a heavy toll among us.

We are opposed to the Taft bill, S. 545, as an ineffectual substitute for a national health program. It allows too little money for too few people on too limited a basis to be acceptable to the American people. The Taft bill is intended to give medical and dental care in the form of medical charity, a method abhorrent to the dignity of the American people. But, it is not only that small fraction of desperately poor Americans who so urgently require medical and dental care, but he great majority of self-supporting Americans who are not in a position to meet the unexpected costs of illness. The Federal funds authorized for medical service under the bill are insufficient, and the provisions for matching funds by the States are too indefinite. It is estimated that, at the most, less than 10 percent of the people would be covered by the program. Furthermore, the administration of the plan is unsound. It does not provide for adequate public representation on the national advisory councils, and, in fact, places the supervision of almost all federally supported civilian health and medical services under an agency controlled by organized medicine. It sets up no proper standards for the allocation of public funds to private voluntary organizations. And, although some aspects of the bill, such as provision for physical examinations for children and for cancer clinics, are desirable, taken as a whole, the Taft bill amounts to Federal underwriting of a poorly administered program of medical charity, which will benefit too few people.

The National Health Insurance and Public Health Act, S. 1320, however, would establish a workable national health program which, although not complete, would be comprehensive enough to be effective. By providing hospital care and all needed preventive, diagnostic, and curative services by a family physician of the patient's choice to all employed and self-employed persons, this bill lays a firm basis for insuring the Nation's health. Federal grants-in-aid to States will enable expansion of public-health services. The financing of the program primarily through a pay-roll tax to be borne equally by workers and employers will provide sufficient funds for a plan of the required scope and magnitude. It is a method which has been tried and proved in our already existing system of old-age insurance. Doctors would be free to enter or stay out of the program and could choose their method of payment. Administration by local committees of lay as well as professional representatives operating under a Federal administrative board and a set of national standards allows for local flexibility within the framework of proper safeguards.

The Congress of Industrial Organizations urges this committee to recommend adoption of the National Health Insurance and Public Health Act of 1947. The program proposed in this act is an extension and a proper implementation of our already existing system of social security. The laboring people of this country do not want charity. They want a positive and effective program to safeguard their health. By providing for a Nation-wide system of prepaid personal health service benefits and Federal grants for expansion of health services, this bill would establish the core of an effective national-health program. We urge enactment of this bill so that the American people will have protection from the economic effects of illness, an opportunity to enjoy good health, and the ability to make a maximum contribution to our Nation's economic well-being. (Whereupon, at 1:10 p. m., the subcommittee recessed until 2:30 p. m. this day.)

AFTER RECESS

(The subcommittee reassembled at 2:30 p. m. pursuant to recess.) Senator SMITH. The committee will please come to order. Is Mr. Michael M. Davis here today?

(No response.)

Mr. Davis and Mr. Louchheim are not here today. Is Mr. Horace Hansen here, general counsel of the Cooperative Health Federation of America?

Mr. HANSEN. Yes, sir.

Senator SMITH. Before you begin your testimoney, Mr. Hansen, I want to read for the record, because I want to stress these points-I will postpone that for a moment.

Mr. Hansen, we will be very glad to hear you. Will you tell us just who you are, what is your job, and how you qualify as a witness here?

STATEMENT OF HORACE R. HANSEN, GENERAL COUNSEL, COOPERATIVE HEALTH FEDERATION OF AMERICA, ST. PAUL, MINN.

Mr. HANSEN. Mr. Chairman and gentlemen, my name is Horace R. Hansen. I am a practicing attorney in St. Paul, Minn. I am counsel for the Cooperative Health Federation of America, and appear here by their specific request.

Senator SMITH. That is not the same organization that is the Committee for the Nation's Health?

Mr. HANSEN. No; it is not. We are not affiliated with the Committee for the Nation's Health.

Senator SMITH. Could you give us a little statement of what the Cooperative Health Federation of America is?

Mr. HANSEN. Yes; I intend to do that in my statement.

Senator SMITH. Then proceed in your own way, Mr. Hansen. We will be very glad to hear you.

Mr. HANSEN. I am also here to represent the Cooperative League of the United States.

Senator SMITH. Does that mean the so-called cooperative movement in the United States?

Mr. HANSEN. Yes, sir.

Senator SMITH. Farmers' cooperatives and any other cooperatives? Mr. HANSEN. All of the cooperatives who are affiliated with the Cooperative League of the United States and by their specific authority in the resolution passed unanimously in the cooperative held at Columbus, Ohio, in September of 1946, and by recent action of their board of directors I appear here and testify.

Senator DONNELL. That is action taken by the Cooperative League? Mr. HANSEN. The Cooperative League of the United States with headquarters at 343 South Dearborn Avenue, Chicago.

Senator SMITH. You are not counsel for that league? You are just representing them for this purpose?

Mr. HANSEN. I am representing them for this purpose. That is

correct.

Senator SMITH. Are you a member of that Cooperative League? Mr. HANSEN. The Cooperative Health Federation of America is an affiliate of the Cooperative League of the United States.

Senator SMITH. What is the over-all membership of the Cooperative League, which I take it is a parent body-what is the membership of that?

Mr. HANSEN. The membership roughly is 21⁄2 million American families, approximately 10,000,000 people.

Senator SMITH. The Cooperative Health Federation-how large an organization is that?

Mr. HANSEN. That has about 150,000 memberships.

Senator SMITH. Is that a branch of the Cooperative League you are interested in as general counsel?

Mr. HANSEN. I am counsel for them but I am not especially interested in that. I am representing them alone or representing the viewpoint of the Cooperative League of the United States.

Senator SMITH. Very well, proceed, Mr. Hansen.

Mr. HANSEN. We wish to submit for study by the subcommittee, and for the record, copies of two statements which are, of course, official documents and policy statements of the Cooperative Health Federation of America and have been widely distributed through our membership.

At this point I would like to insert in the record the resolution that I have numbered "1" which was passed by the conference held at Two Harbors, Minn., in August of 1946.

Senator DONNELL. Is that what is called one of the health workshops?

Mr. HANSEN. It was a national conference on health problems. Senator DONNELL. It was what is called generally, though, one of the workshops, is it not?

Mr. HANSEN. It was a conference of——

Senator DONNELL. I say it is called that, though. That is what it is generally referred to as, is it not?

Mr. HANSEN. No; I believe not. While it concerns the specific problem, it concerns the whole general problem of health. I would like to have that inserted in the record as an official document for the Cooperative Health Federation, and also the statement containing opposition on any national health legislation which was adopted by the board of directors of the Cooperative Health Federation of America in their meeting on November 16, 1946, which I have numbered "2."

I would also like to insert in the record a letter signed by Mr. Jerry Voorhis, former Congressman, who is at present executive secretary of the Cooperative League of the United States and which letter authorizes me to speak for the league. I have numbered that "3."

I would also like to insert in the record the resolution adopted unanimously by the Cooperative League of the United States of America in their cooperative congress held in Columbus, Ohio, on September 9 to 11, 1946, which is numbered "3-A." (The papers referred to follow :)

RESOLUTIONS CONCERNING NATIONAL HEALTH PROGRAM

Resolved, That the conference approve the principle of public responsibility for assuring the availability of health and medical services for all the people, without economic or other barriers, and therefore support proposals for larger grants to the States for public health purposes; and Nation-wide health insurance under public auspices, provided:

1. That all services provided through Government should be available to all the people on a democratic basis regardless of race, creed, residence, or economic status;

2. That any public-insurance proposal to receive our support must assure: (a) Continuation and expansion of the voluntary health and medical-service agencies on a basis that will permit consumer control of administrative and organization policies;

(b) Freedom to establish new medical-service groups with consumer determination of policies;

(c) That as a condition for State participation in the national health program there shall be no State policies, legal or otherwise, that restrict the free development of consumer-sponsored medical-service plans;

(d) That programs of preventive medicine and public health, including services for mothers and children, will be broadly conceived and administered; (e) That Government will share responsibility for a more favorable distribution of medical personnel and facilities;

(f) That provision be made in legislation that will assure to all the right to free choice of physician and freedom to designate the plan with which they wish to be associated;

(g) That Federal, regional, State, and local administrative and policy-making councils, boards, or committees provide for a majority or equal representation from organized consumer groups;

(h) That there be a maximum decentralization of administration and local control.

3. That in all legislation in the health and medical-care field the interests of consumers be protected through consumer representation on policy-making councils, boards, or committees;

4. That legislation be sought, through new bills or through amendments to existing legislation, for grants and/or loans to consumer-sponsored organizations for capital expenditures or purposes of establishing new facilities or expanding and enlarging existing facilities including health centers and hospitals;

5. That the new national organization of voluntary plans be instructed to further the above policies by public education and other appropriate means; and be it further

Resolved, That any association or federation which is organized at this conference be requested to set up, and provide a budget for, a committee of wellqualified persons whose duties it shall be to:

1. Study ways and means of carrying out these principles;

2. Cooperate with other groups in efforts to achieve those aims;

3. Analyze any proposed legislation relating to the achievement of these aims; 4. Make recommendations to the members of such association or federation with regard to action on any such proposed legislation; and

5. Carry out any other related activities as may be determined by the board or the membership.

SPECIFIC PROVISIONS THAT MUST BE INCORPORATED IN NATIONAL HEALTH LEGISLATION IF SUPPORTED BY CONSUMER-SPONSORED VOLUNTARY-PREPAYMENT ORGANIZATIONS

*

National health legislation, to receive the support of the Cooperative Health Federation of America, must contain assurances that when voluntary organizations are operating in the public interest and are providing services to consumers of medical care, such organizations will not be discriminated against. Now existing voluntary-prepayment plans want, also, assurance that they will be free to compete, on an equal basis, with each other and with other types of organizations for medical services or with physicians practicing individually. Organizations established for the purpose of providing a medical service to their members must be free to expand their programs and membership and not be forced to change the basic character of their plan for medical services because of the existence of a national-health program. There must not be anything in the law that will prohibit or unnecessarily impede the establishment of new voluntary medical-service organizations.

To assure these objectives the following circumstances must be provided for in Federal legislation receiving the unqualified support of consumer-sponsored health-medical-care plans:

1. That any national-health program intended to improve the health status of the American people through removing existing economic barriers to necessary care and through making professional personnel and health facilities uniformly available throughout the country shall be based on the principle of medical service benefits to the individual and not cash benefits, providing, however, that disability insurance for income maintenance should be paid in cash benefits.

2. That organizations providing a medical service may negotiate contracts with Government to provide services to beneficiaries who select the particular plan by free-will designation, the terms of such contracts to be not less favorable than those contracts negotiated by Government with other organizations or individual providers of services for the same type of benefits.

3. That Government will be prohibited from granting exclusive rights to any corporation or organization of consumers or providers, or a combination of con

sumers and providers, or groups of providers, whether direct or indirect providers, to act: (a) in any specific geographic area; (b) for any group or class of consumers of medical services; or (c) for providers of benefits under the program. 4. That Government will be prohibited from making a contract or entering into an agreement with any organization or corporation, whatever the type of sponsorship, that enjoys a monopoly under State law, Executive order, or regulation, or otherwise, for operation of a medical-service plan or for representing providers of services in negotiation with Government or rates of payment, and other related matters, in any geographic area or for any given group or class of consumers of medical services; except that this provision shall not apply to agencies of State government or its local political subdivisions.

5. That Government will be prohibited from making a contract with any professional association or corporation, State or local, for the provision of medical services if any provider currently licensed to practice his profession is excluded from participation in the program for any reason other than his professional competence or willingness to accept the conditions of the contract between the association and Government.

6. That Government be prohibited from:

(a) Requiring providers of services to be members of any voluntary association or organization, or to designate any specific agent to represent them in relations with Government for: (1) Negotiating rates of payment, (2) to act for them in submission of claims for payment; or (3) to receive money for benefits rendered to beneficiaries of the program; and (b) Negotiating with any agent of providers that requires membership in the providers' organization by withholding any professional privilege if such organization is not designated by a particular provider of services.

7. That Government be prohibited from the use of any type of voluntary agency as its agent in the performance of such administrative functions as (a) Disbursement of tax funds for payment to individual providers rendering services to individual beneficiaries; (b) determination for Government of the amount to be paid by Government to individual providers of services for benefits rendered by them; (c) determination of the conditions of the contract between Government and the individual provider of services, including such provisions as rates of payment, standards with respect to quantity and quality, use of special consultants, methods and procedures for participation in the program with reference to such items as home calls, office visits, and care in hospitals.

8. That coverage under a national health program shall be universal for all members of the population with no exclusion no exceptions for economic, racial, geographic, or other reasons.

(NOTE. Circumstances shall not exist which recognize, insofar as the consumer of medical services in concerned, two systems of medical care-one for those who contribute through a special or general tax and one for those who are in the lowest income groups and who do not, therefore, contribute through some form of taxation.)

9. That Federal operation of the program is not provided for except in those instances in which State agencies do not properly exercise their responsibility or refuse to do so and that the maximum amount of decentralization of administration is provided for with administration through official State and local health and medical-care agencies.

10. That policy-making boards shall be required for all public or nonpublic agencies with responsibility for performing administrative or executive responsibilities and that such boards shall have representatives of the public interest and the consumers of medical services-to serve with the representatives of the professions—in an effective majority.

11. That allocation of funds by the Federal agency to State and localities be made in accordance with methods which will assure a Nation-wide uniformity of services with respect to kind, extent, and quality in not longer than a 10-year period.

12. That the Government be responsible for an equitable and Nation-wide distribution of professional personnel and facilities and for maintenance of standards of care.

13. That, since there is an insufficient number of all types of professional health personnel, including administrative, that the Government in the expansion of health and medical-care programs, recognize its responsibility for provision of public funds to expand facilities for training and to enable individuals to obtain training.

Adopted by the board of directors, Cooperative Health Federation of America, in meeting November 16, 1946.