Graduate Nurses, Inc., addressed to Senator James E. Murray, dated July 1, 1947, endorsing-containing a resolution adopted by the National Association of Colored Nurses endorsing S. 1320.

Senator SMITH. I might ask the Senator if he will yield just a moment, because, apparently, it was anticipated that the Frothingham letter was to be introduced today sometime and I have a letter from the secretary and general manager of the A. M. A., Chicago, as follows:

It has come to my attention that a letter from Thurman Arnold, Esq., to Dr. Channing Frothingham, chairman, Committee for the Nation's Health, Inc., 1799 Broadway, New York 19, N. Y., dated July 2, 1947, has been introduced as part of the record of the hearings on S. 545 now being held before the Subcommittee on Health of the Senate Committee on Labor and Public Welfare. That letter undertakes to call into question the good faith of the American Medical Association in its efforts to promote the health of the people of the United States. I respecfully request that this communication also be made a part of the record. The American Medical Association, now 100 years old, was organized "to promote the science and art of medicine and the betterment of public health.” It has endeavored to do so to the best of its ability by stimulating progress in medical education, by efforts to assure the purity and potency of medicina! preparations and the therapeutic value of apparatus, by exposing quack remedies and charlatans, by promoting national medical research, and by many other methods, including fostering and development of prepaid voluntary medical-care plans.

I respectfully request that this communication be introduced in connection with the other letters offered by the Senator from Florida. (The letters referred to follow :)

Dr. CHANNING FROTHINGHAM,

ARNOLD, FORTAS & PORTER, Washington 5, D. C., July 2, 1947.

Chairman, Committee for the Nation's Health Inc.,

New York 19, N. Y.

DEAR DOCTOR FROTHINGHAM: Your letter of June 27, 1947, asked me for my comments on the Taft health bill, S. 545, with particular reference to its "restraint of trade and monopolistic implications." In answering your request, I am not writing as the former Assistant Attorney General who prosecuted the case against the American Medical Association, but as one who has always fought monopoly and monopolistic tendencies to such an extent that I am still referred to as "the trust buster."

I would like to break down your inquiry into two specific questions:

I. What monopolistic practices and tendencies exist today on the part of the American Medical Association and the State and county medical societies which, taken together, constitute "organized medicine"?

II. Would the Taft bill promote or restrict such monopolistic practices and tendencies?

I. As to the first question:

(a) I have long felt that organized medicine has utilized agreements, boycotts, blacklists, suspensions, and expulsions to prevent or impede physicians from participating in plans which would make medical services more widely available at less cost to patients. Under the Code of Ethics of the A. M. A., a county medical society may discipline and even expel a doctor who has entered into economic arrangements which the society considers "contrary to sound public policy." The medical society sets itself up as the judge of what is "sound public policy."

Expulsion or even suspension from a medical society is a severe penalty, especially since it ordinarily deprives a physician of staff membership in any hospital. In the case of a surgeon, this may destroy his practice. Thus the medical societies have assumed power over the practice of a profession licensed by the State, and over the civil rights of American citizens. Such a power goes far beyond that of a private club to control its own membership. In my opinion, such power is an exercise of a public function and should be subject to public scrutiny and, when necessary, to court review,

A physician may be brought up for discipline before a committee of doctors that might include his chief competitors in his private practice. In our civil

or criminal courts we would not tolerate a situation in which the judges might profit financially as a result of the verdict they rendered. We should not permit such a situation to exist in medicine.

(b) In spite of the decision in the case of American Medical Association v. United States, organized medicine has continued to put obstacles in the way of the establishment and operation of nonprofit voluntary medical care plans sponsored by other than medical societies. In 17 States, the State medical societies have obtained the passage of legislation which practically gives control over prepayment medical care plans to these societies and prevents farmers, industrial workers, and other consumers from organizing prepayment plans under their own auspices.

Prepayment plans are not the practice of medicine, but are methods of financing medical costs. The people who pay the bills, not the doctors who are paid by these people, should certainly have the right to organize such plans for their own benefit. Such monopolistic laws seem to me an unwarranted interference with private enterprise and experimentation in new ways of financing medical service.

(c) Recently the American Medical Association has begun to use a white list to promote prepayment plans sponsored by medical societies. Its council on medical service, which spent over $100,000 during 1946, grants the A. M. A. seal of acceptance to voluntary prepayment medical plans which meet its requirements. In order to qualify, a plan must have the approval of the medical society of the State and the county in which it operates. Up to date, the A. M. A. has granted its seal of acceptance to 52 plans, all of which have medicalsociety sponsorship. So far as I am aware, the A. M. A. has not granted its seal of acceptance to any one of nearly 200 existing prepayment plans which have been sponsored by industries, unions, farmers, cooperatives, and other groups besides medical societies.

II. Would the Taft bill promote or restrict these present monopolistic tendencies?

My opinion is that this bill would substantially increase the powers and the. monopolistic control of organized medicine. My reasons for this belief are as follows:

(a) The form of administration prescribed in S. 545 would give substantial control over the policies for expending the Federal funds appropriated under this bill to officials who would be the creatures of organized medicine and to councils a majority of whose members would owe their allegiance to medicine rather than to the public.

(b) Such control would not apply to the Federal health agency set up by this bill, but, what is still more important, on the State level also. Under the bill, Federal powers are limited and most of the administrative responsibility is vested in State organizations. The State agencies, as outlined in this bill, would be practically controlled by State and local medical societies. The monopolistic powers and tendencies now exercised by these societies would be greatly increased because the new State agencies would control the expenditure of public funds to care for certain persons and to aid voluntary prepayment plans. The State administrators under this bill could grant funds to medical-society-snonsored plans, and refuse such funds to other plans. The bill does not limit administrative powers in this respect. It does not, for example, prohibit an exclusive contract with a single private prepayment plan.

For these and other reasons which could be spelled out in more detail if space permitted, I believe the Taft bill, S. 545, to be decidedly undesirable. Very truly yours,

THURMAN ARNOLD.

NATIONAL ASSOCIATION OF COLORED GRADUATE NURSES, INC.,
New York 19, N. Y., July 1, 1947.

Senator JAMES A. MURRAY,

Senate Chamber, Washington, D. C.

MY DEAR SENATOR MURRAY: At the first postwar biennial convention of the National Association of Colored Graduate Nurses just concluded in Atlanta. Ga.. it was unanimously voted by the 400 delegates representing 26 States that we send you the following resolution:

"Whereas the National Association of Colored Graduate Nurses has always been vitally concerned with the health of all the people, and whereas the health

of the Nation's largest minority, the Negro people should be of particular concern to the entire country, be it therefore

"Resolved, That we strongly urge the passage of "The National Health Insurance and Public Health Act of 1947,' S. 1320, without discrimination as to race, creed, or color."

We respectfully urge its inclusion in the record of the Senate Subcommittee on Health.

We wish to express our sincere appreciation for your efforts in behalf of legislation which will insure greater health benefits for all of the people of our Nation.

Respectfully yours,

ALMA VESSELS, R. N.,

Executive Secretary.

Hon. H. ALEXANDER SMITH,

AMERICAN MEDICAL ASSOCIATION,
Chicago 10, July 9, 1947.

United States Senate Building, Washington, D. C.

DEAR SENATOR SMITH: It has come to my attention that a letter from Thurman Arnold, Esq., to Dr. Channing Frothingham, chairman, Committee for the Nation's Health, Inc., 1790 Broadway, New York 19, N. Y., dated July 2, 1947, has been introduced as part of the record of the hearings on S. 545 now being held before the Subcommittee on Health of the Senate Committee on Labor and Publie Welfare. That letter undertakes to call into question the good faith of the American Medical Association in its efforts to promote the health of the people of the United States. I respectfully request that this communication also be made a part of the record.

The American Medical Association, now 100 years old, was organized "to promote the science and art of medicine and the betterment of public health." It has endeavored to do so to the best of its ability by stimulating progress in medical education, by efforts to assure the purity and potency of medicinal preparations and the therapeutic value of apparatus, by exposing quack remedies and charlatans, by promoting rational medical research and by many other methods, including fostering the development of prepaid voluntary medical care plans.

The intimation, implicit in Mr. Arnold's letter, that in those efforts the association, or any of its constituent or component units, have been motivated by a selfish or improper interest or that they have not had as an impelling objective the betterment of the health of the people, stems either from a lack of obtainable knowledge or from a disregard of knowledge actually possessed.

Mr. Arnold is quite correct that the council on medical service of the association has established "standards of acceptance for medical care plans" and that it has granted its seal of approval to a number of such plans sponsored by medical societies that have met the standards so established. Plans developed by other groups must meet the standards established by the council if they are to receive its seal of approval and a study of such other plans is now under way.

As to whether or not the enactment of S. 545 would tend to "increase the powers and the monopolistic control of organized medicine," which Mr. Arnold asserts it would do, the association has suflicient confidence in the integrity of the sponsors of the bill and in their sincere desire to promote the public wellbeing to be convinced that no such result is intended nor will any such result ensue if the bill is enacted. Mr. Arnold is simply seeing implications in the bill not warranted by its provisions.

Sincerely yours,

GEORGE F. LULL.

Senator DONNELL. With the Senator's consent, at this point, while this citation is already in the record, I think it will be well, for convenient reference, to again insert it, with reference to the case to which Mr. Arnold refers, namely, the American Medical Association v. the United States, being (317 U. S. 519).

Senator PEPPER. Yes; I think we should have it. I ask to insert in the record an article entitled, "Health Means Plans and Dollars" with

the subtitle "We must find a way to meet our challenging national medical problem," in the April 1947 issue of Kiplinger's Magazine. That is put out by the well-known author of the Kiplinger letter. That contains some very interesting material on this subject, among which is:

This country had higher infant death rates than seven other countries, higher cancer, heart, nervous, and mental disease rates. The average life expectancy at birth was higher in four countries; at 20 years it was higher in each country; at age 40 in 11; and at age 60 in 12.

And so on.

Senator SMITH. Are you offering this entire document, this magazine?

Senator PEPPER. I will offer it for the record, just a couple of pages. Senator SMITH. Very well.

(The article Health Means Plans and Dollars follows:)

HEALTH MEANS PLANS AND DOLLARS-WE MUST FIND A WAY TO MEET OUR CHALLENGING NATIONAL MEDICAL PROBLEM

United States medicine, which has devised brilliant treatments for many of our ills, is having a hard time prescribing for its most acute problem-how to make medical services available for all who need them.

There is wide agreement on the diagnosis-our medical facilities are badly organized and too expensive for most people. There is no general agreement on the right treatment, despite the universal interest in working out some solution. We are all potential consumers of medical services, and we are all affected by the health of our community. And our overburdened doctors need relief from a system under which they can't take care of all the sick, even with charity treatments.

Although the Nation's health cannot be put on a dollars-and-cents basis, employers should be concerned with the terrific inroads, largely preventable, which illness makes on production. Before the war between four and five hundred million work-days were lost annually from sickness-about 40 times the number lost through strikes. The loss of consumption power may be even greater.

Here is what's wrong in the judgment of the American Medical Association, individual doctors, lay experts, and Government officials:

The traditional fee system of payment for medical services is too costly. Most people can afford emergency pills and treatment, but not preventive medicine or prolonged, catastrophic illness. Some estimates say that about 20 percent of the population can't pay even for minimum medical needs.

There are not enough doctors, especially in rural regions, slums, and small communities. Many doctors are underpaid. Few have time to keep up with developments.

Hospitals and other facilities are too few, poorly distributed, often antiquated. Medical research is haphazard. We spend a hundred dollars for research on infantile paralysis, which afflicts relatively few, for every 25 cents spent on mental disease, which afflicts millions and fills more than half the Nation's hospital beds. Many people, particularly if they have no trouble meeting their own medical bills and deal exclusively with comfortably established city physicians, find it hard to accept so sweeping a diagnosis. But the clinical facts are disturbing.

According to the AMA in 1940, most individuals and families with incomes under $3,000 needed help in meeting medical bills. That amounted to well over 75 percent of the population. People who borrow from small-loan companies need the money most often to pay medical bills.

For many an ailing individual the high cost of sickness poses the question of how much medical attention he can do without, and for how long. The grim consequences of such enforced self-denial showed up in prewar medical statistics, which brutally dispose of the notion that the United States is the healthiest Nation on earth.

This country had higher infant death rates than seven other countries; higher cancer, heart, nervous, and mental disease rates. The average life expectancy at birth was higher in 4 countries; at 20 years it was higher in 8 countries; at age 40 in 11; and at age 60 in 12. The subsequent revelation that about 40 percent of

young Americans were unfit for military service for medical reasons has hushed our big talk about national health standards.

It's not primarily the doctor's fault that protracted illness and preventive medicine are so expensive, although it is a fact that organized medicine, through the American Medical Association, has demonstrated a minimum of social awareness in facing the mounting medical crisis.

But the individual practitioner usually is too busy with his never-ending responsibilities to think about broader medical issues. He carries an appalling load. In most cases the family doctor has fully earned the respect and affection which millions of Americans have for him. He has a habit of quietly scaling down bills for needy patients and carrying a load of charity cases without talking about it.

So many doctors have concentrated in the cities that demands on country ard small-town doctors are proportionately higher. These small community doctors are often the ones with poorest facilities, largest practices, and lowest incomes. The main effort to bridge the economic gap between patient and doctor has beerthrough voluntary group insurance plans as a substitute for the fee system of payment. During the last two decades many Americans have got partial coverage against sickness through one of these plans.

But they have three fatal defects: They don't offer adequate coverage; they have proved too expensive for lower-income groups; and they don't include enough people.

Like most commercial health insurance policies, group insurance plans tend to restrict services and to neglect thorough treatment. Some group plans provide only hospitalization for limited periods, but over half our medical bills are for treatment given outside of hospitals. Less than 5.4 percent of the population has insurance for physicians' services, and about 2.5 percent have complete home. office, and hospital coverage. Only 1 American out of 4 has any kind of health insurance at all.

Many of people who have had experience administering group health plans say that these are only a necessary stopgap in the absence of a national health plan. There are signs that the tide is setting in the direction of such a national program as a logical extension of social security. Opinion polls show a majority in favor of pay-roll deductions to provide national health insurance. And in the last Congress Republicans and Democrats joined to provide Federal funds for the construction of more hospitals and clinics, and for treatment and research in mental health and other fields.

Congress hasn't acted on the problem of providing medical services for those who can't afford them. Bat it may do so during the present session. Senator Robert A. Taft (Republican), Ohio, has revised his health bill, and reintroduced it, with the support of the AMA. Given the Senator's influence and the Republican desire to win votes from those who would benefit by the measure's provisions, chances for this bill look pretty good. Its main provisions:

Coordination of civilian Federal health functions in a new Federal health

agency.

Appropriation of $200,000,000 yearly to assist States in providing medical care and hospital services for individuals and families unable to pay for them. Cash contributions by States at least equal to the sum advanced from the Federal Treasury.

Approval of State programs by the Surgeon General, with appeal to a national health council in event of disagreement.

Enactment of the bill, according to its proponents, would probably make some basic medical services available to the poorest 20 to 25 percent of the population; opponents say only 10 percent.

Critics of the bill object strongly to a provision that applicants would have to prove their inability to pay. Too many States require a means test as proof of this inability to pay. This is a throw-back from the concept of social security to that of public charity. It seems needlessly humiliating, say the critics, that sick people should have either to exhaust their savings or stigmatize themselves as paupers to obtain emergency medical care.

The Taft bill also minimizes basic public interest in good health for everyone. We do not maintain schools only for those who are too poor to go to private schools, nor libraries for those who are too poor to buy books. Why offer medical care to the indigent, and exclude middle-income families for whom, also, medical services are too expensive?

Another criticism is that the Taft bill. by providing only emergency relief. forestalls any attempt to combat disease on a Nation-wide scale. Some doctors