It is still commonly said that the poor and the rich get the best care It's a nice generalization and here and there it is true, especially in some large cities. But taking the country over, it is not supported by facts. If adequate medical care is to be available to our peopleaccording to their need for service and not according to their ability to pay-we must remove the financial barrier to adequate care. Lack of health facilities and medical personnel further contributes to the present inadequacy of medical care in many areas. Even befor the war, shortages in doctors, nurses, dentists, and other health personnel, and in hospitals and other facilities existed in many areas especially in low-income and rural sections. There were large differences between States, and the spread was even greater within the States. Hospital facilities cluster in areas where there is sufficien income to assure their existence. Likewise, professional personne tend to locate in areas where higher incomes prevail and where faci ities in keeping with modern medical practice exist. THE NEED FOR PROTECTION AGAINST SICKNESS COSTS Sickness frequently throws a double burden on family resources Aside from the unexpected and largely uncontrollable medical costs which sickness brings, prolonged illness of the breadwinner is likely to cut down or stop family income. When family income stops or is interrupted because of illness of the breadwinner, when medical bills have exhausted family saving when borrowing from loan organizations or friends and relatives is n longer possible, families are forced to turn to charitable or relief agencies for aid. Studies of the case loads of relief and other assist ance organizations, dating back to 1890, indicate that on the averag fully 30 percent, and in many instances as much as 50 percent, of dependency is caused by medical costs and loss of earnings resulting from sickness of the wage earner. The lack of adequate measures to cope with sickness and with sickness costs constitutes the most serious gap in provisions for socia security in the United States. This lack affects all areas in the country, all age groups, and nearly all income levels. Of course, we shoul strengthen our public health programs, in order to prevent all illness and disability that is preventable. But since most illness and most disability cannot yet be prevented, steps must be taken to make ad quate medical care more accessible to all. The most practical metho of working toward this goal is to distribute medical costs among large groups of people and over a period of time. VOLUNTARY INSURANCE The costs of sickness have been distributed for some people throug voluntary insurance plans for many years. At present, benefits to which the insured are entitled under the many different types of voluntary plans vary in many ways. Only a few million persons, probably not more than 2 or 3 percent of the population, have wha: can be termed relatively complete protection against medical bills By far the largest enrollment in voluntary health insurance fo service benefits is in Blue Cross hospital plans. Membership ha grown tremendously within the past 10 or 15 years, but it still cove: less than 15 percent of the population of the United States. Protection against hospital costs is valuable, but the cost of hospitalization accounts for only about a fifth of medical costs paid by families, and voluntary hospitalization insurance does not protect against all of this. Insurance of this type can, at best, serve only a fractional part of the national need. About 2,000,000 Blue Cross members are enrolled in medically sponsored prepayment programs for medical services which are coordinated with Blue Cross. Another 18,000,000 are eligible for hospital benefits only. Blue Cross membership is concentrated in medium-sized and large cities and their environs. Rural membership is very small. I believe only about 3 percent of the membership of the Blue Cross families are in rural areas. The Blue Cross plans have demonstrated, on the one hand, the relative case of insuring a substantial fraction of the middle-income group against hospital costs and, on the other hand, the great difficulty of insuring the low-income or rural groups through voluntary methods. Ordinarily, the plans have failed to insure those who most need this protection-the low-income groups and those in small cities and towns, in medium or small business establishments or self-employed. The difficulties of enrolling the public in voluntary hospitalization plans are small compared to those of medical-care plans. There are in the United States at this time voluntary prepayment medical-care plans with an enrollment of between five and six million persons, whose members are entitled to service benefits. For a regular fee, usually payable monthly, members are guaranteed the receipt of specified services from physicians, and other types of medical care in case of illness. Many of these plans include hospitalization among the services. The organizations differ greatly in the scope of services provided, and various limitations are placed on the amount of care furnished. Membership is frequently restricted to those below a specified age or income. Persons with preexisting disabilities may be excluded entirely or entitled to only limited service. Industrial plans, which in early 1945 included about 30 percent of the members of these prepayment plans, usually provide relatively complete care, but eligibility is in most cases restricted to employees of one organization and the scope of the plans is limited in many other ways. In early 1945, about half of the persons who were members of the plans providing service benefits were members of plans sponsored by State and county medical societies. During the past few years, the number of medical society plans sponsored by State and county medical societies and the number of people enrolled have grown. The American Medical Association, which formerly opposed all forms of health insurance, has definitely gone on record as favoring voluntary health insurance plans of this type. Senator DONNELL. Has the American Medical Association gone on record with respect to an involuntary insurance, that is to say compulsory insurance? Mr. ALTMEYER. They are opposed to that. Senator DONNELL. Have they passed resolutions to that effect? Senator DONNELL. How recently have they done that? Mr. ALTMEYER. As recently as last December at their Chicag meeting. Senator DONNELL. All right. Mr. ALTMEYER. With the exception of medical society plans in th States of Washington and Oregon, the scope of care provided tr these plans is generally much restricted-primarily to obstetric. services and surgical care in the hospital. The Washington and Oregon plans have been in operation for many years and are " typical of the medical society plans as a whole or those being organ ized in other sections of the country. The typical medical-society plan is limited in its benefits, is exper sive, and often either limits the membership to those under a specifie income (usually $2,000 or $2,500) or allows the doctor to make add tional charges for those with incomes over a specified amount o those using a private room in the hospital. Thus, the families wi incomes over the limit, do not really know what insurance prote tion they bought with their premiums. During the past 10 years there has been a rapidly increasing growth in industrial group insurance through which employees a reimbursed in cash for all or a portion of their hospital and medic fees (principally surgical). Policies of this type formerly cover only employees, but recently the coverage in many instances has bee: extended to employees' dependents. At the end of 1944, approx imately 7,000,000 to 8,000,000 persons were eligible for hospitalizatio indemnity payments. Of this number, about 6,000,000 were a eligible for surgical indemnities. Although this is a step in th right direction, insurance of this type is not a satisfactory substitu for a comprehensive health insurance program. Both the numb-: of persons served and the benefits received are too limited. Compr hensive protection of this type would be more expensive than me persons could afford to pay. This, in summary, is voluntary health insurance as it now exis in the United States. Membership is limited, services are incomplet prices are high in comparison with services provided under some the plans, and in many instances additional charges are made f the more expensive services. The plans themselves are unevenly d tributed throughout the country. Each is individually planned ar administered, and, with the exception of the Blue Cross hospitaliz. tion plans, there is practically no coordination among them. The crucial test of a health insurance program is not its good inter tions, but the population coverage it achieves and the scope of prote tion it furnishes. By these criteria, voluntary insurance against t.. costs of medical care has been tried and found wanting. This failur is not due to lack of effort, earnestness or skill on the part of individ uals or organizations sponsoring these programs, nor is it the resu of lack of interest on the part of the American people. The rapid enrollment of Blue Cross and medical society plans ind cates that even the limited protection offered by these plans is w comed by the public. The failure of voluntary insurance is due to t fact that the task is too large and too difficult to be accomplished by organizations or associations representing only a portion-and i most instances a very small portion-of the public. No type of voluntary plan, either here or abroad, has ever eve approximated the goal of including all of the population in a regio As a rule, those who are most in need of protection are not covered. Voluntary insurance is necessarily expensive, because it is constantly exposed to an adverse selection of risk among those who Senator ELLENDER. Mr. Altmeyer, suppose the pending measure should be adopted as written. What would become of all of these plans that you have been discussing just now, the Blue Cross plan and the other industrial insurance associations? Mr. ALTMEYER. I think that they could be fitted into a comprehensive health insurance plan, either as service agencies or as representatives of the persons furnishing the service. Senator ELLENDER. How would they maintain themselves? Mr. ALTMEYER. They would maintain themselves by being reimbursed by the Federal Government for the service they rendered either directly or the service rendered by the persons that they represented. Senator ELLENDER. The only portion of their facilities that could be used would be the hospitals if they have any. Mr. ALTMEYER. Well, I mean some of these medical society plans. The doctors might prefer something along that line. Senator ELLENDER. Let us take the Blue Cross plan which you say insures quite a few people and which has done good work. Would not the passage of this bill as written have the effect of putting the Blue Cross plan out of business? Mr. ALTMEYER. Well, it might. I do not know. Senator ELLENDER. Do you not know it would? Mr. ALTMEYER. No, I do not know it would. The Blue Cross people will have to speak for themselves on that. Senator ELLENDER. As I understand, they collect a certain amount per month from their membership for which they render certain services. Now, if you forced all of the people of the country-I think that we said yesterday 85 percent of them would come under the plan as envisioned by the pending bill-do you think that those paying compulsory insurance would also take membership in the Blue Cross? Mr. ALTMEYER. No; but that is not the whole story. Some of these Blue Cross plans would want to furnish additional services by way of semiprivate or private rooms, for example, and people who like to pay through voluntary organizations for that additional service would do so since that would not be provided under this bill. So far as the basic service under this bill is concerned, the hospitals (which really organized these Blue Cross plans which are producers' organizations and not consumers' organizations) might prefer to continue to be represented through Blue Cross plans, submit their bills to the Blue Cross organization, and let the Blue Cross organization handle all of the relations with the Government. That could easily be done. Senator ELLENDER. How would they maintain themselves? Mr. ALTMEYER. By being reimbursed by the Government first for the services rendered by the hospitals and secondly by the Government paying them the administrative expense that the Government would be saved by their handling the job for the hospitals. Senator ELLENDER. Could that be attained under this bill? Senator ELLENDER. Do you mean the administrative expenses? Mr. ALTMEYER. Yes, sir. To the extent that they save the Govern ment money, the Government could reimburse them for their adminis trative expenses. Senator ELLENDER. All they would receive would be the actual expenses; it would then not be in the nature of a paying concern? Mr. ALTMEYER. It would not be in the nature of a profit, but they are all nonprofit organizations now. They do not propose to ear a profit for themselves. They are all nonprofit. Senator ELLENDER. You concede, however, that as to those organizations that have hospitals and facilities, that that would be most likely the services that would be paid for and contracted for by the Government, through the Administrator? Mr. ALTMEYER. I do not think that I got that. Senator ELLENDER. You have said that most of these plans, the Blue Cross and a lot of industrial groups, put up hospitals or hau contracts for hospital services? Mr. ALTMEYER. That is right. Senator ELLENDER. That would be the only part of their facilities that would be really used through this forced plan? Mr. ALTMEYER. For the Blue Cross? Senator ELLENDER. No; I mean the Government. Senator ELLENDER. Well, why should the Government, or how coul the Government; afford not to administer the compulsory plan if was shown by handling it itself it would be less expensive? Mr. ALTMEYER. That is the question. Take the medical society plans. If the doctors in the locality prefer to handle their relations with the Government through a medical society, there is no reaso why the Government might not deal with the medical society plaz officials, and let those officials deal with the individual practitioners Senator ELLENDER. But these societies would then have to abide by and be under certain rules and regulations, as would be made by Washington? Mr. ALTMEYER. That is right. Senator ELLENDER. They could not handle their affairs as they are now permitted to do? METHOD OF REMUNERATION Mr. ALTMEYER. Well, not completely free of any control over ar rangements, but the bill provides, they could determine for themselves what method of remuneration the practitioners should receive. They would be completely free on that score. Senator ELLENDER. That would be under the jurisdiction, thoug!.. of the Administrator here in Washington? Mr. ALTMEYER. But the bill provides if a majority of the physicia in the community elect a certain method of remuneration, that metho of remuneration prevails. Senator ELLENDER. Irrespective of what it amounts to? Mr. ALTMEYER. Oh, no, I was referring to the method of remuneration. There would have to be a lump sum allocation, based up certain objective factors, but that could be written into the legislatio: by the Congress, and would not be subject to the whim of the Administrator. |