in the cost of the program. Initial participation in a voluntary plan by 5 percent of a group of low-income farmers is encouraging. Farmers are the most individualistic and independent-minded part of our entire populati Many have solved their problems of health service by going without the neces sary care. If such an experiment were conducted in an urban commun among a group of low-income workers in an industrial plant, probably 85 to 95 percent of the employees would have enrolled.

The voluntary plans are making great strides in reaching the rural population and we hope that national agencies will continue to encourage groups in such participation.

(13) Many of the Blue Cross plans have increased their benefits during they period of operation without corresponding increase in subscription rates to the beneficiary. The increased benefits have been made possible through better selection among subscribers and decision to apply reserves to provision of immediate benefits. Blue Cross plans are, of course, concerned with provid.rz protection for all costs of hospitalized illness.

In some cases, increased costs for labor and supplies in hospitals have bee sitated increased rates to the subscribers. Usually, however, this has also be accompanied by increased benefits. But the problem of inflation and its efers upon increased cost of hospital care still faces Blue Cross and any program of health service, voluntary or governmental, if the quality and availability of car is to be increased and assured.

(14) Voluntary plans have been accepted by many veterans as a genuine oppin tunity for family protection.-Even though veterans are entitled to care un st existing GI legislation, they recognize that at least three-fourths of the care = their families is received by wife and children. Moreover, Blue Cross benefi permits free choice of hospital and doctor, which are not available at the prese time for non-service-connected disabilities. Blue Cross plans have exemp returning veterans from the group requirements imposed upon members of the general public, and thousands are being added daily to the Blue Cross rolis (15) Blue Cross plans have been recognized by Government agencies 98 4o ministrative units for the provision of benefits.-Many Blue Cross plans bate signed formal agreements to serve as clearing houses for medical and hosp:L care by private physicians and hospitals for service-connected conditions, wit such care is authorized by the Veterans' Administration. Suggestions have also been made that Blue Cross represent the State or local Government welfare departments in providing health benefits to public assistance beneficiaries. N definite arrangements for this type of service have yet been completed, but they are under discussion in a number of States. These various procedars are, of course, merely incidental services of an agency established primarily :: offer protection to regularly employed persons.

CONTRASTS WITH EUROPEAN EXPERIENCE

It has sometimes been argued that voluntary health insurance is merely the road (or obstacle) to a compulsory plan, as in Europe. It is suggested. ":" Americans should hurdle these obstacles (voluntary plans), and require 12entire population to participate immediately in a complete program.

There are a number of differences between the American situation and the European scene. The typical voluntary health-insurance plan in the Eur pet countries, before the passage of compulsory laws (notably England), w small organization with a few thousand beneficiaries. Many were essenti the ventures of private promoters, although legally established as "cut friendly societies.

The United States has more participants in voluntary plans that the bined population of Sweden, Norway, Denmark, Belgium, and Holland, al which have been cited as evidence of need for a Nation-wide plan in this entry Yet the number of American plans is small. And the most successful plansthe Blue Cross-are organized on a nonprofit basis. Each one serves a are community or an entire State. They are coordinated on a national basis.

The provision of service for hospitalized illness in England and continenti Europe has long been primarily a public responsibility. The introduction of health insurance in the European countries was essentially a method cổ tì lieving the taxpayer, not the worker. The United States is the only t in the world where the average man has ever assumed that a hospital bill wei something for which he should be personally responsible.

BLUE CROSS NATIONAL PROGRAM

The matter of when or whether our population is to be included in a national program of financing health service must be decided by our representatives, the Congress. The decision should be influenced by matters of public necessity and convenience. We hope that the Congress will take into account all of the factors in American life, including the results and prospects of existing professionally and community-sponsored programs. We believe, as the chairman has So aptly stated, that all programs should be considered in the light of facts, rather than slogans or prejudices. It has been the purpose of this testimony to bring some of these facts before you.

The Blue Cross Commission favors the following approach to a health program for the American people:

(a) Complete medical care and hospitalization supported by taxation for all public assistance beneficiaries or indigent members of the population. (This feature is title 1, part C, of Senate bill No. 1606.)

The provision of health service as a right to those already receiving public assistance would clarify the position of charitable organizations in the health field, particularly community hospitals. Acceptance by Government for care of the officially declared indigent would permit voluntary plans to remove this burden from member hospitals, and hence from subscribers.

(b) Government aid in the construction of hospitals and clinic facilities in the areas which require such an assistance because of generally low income, sparse population, or sudden shift in size or the composition of the public. (This feature has been recommended by the President and is included in Senate bill No. 191.)

Adequate facilities are a requirement of adequate care. Voluntary plans would increase in usefulness with the better distribution of hospitals and other health facilities.

(c) Grants-in-aid to State-approved voluntary health programs which are also supported by regular contributions from the beneficiaries. Payments might be made to practitioners or institutions, or to prepayment plans under nonprofit auspices.

Such Government assistance would encourage enrollment and have much the same result as legislative compulsion, but with freedom for localities to determine the timing and character of their health program.

(d) Permissive pay-roll deduction for Federal employees for participation in voluntary prepaid health-service program.

It might appear that this is a small portion of our population, and not a significant factor in developing a program for the country. Yet, this large group of people should be entitled to the same conveniences in obtaining prepaid health-service benefits as the rest of the workers in the Nation. Moreover, the prestige of the National Government, in recognizing the individual's right to participate on the voluntary basis, would be a strong and encouraging example to those private employers, as well as to the States and local governments, which have not yet seen fit to provide permissive pay-roll deductions for their own employees.

In conclusion: The purpose of this testimony has been to tell you enough about the character of the Blue Cross movement and to explain its reputation with the American people at the present time. The Blue Cross plans were started and have been maintained to serve a positive need. We wish their contribution to be considered on its merits. No plan is perfect in every respect, and none is achieving every ideal of public service which its leaders recognize as desirable. We know that there is much to be done. And we also know that administration is difficult; agitation is easy.

It is high tribute to voluntary plans that Blue Cross and other ventures have been mentioned so frequently in this testimony. The Senate committee and the United States Congress are to be highly commended for their sustained interest in developing a national health program for the entire population. We offer you our resources and experience and trust that your committee will take all significant facts into consideration in making final recommendations to the United States Congress.

EXHIBIT 1.—Blue Cross enrollment on Apr. 1, 1946, estimated civilian population as of November 1943, and percent of population enrolled on Apr. 1, 1946

EXHIBIT 2.-Total Blue Cross Enrollment-Apr. 1, 1937, to Apr. 1, 1946

STATEMENT OF JOHN R. MANNIX

Mr. MANNIX. I will not say very much in conclusion, Dr. Rorem has overed the subject so thoroughly.

I was very interested in your statement to begin with, Senator Muray, that everybody would agree that Blue Cross would be an ideal vay of solving this problem. But concern has been expressed that Blue Cross, first, is not comprehensive enough, does not offer sufficient benefits, and second that it does not reach sufficient portions of the American people.

Well, as regards its being more comprehensive, I would like to point out that until 1937, Blue Cross only offered limited hospital care, and only to employed people, not to the family members. We did not, for nstance, offer any maternity service at that time.

The CHAIRMAN. That is only since 1937.

Mr. MANNIX. It has been extended to offer maternity, and nervous and mental diseases.

Mr. ROREM. It also had very little enrollment.

Mr. MANNIX. Up to that time we only had about half a million people enrolled.

Beginning in 1937, the service was offered to families. Maternity service was offered in the same year. Beginning in 1939 medical plans were added to offer surgical and obstetrical, and now in three areas, California, New Hampshire, and Buffalo, N. Y., the plans are offering home and office calls, and the tendency is to offer a more and nore comprehensive service just as fast as the public is interested in producing sufficient sums of money to pay for it, and as soon as acFuarial service justifies the offering of more comprehensive programs. The CHAIRMAN. When the Blue Cross system first began, were they met with skepticism by the medical profession? Did they oppose them at first?

Mr. MANNIX. I would say that that varied in different parts of the country. I happen to have been in Cleveland at the time, and a great leal of the support that we got was from the Cleveland Academy of Medicine, and from a Dr. Follansbee, who is one of the officials of the AMA at the time. It is true that the members of the American medical profession in certain areas did oppose it. It is true that hospitals did oppose it. It is true that many employers opposed it. It is also true that the public did not support them very much, and we had problem of education with all four groups. Now we are enrolling about every 5 days as many people as we enrolled in the first 5 years. The CHAIRMAN. Do you think that if the Blue Cross undertook to give the same coverage as the bill here pending, that is to say, comOlete medical and home care and office care, and everything pertaining to medical care, do you think that the medical profession would approve Blue Cross system, if it went that far?

Mr. MANNIX. I definitely feel they would.

The CHAIRMAN. You think so. You think that if the Blue Cross plan s successful in its present drives and undertakes to lauch out and give the entire medical care to the American people, that they would approve it?

Mr. MANNIX. I believe that is true.

Mr. ROREM. I would like to say one thing here, because it is worth mentioning. We have spoken of Blue Cross as if it was a corporate

entity that provided the medical care. That is not the typical arrangement. The medical care is provided through a parallel organızation administered by the same employees as Blue Cross. However, in few instances, like Delaware, North Carolina, Louisiana, one corporation offers complete health service, which is—and I speak now a an administrator as opposed to a social philosopher-preferable. The CHAIRMAN. Where is that organization?

Mr. ROREM. It is just that the Blue Cross plan has authority to off-: complete medical care, in New York, Delaware, West Virginia, Lou.siana, and I think in New Hampshire and Vermont.

Mr. MANNIX. It is about to start there.

Mr. ROREM. And in Rhode Island it will start on that basis. The CHAIRMAN. They are offering complete coverage there? Mr. ROREM. Offering such medical care as the medical professio". at that particular time will participate in. It is not easy; the ques tion that you asked Mr. Mannix, which he answered in the affirmative, and with which I agree, was answered, I am sure, with the f recognition that individuals in the medical profession still offers a field for considerable effort.

The CHAIRMAN. In these places where you say they are making this wider coverage, the cost there, of course, is greater.

Mr. ROREM. Oh, yes.

The CHAIRMAN. And is that limited to certain classes of people or groups, or is it open to the public generally?

Mr. ROREM. Except in one or two instances where it has proves to be a failure, I mean administratively a failure, where income levels are placed upon permission to participate. That is entirely impract cal, and has not proved to be acceptable to the American people at all.

The CHAIRMAN. Of course, it would be impossible for the very low income groups in the United States to avail themselves of that system. I mean to say people that are earning less than $1,200 a year.

Mr. ROREM. It depends on whether the employer participates. W assume that with the expansion of this larger plan, there will be employer contribution. That is taken for granted.

The CHAIRMAN. The employer would contribute, and the employes also?

Mr. ROREM. Yes.

The CHAIRMAN. At the present time on the voluntary basis it won' be impossible to expect that a third of the population of the Unite States would be able to avail itself of that system.

Mr. ROREM. You mean if they paid it entirely themselves? Com prehensive care requires employer contribution, in my opinion, a in some of the instances the employer has been paying more than ha considerably more. Comprehensive care requires employer cer tribution.

Mr. MANNIX. The entire American public cannot pay for the care now through a Government program.

The CHAIRMAN. Could you furnish us with a list of the States an the membership in those particular Blue Cross plans that give this extensive coverage?

Mr. ROREM. We have all of that, yes.

The CHAIRMAN. And the costs, all of the items that go with that! Mr. ROREM. Yes.