TASK FORCE REPORT ON 
Federal Medical 
Services 
[Appendix 1 
PREPARED POR 
THE COMMISSION ON ORGANIZATION 
OF THE EXECUTIVE BRANCH 
OF THE GOVERNMENT 
January 1949 Federal Medical Services 
A REPORT WITH RECOMMENDATIONS 
PREPARED FOR 
THE COMMISSION ON ORGANIZATION OF THE 
EXECUTIVE BRANCH OF THE GOVERNMENT 
by 
The Committee on Federal Medical Services For sale by the Superintendent of Documents, U. S. Government Printing Office, Washington 25, D. C. 
Price 25 cents Letter of Transmittal 
Washington, D. C., 
15 January 1949. 
Dear Sirs: In accordance with Public Law 162, approved July 7, 
1947, the Commission on Organization of the Executive Branch of the 
Government has undertaken an examination into the operation and 
organization of the executive functions and activities. In this exam- 
ination it has had the assistance of various task forces which have 
made studies of particular segments of the Government. Herewith 
it submits to the Congress a study prepared for the Commission’s con- 
sideration of the Medical Services of the Federal Government. 
The study of each task force naturally is made from its own par- 
ticular angle. The Commission, in working out a pattern for the 
Executive Branch as a whole, has not accepted all of the recommenda- 
tions of the task forces. Furthermore, the Commission, in its own 
series of reports, has not discussed all the recommendations of an 
administrative nature although they may be of importance to the 
officials concerned. 
The Commission’s own report on the Medical Services Systems and 
Methods is submitted to the Congress separately. 
The Commission wishes to express its appreciation to Tracy S. 
Voorhees, chairman of the Committee on Federal Medical Services, to 
the members of the committee, and to their advisers and colleagues 
for preparation of this task force study. 
Faithfully, 
The Honorable 
Chairman. 
The President of the Senate. 
The Honorable 
The Speaker of the House of Representatives. Letter of Submission 
Washington 25, D. C., 
November 30, 194-8. 
Honorable Herbert Hoover, 
Chairman, Commission on Organization of the 
Executive Branch of the Government, Washington 25, D. C. 
Dear Mr. Chairman; Herewith is the unanimous report of your 
Committee on Federal Medical Services, dated November 1. Pre- 
ceding the report itself is a brief summary of the weaknesses found 
and the remedies proposed. 
An appendix to the report, setting forth the committee’s organiza- 
tion for its task, is bound herewith. The other appendices are bound 
separately. 
Since Admiral Boone was appointed and has served solely as secre- 
tary to the committee, not as a member of it, he has not participated 
in the substance of the report or in its conclusions and recommenda- 
tions. 
Sincerely yours, 
Frank R. Bradley, M. D. 
Robin C. Buerki, M. D. 
Michael E. Deßakey, M. D. 
Goldthwaite H. Dorr 
Paul R. Hawley, M. D. 
Henry P. Isham 
Hugh R. Leavell, M. D. 
William C. Menninger, M. D. 
Hugh J. Morgan, M. D. 
O. H. Perry Pepper, M. D. 
Alfred Newton Richards, Ph. D. 
Charles F. Rowley 
Allen O. Whipple, M. D. 
Ray Lyman Wilbur, M. D. 
Edward D. Churchill, M. D., 
Vice Chairman 
Tracy S. Voorhees, Chairman. 
Joel T. Boone, Rear Admiral (M. C.), U. S. Navy, Secretary. Contents 
Page 
Summary of Report ix 
Introduction xix 
I. The Magnitude and Organization of Federal Medical Activities ... 1 
Devoid of Any Central Plan 2 
General Outline of Activities 2 
Beneficiaries of Direct Care 5 
11. Weaknesses in the Present Organization of Federal Medical Services . . 6 
A. Spotlight on Federal Hospitalization by Areas ...... 6 
B. Spotlight on Certain Diseases 14 
C. Spotlight on Construction Programs 17 
D. Spotlight on Patient Stays in Hospital 19 
E. Spotlight on Medical Manpower 21 
F. Spotlight on Definition of Those Entitled to Medical Care . . 24 
Summary of Weaknesses 25 
111. Recommended Organization to Achieve the Objectives Defined by Con- 
gress 26 
IV. Medical Care Functions of National Bureau of Health 28 
A. Transfer of Armed Forces Hospital Functions 29 
B. Transfer of Veterans, Medical and Hospital Functions’ ... 31 
C. Transfer of the Federal Security Agency Hospitals 33 
D. Transfer of Other Hospitals 33 
E. Basic Organizational Principles of the Hospital System ... 34 
V. Integration of Federal Hospital System With Non-Federal Hospitals . . 38 
VI. Need for Reconsideration of the Definition of Beneficiaries .... 43 
A. Dependents of Armed Forces Personnel 43 
B. Veterans with Nonservice-Connected Conditions 44 
C. Merchant Seamen 84 
D. Priorities 49 Page 
VII. Organization of Medical Services in the Armed Forces 50 
A. Unification and Armed Forces Medicine 50 
B. Avoidance of Duplication in Hospitalization 51 
C. Organization at Secretary of Defense Level 51 
D. Position and Functions of Surgeon General of the Army ... 52 
E. Medical Service in the Air Force 53 
F. Concentration on Basic Military Mission 53 
G. Medical Personnel 56 
H. Maximum Hospital Benefits and Length of Stay in Hospitals . . 58 
I. Average Lengths of Stay in Hospital 59 
VIII. Health Resources and Manpower Allocation in Time of Emergency 
A. Requirements of Civil Defense 60 
B. Manpower Allocation 61 
C. Medical Supplies 62 
D. Greater Use of Ancillary Technical Personnel 63 
IX. Public Health Functions of the National Bureau of Health .... 64 
X. Research and Training in the National Bureau of Health 68 
XI. Personnel Policies in Federal Medical Services 
A. A Single Type of Career Service is Requisite 72 
B. Greater Use of Ancillary Technical Personnel 75 
XII. Aid to Medical Education * » . . 76 
XIII. Medical Supply 80 
XIV. Provision for Continuing Study and Top-Level Supervision of Medical 
Services 84 
XV. The Need for Increased Emphasis on the Control of Disease . .. 86 
XVI. Conclusion 91 
Appendix Organization of the Work of the Committee on Federal Medical 
Services 93 SUMMARY OF REPORT 
Our Method of Work—Following the Commission’s example, we dele- 
gated specific fields to task forces. For certain of these we secured 
experts who were added to the committee. Other fields were within 
the particular experience of original members of the committee. Still 
others were covered by securing eminent advisors to the committee. 
Our Objective has been, not to test the efficiency of particular 
agencies, but rather the adequacy of the governmental medical organ- 
ization as measured against the Commission’s objectives. For the 
faults we have found, we blame principally the competitive organiza- 
tional climate in wliich the various agencies have striven to maintain 
themselves, rather than the agencies themselves. You instructed us to 
approach our task courageously without undue solicitude for tradi- 
tional organizations. We have tried to do so. Our study is, in a real 
sense, only a beginning, but we believe it to be a beginning wliich 
needed to be made. 
Assumptions We Have Made.-—(1) That it must be a basic principle 
that whatever medical care the Government provides must be of the 
highest quality which can be sustained by the best possible organiza- 
tion of the strictly limited human resources available. (2) That the 
Commission will recommend a Cabinet Department embracing health, 
education, and security. 
Magnitude of the Medical Problem.-—Four big and some 40 smaller 
agencies of the Government spent about $1,250,000,000 for health 
and medical services in fiscal year 1948, an increase of five times over 
1940, and of 20 percent even over 1947. In 1949, the Veterans’ 
Administration alone will spend as much as all 46 agencies did in 
1948'—half of it for new hospitals. 
The United States gives varying degrees of care to 24,000,000 
beneficiaries—about one-sixth of the Nation. Eighteen and one-half 
million of these are veterans. There are now over 100,000 Veterans’ 
Administration hospital beds in operation, and a further increase by 
one-third is now in process. One estimate prepared on the basis of 
hospitalization of veterans of the first World War projects 300,000 
Veterans’ Administration beds as probably necessary under present 
policies by 1980. Even if only service-connected cases and chronic 
non-service-connected cases—the latter being almost all medically 
indigent—should be given care, an actuarial study made for us 
indicates need for 250,000 beds by 1975, and that of these three- 
fourths would be for mental cases. In these estimates it has been 
assumed that no further war will occur. Weaknesses in Existing Organization 
Tins enormous and expanding enterprise is devoid of any central 
plan. 
Four large, and various smaller agencies, obtain funds and build 
hospitals, each to care for its own clientele. They compete with each 
other for scarce personnel. Generally, no one of them considers the 
facilities available in, or the needs of, the others. No one has re- 
sponsibility for any over-all plan. There is not even any clear defini- 
tion of certain classes of beneficiaries for whom care is to be planned. 
The Government is moving into uncalculated obligations without 
an understanding of their ultimate cost, the lack of professional man- 
power available to discharge them, or the adverse effect upon the 
hospital system of the country. 
Fundamental to all others is the conclusion that there must he over-all 
'planning and that this in turn requires first a clear definition of the extent 
of the responsibilities and second an organization appropriate to carry 
out the commitment. 
We tested in several ways whether the existing set-up squares with 
the Commission’s objectives: 
1. Spotlight by Areas 
We inspected five representative areas and obtained necessary data 
on others. As examples: 
In the New York City area we felt that under imificd manage- 
ment four Army and Air Force hospitals—none of which is profes- 
sionally adequate—could be closed, reducing requirements for medi- 
cal officers by 80 percent (from 60 to 10), but at the same time provid- 
ing a higher standard of care. We found that the absence of integra- 
tion of Federal hospitals produced a waste of physical plant, and 
under-utilization of scarce military medical personnel; further, that 
ambitious plans of all but one of the agencies to build new hospitals 
are likely to make the situation worse. Costs of their planned con- 
struction are over $100,000,000. This will double the permanent 
plant, with no prospect of staffing it, and no satisfying evidence that 
additional beds in such amount are needed. 
In the San Francisco area, there are 13 Federal hospitals with a 
total constructed capacity of 9,900 beds and only 4,200 patients at 
the time of survey. Proper integration would permit the closing of 
7of the 13 hospitals. Their closing would reduce bed capacity by about 
20 percent and still leave the remaining 6 hospitals'—even after trans- 
ferring to them the patients from the 7 closed hospitals—with only 
54 percent of constructed capacity occupied. 
In Houston, we found the Veterans’ Administration building a 
$25,000,000 neuro-psychiatric hospital, immediately adjacent to the Navy hospital, because the Navy decided to retain as an neuro- 
psychiatric center a hospital built during the war. This was built 
under an arrangement that it would revert to Veterans’ Administra- 
tion, and for the past 2 years only about 10 percent of its constructed 
capacity has been required for Navy personnel. Under unified 
planning, Navy would not need this installation, and the entire cost 
of the new Veterans’ Administration hospital could be saved. 
In Honolulu, the Army has just completed a hospital costing 
$37,000,000, started during the war, although the Navy has nearby 
a permanent modern hospital plant adequate for all military personnel 
of all three services in that area of the Pacific. Under unified plan- 
ning, the cost of the Army hospital, except to the extent of construc- 
tion completed before Japan surrendered, could have been saved. Its 
operation is unnecessary. 
2. Spotlight by Certain Diseases 
We selected tuberculosis and neuropsychiatric disorders which 
together fill 60 percent of Veterans’ Administration beds and are the 
greatest expense to the Government. Our task forces, working sep- 
arately, found as to each of these diseases that the present organization 
is unsatisfactory; that it developed piecemeal, with little compre- 
hensive planning; that it involves duplication and inefficiency; that 
there is an acute shortage of medical personnel, aggravated by the 
unsound organization; that there is imperative need for unification. 
3. Spotlight on Construction 
The current Veterans’ Administration building program alone will 
cost $1,100,000,000. The armed forces desire another $200,000,000 
for construction. Large Veterans’ Administration hospitals cost 
about $20,000 a bed; small ones over $30,000. One is costing $51,000 
for a single bed. They are being built at vastly greater cost than the 
per bed cost of community non-Federal hospitals. They contain 
facilities not needed for patients who really require hospital bed care. 
The construction plans often do not fit the need of the Veterans’ 
Administration medical department which must operate them. 
Nearly half of the 89 new Veterans’ Administration hospitals are 
being built or planned in areas where experience has proven that it 
will be difficult, if not impossible, to secure adequate staffs. Further, 
construction of these may prevent erection of essential hospitals near 
medical centers which can be staffed and can give the best care. 
Veterans’ Administration program conflicts with the Government’s 
policy under the Hill-Burton Act of aiding non-Federal hospitals for 
the purpose of establishing a sound hospital system for the country 
as a whole. It competes with such hospitals for scarce personnel. 
It diverts patients from them and threatens the community interest 
that the Hill-Burton Act was designed to stimulate. 4. Spotlight on Patient Stays 
Compared with representative voluntary hospitals, patients with 
the same diagnoses stay in Government hospitals two or three times 
as long. In the same Army and Navy hospitals civilians stay only 
half as long as military personnel. Making all discounts, stays could 
be greatly shortened under a unified system with proper planning, 
aided by the fact that the patients would be nearer home. 
5. Spotlight on Medical Manpower 
We have studied this first in the armed forces separately. A very 
large part of the medical officers were educated at Government ex- 
pense during the war and are now rendering obligatory service. Most 
of them leave within the next 6 months. Voluntary recruitment has 
failed, and increase of the armed forces under Selective Service is 
aggravating the deficiency. A draft is necessaiy, but it will bring in 
only young doctors, who cannot provide high-grade specialist care. 
Except in war, if adequate medical care is to be givern, specialists 
must be utilized in their home communities. 
In the nonmilitary Federal agencies, none has the manpower re- 
sources in sight to meet its full responsibilities. The condition is 
neither temporary nor self-correcting. In the Veterans’ Administra- 
tion alone, 5,600 beds are now closed because of inability to staff them. 
The best opinion available is that not over 120,000 Veterans’ Adminis- 
tration beds can be staffed. Construction is far outrunning manpower. 
Present organization and practices make for inefficiency in utiliza- 
tion of professional personnel. 
6. Spotlight on Definition of Federal Beneficiaries 
An enormous plant is being built for groups of beneficiaries to whom 
the Federal obligation is not clearly defined. 
Some 900,000 dependents of Army and Air Force personnel are 
being given complete care virtually free on no basis other than an 
appropriation act over 60 years old authorizing medical officers to 
care for dependents “whenever practicable.” Acquiescence in this 
practice by appropriation has occurred year after year. 
As to veterans with non-service-connected disabilities, there is 
authorization to hospitalize them only if a bed is “available.” Yet 
100,000 Veterans’ Administration hospital beds have been built or 
authorized which serve no purpose except deliberately to make beds 
available for non-service-connected cases. Congress must have 
expected that care to this extent would be given or it would not have 
appropriated funds for the beds. The fiction of limiting the right to 
care only if a bed is available thus leads to construction of a Federal 
plant of staggering cost, when much of the hospitalization might be 
more efficiently provided in community hospitals on a reimbursable 
basis. Remedies 
The present numerous agencies concerned with similar medical 
activities must be integrated into two major systems—military and 
nonmilitary. For the nonmilitary system, we recommend a new Na- 
tional Bureau of Health, part of the proposed Cabinet Department. 
It should be headed by a professional, career director general, and 
manned by career personnel drawn initially from existing agencies. 
It should include at least three main divisions: (1) Medical care, (2) 
public health, (3) research and training. 
In the continental United States there should be transferred to 
the Medical Care Division: 
1. All general hospitals of the armed forces (with the exceptions 
indicated below), and station hospitals, except those at outlying 
posts so located that hospitals of the National Bureau of Health 
would not be near enough to provide the hospitalization they would 
require. 
2. The medical functions of the Veterans’ Administration in to to, 
including the outpatient services in the regional offices of the Vet- 
erans’ Administration. 
3. The hospitals of the Public Health Service. 
4. St. Elizabeths Hospital. 
Each of the three armed forces should retain one medical research 
and teaching hospital, which would include a general hospital, the 
station hospitals above excepted, and all hospitals overseas. Other 
hospital functions which should not be transferred include hospitals 
of the Bureau of Indian Affairs, the hospitals of the Bureau of Prisons, 
and other small hospital functions such as those which are incident to 
Tennessee Valley Authority and the Atomic Energy Commission. 
The Indian and prison hospitals should be fully staffed by profes- 
sional personnel from the National Bureau of Health. 
This radical departure from traditional functions is proposed, 
not merely to save money, but because it is the only means by which 
high quality care can be maintained with the present shortage of 
doctors in Federal service. Furthermore, it would provide better 
medical protection in time of war. 
Basically underlying these proposals are: 
1. As to armed forces7 general hospitals.—A large number of the 
patients are of little further military value. These general hospitals 
cannot maintain quality staffs because they lack specialists. High 
quality care could be given in a unified system, as many Veterans’ 
Administration (and some Public Health Service) hospitals which 
would be transferred to such a system are well staffed with specialists because of their association with teaching medical centers. We have 
found no other way to give high quality care to the armed forces. 
2. As to the transfer of Veterans’ Administration hospitalization to 
the new bureau.—This follows automatically under the Commission’s 
instructions to place like functions, where possible, together. The 
fact too that the Veterans’ Administration hospitals are the largest 
single group with over half of the total Federal beds, would mean that, 
if they were to remain separate, the new Bureau of Health would be 
a central health agency in name only. Further, only by incorporat- 
ing the Veterans’ Administration hospitals can an integration be 
achieved which will provide high-grade specialist care for the armed 
forces, and only by this means can scarce medical manpower be 
efficiently utilized. Also, a very large reduction in hospital beds 
can be achieved by the above plan. Our area surveys, which covered 
about one-sixth of the country’s Federal hospital beds, showed that 
new construction costing over $100,000,000 could probably be saved 
in these areas alone by such a plan. 
The staffing of such a hospital system should be generally along 
the lines of the law (Public Law 293, 78th Cong.) under which the 
professional quality of Veterans’ Administration medicine has made 
such great strides. 
Integration With Non-Federal Hospital System 
The present inconsistency in policy between the Veterans’ Admin- 
istration construction program and Federal aid to non-Federal hos- 
pitals under the Hill-Burton Act should be ended. Inadequacies 
exist in the Nation’s hospital plant. The Federal Government has 
recognized the need for aid in remedying them, and is now giving 
such assistance. 
This effort would be furthered by placing Federal cases in non- 
Federal hospitals on a reimbursable basis wherever it is efficient to 
do so, instead of further enlarging the Federal hospital plant. In 
that way, many veterans could be cared for near home in their com- 
munity hospitals. 
If beds are inadequate for Federal patients, extension of assistance 
in construction on a grant-in-aid basis, under which the Federal 
government pays only part of the cost and the community bears the 
rest and assumes responsibility, should be the method of choice. 
This step is further indicated because the Federal government is 
dependent upon voluntary and other community teaching hospitals 
for undergraduate and post-graduate training of medical personnel, 
and for the advancement of medical science by joint efforts with the 
medical schools affiliated with them. Many of these hospitals are 
in financial trouble. They are vital resources of the Nation. They, 
together with other community hospitals, should be utilized and not weakened by unrestricted Veterans’ Administration hospital com- 
petition. 
Beneficiaries 
Clear definitions by Congress as to beneficiaries entitled to medical 
care from the Government, and as to how it may be given, are essen- 
tial for sound planning. The question of the Government’s decision 
to assume the financial burden for medical care should be separated 
from the entirely different question of giving the care in Federal 
hospitals. 
As to dependents oj armed forces personnel.—The same policy 
must apply to all three services. The right to such care has been held 
out as an inducement, and is a morale factor. The question is really 
one of pay of the armed forces, except overseas and in posts in this 
country remote from adequate community facilities and professional 
personnel where the right to such care is an essential part of military 
medicine. As part of the compensation of armed forces personnel, 
the Government either should arrange directly to pay, under proper 
controls, for care of dependents in community facilities in acute— 
not chronic—cases, or should provide a health insurance premium in 
a nonprofit insurance plan for dependents. 
As to veterans with non-service-connected conditions.—The present 
situation is inequitable to the veteran and unsound and expensive for 
the Government. Whatever care is given should be accorded in the 
facilities, whether Federal or community, in which it can be furnished 
most efficiently and with optimum utilization of scarce professional 
personnel. 
We do not consider it to be the function of a committee largely 
composed of professional medical members, and presumably selected 
for technical qualifications, to determine the basic question of phi- 
losophy of government as to how much the Government owes to its 
veterans. But a basic clear decision must be made by Congress be- 
tween giving care to all veterans more or less irrespective of financial 
need, or to those with non-service-connected conditions only if they 
are in real need. In any case, there is no necessity for financial screen- 
ing of chronic cases, as substantially all of these are soon made 
medically indigent by their disease. They would be a charge on the 
public in any event. 
As to the acute (temporary) cases, if Congress adopts the second of 
the above alternatives, a possible method would be to offer a health 
insurance plan which would include professional care. As to veterans 
unable to pay the premium for this, payment would, on determination 
to this effect, be made by the Government. Under such plan, veterans 
who neither take out the insurance themselves nor arrange, because of 
financial inability, for the Government to do it for them, would not be 
entitled to care for non-service-connected conditions, except of course emergencies which no hospital would refuse. Such insurance might 
be supplied by extension of existing nonprofit plans, or, if this should 
not prove practical, this purely voluntary insurance could—if neces- 
sary—be written by the Government itself for this class of its wards. 
As to Armed Forces Medicine After Such Change 
Unification of medical services supporting the armed forces would 
be most efficient. But it must be geared to the extent of unification 
of the services themselves. Medicine cannot be merged alone. But 
duplication can be avoided by assigning responsibility in each overseas 
area to one service to give hospital care for all. Further, there should 
be supervision by a deputy—preferably an Assistant Secretary—of the 
Secretary of Defense, with broad power, aided by an advisory com- 
mittee including civilian doctors. 
Draft of Doctors 
The above proposals will greatly reduce armed forces medical 
requirements, but not sufficiently to avert a draft. The draft should 
be limited for the present to the Army Special Training Program and 
Navy V-12 graduates who have rendered no service—of which there 
is a pool of about 8,500—and thereafter to others who have been 
deferred to pursue their medical education. 
Medical Protection Should War Occur 
The above hospitalization plan is a sound and necessary measure 
for national defense. The overwhelming shortage of doctors which 
war would create would thereby be met by optimum utilization of 
those we have. Not only would the proposed single Federal hospital 
system reduce the need for doctors and enable them to care for Federal 
beneficiaries without leaving their communities, but it would also 
assist in saving doctors because it could be fully integrated with non- 
Fedcral hospitals. In an atomic age, physicians cannot be taken from 
their communities as they were in the last war. To do so would 
destroy essential civil defense. 
Public Health and Research Functions 
These would be centered respectively in two divisions of the Na- 
tional Bureau of Health, which would take over existing functions of 
these kinds. 
Aid to Medical Schools 
Many schools are in serious condition. Government aid will 
probably be necessary, and is urgent. Yet adequate facts on which 
to base the extent of, or to beam intelligently, the aid required are 
not now available. There should be a short range survey immediately 
made by the Public Health Source to determine the real needs for emergency aid, amplified later by a longer range study. Any aid 
must be given in a manner to maintain the professional independence 
and the initiative of the schools, and in a way which will increase the 
output and result, partially at least, in meeting especially acute present 
deficiencies. 
Medical Supply 
A unified supply system for medical items-—those used to treat 
patients—would effect a great saving. It could cut the present total 
of Federal medical depots to about one-third of those now operating. 
If the armed forces will make medical supply a responsibility of one 
of the three services, so that it could be assured of single and effective 
management, the service so selected should conduct supply for all the 
armed forces, the National Bureau of Health and other incidental 
Government needs. Otherwise, during peace the National Bureau 
of Health should supply the armed forces, with armed force personnel 
detailed to its supply system. A unified medical supply, including 
standardization of items and assemblies and a single system of depots, 
is also necessary as a medical protection should war occur. 
Over-all Supervision 
There is needed a strong, but small top-level organization to carry 
forward on a permanent basis the studies begun by our committee. 
It should be aided by a medical advisory committee, and should go 
beyond the purely negative control of trying to hold down budgets. 
It is requisite because the necessity for a separate medical service for 
the armed forces prevents a complete unification of Federal medicine, 
making continuing supervision necessary to prevent duplication be- 
tween military and civilian medicine. More than an occasional glance 
at possible duplication in the armed forces themselves might also 
pay dividends. 
We express unanimously our anxiety concerning the dangers in 
uninhibited expansion of Federal medical expense and our conviction 
that strong measures are necessary to control it. If all present 
objectives cannot be provided for within the Government’s capacity 
to pay, our report offers suggestions for priorities. 
An Affirmative Approach 
Just as the medical profession developed a defensive attitude 
through preoccupation with treatment of the sick, so Federal medicine 
has, to a large extent, developed negatively with patient care as its 
principal function. 
Transcending in importance any of our other recommendations, is 
the need to outflank disease by giving the highest priority to research, 
preventive medicine, public health and education. 
818374°—49 2 First is the need for maximum employment of present scientific 
knowledge to control disease. But beyond application of present 
knowledge lies research to find new weapons. Research and public 
health together since the turn of the century have made it possible to 
postpone by about 20 years the death of the average new-born child. 
Medical research has conquered plagues and numbers of mortal dis- 
eases. It is today a resourceful, potent force of incalculable humani- 
tarian, national, and world value. It is also imperative to maintain 
constantly a high level of medical research activity as a protection 
to us in war. Such research must be stimulated, and supported to 
the extent which may prove necessary, to the maximum potential 
of the skilled manpower available to conduct it. 
Since the Federal Government now has wards totaling one-sixth 
of the Nation to which it gives varying degrees of care, and since it 
faces an enormous growth in veteran hospitalization as World War 
II veterans grow older, the Treasury can be protected best by using 
every means to prevent disease rather than by unlimited hospitaliza- 
tion to treat it. This will also promote both the national welfare in 
peace and a stronger manpower to preserve our security in war. The 
highest priority in Federal medical expenditures should, therefore, 
go to the research, preventive medicine, and public health fields. We 
must not just treat patients. We must, and to a large degree we can, 
if we will, control disease. INTRODUCTION 
To The Commission on Organization: 
Acting on your mandate from the Congress, you appointed us to 
study the organization and functioning of all Federal medical services 
—those in the armed forces being at first excepted but later added— 
and to recommend those changes we thought necessary to promote 
economy, efficiency and improved service. You instructed us to ap- 
proach this task courageously without undue regard for traditional 
functions or existing organization. 
Pursuant to your chairman’s instructions, and in accordance "with 
the statute creating the Commission (Public Law 162, 80th Cong.), 
our recommendations are directed not only toward limiting expenses 
and eliminating duplication and overlapping, but also toward con- 
solidating like functions and, where necessary, abolishing services and 
functions as well as defining and limiting them. 
According to your chairman’s instructions, we have proceeded 
upon the assumption that the Commission will recommend a now 
cabinet-level department embracing health, education, and security, in 
which the broad field of health will be one of the three major functions; 
also that standard Government nomenclature below the department 
level will be “bureau” and thereafter “division.” We, therefore, 
describe the health organization which we propose as the National 
Bureau of Health in such new department. 
The above instructions excluded from our consideration the ques- 
tion as to whether a separate Cabinet department would be established 
for health alone, as urged by professional groups. However, should, 
this be done, the organization which we are proposing would be 
adapted to such plan with only a few changes in nomenclature. 
We have proceeded upon the basic principle that whatever medical 
care the Federal Government provides must be of the highest quality 
which can be sustained by the best possible organization of the 
strictly limited human resources available. 
During the war, a high standard of medical care was given to our 
armed forces by putting into uniform a large segment of the country’s 
leading specialists of military age. The spectacular results of this 
care in reduction of mortality and in restoration of sick and wounded 
to health are too well known to need elaboration. Only such a stand- 
ard can be the guiding principle for any sound Federal organization. 
We are convinced that a basic reorganization is essential; that without it such a high level of medical care is impossible to maintain; 
that without it, we will have a disorganized, inefficient, and extravagant 
series of unrelated projects; but that with it, it will be possible not 
only to create a Federal medical service which will give better care 
to the Government’s direct beneficiaries but also to provide the needed 
help to voluntary and State agencies to push on toward the goal of a 
stronger and healthier Nation. 
Because of the profound impact of Federal hospitalization upon 
the medical care of the Nation as a whole, we found it essential to 
explore the relationship of Federal medical and health activities to 
those of State and local governments, community hospitals, and medi- 
cal schools. The crucial shortages in medical manpower cannot be 
comprehended or dealt with if these are not considered. In doing 
this, we are thoroughly aware of the boundaries beyond which Federal 
action would jeopardize local government and stultify the initiative 
of private activity. We have sought to avoid any course by which the 
Federal Government would overstep such proper bounds. 
We believe that compulsory national health insurance is not a 
question of Federal medical service as you employed these words in 
describing our task; but rather that it is a question of broad philoso- 
phy and policy of government. As such, we feel that it is outside our 
terms of reference. 
You have instructed us to indicate the priority of recommended 
activities. We have attempted to do this. We emphasize the im- 
portance of giving a very high priority to research, preventive medi- 
cine, and public health activities. The most expensive and most 
damaging policy is to focus attention and funds principally on hos- 
pitalization, while at the same time neglecting research, preventive 
medicine, public health, and education. We have sought to avoid 
such a negative approach. Instead, we have recommended a long- 
range frontal attack upon diseases which impair the health and pro- 
ductivity of the Nation. We believe that in the long run emphasis on 
preventive measures will not only reduce immeasurably the cost of 
Federal medical services, but also strengthen the security of the 
Nation and improve the welfare of our people. 
We fully realize the challenge and the magnitude of our task. 
To carry it out, we followed the Commission’s example of dividing 
our work among task forces, each of which includes the committee 
members, or in some cases other experts, best qualified to deal with the 
particular subject assigned. They, with our advisors and our full- 
time staff, have devoted months of painstaking effort to these studies. 
Our method of organization and list of personnel are set forth in the 
appendix. 
We assembled, digested, and studied reports previously made 
dealing with this general subject. From many of them we have learned much. We informally consulted with Federal agencies and 
professional organizations, and invited their representatives and those 
of various veterans’ groups to appear before our committee. The 
information and opinions so received have been extremely helpful. 
The reports of our task forces, most of which were subcommittees, 
constitute the background for this report. They give a fund of basic 
information and a body of informed opinion which furnish a founda- 
tion for the solution of the problems referred to us. The most im- 
portant task force reports are submitted as appendices, but are bound 
separately. Additional detailed material of potential future useful- 
ness will later be assembled for the Commission’s records. 
We pointed our work toward determining a basically sound or- 
ganization for Federal medical services, the reasons for it and its 
relationship to non-Federal services, and erecting certain signposts 
as to how the new organization might proceed. So conceived, our 
assignment became possible. But implicit in this limited definition of 
our function is the necessity for inclusion in the organization which 
we propose of a permanent unit to continue such studies as our com- 
mittee has begun and as our work has proved necessary. Our studies 
can then be used as a basis for more detailed analyses not possible in 
a survey limited to a period of months. Recommendations for this 
are included herein as a matter of the highest importance. Chapter I 
THE MAGNITUDE AND ORGANIZATION OF 
FEDERAL MEDICAL ACTIVITIES 
The Government is now responsible for medical care in varying 
degrees for almost 24,000,000 people, or about one-sixth of the entire 
population. By 1947 it was expending well over $1,000,000,000, five 
times the 1940 cost. By fiscal year 1948 this cost jumped another 
20 percent. For fiscal year 1949, the appropriation allocated to the 
Veterans’ Administration medical program alone (almost half of 
which is for construction of new hospitals) approximately equals the 
expenditures of all agencies in fiscal year 1948. The total Federal 
medical budget for fiscal year 1949 is estimated at $1,923,000,000. 
One estimate, which we believe to be too conservative, fixes 175,000 
to 200,000 as the number of Veterans’ Administration beds required 
in 20 to 25 years. Another estimate (made by the American Hospital 
Association) indicates that, assuming continuation of present policies 
and rates of hospitalization, requirements for hospital care for veter- 
ans alone will probably triple in about 20 years, requiring 300,000 
beds. 
Even if only service-connected cases and chronic nonservice- 
connected cases—the latter being almost all medically indigent— 
should be given care, a study (made for us in the Metropolitan Life 
Insurance Co.) indicates need for 250,000 beds by 1975, and that of 
these three-fourths would be for mental cases. In all of the above, we 
are assuming that no further war will occur. 
The present Federal hospital building program for the next three 
years includes $1,100,000,000 in hospitals for the Veterans’ Adminis- 
tration alone, several of the smaller ones costing over $30,000—and 
one over $51,000—for a single bed. 
Projects for Federal hospital construction desired by other agencies 
bring the total current expenditures proposed or under consideration 
roughly to $1,300,000,000 for about the next 3 years, exclusive of 
$75,000,000 annually to aid non-Federal hospital construction. 
1 Devoid of Any Central Plan 
The most striking impression made upon us in our study is that 
this enormous Federal medical project has been entered into and is 
now being conducted without any central plan, without even any 
clear decision as to certain of the large classes of the beneficiaries to 
be covered, with no estimate of the ultimate cost or of the effect upon 
other health measures for the nation. 
Four great agencies in the medical field, and various smaller ones, 
obtain funds each year, erect their own hospitals to care for their own 
clientele, and compete with each other for scarce personnel, with no 
regard for the facilities available in, or the needs of, the other agencies, 
and without any over-all plan. As matters now stand, the Govern- 
ment is moving into uncalculated obligations without consideration 
or understanding of their ultimate cost. It is proceeding with no 
adequate thought as to whether it can staff its hospitals to give good 
care, and without any unified plan as to how to do the job. 
One conclusion fundamental to all others is inescapable; There 
must be over-all planning. This in turn requires a clear definition 
of the extent of the responsibilities, and an organization appropri- 
ate to carry out the commitment. 
General Outline of Activities 
Federal medical activities run along two principal lines; (1) Activi- 
ties promoting the general health of the public as a whole, and (2) 
direct medical care of Federal beneficiaries. 
The second of these constitutes 85 percent of total expenditures. 
Such care is given primarily in Federal installations, and in varying 
degree to the following principal groups: (a) Veterans; (6) armed forces 
personnel and their dependents; (c) Coast Guard and other quasi- 
military personnel and their dependents; (d) merchant seamen; 
(e) Federal prisoners; (J) Indians; and (g) civilian Federal employees. 
The independent, uncoordinated direction and execution of the 
principal activities is distributed among at least seven major depart- 
ments and agencies. There is no over-all central direction or planning 
of these diverse activities except as the Bureau of the Budget may act 
as a brake on expenditures. 
The chief Federal agency for public-health activities and research 
is the Public Health Service. But the Food and Drug Administration, 
2 the Department of Agriculture, the Children’s Bureau, and other agen- 
cies separately carry on certain of such functions in the interests of the 
public at large, and the armed forces conduct extensive programs for 
military personnel. 
The direct medical care of patients is largely a function of the 
Veterans’ Administration, the Army, the Navy, the Air Force (which 
has no separate medical department but is seeking to establish one 
which will be independent except that it will exclude general hospital 
care); the Federal Security Agency through the hospitals of the Pub- 
lic Health Service, St. Elizabeths Hospital and Freedmen’s Hospital; 
the Bureau of Indian Affairs of the Interior Department, and the 
Department of Justice. Limited medical services are also rendered 
by other Government departments, e. g., to civilian employees under 
industrial hygiene type programs. 
Generally, each agency has its own medical personnel and installa- 
tions. However, the Army furnishes personnel for the Air Force, 
and the Departments of Interior and Justice in varying degree make 
use of medical personnel detailed from the Public Health Service. 
The following table gives an idea of hospital beds and their utiliza- 
tion in the major agencies as of June 30, 1948. 
Agency 
Beds 
Patients 
Capacity 
Operating 
Number 
Percent of 
total beds 
TotaL__ _ _ _ _ __ _ 
255, 601 
200, 336 
155, 882 
61. 0 
Department of National Defense 
105, 061 
58, 128 
32, 683 
31. 1 
Army and Air Force 
70, 419 
33, 626 
18, 725 
26. 6 
Navy _ _ 
2 34, 642 
24, 502 
13, 958 
40. 3 
Federal Security Agency 
16, 641 
17, 738 
14, 027 
84. 3 
Public Health Service 
9, 143 
10, 240 
7, 300 
79. 8 
Other 1 
7, 498 
7, 498 
6, 727 
89. 1 
Department of Interior 
4 4, 074 
3, 872 
2, 407 
59. 1 
Department of Justice 
2, 754 
2, 205 
1, 216 
44. 2 
Veterans’ Administration 2__ __ _ 
127, 071 
118, 393 
105, 549 
83. 1 
All other agencies _ _ 
(4) 
(4) 
(4) 
1 Includes St. Elizabeths and Freedmen’s Hospitals. 
2 Includes both hospitals and domiciliary homes; in latter there were 14,259 
patients. 
3 Dispensaries included at operating capacity. 
4 Excludes a very small number of beds and patients in dispensaries of the 
Coast Guard and the Maritime Commission. 
While of course there are important functions other than hospital 
care, the numbers of hospital beds and patients are convenient yard- 
sticks with which to measure the direct hospital program of each 
agency. 
3 The following table represents the obligations for all health and 
medical services of the major agencies in the fiscal year 1948; 
Agency 
Obligations 
Percent of 
total 
Total ___ _ 
$1, 246, 315. 746 
100. 0 
Veterans’ Administration 
759, 748, 289 
249, 794, 373 
161, 409, 391 
88, 384, 982 
184, 263, 060 
126, 691, 597 
57, 571, 463 
16, 528, 243 
15, 119, 455 
9, 676, 833 
I, 607, 296 
9, 578, 197 
61 0 
Department of National Defense 
20 1 
Army and Air Force _ 
13. 0 
Navy ____ ' _ 
7 1 
Federal Security Agency __ 
14 8 
Public Health Service _ _ 
10. 2 
Other _ _ ____ 
4. 6 
Department of Agriculture _ __ ____ 
1. 3 
Atomic Energy Commission _ __ 
1. 2 
Department of Interior _ 
. 8 
Department of Justice 
. 1 
All other agencies. _ 
. 7 
Of the aggregate annual expense in 1948 of $1,246,315,746, the 
Veterans’ Administration spent about 61 percent, Federal Security 
Agency 15 percent, Army and Air Force 13 percent, and Navy 7 
percent. 
Of the gross total of 1.25 billion, about 70 percent was spent for 
inpatient hospital care (including construction) and another 14 per- 
cent for outpatient care. These ratios vary for the different agencies. 
Only 3.9 percent of the total was spent for all aspects of research, 
and 8.9 percent for preventive medicine and public health, which pre- 
sent the only means of holding within reasonable dollar bounds the 
future costs of hospitalization and other curative treatment. Most of 
the agencies charged with providing medical care for their own bene- 
ficiaries are so preoccupied with this immediate demand that research 
and prevention arc of secondary importance. 
It is estimated that aggregate expenditures of the country as a 
whole for health and medical care currently amount to about $9,000,- 
000,000, of which the Federal portion (in 1948) was approximately 
14 percent. 
There are an estimated 1,425,000 hospital beds in the various 
hospital systems of the country as a whole, grouped as follows: 
Hospital system: Number of beds 
Total 1,425,000 
Voluntary 395,000 
Government 1, 030, 000 
State and local 830, 000 
Federal (operating) 200,000 
Thus about one-seventh of all the hospital beds in the country are 
under the control of some Federal agency. In addition, the Vet- 
erans’ Administration is planning or has already contracted for the 
4 construction of 55,000 additional beds, of which 10,650 are under 
construction, presumably as replacements for beds in obsolete or 
temporary hospitals. The armed forces plan an additional 5,000 
and the other agencies substantially fewer. 
In summary, then, a substantial fraction of the medical service 
in the country is now under direct Federal control; the Veterans’ 
Administration is by far the largest of the Federal medical care serv- 
ices; and further increases in the magnitude of the Federal medical 
effort are to be expected. 
Beneficiaries of Direct Care 
Federal beneficiaries are the basis on which the structure of gov- 
ernmental medicine rests, for all but 15 percent of the 1948 expendi- 
tures was for the direct care of patients. At one extreme are members 
of the armed forces and their dependents, merchant seamen, and other 
lesser groups totaling upwards of 3,000,000 persons, all entitled in 
substance to complete medical care. At the other extreme are 2,000,000 
employees of the Federal Government whose coverage is limited to 
industrial accidents and outpatient care of the industrial-hygiene 
type. Veterans, estimated to number 18,500,000, constitute the bulk 
of the population of beneficiaries. Although today the great majority 
of the veterans are entitled to care on the basis of service in World 
Wars I and 11, one must not overlook the future eligibility of present 
and future personnel of the military establishment, now being main- 
tained at greatly increased strength. For this reason the veteran 
population is a growing one. 
5 Chapter II 
WEAKNESSES IN THE PRESENT ORGANIZA- 
TION OF FEDERAL MEDICAL SERVICES 
Congress clearly stated the objectives of the Commission as the 
consolidation of similar functions, elimination of duplication, and 
promotion of economy and efficiency. It is plain from the foregoing 
outline of the present activities why there is no provision for joint 
planning and integration of effort, for Federal health functions have 
been clustered in a haphazard fashion about independent groups of 
beneficiaries. Such lack of plan necessarily results in unrelated 
systems of hospitalization and medical care. But what is the price 
for this lack of integration? After much thought we decided to ap- 
proach this question from a number of very different points of view, 
and chose the following means to spotlight the adequacy of the 
present organization: 
A. Survey of Federal hospitalization by areas. 
B. Study of the management of the two disease groups which 
require the largest Federal expenditures—tuberculosis and 
neuropsychiatric illness. 
C. Examination of the Federal hospital construction program. 
D. Comparison of lengths of stay in Federal and non-Federal 
hospitals. 
E. Analysis of supply and demand in medical manpower, first for 
the armed forces and then for the Federal medical services as 
a whole. 
F. Scrutiny of the definition of those entitled to medical care. 
A. Spotlight on Federal Hospitalization by Areas 
Surveys in New Orleans, New York City, San Francisco, Los 
Angeles, and San Diego, and investigations of special situations in 
several other areas, show that the present organization is important 
in the effective utilization of Federal hospitals and medical manpower. 
6 1. New Orleans 
There are five Federal hospitals, all within a radius of 5 or 6 miles 
from the center of New Orleans, with a total capacity of about 
1,600 beds. At the time of our survey their situation was as follows: 
Agency and hospital 
Beds 
Patients 
Capacity 
In operation 
Total _ _ __ 
1, 620 
1, 278 
913 
Veterans’ Administration general hospital 
670 
579 
477 
Public Health Service general hospital 
500 
572 
365 
Navy station dispensary _ 
150 
27 
28 
Navy Air station dispensary _ _ _ __ _ _ 
100 
25 
2 
Army station hospital _ _ 
200 
75 
41 
The two general hospitals were completely staffed with about 100 
full-time qualified physicians representing all the specialties and backed 
by able local consultants. They are closely associated with the local 
medical schools, and are actively engaged in residency training and 
research. They are able to give medical care of excellent quality. 
On the other hand, the smaller Army and Navy hospitals are not 
satisfactorily staffed in point of quality to give the best medical care 
even of the station-hospital type. Further, patients needing pro- 
longed or highly specialized treatment must be sent to Army and Navy 
general hospitals in San Antonio, Houston, Pensacola, and other 
locations many miles away. 
Lack of over-all planning for Federal hospitalization here results 
in a waste of physical facilities and of scarce manpower, and in a 
relatively poorer quality of care for military personnel. The patient- 
load regularly carried by these Army and Navy hospitals is so small 
that it could apparently be absorbed by the Public Health Service 
hospital, where much better care could be given, and from which 
men would seldom have to be sent to more distant hospitals. In- 
stead, the Public Health Service hospital now provides about 175 
beds for veterans (which on net balance serves merely to add this 
number to the total of non-service-connected cases provided for by 
Veterans’ Administration) and 10 beds for Navy obstetrical patients. 
It is certainly not an obligation of a Public Health Service Marine 
hospital to give such care to veterans. In effect, at present, armed 
forces personnel are being given a lower standard of treatment simply 
because, under the present system, there is no pooling of resources. 
Closing of the three small armed forces hospitals, which now cost 
several hundred thousand dollars annually to operate, would leave as 
the only requirement the provision of dispensary (outpatient) facili- 
ties on the military posts themselves. Such dispensary care would 
7 require only a few of the 12 doctors now staffing the 3 hospitals. 
Thus, at a time when both the Army and Navy are short of medical 
manpower and plan for a draft of doctors, well over half of the armed 
forces medical personnel in this area might be saved by unified hospi- 
tal planning and better care could be given military personnel. 
2. New York City 
There are 11 major Federal hospitals in New York City within a 
radius of 20 miles with good transportation connections. These 
hospitals have a total capacity of 8,257 beds, an operating capacity of 
6,949 beds, and when surveyed held 5,330 patients, or 77 percent of 
operating capacity and only 65 percent of total capacity. About 
7,000 people were employed in these hospitals, including 630 full-time 
physicians. At the time of our survey the situation was as follows: 
Beds 
Agency and hospital 
Capacity 
In opera- 
tion 
Patients 
Total 
8, 257 
6, 949 
5, 330 
Veterans’ Administration; 
Bronx 
1, 670 
1, 500 
400 
1, 542 
1, 125 
1, 397 
Halloran 1 
B 005 
304 
Manhattan Beach 2 
' 350 
Public Health Service: 
Neponsit Beach 3 _ 
250 
300 
257 
Staten Island 
869 
1, 050 
745 
Ellis Island- 
435 
' 454 
300 
Army and Air Force: 
Fort Totten General 
121 
100 
48 
Fort Jay Station 
350 
284 
164 
Fort Hamilton Station 
300 
100 
36 
Mitchell Field Station 
250 
143 
87 
Navy: 
St. Albans _ _ 
2, 112 
1, 500 
987 
1 Owned by New York State, but return not yet planned. 
2 To be returned to Public Health Service. 
3 To be returned to New York City. 
One of the Veterans' Administration hospitals is affiliated with a 
medical school, and all of the Veterans' Administration hospitals 
have well-qualified specialists and consultants on their staffs and 
provide medical care of excellent quality. The Public Health Service 
hospitals have qualified specialists and a good training program, 
making use of consultants from the New York City medical schools. 
The Navy hospital is from 8 to 18 miles from the surrounding Army 
and Air Force installations, is well-staffed, has active consultants 
from the medical schools, and is able to provide medical care of high 
quality. The four Army and Air Force hospitals, which include one 
small general hospital, are not able to give a quality of medical care 
commensurate with that available in the other Federal hospitals. 
8 In the Veterans’ Administration hospitals, 83 percent of the 1,774 
general medical and surgical patients were being treated for non- 
service-connected disabilities. In the Navy hospital approximately 
one-third of the patients were veterans and dependents. In the 
Army hospitals 28 percent of the patients were dependents. The 
Fort Totten Army hospital acts as an Army center for obstetrics in 
the area, with half of its patient-load consisting of dependents. The 
hospital at Fort Hamilton was the Army center for children, 35 of its 
36 patients being children at the time of survey. 
As an illustration of what might be possible, it appeared to us that 
the Veterans’ Administration hospitals could absorb the Veterans’ 
Administration patients now in the Navy hospital, raising their 
utilization of constructed capacity from 76 to only 82 percent; that 
the 335 patients (including 94 dependents) in the Army and Air 
Force hospitals could then be cared for in the Navy hospital, where, in 
this area their care would be of better quality, changing the utilization 
from its present 66 percent of operating capacity to about 75 percent. 
(This could be done even without change in the policy of caring for 
dependents.) Four Army and Air Force hospitals could then be 
closed; only dispensary (outpatient) care would then be required at 
the posts concerned. Such steps would save many hundreds of 
thousands of dollars in annual operating costs, reduce the Army and 
Air Force medical officers by 80-85 percent and at the same time 
provide better medical care for service personnel. 
As in New Orleans, we found in New York City that the absence 
of integration of the Federal hospitals produced a waste of physical 
plant and an extravagant utilization of medical personnel by the 
armed forces. Moreover, priority in the limited amount of high- 
quality care available in Federal hospitals is being given to veterans 
with non-service-connected disabilities (entitled to care only if a bed 
is available) at the sacrifice of armed forces personnel to whom the 
Government owes an unqualified obligation. 
We also believe that there is grave danger that the present situation 
will worsen if not corrected by vigorous measures. All but one of 
the major Federal agencies with hospitals there have ambitious plans 
to construct new hospitals. In so doing, they are acting independently 
of each other and of the program of the State and city, and with 
insufficient consideration of the availability of professional personnel. 
It seems probable that these construction programs will lead, at 
great expense, merely to a large unused capacity. Of the 8,257 
Federal bed capacity in the New York City area, 3,133 are temporary, 
most of these being the 2,100 beds at St. Albans. This leaves about 
5,124 beds in permanent construction compared with a patient load 
for all agencies of 5,330 patients, including dependents and veterans 
with non-service-connected disabilities. These comprise almost half 
the total number of patients. 
9 In addition to putting up a new 1,000-bed hospital in Newark, and 
another of 1,965 beds in nearby Peokskill, the Veterans’ Administra- 
tion is already building a new 981-bed hospital in Brooklyn, and the 
Army, Navy, and Veterans’ Administration together are planning 
four additional hospitals with a capacity of 4,500 beds. Thus under 
this program the present permanent plant of 5,124 beds would soon 
be more than doubled, with a projected capacity of 10,335 beds, which 
would be approximately twice the present patient-load. 
With all possible allowances, including the return of Halloran to 
the State of New York and the planned increase in the size of the 
military establishment, it is difficult to see the wisdom of so huge a 
construction program. Apart from the hospitals in Newark and 
Peekskill (excluded from the analysis), this will cost $105,200,000. 
We are convinced that these plans could be radically reduced by 
central planning, based on the area as a whole. 
Apart from cost, there is the problem of staffing. Difficulties are 
already being encountered in obtaining physicians for Federal hospi- 
tals. Yet in the New York area alone, a hospital-construction program 
has been formulated which would double present requirements for 
physicians. 
A highlight is provided by a recent announcement of a new perma- 
nent Navy cancer hospital being constructed at the St. Albans site. 
The construction contract for $14,800,000 includes a betatron for 
cancer radiation that is said to be “the largest ever built for cancer 
therapy.” We question why the care of cancer patients, except minor 
superficial cases, should be a responsibility of the armed forces at all. 
Patients with cancer requiring deep radiation therapy can rarely be 
of further military value. 
Another highlight is provided by the fact that the New York Hos- 
pital-Cornell Medical Center (one of the two or three finest hospital 
plants in the world with an outstanding medical staff) has 150 beds 
closed because of nursing shortage. Here there is no medical staffing 
problem, no construction required, and the highest type of care for the 
most difficult cases could be provided on a reimbursable basis. Instead, 
the new Federal hospital construction tends further to strip the exist- 
ing hospitals of nurses by outbidding them. Integration of Federal 
planning with the non-Federal hospital system is presently wholly 
lacking, although under the Hill-Burton Act assistance to local hos- 
pitals is a Federal policy. 
3. San Francisco 
The same lack of coordination among Federal hospitals exists in 
San Francisco, as was found elsewhere, with, in general, the same evils. 
Exclusive of specialized (tuberculosis and neuropsychiatric) Veterans’ 
Administration hospitals, there are 13 Federal hospitals in this area, 
representing all the major Federal medical services. They have a 
10 total capacity of 9,905 beds and a patient load of 4,180. The analysis 
showed that a more efficient utilization of these facilities by proper 
coordination of their activities would probably permit the closing of 
7 of these 13 hospitals, representing almost a fifth of the total bed 
capacity and providing a uniformly liigh quality of medical care. 
Even with all the patients now in these 13 hospitals cared for in the 
remaining 6 hospitals, the total occupancy rate would be only 54 
percent of their constructed capacity. 
Moreover, the Army and Navy requirements for physician per- 
sonnel in this area could be reduced by about 10 or 12 percent, even 
with a generous allowance for dispensary (out-patient) needs. This 
does not include considerable savings which might accrue from a 
change of policy in the care of contingent beneficiaries, i. e., dependents 
and veterans, who constitute approximately 40 percent of the patient 
load in the Aimy and Navy hospitals in this area. If medical care for 
these dependents and veterans were provided by other means, as later 
proposed, armed forces requirements for physicians in this area could 
be reduced by another one-third of the present total. 
The local need for hospitals around San Francisco is considerable. 
At present the Federal Government under the Hill-Burton Act is 
financially aiding construction of new hospitals, while at the same 
time holding beautiful, modern hospitals in the area of which it is not 
making effective use. For example, the new Navy hospital at Moffett 
Field is largely unused (average daily census, two patients during 
fiscal year 1948) but there is need for hospital beds in the surrounding 
local area. Further, plans are being worked on looking toward the 
construction in this area of three more permanent Federal hospitals 
to provide a total of over 3,000 additional beds at a cost of perhaps 
$70,000,000, despite the fact that the permanent Federal hospitals 
now there could accommodate the entire patient load with a total 
occupancy rate of only 68 percent. 
4. Los Angeles 
The survey showed that probably five Navy hospitals, representing 
about 30 percent of the total capacity in the 12 Federal hospitals in 
Los Angeles, could be closed under a unified hospital plan. 
In this area the armed forces are using about half of their doctors 
in the care of patients other than personnel on active duty. If this 
care of “supernumeraries” were provided for by other means, the 
Army’s hospital could be closed, in addition to the closing of Navy 
hospitals above-mentioned, and all active duty military personnel in 
the area could be cared for in one Navy hospital. This would reduce 
the requirements for Army and Navy doctors in this area by almost 
one-half. 
At Corona, the Navy is maintaining a center for chronic patients 
(tuberculosis and paraplegia), although almost none of such patients 
818374°—49 3 
11 will ever return to active military duty and should be transferred to 
the Veterans’ Administration. This might well save the government 
the $21,000,000 cost of the proposed new Veterans’ Administration 
hospital of 1,000 beds in this area. 
5. San Diego 
There are 10 Federal hospitals, all but 2 within a radius of 15 miles. 
The survey showed an even greater dispersion of medical resources 
with resultant inefficiency in their utilization. The total number of 
patients (1,611) in the area (veterans, dependents, and other super- 
numeraries included), amounts to just about the operating capacity 
of one of the Navy’s general hospitals hi this area. With the possible 
exception of the patients at two of the hospitals, all of the patients 
in the small hospitals could easily be accommodated at the one large 
general hospital, providing a uniformly better quality of care and a 
considerable saving in personnel utilization. 
In addition to the above more comprehensive area surveys, we 
noted several other special situations: 
Houston.—For example, in Houston, Tex., a 1,000-bed Navy hospital 
was built at a cost of $12,000,000 during the war. It had been ap- 
proved originally with the express understanding that it would revert 
to the Veterans’ Administration as a postwar facility. Yet because 
the Navy has now decided to keep it, the Veterans’ Administration is 
letting bids for a new 1,000-bed hospital at an estimated cost of 
$25,000,000 immediately adjacent to the Navy hospital. At the time 
of our study the Navy hospital had only 437 patients, of whom 304 
were veterans, and only 124 were Navy personnel. There are no 
major Navy installations in this area. During the past 2 years active 
duty Navy patients have occupied only an average of about 10 per- 
cent of the total capacity of this hospital. The Navy is now making 
this hospital a neuropsychiatric center. However, the Navy now 
has 26 general hospitals with a total constructed bed capacity of 
about 28,000 beds (only about 46 .percent of which are occupied). 
They have only about 900 neuropsychiatric patients. Under a unified 
over-all Federal plan, transfer of this hospital would be possible, sav- 
ing the entire cost of building and operating the proposed Veterans’ 
Administration hospital. 
Honolulu.—In Honolulu the Army has just opened, 3 years after the 
war, the new 1,500-bed Tripler General Hospital. It was completed 
in spite of the fact that the adjacent Navy hospital, only 7 years old 
and of permanent construction, could meet all current needs of armed 
forces patients in the area. The original plan was for an Army hos- 
pital costing $11,000,000, but finally over $37,000,000—$25,000 per 
bed—has been spent. Pursuit of this building plan after the close of 
the war is evidence of what lack of unified planning can cost, since 
12 the Army went ahead without counting upon availability to it of 
Navy beds. 
Summary 
In these area surveys there exists a similar pattern of duplication 
of physical facilities, waste of scarce medical personnel, inadequate 
quality of medical care for armed forces personnel at smaller installa- 
tions and unwarranted construction of new facilities—all resulting 
primarily from the lack of a central plan for Federal medical care. 
More specifically: 
1. Too many small military hospitals are kept open when efficiency 
in utilization of personnel requires concentration of patients in cen- 
ters: Taken together the military hospitals, with a constructed capac- 
ity of 21,555 bods and a presently operating capacity of 12,851 beds, 
contain about 7,800 patients, giving occupancy rates of about 36 and 
60 percent respectively. 
2. Too large a part of the medical resources of the armed forces 
are devoted to the care of civilians, veterans and dependents of mili- 
tary personnel. Of the total 7,800 patients in these armed forces 
hospitals only 61 percent are active duty military personnel. 
3. Military hospitals continue to care for an appreciable number of 
chronic patients who should be discharged to the Veterans’ Adminis- 
tration more promptly, 
4. Hospital construction is planned by the major Federal agencies 
for their own individual needs without coordination of medical needs 
and resources. In consequence, one agency will build a new hospital 
near an empty or nearly empty hospital of another. At the present 
time, on the basis of existing policies, and even allowing for increase 
in the requirements of the various agencies, there is in these areas 
alone excess capital expansion under contract or in some stage of 
planning of an estimated cost well over $100,000,000. This sum alone 
is more than twice that being expended at the present time annually 
by the Federal Government for medical research. 
5. There are repeated instances in which contingent beneficiaries 
are hospitalized in a large, well staffed general hospital while many 
active duty military patients in the same area are cared for in small, 
inadequately staffed hospitals. This phenomenon occurs even when 
such hospitals have ample room for both military and nonmilitary 
patients. 
Finally, it is plain from the results of these surveys that the Federal 
Government lacks any means of coordinating the medical programs 
of the separate agencies. So competitive is the environment in which 
they operate that no one agency can now take a Government-wide 
point of view. As long as this system continues, uneconomical use 
of medical manpower and facilities will continue. 
13 B. Spotlight on Certain Diseases 
Shifting to a different approach, we selected tuberculosis and 
neuropsychiatric illnesses for special study because, together, they fill 
some 60 percent of Veterans’ Administration beds. Measured in 
Federal cost, they are among the greatest disease problems. We, 
therefore, sought to analyze the present Federal medical set-up by 
appraising its adequacy as to them. Task forces on each were created. 
The following is a summary of their findings: 
1. Tuberculosis 
Our task force (headed by Dr. Robert E. Plunkett, with Dr. Esmond 
Long as consultant) found that, although reduced 78 percent since 
1910, tuberculosis still causes 50,000 deaths annually in the United 
States. There are an estimated minimum of 500,000 cases. It is 
essentially not an individual, but a family and community disease. 
Hence, it has been accepted largely as a public responsibility. The 
measures essential to its control are discovery, segregation, treatment, 
and rehabilitation. 
Because it is not only a medical treatment problem, but also a 
public-health, social, and economic problem which affects the entire 
community, the several essential techniques for its control cannot be 
separated. Time in hospital is often only a small portion of the total 
period of care. Thereafter, the tuberculosis hospital cannot be oper- 
ated with full effectiveness unless integrated with all other community 
services for control. However, several Federal agencies entered 
this field separately with their own hospitals as a branch of general 
hospital care for their beneficiaries, not primarily for control of the 
disease. There is little or no integration with programs of other Fed- 
eral agencies or with the control programs of State and local agencies. 
Annual cost to the Federal Government is about $60,000,000, or almost 
nine times the total grants-in-aids to States for control of the disease. 
The Veterans’ Administration is not soundly organized to deal with 
this disease because of subordination of medical direction to nonmedical 
personnel and the absence of a clear-cut medical lino of authority. 
In the Indian hospitals, there is lack of integration with other 
Federal agencies and State and local facilities. 
The successful control of tuberculosis requires adherence to two 
principles, namely, that clinical treatment without regard to public 
health implications retards control, and that treatment of the patient 
is best carried on in intimate relationship with the community of which 
he is a part and near his family. 
Both principles are violated by the present Federal system. In gen- 
eral Federal programs consist merely of clinical treatment. A patient 
is not cared for in even the Federal hospital nearest his home, but 
14 must go to the hospital of the agency charged with his care. This 
weakens family and community ties which sustain the patient in his 
illness, and through which all control measures except hospitalization 
must necessarily be effected. It is not the least of the influences 
which make it difficult to keep patients in hospital. The necessary 
continuity of care in and out of hospital is destroyed. 
Further, the Federal agencies spend their money with little pur- 
poseful regard for the programs of the various States and communities 
for control of the disease. There has been an almost complete lack of 
coordination of hospital planning of the Federal agencies with those 
of States. The same applies to hospital use and operation. 
Federal programs were developed piecemeal, with little compre- 
hensive planning. 
Since State hospital needs are calculated on the basis of estimated 
cases in the population, including the veterans, there is presently a 
duplication in hospital planning. 
Operation of separate tuberculosis hospital programs by five 
Federal agencies results in duplication and inefficiency. There is 
imperative need for integration. 
There is a shortage of physicians specially trained in tuberculosis, 
especially in the Federal service. This is aggravated by lack of co- 
ordination among the Federal agencies, causing competition for, and 
inefficient use of, this scarce personnel. 
2. Neuropsychiatric Illnesses. 
The conclusion of our task force (headed by Dr. William C. Men- 
ninger) is that no Federal program exists in neuropsychiatric fields, 
but only unrelated endeavors centered chiefly on the care of patients. 
Its findings are that no single agency has more than partial re- 
sponsibility for national leadership in this field, where over-all leader- 
ship is most urgently needed. The National Mental Health Act of 
1946 is but a mere beginning in this direction. 
In the main the Federal agencies engage in the treatment of psy- 
chiatric illness, and do not have preventive programs. Through 
grants-in-aid, the Public Health Service has recently begun to stimu- 
late State mental hygiene programs. Out-patient care in the Veterans’ 
Administration is strictly limited by law to service-connected condi- 
tions, although the consensus of psychiatrists is that an out-patient 
program could do much to prevent the development of serious, chronic 
disease and thus greatly reduce the need for expensive hospital care. 
Illustrative is the fact that nothing adequate is being done to prevent 
the occurrence of thousands of cases of paresis, although it is possible, 
and although each such paretic will cost the United States at least 
$40,000 for life-time care. 
15 Veterans’ Administration hospitals now provide a quality of care 
approaching that of the private neuropsychiatric hospitals, and far 
better than that of the State hospitals. 
There is an acute national shortage of psychiatrists, which is even 
more severe in the Federal medical services. They have about 1,000 
and need an additional 900. Ancillary personnel in this field are in 
equally short supply. Even in residencies, 27 percent are vacant in 
the Veterans’ Administration alone. The ratio of neuropsychiatric 
patients to qualified psychiatrists and neurologists in the Federal 
system is about 70 to one, so that only inadequate active therapy can 
be attempted. 
In general, in the Federal medical services the authority of pro- 
fessional medical personnel is limited and actually subordinate to that 
of nonmedical personnel. This is most striking within the Veterans’ 
Administration. This divided responsibility results in a poor admin- 
istrative organization, interfering with morale and efficiency in the 
Veterans’ Administration hospitals. There is inadequate authority 
in the Chief Medical Director of the Veterans’ Administration. 
Although the supply of personnel is inadequate, patients are hos- 
pitalized who in non-Federal systems of care would be handled as out- 
patients; and for equivalent cases the average length of stay in Federal 
hospitals greatly exceeds that in private hospitals. 
Each of the major agencies has its own top administrative and 
planning staff for this disease. 
Except for the Veterans’ Administration, each agency has its 
neuropsychiatric patients in so many different installations that it is 
unable to effect the personnel economies which result from concentrat- 
ing patients in centers. So uncorrelated are the programs that two 
Federal neuropsychiatric hospitals may exist in the same community. 
There is no exchange of personnel among the agencies. The cumu- 
lative effect of the independent operation of small, unrelated neuro- 
psychiatric programs on a national scale is an inefficient utilization of 
a very scarce type of medical manpower. 
In the face of the above extreme shortage of neuropsychiatric per- 
sonnel in the Federal service, extensive plans are being made for hos- 
pital expansion. In addition to the 56,000 bed capacity available for 
neuropsychiatric patients in the Veterans’Administration on June 30, 
1948, another 17,000 beds are being planned or are already under 
contract, an increase of 30 percent. These beds are needed in the na- 
tional economy, but it is a grave question whether the Federal Govern- 
ment should erect an independent hospital system of its own, devoid 
of community roots, for approximately one-seventh of the total pop- 
ulation. 
16 C. Spotlight on Construction Programs 
Of total new beds in various stages of planning, about 85 percent 
consists of the Veterans’ Administration program, so we limit comment 
to it. Last July the Veterans’ Administration had under contract, 
or was proposing to contract for, and additional 54,000 beds in 89 
new hospitals and additions to 11 others—a gross increase of 52 percent 
of its present operating plant of 102,219 beds. Depending upon how 
many of the 21,000 existing beds in 28 temporary structures (acquired 
from the armed forces after the war) are ultimately closed, the new 
construction will represent a net addition of at least one-third in 
Veterans’ Administration beds. It will add two-thirds to the existing 
operating capacity in permanent construction. 
The Veterans’ Administration building program alone amounts to 
$1,100,000,000 as presently projected, almost as much as all agencies 
together had spent in construction and maintenance of Federal 
hospitals prior to 1945. Of this amount about half had been appropri- 
ated by June 30, 1948. The plans of other agencies for construction— 
in various stages of consideration—may add another $200,000,000. 
Including the Hill-Burton Act funds, hospital construction now in 
contemplation by all agencies, covering a period of about 3 years, 
amounts to over $1,500,000,000. 
Voluntary hospitals are reported to be still able to build efficient 
hospitals for about $16,000 per bed. Compared with this, veterans 
hospitals cost from $20,000 to $51,000 per bed. 
The average per bed costs of Veterans’ Administration general 
hospitals for which contracts were let in 1948 for each of the principal 
size groups are: 
Number of beds: Average cost per bed 
1,000 $20,000 
500 22, 000 
300 26, 000 
250 27, 000 
200 29, 000 
150 33,000 
100 51, 000 
It will also be noted that the cost per bed increases in inverse ratio 
to the number of beds, so that smaller hospitals cost 50 percent to 100 
percent more per bed than the big hospitals. The smaller hospitals are 
not only more expensive but more difficult to staff on a full or part- 
time basis because of their remote locations. Moreover, larger instal- 
lations near medical schools and metropolitan centers can be staffed 
17 without displacing doctors from their communities, and can depend 
upon access to superior specialists. They have the additional advan- 
tage of proximity to sources of other important categories of supporting 
staff, especially nurses and attendants. 
Significant facts to be noted in connection with the above figures 
are: 
1. There is a great discrepancy between cost per bed in Veterans’ 
Administration hospitals and in community nonprofit hospitals. 
2. One reason for huge costs in Veterans’ Administration hospitals 
is the inclusion of recreational facilities, large dining rooms in general 
hospitals for a convalescent ambulatory class of patients, and offices 
for various organizations. Such facilities are as a general matter 
unknown in voluntary general hospitals and would serve no purpose 
in similar Veterans’ Administration installations if patients were 
promptly discharged when their real need for hospital care ceases. 
Veterans’ Administration hospitals also include an abnormally large 
amount of office space for other Veterans’ Administration functions 
(such as finance, claims, records), and other purposes not strictly 
medical. 
3. New hospital construction is going forward at great expense 
although the Chief Medical Director of the Department of Adcdicine 
and Surgery, who has responsibility for the care of the patients, does 
not desire such construction and does not believe he can staff the 
hospitals. 
4. Small Veterans’ Administration hospitals cost disproportionately 
more than those with large bed capacities, both to construct and to 
maintain. 
5. The more costly smaller hospitals are to a very large extent the 
ones which the Chief Medical Director of the Department of Medicine 
and Surgery does not want, because of his anticipated inability to staff 
them. They are located in areas where experience has convincingly 
proven difficulties in staffing. After they are built, it will be impossible 
to utilize fully the facilities so created and give a high standard of care. 
Such hospitals, therefore, mean both great cost to the Government and 
poorer care to the patients. 
6. The large amounts of money spent on small inefficient hospitals 
may prevent much more essential construction of hospitals near medi- 
cal centers which can give the best care to the veterans and which have 
proven over the past 3 years the key to the significant elevation in 
standards of veterans’ care. Although the Veterans’ Administration 
(which presently has 5,600 beds idle for lack of personnel) cannot, in 
18 the opinion of either its present Chief Medical Director or his pred- 
ecessor, expect to staff more than 120,000 beds with qualified per- 
sonnel in the foreseeable future, the present building program will 
increase its bed capacity and, therefore, its present shortages of staff, 
by a third or more. 
The problem is aggravated by poor choice of location for many 
hospitals. There are 17 existing hospitals with 15,600 beds for which 
the Department of Medicine and Surgery has stated that it is unable 
to provide a satisfactory professional staff. Similarly, 12 hospitals 
now being planned, with a total of 3,000 beds, are so located that it is 
not expected that they can be staffed. Another 30 with 11,000 beds 
can be staffed only with difficulty. Part of the above condition is 
explained by the taking over, after the war, of temporary Army and 
Navy hospitals, six of which are poorly located for Veterans’ Adminis- 
tration purposes. But the future program also includes badly located 
hospitals, products not of design but of pressures. To place these 
hospitals where they will have difficult staffing problems, and will 
lack the intimate day-to-day advice of expert part-time consultants 
from the Nation’s best teaching hospitals and medical schools means 
poor care instead of good care. It is a disservice to veterans and a 
waste of tax funds. Yet, 10 of the 28 general medical and surgical 
hospitals now under construction by the Veterans’ Administration 
are in such areas. 
Continuance of present policies may lead to a Veterans’ Adminis- 
tration hospital system of 300,000 beds by 1980. 
7. Finally, the Veterans’ Administration’s vast construction pro- 
gram, which is clearly required only for the care of non-service- 
connected cases, is thoroughly inconsistent with the other policy of 
the Government of aiding non-Federal hospitals under the Hill- 
Burton Act. It competes with them for scarce professional personnel 
other than physicians, pays higher wages for such personnel, drains 
off from such hospitals part of their patients, and weakens local sup- 
port for construction of community hospitals. We believe these 
destructive implications are not clearly understood. 
D. Spotlight on Patient Stays in Hospital 
Length of stay was studied as a striking index of hospital utilization. 
By averaging a large number of selected uncomplicated surgical 
procedures, we obtained a usable yardstick of the relative length of 
stay in Federal and in a representative number of voluntary general 
hospitals. We also compared the lengths of stay of active duty 
19 military personnel with those of civilians in military hospitals. These 
studies showed: 
Average length of stay in days 1 
Operation 
Volun- 
tary gen- 
eral hos- 
pitals 
Public 
Health 
Service 
Marine 
Veter- 
ans’ Ad- 
minis- 
tration 
Army general 
Navy general 
Active 
duty 
person- 
nel 
Other 2 
Active 
duty 
person- 
nel 
Other 2 
Appendectomy _ _ _ 
7. 8 
11. 9 
14. 3 
19. 6 
9. 9 
20. 3 
9. 6 
Tonsillectomy _ 
1. 4 
6. 8 
15. 1 
16. 1 
3. 0 
13. 3 
2. 5 
Hemorrhoidectomy 
6. 9 
11. 8 
34. 3 
27. 3 
15. 2 
25. 7 
10. 2 
Herniotomy (inguinal) 
10. 3 
16. 0 
27. 0 
29. 4 
16. 1 
28. 1 
. 13. 4 
1 Patients discharged between January and August 1948. 
2 Excluding veterans. 
This table brings into clear focus the fact that patient stays are 
excessive in Federal hospitals, and particularly for active duty per- 
sonnel in military hospitals, if consideration is given, as it should be, 
to real need for bed care. The figures—particularly those for the armed 
forces and the Veterans’Administration—are subject to some discount 
because of the practice of charging the hospitals with patients while 
they are out on pass, as it is possible to utilize to some extent the beds 
of such patients. However, in the surgical procedures listed above, 
this discount would not be as much of a factor as in cases requiring 
prolonged convalescence. 
Factors in these startling differences in length of stay include the 
following: 
1. Federal hospitals give convalescent care. In military hospitals 
75 to 85 percent of the patients arc ambulatory. 
2. In voluntary general hospitals, the economic pressure of cost 
to the patient, and the demand by the hospital for beds to serve others, 
hold the average stay down. Also improvements in professional care 
have significantly reduced lengths of stay in recent years. This both 
makes for much more efficient utilization of beds, holds down real costs 
and increases the volume of cases treated by scare specialists. But 
this has not occurred correspondingly in Federal hospitals where 
economic motives operate in reverse to lengthen stays, and there is 
obvious indifference on the part of management in many cases to make 
optimum use of facilities. 
3. Some part of the difference is due to hospitalization far from the 
patient’s home. 
4. Many patients are admitted to Federal hospitals with less 
thorough determination that hospitalization is needed. Patients are 
admitted and diagnostic procedures then performed; many of these 
20 could be done in an outpatient service or otherwise without the patient 
being in the hospital. 
5. Stays are lengthened because the medical staff is not ready, the 
results of diagnostic or laboratory procedures are not completed or 
because the appropriate consultant will not make his periodic visit 
until sometime later. In community hospitals, the patient is generally 
only in the hospital when he needs to be there and when the hospital 
is ready to serve him. 
6. Another factor often seems to be a desire of certain agencies to 
maintain hospitals in operation, and therefore to maintain a good 
census as a basis for personnel and other allocations. 
7. Administrative procedures for discharge of patients, particu- 
larly in military hospitals, cause patients requiring no attention to be 
retained 2 to 3 weeks at times in Army hospitals. This is reflected 
in the fact that such patients are in hospitals twice as long as civilians 
in the same institutions with the same diagnoses. 
8. Stay in voluntary hospitals has been materially shortened in 
the last few years by early ambulation of patients, especially surgical 
and obstetrical cases, who are urged to get out of bed and even out of 
the hospital at the earliest possible date. Apparently, this develop- 
ment hks not been widely accepted by Federal hospitals or at least 
their length-of-stay experience does not reflect it. 
This analysis shows that stated requirements for beds in Federal 
hospitals and especially for military patients could be very greatly 
reduced. Since Federal hospitals now cost $20,000 to $40,000 a bed to 
build, such traditional easy practices of utilization are no longer 
acceptable. This is especially so since cutting the length of stay means 
that the same medical staff can take care of many more patients, 
reducing the shortage of doctors. 
E. Spotlight on Medical Manpower 
While there may be some controversy over the question of an over- 
all shortage of doctors in the country for peacetime needs, it is beyond 
dispute that such a shortage exists in the Federal Government. Its 
seriousness is stressed by the reports of two of our subcommittees. 
Our Subcommittee on Armed Forces Hospitalization (chairman, Dr, 
Paul R. Hawley) was forcibly led by its study to identify the acute 
professional manpower shortage as the core of its problem. The Sub- 
committee on Medical Manpower (chairman, Dr. Edward D. Churchill), 
appointed to deal specifically with professional manpower, started 
from an entirely different approach and reached the same conclusion. 
Its findings document and corroborate those of Dr. Hawley’s subcom- 
21 mittee. These conclusions were in turn supported by the findings of 
the task forces on tuberculosis and neuropsychiatry, already cited. 
Considering first the military services, we adopt the following from 
the report of om* Subcommittee on Armed Forces Hospitalization: 
* * * The provision of adequate medical care for the armed forces has now 
become a matter of the gravest concern. * * * 
The number of doctors in the medical services of the armed forces is insufficient 
at present for them to meet all of their responsibilities; and the shortage in medical 
specialists is much more critical. A large proportion of their present medical- 
officer strength is made up of young physicians whose medical education was 
subsidized, in whole or in part, by the Army Special Training and V-12 programs 
of World War 11. These young gentlemen have received excellent general train- 
ing, but no specialist training of a scope to qualify them in these fields; and their 
experience is necessarily limited by their recent graduation. * * * at present 
their skills fall far short of the expertness demanded by modern medical knowledge. 
Furthermore, these young physicians are now serving under compulsion, as a 
partial return for the Government’s contribution toward their education. Their 
terms of service will expire not later than June 30, 1949. This will create a still 
greater shortage of medical officers—a paralyzing shortage. Voluntary recruit- 
ment has thus far failed to fill present vacancies, and assuredly will fail to replace 
the excessive losses of the next 6or 8 months. This is an incontrovertible fact. 
The general Selective Service Act will produce but an insignificant number of 
physicians for the armed forces. The upper age limit and the several grounds 
for exemption will exclude all but a few. 
The only remaining alternative is a special draft of physicians, and it is generally 
accepted that this will be necessary if the armed forces are to be given any kind of 
care. * * * The pool of eligibles from which physicians could be drafted is 
limited almost entirely to recent graduates of limited training and experience, 
wholly unqualified to assume the heavy responsibilities of a modern first-class 
medical service; and the number of qualified specialists left in the medical services 
is woefully inadquate for the proper supervision and training of these fledgling 
doctors. 
Under the existing pattern of military medical practice, and with the medical 
talent now in sight for this duty, it is certain that the quality of medical care is 
certain to drop even if the strength of the armed forces is not augmented. 
This serious problem of the present, however, becomes critical with the opera- 
tion of the Selective Service Act. Thousands of young Americans are to be com- 
pelled to serve in the armed forces. It may be accepted that these young men, 
their families and their friends—a number comprising a large proportion of our 
population—will expect and demand for these inductees a quality of medical care 
no less than that given the armed forces during World War 11. The slightest 
relaxation of this standard is certain to produce serious repercussions; and a 
significant departure therefrom may well threaten the very security of the Nation 
through repeal of the Selective Service Act. * * * 
It must be accepted then, that, unless such expert medical skills are—in one 
way or another—made fully available to the sick and injured of the armed forces, 
thousands of young Americans will have been forced from their homes and vocations 
to serve a Government that is indifferent to their welfare. This is not a pleasant 
thought, but it is the truth. 
* * * voluntary recruitment has fully met the medical needs of our armed 
forces in all our wars. * * * However, in World War II the interplay of the 
factors * * * made this solution barely tolerable for the civil population. 
The country was most fortunate during those war years in escaping both epi- 
demics and enemy attack upon the civil population. Had either of these con- 
22 tingencies occurred, those at home would have suffered from lack of sufficient 
medical care. With the rapid development of new weapons for total war, the 
medical needs of the civil population must henceforth be given much greater con- 
sideration in the distribution of medical resources in war. * * * 
These convincing facts point only to one conclusion—that, if adequate medical 
care is to be given the armed forces, the services of expert medical and surgical 
specialists must be made available in some way other than by induction for full- 
time employment. There is no other solution. 
This appraisal of the condition in the armed forces is irrefutably 
corroborated by the detailed analysis of the Subcommittee on Medi- 
cal Manpower. The highlights of the findings of this report, which 
we adopt, include: 
No single agency of the Government now has the manpower resources in sight 
to enable it to meet its full responsibilities for health and medical service. 
This critical situation is neither temporary nor self-correcting. Vigorous meas- 
ures to meet this condition during the past 3 years have produced fragmentary 
and inadequate results. 
When improvement has occurred, as in the case of Veterans’ Administration 
through Public Law 293, the benefit to that agency has been achieved only at the 
expense of the others. 
The armed forces have been able to meet these responsibilities only by the obli- 
gatory service of Army Special Training Program and V-12 trainees during the 
war. 
Quality of medical service is equally if not more important than quantity and is 
derived from an integration of general medical care with specialist services. 
Technical skill and competence in medicine are synonymous with specialization. 
Present and prospective personnel deficits are so serious as to show that the 
work load is greater than can be maintained. 
The work load must be examined against the prime needs of each agency for 
supporting medical service, and when recruitment has failed we must examine 
whether a primary function of Government is jeopardized to the extent that con- 
scription of doctors is necessary. 
The report of the Subcommittee on Medical Manpower documents 
the shortages of the different agencies in professional manpower, 
showing the appalling gap, quantitatively and qualitatively, between 
availability and requirements under the present system. In the Army 
and Air Force, taking surgery as an example, we estimate an over-all 
deficit in surgeons of about 25 percent on October 1, 1948, and at least 
40 percent on July 1, 1950. However, this fails to reveal the true 
shortage. When analyzed for differentials of training and experience, 
the anticipated shortage on July 1, 1950 becomes 77 percent in board- 
certified or equivalent surgeons. Thus, it is not only a numerical 
shortage but, even more important, a qualitative shortage. 
In the Nation as a whole, 1 doctor out of every 6 or 7 is a specialist, 
certified by the appropriate board; in the Army the ratio is 1 to 33. 
The Division of Psychiatry and Neurology of the Veterans’ Admin- 
istration has recommended against constructing any more neuropsy- 
chiatric hospitals, except in medical centers, because of the inability 
to staff them. 
23 Medical care in the Veterans’ Administration has been maintained 
through the past 2 years only because its staff was augmented by 
loan from the Army and Navy of 1,500 Army Special Training Pro- 
gram and V-12 doctors. These men completed their obligatory ser- 
vice this year and there is no further supply from this source. 
In the Veterans’ Administration hospitals, problems in staffing have 
a close relationship to location of the hospitals. Some relief could be 
secured if, as the Veterans Administration Department of Medicine 
and Surgery has strongly recommended, hospital construction is con- 
centrated in larger cities in which part-time medical and ancillary 
personnel could be recruited without undue sacrifice to private practice 
and teaching connections. 
The Federal agencies as presently organized have no means of cop- 
ing with the manpower shortage, other than measures which accen- 
tuate the competition among themselves and with civilian institu- 
tions. These facts emphasize that a cardinal weakness of the present 
Federal organization for medical care is its failure to provide for 
coordinated personnel planning, procurement and utilization. 
Further, the Federal agencies make poor utilization of their physi- 
cian personnel. Earlier studies have shown that the doctors them- 
selves feel this strongly and are resentful of it. Our surveys con- 
firm both poor utilization and doctor resentment. 
In summary, then, we found shortages of skilled medical person- 
nel in combination with inefficient use of such personnel. The armed 
forces’ proposal to draft doctors is necessary, but can be justified only 
for truly military needs. Only a major reduction in work load and 
radical organizational changes which will make for efficient use of 
scarce medical personnel will enable the Federal Government to give 
medical care of high quality. 
F. Spotlight on Definition of Those Entitled to 
Medical Care 
Although not technically an organizational weakness, the lack of 
a clearly expressed congressional policy defining certain classes of 
beneficiaries is a serious inadequacy of the present organization. 
There is no clearly expressed statutory authorization as to whether 
the dependents of Army and Air Force personnel are eligible for 
medical care; nor any clear legislative authorization to plan compre- 
hensively for the hospital care of veterans with non-service-connected 
disabilities. Care for both these groups may be a proper function of 
government but such vast obligations should be undertaken only 
under a clear authorization by statute. It should be planned, not 
just happen. 
24 A vast hospital plant has been created for purposes some of which 
are neither clearly defined nor authorized by any settled policy. The 
Congress must have intended to provide medical care to veterans 
with non-service-connectcd disabilities in far greater numbers than 
could be accommodated in surplus beds in hospitals built for service- 
connected illnesses or it would not have built three times as many 
hospitals as are needed for the latter. But the Veterans Adminis- 
tration at present can provide medical care legally for veterans with 
non-service-connected disabilities only in Federal hospitals. Con- 
sequently, it cannot provide care to these veterans in the most eco- 
nomical way, which in many instances would be in the local hospitals 
of their home communities. 
Further, veterans with non-service-connected disabilities, not being 
clearly entitled to hospitalization, may have to wait weeks or months 
until beds are available. Moreover, they may not receive out-patient 
care even during the waiting period. 
Under the provision that hospital care will be furnished for non- 
service-connected disabilities on the veteran’s statement without 
investigation that he is unable to pay (the so-called “pauper’s oath”), 
many veterans whose needs are less acute may receive hospitalization 
while others, less financially able but more conscientious, may not be 
benefited. 
Present practices are so loose that veterans are often considered to 
be unable to pay if the question as to ability to pay is left unanswered. 
As a practical matter, the hospitalization of veterans is now limited 
principally by the size of the Federal hospital plant, and the desire 
of the individual veteran to seek hospital care under a statement of 
financial inability which is largely a matter of form. Ability to pay 
is not more than a very minor moral deterrent. 
Summary of Weaknesses 
Tested in these various ways, it is clear that the unsatisfactory 
conditions found are not sporadic instances of bad judgment nor 
administrative failure, but result from inherent weaknesses caused 
by the way in which the present Federal medical services have come 
into being, and the nature of the existing set-up itself. 
The foregoing facts are not offered as tests of the efficiency of the 
several agencies, which was not our objective, but as a yardstick by 
which to measure the adequacy of the existing governmental medical 
organization against the Commission’s objectives. We conclude 
that it does not meet the standard so set. For the faults we have 
found, we blame primarily the competitive organizational climate in 
which the various agencies have striven to function and to maintain 
their existence, rather than the agencies themselves. 
25 Chapter 111 
RECOMMENDED ORGANIZATION TO ACHIEVE 
THE OBJECTIVES DEFINED BY CONGRESS 
The present numerous services concerned with similar medical 
activities must be integrated into two major systems—military and 
nonmilitary. Before reaching this conclusion we considered care- 
fully whether an agency in the Executive Office of the President might 
be able to secure effective coordination of the various independent 
departments and agencies in a way to remedy the serious defects 
which we have disclosed. It is, we feel, an impossible task to remedy 
these weaknesses merely by high-level efforts to coordinate inde- 
pendent and competing agencies. The manpower shortage is the 
conclusive, determining factor which convinces us of the inadequacy 
of this approach. 
If consolidation is to occur, our examination shows that there is no 
existing Federal organization suited to absorb or supersede the others. 
Proceeding upon the assumption, which we were instructed to make, 
that the Commission would recommend a Cabinet Department 
embracing health, education and security, we believe that such a 
department, including a National Bureau of Health, could remedy to a 
major extent the organizational weaknesses of the present set-up, 
and give the leadership, direction, and considered planning urgently 
needed and contemplated by Congress. 
We, therefore, recommend for the nonmilitary system the organi- 
zation of a new National Bureau of Health, in the proposed new 
department, to be headed by a professional career Director General. 
He should report directly to the Secretary, and should, in the non- 
military Federal organization, be the highest ranking physician in the 
Government. Since the appointment of Under Secretaries and 
Assistant Secretaries is of course not necessarily on a career basis, no 
physician should be appointed to such posts who would come between 
the Secretary and the career Director General. The supreme medical 
importance of the position of the Director General should command, 
irrespective of all other considerations, the ablest medical and health 
administrator whose services can be obtained by the Government. 
Our recommendation does not contemplate the creation of an addi- 
tional Government agency in the usual sense. It proposes using the 
facilities and resources of existing agencies. We do not believe 
that this change will result in additional expenditures; on the contrary, 
26 we are convinced that it will bring both great savings and an improved 
standard of care by better utilization of the limited manpower re- 
sources. 
This bureau should be manned by career personnel drawn initially 
from the various agencies whose functions are recommended for trans- 
fer to the new National Bureau of Health, supplemented by medical 
officers whom the armed forces shall have the right to detail for 
training and rotation as later discussed. 
This brings us to the question of the main organizational units of 
the proposed new National Bureau of Health. It should consist of 
at least three main divisions: 
1. Medical Care Division, in which would be gathered all of the 
functions of the National Bureau of Health with respect to hospitaliza- 
tion and other direct medical care of patients (discussed herein in 
Ch. IV); 
2. Public Health Division (discussed herein in Ch. IX); 
3. Research and Training Division (discussed herein in Ch. X). 
Because our recommendations relating to the transfer of hospital 
and medical care functions involve other considerations and adjust- 
ments, they will be presented before we take up recommendations for 
the military system and its relation to the nonmilitary. Medical 
supply, an ancillary but important aspect of medical care, will be 
considered in Chapter XIII. 
818374°—49 4 
27 Chapter IV 
MEDICAL CARE FUNCTIONS OF NATIONAL 
BUREAU OF HEALTH 
Unless we can bring to bear upon this question the informed and 
courageous approach which the Commission has asked of us, the 
efforts of this committee will be of little value. 
Our conclusion is that the great body of the Federal functions, 
facilities, and the personnel for medical care of patients should be 
transferred to a Medical Care Division of the proposed National 
Bureau of Health. These should include: 
1. The general hospitals of the armed forces in the continental 
United States (except a medical center for each of the three services), 
and station hospitals (certain of which the Navy calls “dispensaries”) 
in the continental United States except those at outlying posts so 
located that other hospitals of the National Bureau of Health would 
not be near enough to provide the hospitalization required. 
2. The medical functions of the Veterans’ Administration in toto, 
including the out-patient services in the Regional Offices of the 
Veterans’ Administration. 
3. The hospitals of the Public Health Service; 
4. St. Elizabeths Hospital; 
5. The four nonmilitary hospitals in the Canal Zone; 
6. Both the United States Soldiers Home in Washington and the 
United States Naval Home in Philadelphia. 
On the other hand hospital functions which should not be trans- 
ferred include: 
1. The armed forces station hospitals above excepted, together 
with all armed forces hospitals overseas. 
2. The hospitals of the Bureau of Indian Affairs. 
3. The hospitals of the Bureau of Prisons. 
4. Other small hospital functions such as those which are incidents 
of Tennessee Valley Authority and the Atomic Energy Commission. 
The Indian and prison hospitals should, however, be completely 
staffed by professional personnel from the National Bureau of Health. 
We deal separately with Freedmen’s Hospital. 
Fully conscious of the radical departure from traditional functions 
inherent in this plan, and of the responsibility involved in recommend- 
28 ing it, we have reached the decision to do so not only because of the 
vast saving in money which it makes possible, but because it is the 
only way in which high-quality care can be maintained in the face of 
the Federal medical-manpower shortage. 
For an understanding of these proposals, it is necessary to state 
at this point that for this plan to function it must be accompanied 
by a clear definition of the rights of veterans with nonservice-con- 
nected disabilities and of dependents of military personnel, subjects 
which are later fully discussed herein. This plan presupposes that, 
based upon such new clear definition of the rights of these classes of 
beneficiaries, the resources in medical manpower and the facilities— 
where these are of satisfactory quality—of community hospitals will 
be utilized for care of Federal beneficiaries to whatever extent efficient 
operation indicates. 
The principle should be that hospital care for Federal beneficiaries 
be planned in relation to the hospital resources of the country as a 
whole, not merely through construction of Federal hospitals as a 
class apart. 
It must be steadily borne in mind that assumption of Federal 
financial responsibility is an entirely distinct question from provision 
of such medical care directly in Federal hospitals only. 
In these recommendations the two transfers of greatest moment 
are the medical services and hospitals of the armed forces and of the 
Veterans’ Administration. In making these, we adopt the essentially 
identical conclusions of several of our subcommittees. 
A. Transfer of Armed Forces Hospital Functions 
Speaking first principally of the transfer from the armed forces, 
we cannot improve upon the following statement of Dr. Hawley’s 
subcommittee on Armed Forces Hospitalization. 
In exploring the possibilities for more efficient use of the medical potentialities 
of the Nation, this subcommittee early arrived at the firm conclusion that so 
much of a medical service as is in direct support of an armed force is, and must 
continue to be, inseparable from that force. The functions of a medical service 
are too diverse, and the responsibilities of commanders too inclusive, for medical 
personnel to be allocated and withdrawn solely on the basis of current need for 
medical care. 
There is at present, however, a function of medical service that is not one of 
direct support of an armed force. This is the purely professional care in hospitals 
of the serious cases requiring expert medical or surgical skills (specialists). A high 
proportion of such cases are forever unfit for further military service; and such as 
do fully recover are of little military value during the period of their hospitaliza- 
tion. Such patients are primarily a medical, rather than a military responsibility; 
and, while there are many sound reasons for not separating those of further use- 
29 fulness from military control, there is no impelling reason for treating them in 
military hospitals. 
* * * The one major responsibility of the medical services of the armed forces 
that cannot be met adequately either by voluntary recruitment or reasonable 
compulsory service of physicians, then, is the operation of that class of hospitals 
that are capable of providing highly expert (specialized) care and treatment. 
Fortunately, a precedent for such solution has been established by the De- 
partment of Medicine and Surgery of the Veterans’ Administration. Faced with 
almost the identical problem, this Department obtained the services of hundreds 
of outstanding specialists upon a part-time basis. This program has been in 
operation for almost 3 years, and its success is no longer in doubt. Of the 91,290 
patients in Veterans’ hospitals on June 30, 1948, the professional treatment of 
about 58,000 was given wholly by, or under the close supervision of, part-time 
specialists. To provide these services with full-time personnel would require 
the withdrawal of at least 1,250 specialists from the limited medical pool of the 
country. * * * 
These facts lead the subcommittee to the firm conclusion that an acceptable 
quality of medical care can be insured to the armed forces only by a radical 
departure from the traditional pattern of such care. The subcommittee is fully 
aware of the repercussions excited by any departure from tradition; but it is also 
conscious of the insurmountable obstacles that have recently come into the picture 
and which cannot be overcome in any other way. 
First, the most economical use must be made of the limited amount of expert 
(specialized) medical talent in the Nation. No longer can it be dissipated through 
exclusive allocation to one or the other Federal medical service, or even to the 
exclusive service of the Government. The needs of the civil population must be 
protected in war as well as in peace. To this end the part-time services of spe- 
cialists must be utilized to the fullest extent in staffing the military hospitals of 
general hospital caliber within the continental limits of the United States. Ob- 
viously, such a territorial limitation is necessary, but only because their services 
are not available elsewhere. These specialists on part-time must actually replace 
military medical men rather than, as at present, merely supplement numerically 
adequate staffs for purposes of instruction. They must be given responsibility 
for patient care as well as for teaching. * * * 
* * * Efficient and economical use by the Government of the limited 
amount of expert medical talent can he assured only through the establishment 
of a single system of Federal hospitals in which the bulk of the responsibility 
of the Government for medical care can he discharged. Such a system would 
effect great economy in hospital plant as well as in medical personnel of all 
categories; and it would least disturb the medical care of the civil population 
both in war and in peace. 
The scope of this Federal hospital system should include all of the responsibili- 
ties of the Government for medical care other than those that are inseparable 
from the armed forces and from other Government activities of peculiar nature. 
* * * This Federal hospital system should absorb all hospitals of the armed 
forces of general hospital caliber within the continental limits of the United 
States (with the exceptions hereinafter mentioned), and the existing hospitals 
of the Veterans’ Administration, and the * * * Public Health Service. 
* * * The armed forces must retain military hospitals of station hospital 
and naval dispensary caliber and less, within continental United States only where 
other Federal hospitalization is not available, and all military hospitals beyond 
the continental limits of the United States. In addition, for purposes of training 
and research, the Army should retain the Army Medical Center, the Navy, the 
30 Naval Medical Center, and the Air Force should be permitted to construct an 
Aviation Medical Center. 
If and when created, this Federal hospital system should follow the pattern of 
medical staffing established 3 years ago by the Veterans’ Administration. The 
fullest possible use should be made of the faculties of schools of medicine, and of 
other expert medical specialists upon a part-time basis. These hospitals must serve 
the professional training needs of the armed forces, and permit the detail of com- 
missioned medical officers and other military medical personnel to receive in- 
struction. There is no reason why this proposed Federal hospital system should 
not be charged with the responsibility of all technical training of medical spe- 
cialists and technicians for the Federal Government. * * * 
The care and treatment of military personnel in such a Federal system of hospi- 
tals need present no insoluble difficulties. The use of military registrars in the 
larger hospitals, and for areas in the case of smaller hospitals, will simplify the 
problems of records and of discipline. Separation of permanently disabled from 
the service at the earliest possible date can be arranged by mutual agreement 
upon policy. 
Working entirely independently of Dr. Hawley’s group, Dr. 
Churchill’s subcommittee on medical manpower also recommends 
that, to correct the unsatisfactory conditions above described and 
secure optimum utilization of scarce personnel, the work load of the 
Federal medical service, except the part clearly identified with the 
primary missions of the armed forces, be consolidated in a single 
Federal agency. 
One illustration of what this change would mean to the armed 
forces is that the shortage of board certified or equivalent surgeons 
in the Army and Air Force would be reduced from a deficit of 75 
percent to only 35 percent as of December 31, 1948. 
B. Transfer of Veterans’ Medical and 
Hospital Functions 
Implicit in the above plan is the transfer to the new Bureau of 
all medical and hospital services of the Veterans’ Administration, 
including out-patient services now provided through regional offices. 
Veterans’ hospitals are by far the largest single group, have more 
than half the total bed capacity of all the Federal hospitals and are 
progressively increasing in size relative to the others. Were they 
to remain separate, the new Bureau of Health would be the Govern- 
ment’s central health agency in name only. Under the direction of 
the statute and the instructions of the Commission to consolidate like 
services, this transfer is mandatory. 
The advantages flowing from the above steps, without which we 
have been able to find no solution to the medical problem now faced 
by the Government, include: 
1. It creates a hospital system in which armed forces personnel 
can be given specialist care not otherwise available. 
31 2. Merging of the Veterans’ Administration hospitals, those of 
the Public Health Service (later discussed), and most of the general, 
and some of the station, hospitals of the armed forces will create a 
unified hospital system which can consolidate facilities, make opti- 
mum use of scarce manpower and thereby provide a generally higher 
standard of care. 
3. Priority of attention can be given to the groups to which the 
Government owes an unconditional and primary obligation—the 
largest of which of course are veterans with service-connected dis- 
abilities and personnel of the armed forces. Veterans with non- 
service-connected disabilities and other contingent beneficiaries may 
be given care as Congress may authorize both in such hospitals and, 
to the extent necessary and desirable, in community hospitals under 
the comprehensive plan later discussed. 
4. Hospitalization of patients will be possible nearer home. This, 
together with the development of convalescent facilities as an integral 
part of the system, should under proper management result in shorter 
stays in hospital, and effect a significant reduction in the number of 
Federal beds required for any given amount of patient work load. 
5. The reduction in Federal bed requirements as a consequence 
of all of the above factors, and other reforms which such a manage- 
ment should effect, could avert much of the very costly new Federal 
hospital construction program now projected. For example, in the 
areas surveyed by the Subcommittee on Hospitalization—constituting 
roughly only one-sixth of Federal hospital beds in this country—it 
has been estimated that new construction costing upwards of SIOO,- 
000,000 in such areas alone could be saved by a unified Federal 
hospital system. 
6. The greatest and the most vital saving of all would be in pro- 
fessional manpower. The hospital system as a whole would be an 
integrated one, with specialized centers, use of part-time specialists, 
and association with medical schools and teaching hospitals. By these 
and other techniques, scarce professional personnel could be conserved 
to the utmost, as is now being done as to physicians in those Veterans’ 
Administration hospitals under Deans’ committees. 
7. This plan also has great advantages should war occur as will 
be later discussed (ch. VIII). 
8. Such unification is requisite to make satisfactory provision for 
the two great chronic diseases. The task force on tuberculosis re- 
ported that consolidation of existing Federal tuberculosis hospitaliza- 
tion in a single agency is essential; that no new Federal tuberculosis 
hospitals should be built except those under construction; that as a 
long-range solution there should be a gradual transfer of more re- 
sponsibility to state institutions for the care of Federal tuberculosis 
beneficiaries; that the Army and Navy should discontinue operation 
32 of tuberculosis programs of their own; that tuberculosis hospitals of 
the Veterans’ Administration should be transferred to the new central 
hospital system. 
Similarly, the task force on neuropsychiatry found that there 
should be a fusion of all major hospital and clinical services of the 
Federal agencies with “psychiatric centers” in general hospitals. 
9. This hospital system would offer unique opportunities for 
the training of all types of hospital personnel, including military— 
executives, administrators, department heads, and all technical and 
ancillary staff. Nowhere else in the world would there be comparable 
opportunities for such training. 
C. Transfer of the Federal Security Agency Hospitals 
1. Since the Public Health Service, together with the Federal 
Security Agency of which it is a part, would be merged into the new 
department, its hospitals should obviously become part of the National 
Bureau of Health. 
2. For the time being, St. Elizabeths Hospital should also become 
part of the National Bureau of Health, Because it serves residents 
of the District of Columbia primarily, it is organizationally sound for 
it to become a part of the Government of the District. However, 
this must wait, in our opinion, until there is better assurance that 
the District Government will provide direction for it which will 
maintain the high standards now set by St. Elizabeths in its special 
field. Under the unified hospital plan which we are proposing, Federal 
beneficiaries in St. Elizabeths, other than residents of the District of 
Columbia, could then either be taken care of elsewhere in the Federal 
hospital system or in St. Elizabeths on a reimbursable basis. 
3. Freedmen’s Hospital is a special institution to provide care for 
Negro residents of the District of Columbia. It is also the teaching 
hospital for Howard University. It should be transferred to the 
University with such assistance in the form of appropriations as may 
be necessary for it to serve its purpose as an essential link in the 
plan for medical education at the university. 
D. Transfer of Other Hospitals 
1. The Army maintains in Washington, D. C. the United States 
Soldiers’ Home and the Navy in Philadelphia the United States 
Naval Home, each of which has a small hospital. These are now 
entirely separate from the hospitals and domiciliary homes of the 
33 Veterans’ Administration. Since domiciliary homes of the Veterans’ 
Administration would be transferred to the new National Bureau of 
Health as well as Veterans’ Administration hospitals, it is clear that 
both the United States Soldiers’ Home and the United States Naval 
Home should be similarly transferred. 
2. In the Canal Zone the Federal Government maintains four 
civilian hospitals, namely, Gorgas, Colon, Palo Seco (leprosarium), 
and Corozal. While outside the continental limits of the United 
States, these hospitals would be more effectively staffed and operated 
if consolidated with the hospital system in the United States. Present 
day air transfer of patients would make it possible through such 
transportation both to achieve a better standard of care and substan- 
tially cut down the number of beds required and the stand-by capacity 
which it might otherwise be necessary to maintain. It would also 
terminate the isolation of these hospitals and thereby provide a better 
professional climate for them. 
E. Basic Organizational Principles of the Hospital 
System 
The hospitals should be grouped into regions, each so far as possible 
with a general hospital as its teaching and consultative center, and 
each under a regional director, reporting directly to the Director of 
the Medical Care Division, who should have the maximum amount 
of authority decentralized to him from Washington. 
The regional pattern, set up by the Commonwealth Fund project 
and others, should bo followed in making the medical center the focal 
point for the region. The hospital organization in each region should 
include not only smaller general and station hospitals, but also 
tuberculosis, psychiatric, and other specialized hospitals and facilities 
for out-patient care in the area. Our tuberculosis and neuropsychiatric 
subcommittees are strongly in accord with this recommendation. 
Under the above plan, the pattern of organization would be es- 
sentially vertical in character, with full authority in the Director of 
the Medical Care Division, under him in the Regional Director, and 
under him in turn complete management responsibility in each hospital 
director. Each hospital should have a single budget. The hospital 
director should prepare this and, upon obtaining approval of it, 
should be responsible for the expenditure of it. 
It must be recognized that there is a dearth of trained and ex- 
perienced hospital administrators for large operations. It is desirable 
that such administrators’ qualifications should, if possible, start with 
a medical education. However, it is essential that such administrators 
adopt hospital administration as a career with medical education 
34 merely as a foundation for it. This is requisite because executive 
experience in a large enterprise is the basic qualification. Because of 
the shortage of medical directors qualified as above, it would not be 
possible in any hospital system of this magnitude to secure uniformly, 
or perhaps even in large part, medical directors for them. It must 
be recognized, therefore, that below the level of the Director of the 
Medical Care Division, who should bo a physician, the positions in 
the hospital system might have to be filled in varying degrees by 
persons selected primarily for their executive ability and experience 
in hospital administration, even though they arc not physicians. 
Present civil service limitations would make it virtually impos- 
sible to obtain the right men for posts of the great responsibility 
required for the key offices of this division. We deal with these sub- 
jects later under Personnel Policies in Federal Medical Services, 
Chapter XI. 
The above principles of direct management authority are violated 
extensively in the present Federal medical organization. The two 
largest units-—Veterans7 Administration and Army—have somewhat 
analogous systems. In the Veterans7, Administration, lay control by 
the Administrator includes decision, not only of what hospitals will 
be built, but also of the location. Both of these matters should be 
both initiated and finally decided by the highest medical authority 
in the agency. Further, Veterans7 Administration hospital con- 
struction is an independent function not under the firm control of 
the Chief Medical Director. Naturally, hospitals so constructed do 
not fit medical needs, and involve unnecessary facilities and excessive 
costs. Architects, engineers and any other construction groups should 
be the agents not the masters. Because in the Veterans7 Administra- 
tion the entire field of “special services77 is outside medical control, 
demands from this independent service, which may be foreign to true 
medical requirements, are included in hospital construction. Various 
veterans7 organizations and other agencies arc given extensive office 
space. Huge dining rooms, recreation halls, auditoriums, and other 
expensive facilities are included. All these greatly increase hospital 
costs. Many are not essential for real hospital care in general 
hospitals. 
In the recent history of Veterans7 Administration, these weaknesses 
are proving extremely expensive. Before the new regime came in, 
in 1945, certain hospitals had already been planned. Thereafter, 
additional hospitals were planned, including various small peripheral 
installations, many of which had the approval of the Bureau of Medi- 
cine and Surgery, and others were located due to outside pressures. 
However, by the early part of this year, at the latest, it had become 
apparent that for many of these hospitals it would be difficult, if not 
impossible, to procure adequate staffs. Had the control of construc- 
tion been, as it should have been, under the Department of Medicine 
35 and Surgery, the construction program could have been adapted to 
the medical and hospitalization requirements and the manpower 
available. Instead, because of the rigidity of the organization and 
controls independent of the medical department, contracts have been 
let, and programs are going forward, which bear no sound relationship 
to the best medical treatment of veterans. We explain this condition 
in detail only because it is essential that it be understood in order that 
corrective organizational measures be adopted. It is one of the 
reasons on account of which the transfer of the medical functions 
from the Veterans’ Administration will mean a better standard of 
care for the veteran. 
(Somewhat analogous conditions exist in the control of the Army 
hospital system, which we discuss later as part of the problems of 
the armed forces.) 
But it is not only in the Veterans’ Administration central office that 
this fragmented authority exists. The condition is equally serious in 
the field. In each region the Deputy Administrator is in charge of 
the hospitals in his area, not the Chief Medical Director or a regional 
hospitalization director responsible to him. In each, hospital manage- 
ment is in turn split into various mutually independent sections, so 
that the manager of a particular hospital has no over-all authority nor 
single supervision but reports in different fields of activity to different 
superiors. 
Moreover, the out-patient services provided through the regional 
offices are not correlated with the hospitals. They have separate 
staffs with entirely independent and often duplicate equipment, and, 
by contrast with the better hospitals, deliver an unsatisfactory stand- 
ard of care. 
The out-patient services provided by the regional offices consist 
primarily of treatments to veterans with service-connected disabilities 
and the medical examination and evaluation of disability claims for 
pensions. The actual decision on disability or pension applications 
is made by the Claims Service. There is no real need for the medical 
and claims functions to be associated within the same organization 
because the medical services provided are nothing more than those 
commonly purchased by insurance companies from private physicians, 
which is done purposely to get an independent evaluation. 
With respect to the direct care provided by the out-patient service, 
as good or better care could be given through the out-patient depart- 
ments of the hospitals. 
As matters now stand, the personnel and out-patient activities of 
the hospitals are duplicated at least in part; the services lack the sup- 
port of the highly specialized facilities and personnel of the hospitals; 
hospital personnel are not rotated through the clinics—nor vice versa- 
for the good of the patient and the training of the personnel; and 
the medical revolution which has made such remarkable progress in 
36 veterans hospital care has hardly touched the regional office out- 
patient clinics. 
In recommending that the entire medical function of the Veterans’ 
Administration should be placed in the new National Bureau of 
Health, we have had in mind the necessity for furnishing to the 
Claims, Insurance, and Vocational Rehabilitation Services of the 
Veterans’ Administration, medical examinations, evaluations and 
any other medical support requisite. For this purpose, it is not neces- 
sary to maintain such medical services in the Veterans’ Administration 
itself. The National Bureau of Health should be required, through 
the installations above described, to perform these medical functions 
for the Veterans’ Administration. The fact that the medical judgment 
in such evaluations would thus be an independent one is an advantage, 
not a handicap. Forther, the integration of these out-patient depart- 
ments with the hospitals would provide a considerably higher pro- 
fessional standard. The change would also correct serious weaknesses 
in the existing organization, previously pointed out. 
37 Chapter Y 
INTEGRATION OF FEDERAL HOSPITAL WITH 
NONFEDERAL HOSPITALS 
The Government has been pursuing two mutually inconsistent 
policies in its aid to non-Federal hospitals under the Hill-Burton Act 
and in the Veterans’ Administration hospital-construction program. 
Finding gross inadequacies in the Nation’s hospital plant, the 
Government paid part of the cost of hospital surveys in the states to 
determine real needs, and is now authorizing up to $75,000,000 per 
year in payment of one-third of the construction costs of hospitals 
found necessary by such surveys. The soundness of this step in pro- 
moting better national health is beyond question and the benefit 
derived from such carefully limited Federal expense is great. How- 
ever, because hospitals operated by the Federal Government are not 
open to meet community needs, they were excluded from considera- 
tion in the survey. 
Concurrently, the Federal Government, without relationship to 
the Hill-Burton Act program, launched a new and greater building 
enterprise for veterans’ hospitals. These hospitals, under present 
policies, are in effect built to give total hospital care to veterans 
who constitute about one-seventh of the population. But this one- 
seventh has been included—and correctly so-—in the survey of com- 
munity hospital needs. This obvious wasteful duplication in planning 
is but one of the resultant evils. More serious is the waste of spending 
$20,000 to $30,000, and in occasional instances over $40,000, per bed 
for veterans’ hospitals, of which the Federal Government pays all, and 
for which it pays all operating costs, when the expenditure of a frac- 
tion of this amount in the communities in which veterans live (if added 
facilities are there required) could furnish hospitalization near their 
homes. Under an extension of the Hill-Burton Act, such aid to com- 
munity hospitals might require a 50 percent Federal grant or a 33 
percent grant and an equal amount in long-term mortgage loan. Costs 
of hospital construction are now so high that even the vitality and 
energy of the community hospital system coidd probably not pay for 
two-thirds of the cost of construction, as is now required under the 
Hill-Burton Act. But these hospitals, which are constructed, not as 
rest homes but solely for the care of really sick patients, can still be 
built at lower average costs per bed. 
38 The economy of this approach is furthered by the fact that in 
many cases beds can be provided by additions to going institutions. 
The average bed cost of construction of general hospitals under the 
Hill-Burton Act up to a recent date—of which the Government has 
of course paid but one-third—is only $12,200. Since most of these 
are small hospitals of 50 beds or less and include considerable frame 
construction, they are of course not strictly comparable with the costs of 
new Veterans’ Administration hospitals. But they do illustrate vividly 
how beds can be supplied at low total—and even lower Federal— 
cost, when the money does not come easily and every dollar is made 
to do an earnest day’s work. They also make a rather startling con- 
trast to the shocking per bed costs of various of the projected Veterans’ 
Administration small hospitals, some of which are three times as 
costly. When Veterans’ Administration hospitals cost per single 
bed as much as no one but a wealthy man can afford to pay for a house 
for himself and his entire family, a pause in such operations and 
careful scrutiny of them is called for. This is especially so when a 
clear, simple means of avoiding such vast Federal expense is presented, 
as it is here. 
An even greater evil of the present plan is the injury to the com- 
munity hospital system. Veterans’ hospitals siphon off nursing and 
other scarce personnel. Such unfavorable competition between Fed- 
eral and community hospitals is occurring at a time when the latter 
are already in great financial difficulties because of increased cost of 
operation due to inflation, which has caused threatening deficits for 
many of even the strongest. 
The bald fact is that at the same time that the Government is 
spending up to $75,000,000 per year to build up community hospitals, 
it is in effect tearing them down by disastrous competition. At the 
same time, it is reducing their incomes by taking away a large class 
of patients who would normally come to them. 
In the term, community hospital, we include voluntary hospitals, 
State university hospitals, and county and city hospitals in smaller 
centers of population where these are in fact the hospital of the 
community. 
The vital importance of community hospitals, not only for medical 
care in the country as a whole, but also specifically for Federal medi- 
cine must be clearly understood. These institutions, particularly the 
great voluntary teaching hospitals and the medical schools affiliated 
with them, have been and are the mainspring of modern medicine, 
the heart of research in medicine and the source of the very great 
progress in standards of care, length of human life and conquest of 
disease. It is in these hospitals that the undergraduate doctors obtain 
their clinical training and in which the graduates receive their resi- 
dency training and become the specialists of tomorrow. Graduates of 
these schools and hospitals are the men from whom Federal medicine 
39 must obtain its own staffs and to whom it must look for further 
scientific achievements. Veterans’ Administration hospitals which 
have been very recently affiliated with medical schools perform a 
comparable function, but their number is limited. 
The voluntary hospitals of the country for a century have had, 
and still have, tremendous vitality. But heavy taxation of individuals 
and estates has reduced donations by preventing the accumulation 
of large fortunes such as those which created our great medical centers. 
Costs of operation of hospitals have gone up faster than patient 
income; building costs have increased so that modernization to keep 
the plants abreast of the need is not possible. Recent surveys in 
several eastern cities indicate that at least 25 percent of the community 
hospital plant is so obsolete that it should be replaced at once. A sub- 
stantial additional percentage is obsolescent. 
The Hill-Burton Act initially attacked the desperate lack of hos- 
pitalization in rural areas. This was as it should be. All statistics 
prove that rural health and health facilities are inferior to those in 
urban areas. Therefore, most of the Hill-Burton Act funds to date 
have properly gone for smaller hospitals and additions in small com- 
munities. 
But now the support should be directed, toward the heart, as well 
as the periphery, of the community hospital system, with special 
emphasis on the teaching hospitals. 
Both because the Federal policy of assisting community hospitals 
has already been recognized as necessary, and also because under 
proper planning such hospitals can aid directly in care of Federal 
beneficiaries, the over-all plan must consider them. 
Local general hospitals are already staffed with the best medical 
talent in their communities. To the extent that facilities exist or 
are created, care of Federal beneficiaries can, therefore, be given 
without seriously intensifying the medical manpower problem. A 
formula already exists as a basis for the reimbursable cost for such 
care. While this does not include medical attention, for which rates 
and arrangements would have to be agreed upon, bases for this also 
exist, so that the problem presents no insuperable difficulty. 
In summary, our appraisal of the present Federal position shows 
that we have, in essence, a veterans’ hospital system which has reached 
or almost reached the limit to which it can be staffed to give quality 
care; an armed forces hospital system which has greatly exceeded the 
limit which can be staffed except by draft (and a draft of doctors 
cannot supply quality but merely a quantity of junior doctors); and 
at the same time a community hospital system already staffed and 
attracting a steady flow of medical graduates; that the latter system 
is essential to teaching and research; and, finally, that it is already 
Federal policy to give it reasonable aid. 
40 The solution is obvious—not to expand the Federal system, but 
to extend limited aid to the community system. This should be done 
by partial assistance in new construction for general medical and 
surgical hospitals, to at least the extent that is necessary to provide 
needed facilities for Federal patients, and to contract for such care 
in such institutions. At the present time this would have to be con- 
fined to general medical and surgical hospitals, because local facilities 
for the care of tuberculous, psychiatric, and other long-term patients 
are now very inadequate. 
On the negative side, the above program will eliminate or mini- 
mize the present destructive competition; on the affirmative side it will 
provide needed care for Federal beneficiaries for which Federal man- 
power does not exist, and will further the policy of revitalizing the 
community hospitals. Aid in construction should, of course, not be 
given to an extent which would diminish the responsibility and initia- 
tive of private philanthropy for these institutions. 
It should be made clear that we are not recommending a curtail- 
ment of the existing Veterans’ Administration hospital plant, but 
merely that it not be enlarged. If a limit is placed on the size, such 
as we propose, the new system will not at any future time be as large 
as the Veterans’ Administration alone will be in a few years if there is 
no curb on its expansion. The proposed new hospital system will 
also be much smaller than the Army hospital plant in the United 
States during the war. 
We also clearly recognize that many community hospitals have 
not yet attained a high standard. These, of course, would not now be 
used for Federal patients. But the recommendations we are making 
will help to improve the weaker ones by modernizing their plants and 
increasing their opportunities for service. 
We make the above recommendations because we believe that 
Federal medical services cannot be planned in a vacuum, but must 
be considered as part of a sound over-all hospital service for the na- 
tion. This can be done at a lower ultimate Federal cost, without 
aggravating the manpower problem, with the patients nearer home 
and with shorter hospital stays, by a policy of stimulating private 
charitable enterprise in a manner consistent with the American way 
of life. 
While valuable in peace, perhaps the greatest benefit from this 
plan would be the security which it offers if hostilities should occur, 
as we discuss later. 
In the above recommendations the entire program of hospital con- 
struction, both for federally operated hospitals and non-Federal 
hospitals financed through the Hill-Burton Act, would be coordinated 
through one planning agency with due consideration of local conditions 
and regional planning. 
41 Federal and State governments should sponsor local voluntary 
groups, representing the States and communities, to carry out the 
function of planning the hospitals of each State or subdivision. Fed- 
eral and State funds should be contributed to the financial support of 
this planning group, but a major portion of the budget should come 
from the local communities. 
Such State and local planning councils should not have responsi- 
bility for the operation of hospitals, but should be advisors to represent 
the interests of the community. They should be made up of members 
representing the planning organizations of the community and should 
not be dominated by members with vested interest in the hospital 
service. 
42 Chapter VI 
NEED FOR RECONSIDERATION OF THE 
DEFINITION OF BENEFICIARIES 
As has been pointed out above, there is now no satisfactory author- 
ization and definition by Congress as to medical care of dependents of 
Army and Air Force personnel and veterans with non-service-con- 
nected disabilities. So far as there are present provisions for care of 
these groups, it is requisite that the care be given in Federal facilities 
and by Federal personnel rather than through making supplementary 
use of local community facilities and non-Federal personnel. 
We also consider in this section of the report, Navy dependents 
(because the three armed services must, of course, be treated uniformly 
as to such privilege), and merchant seamen. As to both of such groups 
the present statutory authorization for care is in clear form. 
A. Dependents of Armed Forces Personnel 
Medical care should be given by the armed forces to dependents 
overseas, as other medical facilities of acceptable quality ordinarily 
do not exist. The same applies to dependents at some camps and sta- 
tions in this country in areas remote from large cities, where com- 
munity facilities are not adequate. In both of these instances care of 
dependents is a necessary incident of normal maintenance of the armed 
forces. 
We question the justification for drafting doctors from their homes 
and practices, where they are now meeting community needs, to care 
for dependents who may be in no more need of such care than are 
these doctors’ own patients at home. Representatives of the medical 
profession have indicated that the profession will oppose such a draft. 
It is impossible under present record-keeping practices of the armed 
forces to arrive at a definite figure of the number of medical officers, 
particularly specialists, now required for dependents’ care, although 
it admittedly constitutes a substantial share of the work load. Our 
Subcommittee on Medical Manpower, however, estimates that a 
saving of several hundred medical officers would be possible if such 
care were not provided directly by the armed forces. This could be 
done without depriving dependents of care, by adopting a policy of 
818374°—49 5 
43 utilizing for them local community facilities and professional personnel 
wherever possible. 
We recognize that provision of adequate care for dependents has 
been offered as an inducement to men in service as part of their com- 
pensation, and that to terminate it would be injurious to morale at a 
time when it is necessary to build up, not tear down, our defense 
structure. 
If Congress determines that the equivalent of the present care of 
dependents should be supplied by the Federal Government in all areas, 
it could be done by either of two methods. 
First, the Government might, as part of the compensation of 
members of the armed forces contract directly for such service with 
local community facilities and personnel; this would be limited to 
hospital care in acute (not chronic) cases and to out-patient care. 
Second, if a nonprofit or commercial health insurance plan is found 
to be available which conforms to the requisite standards set by the 
Government, premiums for the dependents could be paid as part of 
the compensation of members of the armed forces. Such insurance 
should omit provision for care in overseas or other remote localities 
and the aggregate premiums adjusted downward accordingly, since 
care in these places would be provided by the armed forces in any case. 
Either of such plans, apart from relieving the armed forces of a 
responsibility for which it is not reasonable to draft doctors in peace- 
time, has the advantage of bringing the cost of this item clearly into 
the budget. It represents the basically sound fiscal policy and true 
long-range economy of having all real costs budgeted for the purpose 
for which appropriated. So considered, medical care of dependents 
in this country generally is really an item of the compensation of 
military personnel. It should be budgeted and shown as such; not be 
a concealed subsidy in unknown amount. If such care is to be pro- 
vided, which is for the Congress to define clearly, we recommend that 
it be furnished by one of the methods outlined above. We have con- 
sidered and rejected as a substitute an increase in pay by an amount 
sufficient to meet a health-insurance premium. 
Because the present cost is unknown, no specific figure of the 
savings which might be effected by the change proposed is possible, 
but, if either of the methods we suggest is adopted and properly ad- 
ministered, the cost should not be more than at present. 
B. Veterans with Non-Service-Connected Conditions 
We do not consider it to be the function of a committee largely 
composed of professional medical members, presumably selected for 
technical qualifications, to determine the basic question of philosophy 
44 of Government as to how much the United States owes to those who 
fought to defend it. But a basic, clear decision must be made by the 
Congress. 
At present the law merely provides that veterans with non-service- 
connected disabilities may receive hospitalization if beds are available 
and if the patients are not able to pay, but it requires acceptance of 
the veteran’s own statement under oath as to his inability to pay. 
Veterans’ hospitals have been built or are now in the process of con- 
struction or authorization to make available 100,000 beds beyond the 
needs of veterans with service-connected disabilities. 
1. Present Situation Unsound 
We believe that the present situation is unsound, both for the 
veterans and for the Government: 
From the point of view of the veterans’ interest: 
a. The patients with non-service-connected disabilities now receive 
only hospital, not outpatient, care. It is not possible, therefore, to 
employ effectively preventive measures which might avert long chronic 
hospitalization, unfortunate for the veteran and expensive for the 
Government. 
b. The present eligibility provision for the care of veterans with 
non-service-connected disabilities is highly uncertain in its operation. 
Veterans, depending upon the nature of their disabilities or the area 
in which they live, may go on a long waiting list. The veteran has, 
therefore, no assurance of hospital care when he needs it. 
c. Hospital care can be obtained only by taking the so-called 
“pauper’s oath.” This may be merely a form for many. But one 
effect is that many receiving care may be in much less financial need 
of this assistance than others who do not get it. 
From the Government’s viewpoint ; 
a. It is neither giving care to all veterans with such disabilities, nor 
is it effecting the economies of giving free care only to those who 
really need it. 
b. It is increasing the cost of care by failing to provide early detec- 
tion and treatment for chronic cases. For example, present knowledge 
is such that paresis among veterans could be prevented at small cost, 
whereas the present crop of 5,000 paretics in Veterans’ Administra- 
tion hospitals who must be cared for for life will have an ultimate 
total estimated cost to the Government of $200,000,000. 
c. The present provision, whether or not the Congress intended it, 
leads to the snowballing-up of additional facilities for veterans’ care, 
far beyond those needed for service-connected disabilities, because the 
Government can make no intelligent over-all hospital plan, utilizing 
45 community hospitals wherever it proves efficient to do so. This is 
because, under the present provision, care can be given only if a 
Federal hospital bed is available. 
2. Alternatives 
To meet this unsatisfactory situation, an initial determination must 
be made by the Congress. First, it must decide as a matter of policy 
whether to assume full responsibility for the care of non-service- 
connected disabilities as it now does for service-connected cases. As 
a practical matter, Congress has taken a very long step in this direc- 
tion by its appropriations for constantly increasing the facilities of 
veterans’ hospitals far beyond the present or prospective needs of 
service-connected disabilities, and by opening the hospitals to veterans 
without any inquiry into their need of free care. Therefore, the 
realistic choice open to the Congress seems to be between {a) pro- 
viding hospital care for all or (6) making a real, not a nominal, limita- 
tion based on financial need. 
a. If the Congress determines on a policy of complete hospital care 
for all veterans, there should be provision in the law which will make it 
possible to give care for non-service-connected disabilities in non- 
Federal hospitals on a reimbursable basis. 
b. If the Congress decides to limit care to veterans in financial 
need, provision for screening is necessary for acute cases. But this is 
not requisite in our judgment in chronic cases. We have noted above 
that in the chronic diseases, such as tuberculosis and neuropsychiatric 
illness, which now constitute some 60 percent of all Veterans’ Admin- 
istration hospitalization, the illness itself almost uniformly is so pro- 
longed as to make the patient medically indigent. Nonveterans with 
such illnesses are almost uniformly unable to pay for their care and 
are provided for in State, county or city supported facilities. 
On the basis of his experience as Chief Medical Director of the 
Veterans’ Administration, General Hawley estimates that in 98 per- 
cent of chronic cases veterans are really unable to pay for their care. 
It would be realistic, therefore, for the Government which is now 
contingently providing for these chronic cases only if beds are avail- 
able, to assume generally and unconditionally the obligation to supply 
such care, thereby giving the veterans a dependable and self respecting 
protection against the spectre of the cost of a permanent crippling 
illness. On this basis, care for these chronic cases would not be given 
merely if a bed is available, but beds would be provided in Federal 
or community facilities. 
c. We, of course, recognize as a third alternative that, if the Con- 
gress establishes a system of compulsory health insurance, the ques- 
tion of non-service-connected disabilities would be automatically 
46 eliminated, as they would then be provided for in the same way as 
cases of other citizens. 
d. If the Congress should decide to limit care in acute cases to real 
financial need (alternative (b) above), it could make provision for aid- 
ing the veteran under voluntary insurance to secure at reasonable 
expense care for non-service-connected disabilities in the following 
manner; 
The insurance would cover hospitalization for acute non-service- 
connected conditions up to 3 months, including both hospital ex- 
penses and professional expenses in hospital. This would be done 
upon payment of a premium—roughly S3O to S4O per year—by the 
veteran for such insurance if he can afford it. If not, the Government, 
after determining his inability to pay, would make the premium 
payment. If the premium is not paid by either the veteran or the 
Government, the veteran would not be entitled to care, except in 
emergency cases of a nature which no hospital would refuse. The 
premium would be calculated on an actuarial basis for which, it is 
now established, there is sufficient experience. 
Such insurance might be effected through nonprofit hospitalization 
insurance plans, provided these meet standards approved by the Gov- 
ernment, or, if necessary, by the Government’s writing the insurance 
itself and contracting for the service in local community facilities. 
We believe the former to be preferable. But if this proves impractica- 
ble, the second course is perfectly possible. A minority of our com- 
mittee, however, does not agree that it is necessary for the Government 
to provide the insurance or that it should do so. If it is done it would 
be purely voluntary insurance for hospitalization and doctors’ services 
in the hospital, and only for beneficiaries to whom the Government now 
owes a special obligation and is now rendering in its own facilities and 
with its own personnel free service upon application by the veteran. 
3. Preventive Attention 
Both for the veterans and the Government’s protection, the Vet- 
erans’ Administration should be authorized to provide free out-patient 
care for tuberculosis, neuropsychiatric complaints and for syphilis. 
We mention these because they are, from the viewpoint of Govern- 
ment expense, the principal chronic diseases for which our committee 
considers that there is the best prospect of such preventive measures 
showing significant results. We must certainly avoid opening the 
floodgates to unrestricted out-patient care for all kinds of conditions, 
both because the cost and the facilities required would be enormous 
and Federal professional manpower does not exist to give such care. 
However, as the great group of veterans of World War II grows older, 
care of chronic cases will, as we have seen, become an enormous Fed- 
eral liability unless all possible steps are taken to control it. There- 
fore, as medical science may produce dependable tests which will make 
47 early recognition of other chronic diseases possible, or as it may de- 
velop specific remedies for them which, if employed in time, would 
avert long chronic illnesses, the National Bureau of Health should be 
authorized, upon determination to that effect to give out-patient care 
of essentially a preventive nature for them. Also, in addition to or- 
dinary out-patient care for tuberculosis, the Bureau should be author- 
ized to give chest X-rays routinely to veterans; in proposing this, we 
follow the recommendation of the chief of our task force and of our 
distinguished consultant in this disease. 
C. Merchant Seamen 
As to the rights of this group, the law is entirely clear. The ques- 
tion is whether it should be changed. At present, seamen employed 
on United States flag vessels are entitled to free hospital and out- 
patient care by the Public Health Service. Certain other similar 
groups, minor in number, have like privileges. Care is generally 
given in the Public Health Service Marine hospitals, but also can be 
afforded by contract with other Federal or non-Federal institutions 
and individuals. Seamen on foreign flag vessels may be given medical 
care in the Marine hospitals when accommodations are available, but 
only on a fully reimbursable basis. Accordingly, there is no real 
problem now as to this latter group. Since provision exists for pay- 
ment, the care can be supplied in non-Federal hospitals. 
As to seamen on United States flag vessels, we are informed that 
under maritime law the shipowner is liable to a seaman, who becomes 
ill or is injured during a voyage, to supply maintenance and care as 
well as wages to the end of the voyage for which the seaman has 
signed, and maintenance and care for a reasonable time after the 
voyage is completed. 
A study of this subject incorporated in the report of the “Inter- 
departmental Committee to Study Workmen’s Compensation for Sea- 
men” (S. Doc. 113, 77th Cong., Ist sess.), dated September 17, 1941, 
states: 
As far back as 1798 marine hospitals were established for the benefit of seamen 
of the American merchant marine. Today there are such hospitals in almost 
every port of the United States and their facilities are available to seamen with- 
out cost. As a practical matter, the shipwoner and his underwriter pass along 
their liability for medical treatment to the marine hospitals whenever possible. 
The courts hold the seaman must avail himself of the facilities afforded thereby, 
and cannot charge the shipowner with the cost of treatment privately obtained. 
We question why the Government should supply without cost a 
service which the shipowner is legally obligated to render. 
48 D. Priorities 
Among classes receiving care, if there are not funds sufficient for 
all, first must come personnel of the armed forces, veterans with serv- 
ice-connected disabilities and other direct wards of the Government, 
to all of whom an unconditional obligation is due; next veterans with 
non-service-connected disabilities, in real financial need, then those 
not screened for real financial need. Care for dependents of the armed 
forces is essentially a question of pay of military personnel. Care for 
Indians should be gradually transferred to the States. Merchant sea- 
men should rate last. 
49 Chapter VII 
ORGANIZATION OF THE MEDICAL SERVICES 
IN THE ARMED FORCES 
In recommending the transfer from the armed forces of all general 
hospitals in the United States and of such station hospitals as are 
located in parts of the country where other adequate Federal facilities 
exist, we have not been insensitive to its effect upon the medical 
departments of the armed forces and then’ internal organization. 
It is basic that the armed forces must have supporting medical 
service subject to military control. A single service embracing mili- 
tary and civilian Federal medicine is not practicable. 
In our studies of the armed forces we have exchanged information 
and ideas freely, and have worked closely, with the medical advisors 
to your Committee on National Security Organization, Dr. Howard 
A. Rusk and Dr. Richard L. Moiling. Although each committee 
retained complete independence in viewpoint and presentation, we 
have arrived at similar essential conclusions. 
A. Unification and Armed Forces Medicine 
If there were no considerations other than economy and efficiency 
to be taken into account, a unified medical service supporting the 
Department of National Defense would appear mandatory for the same 
reasons that dictate unification of civilian Federal medical services. 
However, the structure of military medicine must conform to the 
organization of the National Defense Establishment. A unified medical 
service cannot exist in a vacuum in the Office of the Secretary of 
Defense with his duties constituted as at present (or limited to policy 
and excluding operations) and with three separate branches of service. 
Our Subcommittee on Armed Forces Hospitalization states the 
essentials succinctly in language which we adopt and part A which 
we have previously quoted: 
The medical service of an armed force is a necessary and an integral part of that 
force. To separate it from the force is wholly or largely to destroy its useful- 
ness. * * * 
* * * so much of a medical service as is in direct support of an armed force 
is, and must continue to be, inseparable from that force. The functions of a 
50 medical service are too diverse, and the responsibilities of commanders too in- 
clusive, for medical personnel to be allocated and withdrawn solely on the basis of 
current need for medical care. 
We are assuming, in the absence of any change in the functioning 
of the Office of the Secretary of Defense, that at present each of the 
three forces will have its own medical service. We recognize that this 
involves some overlapping, increase in personnel, and additional cost. 
Medicine could follow a merger, but it is difficult for it “to merge” 
without one. However, the disadvantages of possible triplication may 
be minimized by the adoption of some of the measures which are 
suggested herewith. 
B. Avoidance of Duplication in Hospitalization 
The proposal to transfer general hospitals and most station hospitals 
in the continental United States to a single national hospital system 
will eliminate much of the existing duplication and conserve scarce 
professional manpower. The area surveys vividly show the greater 
efficiency that will result. 
Overseas, the Secretary of Defense should assign to one of the 
services full responsibility for the hospitalization, and much of the out- 
patient care, of all United States personnel in each geographic area. 
This proved successful during the war; it should be done now in an 
even more systematic manner. This step would conserve scarce 
medical personnel and make optimum use of facilities. The service 
having greatest responsibilities in an area would be the natural choice 
for the task there. 
For example, the above plan would at once correct such a waste as 
now exists in Hawaii. Under it, either the Army or the Navy would 
be designated as the service responsible for hospitalization. One of 
the two modem hospitals now being operated by the Army and the 
Navy, respectively, is sufficient to care for all military personnel there. 
The other could be made available to the civilian community, with its 
ownership retained by the United States Government against the 
danger of war. 
C. Organization at Secretary of Defense Level 
Since coordination by consent is a very lame, slow, but withal an 
expensive horse to ride, strong control over medical policy must be 
exercised from the level of the Secretary of Defense. This should be by 
a Deputy—or preferably an Assistant Secretary of Defense—whose 
function would include armed forces medical service as a primary 
51 responsibility. He should be advised by a committee composed prin- 
cipally of civilian doctors of medicine, with dentistry also represented, 
together with the two Surgeons General and the Air Surgeon. With 
the advice of the committee, the Deputy should allocate available 
professional personnel among the armed forces, issue directives to 
correct duplication, assign areas of responsibility for hospitalization, 
make certain that no unnecessary station hospitals are maintained in 
the United States, and generally, acting with the full authority of the 
Secretary of Defense, coordinate the three medical services with the 
proposed National Bureau of Health. 
The Advisory Committee should be organized with a small working 
subcommittee of the two Surgeons General and the Air Surgeon, to deal 
with many operational problems which should not require civilian 
advice or assistance. The full committee should act principally upon 
policy questions. Existing programs for residency training, concern- 
ing which there has been much question, and, assuming the passage of 
a draft law, the extent to which the drafting of medical personnel 
would be permitted, would be important matters for special considera- 
tion. Relationship with the civilian medical profession would also 
be maintained and strengthened by such a committee. 
Medical supply, which we later recommend be made the responsi- 
bility of one of the armed forces, should also be under the general 
supervision of the Deputy to the Secretary of Defense. 
D. Position and Functions of Surgeon General of the 
Army 
The Surgeon General should have direct access to the Secretary 
of the Army and the Chief of Staff on important matters affecting 
health, medical care, and medical personnel. 
The Army’s relationships with the medical profession should be 
supervised by the Deputy and Advisory Committee to the Secretary 
of Defense above proposed, and should no longer be primarily an 
Army problem. 
The Surgeon General has only splintered authority over hospital- 
ization, medical care, and medical and ancillary personnel because of 
the conflict between professional concepts on the one hand and the 
Army’s emphasis on command responsibility on the other. In this 
country, the Surgeon General has no real control over station hos- 
pitals, and lacks complete freedom in management of medical 
personnel in the six Army areas. If the Surgeon General were given 
direction over the remaining station hospitals in this country, the per- 
sonnel operating them and the general dispensaries (in general, the 
medical service except the so-called “attached medical”) to manage 
52 as an integral unit, more efficient use of personnel and facilities should 
be possible. 
In overseas theaters, the same difficulties in medical management 
exist, but the greater importance of command responsibility makes 
the problem more complex. However, the command authority of 
the theater is not jeopardized by the Surgeon General’s exercising 
technical authority, with the right and duty to make inspections, 
and with the expectation that his professional advice, his judgment 
as to assignment of personnel, and medical policies, should, as a general 
matter, be accepted, upon the basis that he is the chief medical advisor 
to the Secretary of the Army and the Chief of Staff. Too great 
emphasis on command authority and insufficient attention to tech- 
nical professional direction have been real weaknesses and should be 
corrected. 
The Surgeon General of the Navy is in a sounder organizational 
position for the discharge of his professional functions. Testimony 
indicates that the Navy concept of command recognizes military 
command, management control, technical control, and coordination 
control. The military commander of course has military control, 
but this is limited to matters inherently necessary to maintain com- 
mand. The Surgeon General of the Navy has management and 
technical authority, under which he assigns personnel and manages 
the hospital system. Organizational difficulties which in the Army 
have been very serious, have thus been overcome. Consideration 
should be given by the Army to changes in this direction. 
E. Medical Service in the Air Force 
Representatives of the Air Force testified before our committee 
that they did not desire general hospitals, but that they did wish to 
recruit their own medical personnel. The present relationship 
between Army and Air Force medicine is not satisfactory. If a uni- 
fied medical service in the armed forces were possible, there should 
not be a further split. But subject to the limitations above explained, 
and to the proposed plan for supervision from the Secretary of Defense 
level, we believe that the Air Force should be given the right to operate 
its own medical service. 
F. Concentration on Basic Military Mission 
Much greater effort should be expended in planning and preparing 
medical support for military operations, and relatively less emphasis 
be placed upon the care of illness and accidental injury occurring dur- 
53 ing peace. Between World Wars I and 11, the latter function too 
largely occupied the Army Medical Department. An illustrative 
result was that the plans for cantonment-type hospitals initially avail- 
able for World War II were essentially those left from World War I. 
Again, hospital administrators who were to command great institu- 
tions under unusual difficulties were largely Army doctors in middle 
life whose principal experience had been bedside care. Experience in 
the European theater alone convincingly demonstrated the inadequacy 
of a large number of these men for such executive tasks, a failing which 
was not primarily their fault. It arose from inadequate long-range 
planning for war. We feel that there is a genuine danger that this 
weakness is recurring. It is accentuated by the shortage of medical 
manpower which has led to a concentration of effort on the recruit- 
ment and maintenance of a professional staff. 
The report of our Subcommittee on Armed Forces Hospitalization 
states that: 
The most important responsibility of a medical service in peace is constant 
readiness to support its parent force in war. Our own military history indicates 
that this responsibility cannot be neglected without unfortunate effect in the 
next war. The exclusive employment during peace of a medical service of an 
armed force in the routine care of the current sick and injured no more prepares it 
for war than would comparable employment of fighter pilots in commercial 
aviation, or of infantrymen in municipal police forces, prepare them for war. 
Easing the burden of current medical care by shifting elsewhere 
a large part of the general hospital care and some of that in station 
hospitals, will enable the armed forces to concentrate on then- primary 
mission of preparing for war. 
To this end medical officers should, after reasonable opportunity 
to arrive at a decision, elect whether to make then- careers primarily 
in bedside professional care or in planning for war. The latter could 
be made a career with great promise and attraction, for these men 
would be the leaders if hostilities should commence, and would neces- 
sarily receive the most rapid promotions. They would be trained for 
such key administrative posts as chief surgeons of overseas theaters, 
surgeons of armies, and commanders of the great military hospitals. 
Their peacetime assignments should be calculated to serve these inter- 
ests primarily. They should be kept in touch with the progress of 
professional medicine through refresher courses at the best hospitals 
from time to time. They should be detailed to important administra- 
tive posts, including that of director, in large hospitals in the proposed 
National Bureau of Health, to gain experience, and further develop 
the science of hospital administration. Then* duties would include 
54 participating in the peacetime planning of the mobilization of civilian 
doctors. They would be the key executives of the military medicine 
of the future. 
This expert competence in the administration of military medicine 
can be based only on familiarity with and respect for preventive 
medicine. The balance of military potential in war does not rest on 
firepower alone but on the control of communicable disease, the main- 
tenance of health in a wide range of environmental conditions, the 
elimination of hazards peculiar to the machines of war, and the control 
of mental attitudes which lead to psychological disturbances and end in 
psychiatric disabilities. Military medicine should not only develop ex- 
perts in these special fields but by vigorous research and development 
achieve the leadership that is its heritage. 
Another alternative offered Regular Army medical officers should 
be a career in bedside care, including specialization in a chosen field. 
Continuity of assignment in that field should be assured, and a fair 
balance should be provided between overseas and Zone of Interior 
duty. Extensive training opportunities should be given in the best 
hospitals of the National Bureau of Health and in the three medical 
centers of the armed forces. 
We have recommended that each of the three forces maintain a med- 
ical center, one component of which should be a hospital. The other 
components should be a center for post-graduate education in military 
medicine and a research institute occupied with medical problems 
identified with the primary operations of the force. If these objec- 
tives are to be attained, these centers cannot afford to impede their 
activities by a heavy work load of routine patient care. They must 
free their research laboratories of procedures, once these have been 
developed and standardized. Educational responsibilities must be 
directed to the postgraduate level with particular emphasis on 
military medicine in its broadest aspects. The work load of under- 
graduate medical education should not be undertaken. 
From a functional standpoint, therefore, it is our opinion that 
military medicine is in essence total medicine. Its scope is as poorly 
represented by the board certified specialist in a large hospital as by 
the general practitioner on an army post. In planning for war, it can 
be assumed that sufficient doctors will be obtained from civilian sources 
to carry the work load of both general and specialized remedial medi- 
cine. The emphasis of the peacetime medical service should be 
directed broadly toward formulation of the military aspects of medi- 
cine as a whole. This will be achieved by integration of experts from 
all special areas without undue emphasis on any one. 
55 G. Medical Personnel 
1. Draft of Physicians 
No savings which can be produced by our recommendations will 
be sufficient in time or in quantity to avert the need for a draft of 
doctors. But it can be greatly limited. There is a pool of about 8,500 
former Army Special Training Program and Navy V-12 students 
who have never rendered any military service. They were protected 
from the call to war, were allowed to pursue their education for their 
chosen profession and received Federal support while so engaged. 
But they should be drafted only for services truly essential to the 
primary mission of the armed forces. 
If this pool is conserved, as it would be under our recommendations, 
this group can meet all needs of the armed forces for 4 or 5 years, 
unless war occurs. 
After them, there should be drafted those who, while not in the 
Army Special Training Program and Navy V-12 groups, were also 
deferred during World War II to pursue their medical education and 
those who may be deferred under the current draft because they are 
medical students. 
The general principles set forth in the above discussion also apply 
to dentists. 
Our area surveys, our manpower questionnaire study, and our 
review of hospitalization in the armed forces, have convinced us that 
the present medical personnel requirements of the armed forces are 
not justified in full. We believe that a thorough review of these 
requirements by the Deputy to the Secretary of Defense and his new 
committee should precede any draft legislation. 
2. Resident Training 
Programs of residency training which the armed forces are now 
conducting, insofar as these are operated in armed forces hospitals, 
should be discontinued except in the single medical center conducted 
by each service respectively. 
Residency training for all the armed forces should be included as 
one of the functions of the nonmilitary Federal hospital system and 
uniformed personnel should be received for such training. The armed 
forces should have the privilege of placing their personnel in the non- 
military Federal hospitals for rotation and training, including re- 
fresher courses. This would prevent armed forces’ specialists from 
having unduly heavy tours of duty overseas or being deprived of 
opportunities for study and experience in general hospitals with out- 
standing staffs. The presence of some uniformed personnel in the 
nonmilitary Federal hospitals for these purposes would be and should 
be recognized as a true military necessity. 
56 On account of the emphasis placed by the Army and Navy on 
residency training, our Subcommittee on Hospitalization made a 
special study of the subject. The conclusions of this committee, 
including the recommendations above, may be summarized as follows: 
Resident training is of indispensable value but the value is dependent upon 
quality rather than quantity; residencies in the Veterans’ Administration hos- 
pitals are conducted under the committees chosen by the deans of medical schools 
and are carried out by fully qualified specialists in civilian life. On the other 
hand resident training in some armed forces’ hospitals is unsatisfactory because 
the officers conducting it are not themselves in many cases adequately trained 
and because the civilian consultants do not supervise the training closely enough 
and are not sufficiently active. Further, resident training in the armed forces 
does not seem to be directed effectively toward the needs of the services. We 
find that there are in training on active duty status 10 percent of all obstetricians, 
6.7 percent of all pediatricians, and 16.7 percent of all thoracic surgeons who are 
preparing to care for the entire population of the Nation. As the personnel of 
the military establishment with all their dependents accounts for less than 2 
percent of the total population, it appears that resident training has become 
seriously unbalanced and a goal in itself. It leads inevitably to measures designed 
to increase the work load in order to make the program successful. 
Residencies also received consideration by onr Subcommittee on 
Medical Manpower, with substantially identical conclusions. 
It is clear that, in the arid postwar recruiting climate for medical 
officers, the device of resident training was seized upon as virtually 
the only means of attracting voluntary service. Although the armed 
forces started resident training in order to procure doctors, they found 
it necessary to add greatly to their patients to maintain their resi- 
dencies in order to supply sufficiently diversified clinical material. 
Dependent care helped, but was insufficient, and about 7,500 bed 
credits were established for veterans. 
Accordingly, this device for procuring additional doctors itself 
created a great additional work load which, in turn, necessitated more 
doctors, completing the cycle. 
There are also extensive residencies which have been established 
by the armed forces for the training of medical officers in civilian hos- 
pitals. These officers receive full pay and other emoluments of active 
duty status but render no service to Federal patients. They are an 
extremely expensive addition. A very careful scrutiny of such policy 
in. each specialty would be needed to see whether any, and how many, 
of these residencies should be continued after the armed forces have 
been given the opportunity to train residents in the Federal hospital 
system we have proposed. While training in the Federal system a 
resident has been estimated to be able to give the equivalent of from 
50 to 70 percent of the patient care given by a full-time staff doctor. 
No such value, either in dollar or manpower saving, exists in resi- 
dencies in non-Federal hospitals. Pending a close study, such resi- 
dencies should be recognized as so costly that they are justifiable only 
57 as an emergency measure to fill a gap which could not otherwise be 
bridged. 
In this discussion we are assuming that the armed forces’ residency 
program is sound from the point of view of the armed forces’ ability 
to continue to hold the residents after graduation. At present the 
residents merely obligate themselves, after completion of their course 
to serve 1 year or more for each year of residency training. If, as 
there seems strong reason to believe, and as both our subcommittees 
which considered the subject concluded, the total service rendered by 
recent recruits will not exceed their obligated service, the armed forces’ 
residency program will be an extremely expensive device on this 
account also. It must be recognized, however, that the armed forces 
will continue to need specialists for overseas hospitals and for some 
station hospitals in this country and at this time we know of no better 
method of procuring them than to train them. But this should be 
done in the hospitals of the National Bureau of Health and the three 
armed forces’ medical centers and, to the minimum additional extent 
necessary, in non-Federal hospitals. 
H. Maximum Hospital Benefit and Length of Stay in 
Hospitals 
The present doctrine of “maximum hospital benefit” should be 
abandoned. As our Subcommittee on Armed Forces Hospitalization 
stated, “It has been the policy for many years to retain all surviving 
disabled in service until they have received maximum benefit for hos- 
pitalization. Not infrequently this results in the retention of cases in 
military hospitals for one, 2, or even 3 years after their military use- 
fulness has ended.” In explanation of this policy in the past, it should 
be remembered that, until the last 3 years, Veterans’ Administration 
hospitals were unable to provide medical care of the same high quality 
as the military. More recently, the armed forces’ residency training 
programs have tended to stimulate retention of these cases because 
they are desirable to furnish a wider variety of clinical material for 
such teaching. 
In our view, these patients under the existing organization should bo 
cared for by the Veterans’ Administration. The proposed new hospi- 
tal system would enliminate the problem of hospitalization, but not 
that of pay. At present the patients are retained on active duty in 
certain cases because of the large investment in special training and 
experience which the Government has in some of them, from which it 
might be possible to get some small dividend in the form of future 
limited service. Also in part, they are probably retained because of 
added privileges in military hospitals. But the question is also a 
58 matter of compensation. As long as the patient remains in the hospi- 
tal, he is on active duty and draws full pay. 
If an officer is retired for disability, he draws three-quarters of base 
pay, which is roughly half of his total active duty compensation. It 
seems apparent that this is a significant factor explaining the practice 
of keeping officers for long periods in Army and Navy hospitals after 
they are of little prospective military value. It does not furnish a 
valid reason for such practice. 
An adverse financial change also affects enlisted men when sepa- 
rated and transferred to veterans hospitals. 
It is not our function to determine what would be an equitable 
financial formula for such military personnel when they ought to be 
separated but still require hospitalization. However, the length of 
medical care in military hospitals ought not to be determined by such 
considerations. It should be noted that it is equally important not to 
make the provisions for compensation while in veterans hospitals so 
alluring as to prolong stays there for financial reasons. 
A considerable amount of retention on active duty is a result of 
the present disability retirement law, necessitating a final determina- 
tion as to the existence of permanent disability. The British system 
does not require this and permits later reevaluation. We might profit- 
ably follow this example. 
Under the policy of maximum hospitalization the Army and Navy 
both operate tuberculosis hospitals for patients who have little pros- 
pect of ever returning to duty and no prospect of early return. The 
Navy has recently announced the building of a new hospital with 
elaborate equipment for radiation treatment of cancer and is establish- 
ing a new psychiatric center in its Houston hospital. Treatment of 
patients of the above classes except in the acute period does not serve 
the primary mission of the armed services, and with the present and 
prospective shortage of medical personnel it is indefensible to draft 
doctors to care for such patients when there are excellent Veterans’ 
Administration hospitals for them. 
A basic change in policy is, therefore, recommended to separate 
patients from the armed forces as soon as their early return to active 
duty is found to be unlikely. 
I. Average Lengths of Stay in Hospital 
These are now excessive as above pointed out. They should be 
cut down to some basis consistent with real need for bed care. This 
will still be important in the three medical centers, in remaining station 
hospitals in this country and in all overseas hospitals. 
818374°—49 6 
59 Chapter VIII 
HEALTH RESOURCES AND MANPOWER 
ALLOCATION IN TIME OF EMERGENCY 
A. Requirements of Civil Defense 
No reorganization of the national health structure should be pro- 
posed without considering its relationship to the planning for civil 
defense. For background material we have had access to the report on 
Civil Defense for National Security prepared and recommended by 
the Office of Civil Defense Planning, dated October 1, 1948, from 
which we quote: 
To care for the civilian sick and injured in a war which reached into American 
cities would require mobilization, through Civil Defense, of all the facilities and 
manpower in medical and health fields. 
Wherever attack might occur there would need to be units of professional 
personnel trained and equipped for the unusual task of caring for the injured 
where the numbers might run into hundreds of thousands. 
Paralleling this medical care need, would be problems of public health: The 
measures to protect against disease; against contaminated water, milk and food; 
against the disease of animals. 
Recognizing the need for central civil defense operational control in 
metropolitan areas, the report concludes that: 
Emergency conditions will not permit of delays in crossing municipal, county, 
or State lines because of difference of governmental entity in an area where 
municipalities are contiguous, boundary lines artificial, and the populace united in 
concert of purpose and needs. 
Similarly, emergency conditions will demand that all hospital 
facilities in critical areas be pooled and placed under civil defense 
operation control. The single hospital system of the National 
Bureau of Health could move quickly in response to the needs of 
civilian authorities or, if the situation demands, martial rule. Under 
its unified administrative control, patient groups could be transferred 
at the first alert warning. Already closely integrated with other 
community resources, in time of emergency the common purpose 
could be effectively served. 
In making recommendations concerning the structure of the Medical 
Care Division of the proposed National Bureau of Health, we have 
stressed both regional autonomy and close integration with voluntary 
60 medical services. Isolation of Federal medicine as something apart 
from the community is no longer tolerable either in peace or war. 
Developments since World War II show the need for dissolving 
existing barriers. Active participation or leadership in civil defense 
planning, to prepare a program of medical service for a war emergency 
to encompass the total needs of the country, will tend to bring further 
community of effort and purpose into our medical economy which 
would be required if war should come. 
While hospital facilities can be improvised for emergency need, this 
is not so with medical manpower. The Civil Defense report expressly 
recognizes this problem in saying: 
Thousands of physicians will be required in the Nation-wide program. Many 
of these men will need to possess special surgical or related skills. * * * 
Furthermore, they may be needed not only for service in their own communities 
but for duty with mobile medical casualty units which can be sent to the assistance 
of other stricken cities. 
In addition, many of the country’s younger physicians will be 
required for active duty in the armed forces. But to drain civilian 
areas of doctors for this purpose would necessarily throw an impossible 
burden of medical care on those not eligible for active duty because of 
age or disability. 
Under emergency conditions, the distribution of medical manpower 
within geographical areas defined by civil defense authorities would 
necessarily be determined by the total needs of the area. Only in this 
manner could the requirements be met, and the services of specialists 
be utilized to the fullest extent. The individual doctor would thus be 
able to care for the maximum number of patients compatible with his 
physical endurance and specialized skills. Except for those mobilized 
for rock-bottom needs of military service or sent to the aid of stricken 
areas by civil defense, the doctor should he working in his own com- 
munity where his efforts can be expended with the greatest efficiency. 
He should there also give as much care to sick and wounded military 
personnel as possible, and the system we have proposed makes this 
possible. 
B. Manpower Allocation 
The allocation and assignment of medical personnel between the 
civilian population and the military was a difficult problem in World 
War 11. As we have noted above, Dr. Hawley’s subcommittee reports 
that the solution was “barely tolerable” even though the country 
escaped both epidemics and enemy attack upon the civil population. 
Had either of these contingencies occurred, those at home would have 
suffered for lack of sufficient medical care. With the rapid develop- 
ment of new weapons for total war, the medical needs of the civil 
61 population must henceforth be given much greater consideration in 
the distribution of medical resources in war. 
Difficult and unsatisfactory as must be any mechanism for the 
allocation of scarce personnel, for equally vital competing require- 
ments, experience makes it obvious that in war some central direction 
must channel available personnel on the basis of respective needs. A 
plan must be in existence for immediate execution if an emergency 
arises. Its formulation should not be deferred. For successful opera- 
tion there must be a single authority in planning and execution, which 
can speak in the name of the President and which is not identified with 
any of the claimant interests. A board or committee which includes 
the claimant interests may usefully advise, present their respective re- 
quirements, and make such adjustments and accommodations as prove 
possible by agreement. But a group which must depend upon agree- 
ment among divergent interests cannot be charged with the formu- 
lation or execution of the plan. That way lies paralysis. 
Either the National Security Act is not sufficiently definite or the 
action taken under it so far has been inadequate, for the plan that will 
be essential to the allocation of medical personnel in an emergency, so 
far as we can learn from the testimony before us, has not yet been 
formulated. 
The evidence shows that medical manpower is one of the scarcest of 
the resources essential to the country in war. Its production cannot 
be increased in response to emergency demands. It cannot be stock 
piled. A sound program of conservation centers on allocation and 
distribution in accordance with absolute requirements, not in response 
to claimant estimates of needs. Furthermore, plans based on precise 
calculated requirements must be in shape to be put into immediate 
operation on proper authorization. 
Our experience shows that planning of this character needs an 
effective and independent staff not identified with claimant interests 
and equipped to find the facts and do its thinking for itself. This staff 
must both assemble factual data from basic sources and itself subject 
them to rigid analysis. 
C. Medical Supplies 
We note that the above-cited report on civil defense proposes that 
the responsibility of procuring and maintaining medical and surgical 
supplies for medical phases of civil defense be assumed by the Medical 
Department of the Army. Regional depots are proposed to avoid 
costly deterioration of perishable drugs and biologicals. We deal 
with this in chapter XIII covering “Medical Supply.” 
62 D. Greater Use of Ancillary Technical Personnel 
In any future war, the shortage of medical manpower would be so 
acute that national service of doctors, dentists, nurses, pharmacists, 
and all other ancillary persons trained in health and medical services 
would be essential. Special training programs for ancillary personnel 
in highly specialized civil defense activities related to this field are 
recommended by the civil defense organization. The leadership that 
should be exerted in this field by the National Bureau of Health is 
discussed in chapter XI. 
63 Chapter IX 
PUBLIC HEALTH FUNCTIONS OF THE 
NATIONAL BUREAU OF HEALTH 
The Federal public health organization is much less confused now 
than before the principal units were gathered together in the Federal 
Security Agency. A number of important public health activities are 
still outside that Agency and perhaps should remain so in recognition 
of the importance of having the maximum number of agencies develop 
an active interest in health. It is equally important, however, that 
these activities be coordinated. Accordingly, we have not proceeded 
on the assumption that it was either necessary or advisable to draw 
all health activities under a single administration. We were, however, 
cognizant of some jurisdictional disputes and internal maladjustments. 
All Federal public health functions and agencies, with the excep- 
tions noted, should be transferred to the Public Health Division of the 
proposed National Bureau of Health. Specifically, this includes: 
1. From the Public Health Service, the Bureau of State Services, 
the quarantine activities of the Bureau of Medical Services, the 
Biologies Control Laboratory and the cancer control activities of the 
National Institutes of Health, and Offices of Sanitary Engineering 
and of Dentistry from the Office of the Surgeon General. 
2. The Food and Drug Administration. 
We do not recommend the inclusion of the preventive medicine 
functions of the armed forces, the Children’s Bureau, the Office of 
Vocational Rehabilitation, or meat inspection or other activities of 
the Department of Agriculture. 
The most important functions of the Public Health Division will 
be (a) the administration of grants-in-aid to States and the provision 
of technical assistance and demonstrations, (6) the conduct of a 
clearing house of information on public health activities of both public 
and private agencies, including the conduct and sponsorship of research 
in public health problems, and (c) the establishment and enforcement 
in interstate commerce of regulatory standards for food, drugs, medi- 
cal, sanitation, and other types of equipment used in health services. 
Federal grants in the public health field have proved extremely 
useful. They have been to a great extent responsible for making 
full-time local health service available to more people (37 percent in 
1935 up to 72 percent in 1946). Instead of retarding, grants have 
64 actually stimulated greater financial participation by State and local 
government in support of local health work. The Federal share of 
the cost of State and local health departments fell from 46 percent 
in 1937 to 29 percent in 1946. Both quality and quantity of public 
health workers throughout the Nation have improved because of the 
training programs and Federal insistence on the merit system. The 
great majority of States are now active in health fields which were 
being neglected in 1935. 
Health grants are now administered in 12 different categories by 
3 Federal agencies. While the categorical approach has fostered 
new programs and enlisted support from interested groups, many 
local health officers have found it difficult to organize balanced health 
programs adapted to meet varying local needs. Only because the 
disease problems have been so great in relation to funds available for 
attacking them has the overlapping been relatively small. It is 
recommended that grants be made on a general health basis and that 
further development of full-time local health units be fostered to 
provide the basic framework upon which the various special programs 
must be engrafted. The Federal structure for administering grants 
needs simplification and decentralization with minimum supervision 
of the States consistent with sound planning and administration. 
Field representatives should be authorized to transact business 
with States under a policy of maximum decentralization. Field 
representatives of all bureaus of the new cabinet department should 
have offices under the same roof if possible and work under a regional 
director for the department who would be responsible for “housekeep- 
ing” administration, general coordination, and for supervising joint 
fiscal and merit system audits. Specialist consultants in health should 
be assigned to specific research or demonstration projects rather than 
to the regional office, but should be available on call. Decentraliza- 
tion cannot work effectively without ample travel funds so that the 
central office may keep in close touch with regional offices and they, 
in turn, with the field. 
While all of the grants-in-aid functions of the present Public 
Health Service should be transferred to the Public Health Division 
of the National Bureau of Health, there is a question as to whether 
the administration of all of the grants-in-aid now administered by 
the Children’s Bureau should be transferred to the new Public Health 
Division. The history of the Children’s Bureau has shown the great 
value of an agency with the broadest possible approach, so situated 
administratively as to be able to work for the best interests of the 
whole child in all areas of health, welfare, and educational activity. 
It is the view of your committee that it should function as a staff unit 
directly responsible to the secretary of the proposed department 
rather than having its health and other functions split and united 
with the major component units of the department. It is our view 
65 that it should conduct research directly and through grants, carry on 
training and demonstration programs, provide technical assistance to 
other Federal agencies, State and local governments and voluntary 
agencies, and set standards. In this connection, we are of course 
assuming to speak solely from the health service standpoint. 
On the other hand, we have concluded that it would be admin- 
istratively unsound to leave the administration of the grants for ma- 
ternal and child health and for crippled children in the Children’s 
Bureau indefinitely. In our view, in not more than 3 years these 
grants, which comprise integral parts of State and local health depart- 
ment programs, should be consolidated with the other health grants-in- 
aid administered by the Public Health Division, in a special grant unit. 
We have no doubt but that the preventive medicine functions of the 
armed forces must remain within the control of the armed forces 
because of the obvious necessity of having the control located with 
the troops. 
The meat inspection service now in the Bureau of Animal Industry 
should remain there. It is a service operated by veterinarians trained 
in animal pathology and should be associated with related operations. 
The control of animal biologies should also continue in its present 
organizational location. Other activities of Agriculture relating to 
human health should be coordinated with general health work of the 
Federal Government, under the leadership of the Director General of 
the proposed Bureau of Health. 
Numerous Federal agencies quite properly carry on health activi- 
ties which should not be transferred to the new cabinet department. 
Interest in health should be as broad as possible, but it is essential that 
responsibility for coordinating all Federal health work be legally placed 
in the Director General of the Bureau of Health. He should be more 
concerned than anyone else in mobilizing the health resources of the 
whole Nation for a concerted effort. Work in the fields of nutrition, 
mental health, environmental sanitation, industrial health, the health 
aspects of housing, health education, and international health is carried 
on by various Federal agencies and requires strong coordination by 
interdepartmental and interagency committees provided with proper 
secretariat. Such committees should assist in solving existing jurisdic- 
tional disputes over industrial health, milk inspection, hospital con- 
struction and stream pollution control. They should agree upon suit- 
able divisions of work and prevent duplication and contradictions in 
policies and educational materials. Problems of rural health and the 
health of migrant labor demand approaches on a broad governmental 
front involving many Federal agencies. 
The technical health personnel required for health programs oper- 
ated by nonhealth agencies should be assigned from the proposed 
Bureau of Health to work under administrative direction of the agency 
to which assigned. Such assignments of commissioned officers from 
66 the Public Health Service to other agencies have demonstrated 
effectively the value of this coordinating mechanism. 
The Association of State and Territorial Health Officers serves a 
very useful function in keeping the Federal Government aware of 
State and local health problems; and the National Advisory Health 
Council should also be continued with coordinating authority over 
subsidiary councils functioning in special fields such as mental health 
and hospital facilities. The Bureau of Health should play an active 
role in the National Health Council to maintain liaison with voluntary 
health agencies and there should be close relationships with profes- 
sional organizations. 
The need for intensifying our activities in preventive medicine and 
public health is discussed later in chapter XV. 
67 Chapter X 
RESEARCH AND TRAINING IN THE NATIONAL 
BUREAU OF HEALTH 
Research and medical education are inseparable in any really broad 
medical program. We, therefore, recommended a Division of Re- 
search and Training. This Division should have cognizance of all 
the activities in research and medical education which are appropriate 
to the Bureau’s huge program of direct medical care, and should ad- 
minister those which are dictated by its broad responsibilities for the 
health of the Nation. Medical research, oriented toward military 
problems, whether basic, applied, or developmental, should continue 
under the control of the armed forces. Similarly, the classified pro- 
gram of the Atomic Energy Commission must be separate. Because 
of their intimate relation to its primary mission, research activities 
of the Department of Agriculture related to health should also remain 
undisturbed. 
In research there is need for a certain looseness and flexibility of 
administrative control. By their very nature, research activities are 
directed at now solutions and are easily stultified by rigid controls. 
They must have a large measure of autonomy if effective, imagina- 
tive work is to be done. A certain amount of duplication here is 
scientifically desirable. Such budgetary controls, coordination of ef- 
fort, and broad planning as may be necessary to fulfill the responsibili- 
ties of the division, therefore, should not prejudice the maintenance 
of a large measure of autonomy at the level of the man with the ideas. 
But some coordinating mechanism is needed under which research 
activities truly vital to national welfare may be considered. The 
armed forces have such a coordinating body in the recently appointed 
Committee on Medical Sciences of the Research and Development 
Board. 
1. We recommend the establishment of a similar Committee on 
Medical Sciences for the continuing study and coordination of medical 
research activities of the nonmilitary Federal agencies, consisting of 
representatives of the Division of Research and Training of the new 
Bureau, of the Atomic Energy Commission, and of the Department of 
Agriculture. 
2. We recommend that representatives of this new committee, to- 
gether with those of the Committee on Medical Sciences of the 
Research and Development Board, be appointed to a new Interagency 
68 Committee on Medical Sciences to review the broad programs of all 
Federal agencies as a whole. 
The duties of the Interagency Committee on Medical Sciences 
should relate less to the intramural programs, where autonomy should 
be virtually complete, than to the programs of contracts, grants-in-aid, 
and institutional grants to non-Federal institutions. The agency 
programs of the latter type must yield some measure of autonomy 
in favor of cooperation and coordination directed at insuring not only 
economy, but also the broad coverage which the entire Federal pro- 
gram must have. 
When the National Science Foundation shall have been established, 
the Interagency Committee should include representatives from the 
medical sciences unit of the Foundation. 
We recommend the creation of a National Science Foundation, not 
as a specific organizational reform in the Federal medical service, but 
as an obvious means of insuring the strength in basic sciences upon 
which our national security rests and upon which the future progress 
of scientific medicine depends. Some members of our committee 
feel that the Foundation should cover the social sciences as well; 
others stress that it should include lay members. Our concept of a 
Foundation, it should be pointed out, calls for very great powers and 
resources to sustain and, where necessary, to increase the output of 
basic scientists, to develop new fields of knowledge, and to support 
educational and training institutions. We visualize no change in the 
responsibility of the proposed Division of Research and Training after 
establishment of such a Foundation. 
The proposed Division of Research and Training should include 
among its activities direct conduct of laboratory and basic research, 
administration of grants in-aid programs, and maintenance of a 
clearinghouse for research information. Behind these functions should 
lie an over-all responsibility for planning an integrated research pro- 
gram for the Bureau with the advice and recommendations of the 
operating divisions. Budgetary control of funds should rest with the 
Division of Research and Training. This does not mean that there 
shall not be, incident to such functions as medical care and prevention 
of disease, research outside this budget. Such autonomy at the level 
of the research worker is essential but it should not be extended to 
major expenditures of public moneys. 
The laboratory and experimental work presently carried out in the 
National Institutes of Health would be transferred to the division. 
Clinical research is a more complex problem. For the most part 
it would be done in hospitals under the proposed Medical Care Divi- 
sion. Yet the Congress has recently authorized construction of a 
Clinical Research Center for the combined clinical and laboratory 
investigation of cancer, mental disease, and cardiovascular disease. 
Under the principle of autonomy, the individual hospitals of the pro- 
69 posed Medical Care Division would have their own independent funds 
to the maximum degree thought wise by the director general and his 
advisors. They would engage in research as an inseparable part of 
teaching and good medical care with provisions for only local review of 
individual projects. The Medical Care Division would exercise budg- 
etary control over relatively small allowances to individual hospitals 
in the light of their special needs and accomplishments, within such 
over-all policy as the director general should prescribe, but would not 
operate its own separate research section. The Division of Research 
and Training should retain responsibility for the allocation of major 
funds to individual hospitals and for developing projects involving a 
number of hospitals. It should also provide necessary leadership in 
promoting small-scale projects within the jurisdiction of the individual 
hospitals, as new fields of investigation open up or strategic opportu- 
nities remain unexploited. 
The division would operate the proposed Clinical Research Center 
of the Public Health Service. The chief of the division and the 
director general should know and consider that many experienced non- 
Federal educators and investigators are apprehensive lest the staffing 
of this great center so deplete the personnel of existing non-Federal 
institutions as to be detrimental to the medical economy of the Nation 
as a whole. If these fears prove justified, the rate at which construc- 
tion, operation, and staffing of the center shall proceed should be so 
adjusted as to avoid it. In the interests of research efficiency, the 
work of this center should be coordinated with that of other clinical 
centers in the Medical Care Division to promote efficient medical care 
and maximum utilization of specialist personnel. 
The research grants-in-aid program of the Public Health Service, 
now under the National Institutes of Health, and of corresponding 
functions in the Medical Research and Education Service of the 
Veterans’ Administration should be transferred to the new division. 
The consolidated program should serve the broad research purposes of 
the Bureau and pertain to all types of medical research. It should 
include projects for which Federal facilities arc inadequate or non- 
existent. This should be pursued as a permanent program, not as a 
temporary solution for a mere shortage of Federal facilities. To build 
up within the Federal Government a research potential of sufficient 
size to meet the full research needs of the Bureau would be at the 
expense of well-established non-Federal centers of investigation, and 
woidd have far-reaching, damaging consequences for the medical 
economy of the Nation. 
We recommend, not only that an extramural program be con- 
tinued but also that emphasis upon project research, financed by 
grants-in-aid and contracts, be changed in favor of a more sustaining 
type of support. Despite the invaluable aid which these programs 
have afforded to the medical schools during the postwar period as the 
70 exclusive means of supporting extra mural research they have marked 
disadvantages. We recommend that more use be made of long-term 
grants for long-term projects and institutional grants, including funds 
for construction, directed not at narrow, carefully delimited projects 
but at larger problems to be attacked from various points of view and 
over longer periods of time. 
The clearinghouse function would have essentially two parts: (1) 
Collection and dissemination of information about and emanating from 
various research projects, whether or not they are under Federal aegis; 
and (2) maintenance of a Nation-wide inventory of medical research 
and facilities by location, type, and sponsorship. 
We recommend further that the design of broad research programs, 
the choice of investigators and of institutions, and the review of 
research proposals be referred to appropriate non-Federal experts for 
advisory opinion, but without diminution of the responsibility of the 
director general. Such formulation and review should pertain to the 
broad research policies of the Bureau, to the expenditure of major 
funds for intramural research, and to the disbursement of all funds 
for extramural research. The advisors must have not only scientific 
competence and general wisdom but also complete independence of 
Bureau ties and obligations. At least two successful patterns now 
exist for providing such advisory services and, although we do not 
recommend any particular pattern, we do recommend that, before 
deciding upon his advisory bodies, the director general request and 
consider advice from the National Academy of Sciences. 
Investigations in public health methods, epidemiological research, 
surveys of the Nation’s health, vital statistics, and the establishment 
of general bench marks to guide public health activities, should be 
under the complete control of the Division of Public Health. 
The educational programs would also be varied. In addition to 
whatever may be appropriate for the educational arm of an organi- 
zation with such great responsibilities for medical care and investiga- 
tion, the Division of Research and Training would have a fellowship 
program along the lines of that presently conducted by the Public 
Health Service, would administer whatever aid to the medical schools 
the Congress might decide to give, and would be administratively 
responsible for the present Army Medical Library (for which a new 
building is urgently required). This latter would become a national 
medical library. An advisory committee on professional training and 
education would be essential to the proper exercise of these responsi- 
bilities. It may be noted that we do not recommend transfer of the 
Army Institute of Pathology, which should remain in association with 
the Army Medical Center. The fellowship program of the Division 
to help meet the acute shortage of trained and experienced workers 
in the medical and biological sciences should supplement the endeavors 
of the National Science Foundation and not compete with it. 
71 Chapter XI 
PERSONNEL POLICIES IN FEDERAL MEDICAL 
SERVICES 
A. A Single Type of Career Service is Requisite 
In a merger of Federal civilian medical services, there would be 
drawn together Veterans’ Administration medical personnel employed 
under the special Veterans’ Administration statute Public Law 293 
(under which such employment was lifted out of Civil Service), com- 
missioned personnel of the Public Health Service, and all medical 
professional personnel employed under Civil Service by the new 
Bureau, These groups should form the nucleus of a single new career 
service. It would be impractical to make this a commissioned corps. 
The Civil Service has never functioned effectively in providing an 
adequate professional-career service for medical and ancillary per- 
sonnel partially because of its relatively low-salary levels and partially 
because of its rigidity, slowness, and lack of opportunity for promo- 
tion. Public Law 293 was a long step in the right direction and it 
should be the framework for the new service. We checked this matter 
with the Personnel Management Task Force and were informed that 
such a plan would not be inconsistent with its recommendations. 
Civil Service medical personnel should, where properly qualified, be 
taken into the new service in the same way that Civil Service medical 
personnel of the Veterans’ Administration have been absorbed. 
Members of the commissioned corps of the Public Health Service 
should be given the option of positions in the new service or of con- 
tinuing in their present commissioned status, but no new commissions 
should be issued. 
It should be recognized, however, that part of the present success 
of Public Law 293 has been due to its more generous salary scale, as 
compared with those of Civil Service, the military and the Public 
Health Service commissioned corps. Also it is in part due to the 
fact that there have been substantial numbers of vacancies in the 
higher grades in the Veterans’ Administration which, for the present, 
permit rapid promotions. This will obviously no longer be the case 
once the upper grades are filled and if a rigidity comparable to that 
in the Civil Service makes its appearance. Public Law 293 is particu- 
larly deficient, however, in its provision for qualitative selection and 
72 regular advancements, both of which are essential for effective per- 
sonnel administration of health services. Its provision for 25 percent 
additional salary for specialists in clinical medicine, while useful in a 
program that is largely clinical in character, would be inequitable in 
a general health program. Specialists are not clearly defined in the 
fields of preventive medicine and research, although physicians and 
other professional personnel in these fields must have at least as much 
postgraduate training and experience as clinical specialists. Most 
nonmedical professions have no ratings comparable to specialists. 
The term “specialist” has no relation to competence in many of the 
health professions. Since the health agency will employ thousands 
of nonclinical, medical, and nonmedical personnel who will have no 
opportunity for certification as specialists, it appears that payment 
of additional salaries to clinical specialists would create serious morale 
and administrative difficulties among the personnel engaged in non- 
clinical work who are fully as essential in a general health program 
as are the clinicians. It would seem advisable instead to provide 
additional promotion credits or advance appointment credits for 
individuals of all health professions who possess advanced or post- 
graduate training. 
Of particular importance in Public Law 293 are the liberal and 
flexible provisions it makes for the employment of part-time civilian 
specialists utilized not only for consulting and teaching purposes but 
for actual participation in the treatment of patients. This measure 
represented a real advance, and has contributed immeasurably to the 
success of the new regime in the Veterans’ Administration. It is 
essential that similar provisions be made as to the terms and condi- 
tions under which civilian specialists may be employed for the new 
service. 
The modernized and improved personnel system (Public Law 725, 
79th Cong.) of the Foreign Service of the State Department should 
also be considered in planning the new personnel system for health 
service. The Foreign Service represents an excellent combination of 
the good features of the commissioned corps system, with its regular 
promotions and career character, and of the classification system with 
its rewards of higher pay for more responsible positions. 
Both features would be important in a health service and rank in 
that service should, therefore, relate to the individual as well as to 
the job. On the one hand, regular promotions are necessary, especi- 
ally in clinical medicine and in research, because professional per- 
sonnel may steadily increase in value to the organization while per- 
forming the same type of work over a period of years without any 
increase in administrative responsibility. On the other hand, ad- 
vancement in status and pay must also be possible as incentives for 
acceptance of increased administrative or supervisory responsibility. 
73 Temporary or “spot” promotions for personnel while they are filling 
particular jobs (regardless of the regular rank) are also important. 
The importance of the work and the tremendous responsibility which 
would be carried by the divisions we are proposing make it impossible 
for such an organization to be satisfactorily staffed under present 
Civil Service salary schedules. We make no specific proposals with 
respect to salaries because we are informed that the Commission’s 
Task Force on Personnel Management is studying and making recom- 
mendations for a revised salary scale which will make it possible for 
the Federal Government to attract and keep high-level professional 
and medical administrative personnel. 
The new system should put into the hands of the National Bureau 
of Health the full responsibility for recruiting, selecting, assigning, 
and otherwise handling its own professional personnel. 
It should be possible to detail personnel from the National Bureau 
of Health to any other government agency, Federal or local, as well 
as to nonprofit private institutions and agencies. To facilitate detail 
to the armed forces, a simulated rank should be prescribed by law 
to personnel assigned from the Health Bureau to the military. 
It is essential also to consider carefully the status of personnel of 
the Bureau of Health in the event of war. Since the professional 
personnel of the Bureau must be considered essential to the Nation’s 
needs in war on a par with the military, its entire group of professional 
personnel should be offered military status on the outbreak of war and 
should be available for obligatory service wherever the national interest 
demands. In the interest of flexibility the pattern of the military in 
maintaining a reserve corps should be followed by the National 
Bureau of Health. This reserve group, which would be of particular 
importance in time of war or other national emergency, should be care- 
fully selected with regard to professional representation and should 
receive periodically training in subjects related to anticipated 
assignments. 
The new career service should include physicians, dentists, nurses, 
sanitary engineers, and all other scientific personnel who are requisite 
for a general health program, such as nonmedical scientists (in both 
the natural and the social sciences) working in the health field, pharma- 
cists, dieticians, physical therapists, etc. 
74 B. Greater Use of Ancillary Technical Personnel 
The training of physicians has become increasingly complex and 
prolonged with the progress of medical science. But at the same time 
physicians have become unnecessary for many minor tasks. The same 
principle applies to graduate nurses. The armed forces in the recent 
war showed that there are many time-consuming tasks, customarily 
done by doctors or nurses, which can be performed satisfactorily by 
persons with far less technical training. Under the pressure of 
war, extensive emergency steps were taken to train and use such 
ancillary personnel to save scarce professional time. Since the war 
we have tended to relapse to the old groove. 
Practical leadership is needed in this field, which is beset with 
obstacles in the form of State laws and the natural conservatism of 
professions with high standards. Since the Federal Government can 
operate its own medical services without undue restrictions from State 
laws, and since the need to save professional personnel is so acute, the 
proposed National Bureau of Health and the armed forces medical 
service should provide an effective leadership and demonstration in 
this field. 
818374°—49 7 
75 Chapter XII 
AID TO MEDICAL EDUCATION 
The short supply of medical personnel has been cited throughout 
this report as a most urgent and vital reason for organizational change. 
It is necessary therefore to consider the source of this supply—the med- 
ical schools and teaching hospitals. Although our consideration is 
limited to the education of physicians, we are fully cognizant of the 
fact that the spotlight is being directed only to one of many areas of 
higher education, and only to one of many areas that produce per- 
sonnel vital to the maintenance of the health of the Nation. Because 
our primary task is to recommend an organizational structure that can 
cope with such problems, the education of the physician has been 
selected as the central one in the health area; also, the situation 
disclosed is one that may well require emergency measures. 
The Federal Government depends for its large supply of doctors 
during peace, as well as its staggering demands during war, upon 
the output of some 70 medical schools, 43 of which are supported by 
private funds (endowment, gifts, fees), mostly as integral parts of 
universities, and the remainder are supported by States and munici- 
palities. Two studies made at the committee’s request, quite inde- 
pendently of each other, confirm the distressed financial condition of 
a large number of these schools, definitely preventing their expansion 
and even threatening their very existence. That this situation is a 
critical one for Federal medicine is self-evident, for shortage of medical 
manpower is its most serious problem. 
As medicine has become more complex, standards of medical educa- 
tion have become more exacting and far more expensive for the schools 
to meet. Tuition formerly covered 70 percent of the expense of 
operating the schools. It now pays only about 25 percent, although 
tuition has been increased to the maximum amount tolerable and 
probably beyond the amount desirable. Inflation has of course added 
to the schools’ financial difficulties. 
The hope for large gifts for medical education from philanthropic 
foundations and wealthy citizens (with a very few notable exceptions), 
or for substantial support from commercial enterprises or public sub- 
scriptions, is judged to be remote. Federal support will be required, 
in spite of the potential dangers inherent in government subsidization. 
Resistance of the schools and of the profession to the acceptance of 
Federal aid can be resolved, provided assistance is offered on a basis 
76 which would not entail interference with professional educational 
policies but which would still provide to the taxpayer full justification 
for the aid and the purpose for which it is spent. 
Some Federal funds are now directed to schools in the form of 
grants-in-aid and contracts for research and for some other specialized 
purposes, but these are of limited value in strengthening them and 
may actually add to the financial burden of these institutions as ex- 
plained in the report of the Subcommittee on Research. A different 
kind of aid is needed. 
The magnitude of the need has been estimated variously. The 
American Medical Association, although not favoring Federal aid, 
estimated that nearly $700,000,000 is needed at once to supplement the 
endowment of the private schools. In March 1947, a representative of 
19 universities having medical schools, estimated that the private 
medical schools needed additional budgets of $30,000,000 per year. 
A more recent estimate is $16,000,000 per year more than is now 
available and about $200,000,000 for long range development of 
facilities. 
These needs are not new. Many schools, which have never pos- 
sessed adequate funds have deficiencies in plant and personnel which 
urgently require correction. Practically all schools need additional 
physical facilities, especially laboratories, for replacement of old and 
outworn facilities. Confronted with the urgent problem of maintain- 
ing present standards, the schools have been unable to undertake new 
developments important to their educational programs. 
Facts are lacking on which to base an intelligent program of com- 
prehensive aid. There is no uniform system of accounting by the 
schools. Some are financially integrated with their universities, with 
affiliated hospitals, or with other schools (nursing, dental) or teaching 
units. Under such conditions we could not recommend Federal aid 
without a study which would develop enough facts to assure that the 
assistance would go to the areas of greatest need and that it would 
be utilized effectively for the desired purposes. A further reason for 
disapproving aid on a blind basis is that the best and probably the only 
way to get the facts is to make the receipt of aid conditional upon 
securing them. 
One question which a study should answer is whether medical 
schools receiving aid might utilize their facilities throughout the 
year on an 11-month basis instead of an 8-month basis. Some 
schools do this now; others do not. Many medical educators have 
expressed the opinion that the accelerated program of the war years 
resulted in deterioration in quality of education. However, this 
experience cannot be held conclusive, because at the time perhaps half 
of the faculties of the schools were absent in military service, a fact 
which alone might explain such results. When at one and the same 
time our medical schools are in such financial distress that the supply 
77 of doctors is threatened and our Federal medical services are in distress 
because they cannot obtain doctors, it is fair to inquire into any and all 
measures that may correct the situation. Although facts are not at 
hand to provide a basis for specific recommendations, they can be 
obtained before any policy of continued large grants is established. 
We have tentatively considered several plans for the provision 
of Federal aid, and favor linking assistance (1) with an undertaking 
by the schools to increase enrollment up to the maximum point con- 
sistent with maintenance of high standards of education and (2) with 
a system of fellowships under which men of exceptional ability may 
be given an opportunity for medical education. 
Fellowships are particularly needed to stimulate the training of 
research personnel, public health officers, and psychiatrists, to meet 
those shortages which are perhaps the most serious of all in their 
implications for the future. For men willing to remain in research, 
continuing postgraduate aid should be provided, in order to keep them 
in what is one of the most valuable of all medical activities 
but in which financial rewards are so meager that the basic financial 
security enjoyed by the skilled laborer is lacking. 
For fellowships to be attractive to the holders and also of real 
help to the medical schools, the amount provided would have to be 
much greater than the tuition plus the stipend paid to the student for 
his other expenses, because each additional student represents a further 
deficit to the school. Acceptance of such fellows as additional students 
would be a partial compensation for Federal aid. 
Funds for capital improvements are also required. These can 
be furnished, like the aid to local hospitals, on a percentage basis, 
leaving initiative and responsibility in the schools to match the 
Federal aid. Since some school deficits stem from support of their 
teaching hospitals, the aid above proposed for such hospitals will 
diminish the aid to the schools. 
Because the needs are acute, there is considerable pressure for 
interim aid in advance of a full-scale study and analysis of the facts. 
Certainly provision must be made to maintain the output of doctors 
from the educational system as it now exists. Since Federal assistance 
will be necessary for a long period, an intensive long-range study 
should grow out of an initial emergency survey. 
Accordingly, we recommend: 
1. That an initial survey of the acute emergency needs be made 
by the Public Health Service, with the aid of advisoiy groups repre- 
senting the public, the medical schools, and those philanthropic foun- 
dations which have given so generously to medical education. Where 
financial problems of an emergency nature are found which threaten 
the survival of medical schools or the maintenance of high standards 
of medical education, emergency financial aid should be supplied 
78 promptly by the Federal Government if it is clear that the schools and 
their universities themselves are making maximum efforts. 
2. That a long-range study of the economics of medical educa- 
tion be made to determine ways and means of insuring the maintenance 
of current output at present standards and of expanding output and 
elevating standards. This study, should define the extent to which 
present facilities can be better utilized and need to be expanded. 
3. A plan of fellowships for brilliant men, particularly those who 
evidence an especial interest in the fields in which there is the greatest 
shortage including Federal medical service. 
These recommendations are predicated on the principle of not di- 
minishing the essential independence of the schools in professional 
educational policies, or their self-support to the full extent possible, 
or the private initiative now supporting them. 
A sufficient principle on which to justify such Federal aid is that 
the Government is the largest single customer for medical personnel 
even in peace, and by far the greatest customer of all in war. 
79 Chapter XIII 
MEDICAL SUPPLY 
The purchase of purely medical items, which we may describe 
loosely as those used to treat patients, is a technical function requiring 
extensive professional knowledge and continuous adaption to the chang- 
ing techniques of the medical profession. For this reason, it is in the 
armed forces separated from other procurement, and such supplies are 
now bought for all three services by a joint medical procurement office. 
Experience during the war, when the biggest medical supply enter- 
prise of all time was conducted—over a billion dollars worth of such 
supply and equipment being bought by the Army alone—demon- 
strated irrefutably that such an operation should be under medical 
control to select items, to regulate specifications, quantities, packing, 
and standards closely in accordance with the using doctors’ needs, and 
to develop, procure, and distribute promptly new items as the constant 
progress of science and as medical experience modifies existing concepts. 
This principle is violated in the Veterans’ Administration, in which 
the supply service is on an equal basis with, and wholly independent 
of the Department of Medicine and Surgery. After the war, Veterans’ 
Administration was destined for a long time to use large quantities of 
armed forces surpluses. Had a unified medical supply service been 
developed, the Veterans’ Administration could have been effectively 
serviced with no mass shifting of these stocks. But the natural desire 
of each agency to control and operate its own enterprise, and the fur- 
ther fact that in the Veterans’ Administration the supply service was 
an organization separate from its medical department, resulted in the 
movement of great stocks of supplies at large expense, the reware- 
housing of them in Veterans’ Administration depots and in a contin- 
uing duplicating service. 
Today, although there is no need in a properly conducted unified 
supply system for more than a 3-month depot stock level, except 
for war surplus and war reserve stocks, the Veterans’ Administration 
authorizes a 6-month level. Actually Veterans’ Administration has 
a 2-year level, explained largely by war surplus stocks. Recently the 
Veterans’ Administration supply organization proposed to increase its 
stocks by another $33,000,000, but this unnecessary expense was 
averted by the Bureau of the Budget. The Veterans’ Administration 
medical supply operation is neither an economical one, nor satisfactory 
to the doctors being served. In spite of its enormous stocks a large 
amount of local procurement (58 percent of the total) is necessary at 
80 high cost. A substantial part of the supplies could be furnished by 
purchases under open-end general contracts with direct delivery from 
the sellers, greatly lessening the depot function. We understand that 
steps in this direction are now in progress. 
Even more serious is the fact that there is no complete common 
Federal medical supply catalog, and, therefore, inadequate stand- 
ardization except in the armed forces. 
In the armed forces, the procurement system has been consolidated 
for the past 3 years and operates satisfactorily. This procurement 
office with some expansion could readily buy all the medical supplies 
required for the Federal Government as a whole. 
However, the armed forces have never been able to get together on 
warehousing or stock control, and the Army and Navy operate wholly 
separate depot systems with duplication and unnecessary expense. 
The Army authorizes a 3-month stock level, the Navy a 6-month 
level, in depots. In the Army, which includes service to the Air Force, 
warehousing could be contracted by 25 percent at least. Large 
amounts of stocks are also carried‘at the stations (hospitals). We have 
reason to believe that these are in many stations far in excess of needs. 
A 60- to 90-day level is all that is necessary. 
Total Government stocks of medical supplies are $177,000,000 
against an annual issue of $44,000,000, or a total of about 4 years 
stock expressed dollar-wise. These deteriorate and are costly to keep. 
Of course they represent in substantial part war surplus which was 
properly retained, but the very size of the total stocks makes single 
control of them, of their warehousing and utilization even more 
important. 
The loss due to the present independent systems can be illustrated 
by the existence of 17 depots carrying major amounts of supplies; 
(aside from 12 other depots of the Federal Bureau of Supply which 
include some medical supplies) although an over-all unified Federal 
medical supply system properly conducted would require only 4 to 
7 depots, roughly one-third of those now used. 
Progressive reduction in inventory with savings in very large 
amount would follow this change automatically, although it would of 
course take time to realize the full benefit. 
Such consolidation of stocks could still provide for sufficient dis- 
persion to protect against danger of loss due to bombing, while on the 
other hand making the stocks much more readily available should a 
crisis arise, since they would all be a part of one system and would be 
standardized. 
Before making this recommendation, we checked informally with the 
Commission’s Task Force undertaking the study of Federal procure- 
ment, and ascertained that our plan for separate procurement of purely 
technical medical items would not be inconsistent with its recom- 
mendations. 
81 We feel justified in stating categorically that there is no need for 
more than a single medical supply system, including single systems of 
stock control and warehouses for the entire Federal Government, and 
that better service can be given with significant savings. 
In such a plan, it must be remembered that the armed forces require 
for military preparedness a complete supply system, with stocks of all 
items in depots, and with facilities, plans, and experience for the rapid 
assembly in an emergency, of hospitals and other military medical 
units complete (except for buildings) for possible overseas use or 
catastrophes here. This does not mean that the armed forces could 
not, for current consumption, buy many items for direct delivery to 
the using station, wherever this could be done more economically. 
In the civilian medical agencies which would become part of the 
new Bureau of Health, there is no corresponding need for a complete 
supply system in the same sense. For their purposes, the criterion 
should be, on an item by item basis, whether considering all indirect 
as well as direct costs it is cheaper to buy locally, or wherever possible 
under open-end general contracts, for direct delivery to the using sta- 
tion, or to take delivery in Government depots in larger quantities, 
and therefore at lower cost to the manufacturer and fill station requi- 
sitions from the depots. 
If the armed forces were merged, or if responsibility for medical 
supply were assigned exclusively to one of the three services, such 
function could also be performed effectively for the Federal Govern- 
ment as a whole. This would, of course, include supply only to the 
depot level; that is, the stations (hospitals) of each service and of the 
Bureau of Health would not be included in the central system; also 
overseas supply would still be the function of the respective armed 
forces concerned. 
The above plan would be consistent with the report on Civil Defense 
for National Security to the Secretary of Defense, which recommends 
that the Army conduct procurement and warehousing of the large 
quantities of medical supplies requisite for civil defense. 
We recommend against having the armed forces assume responsi- 
bility for medical supply both for themselves and civilian Federal medi- 
cine if the operation would have to be conducted as a joint function 
of the three services, resting necessarily in considerable degree upon 
their mutual concurrence. A single responsibility and authority is 
needed. But, of course, such proposed delegation to one service 
would not prevent the inclusion by detail of personnel from the other 
services, to any reasonable extent that the latter desired to have their 
officers trained in medical supply work. 
A great advantage to the armed forces in the method here proposed 
would be that their personnel would have training and experience in 
handling a large medical supply system instead of the relatively small 
peacetime armed forces operation. The civilian Federal medical 
82 agencies would be the largest consumer except in war, and the oper- 
ation would, therefore, bo very much bigger than one conducted for 
the armed forces alone. Inadequate experience in large-scale medical 
supply operations preceding the recent war caused many months of 
anxiety and protracted deficiencies. It should be avoided again. 
Unless there is either a merger of the medical services of the armed 
forces or a delegation of exclusive responsibility to one of them, we 
favor the alternative of placing the unified supply service in the Na- 
tional Bureau of Health, and of letting it take care of the armed forces 
peacetime needs in addition to its own. In such event the armed 
forces would operate only the depots containing the war reserve. But 
they would detail personnel to the National Bureau of Health for 
training and experience in medical supply to the extent that the armed 
forces find reasonable need to do so. The invaluable knowledge of 
the senior personnel of the medical supply services of the armed forces 
should be made available by such detail. 
In making this alternative recommendation, we are fully aware of 
the strong feeling of the armed forces as to controlling all of their 
logistics. Under the first recommendation made, they would have 
the option to do this. But if this option is not exercised, certainly 
the advantages of unified supply, in economy and in better availa- 
bility of stocks for a war emergency both for civilian defense and the 
armed forces themselves, outweigh other considerations. United 
supply under a single responsible head is a must if the objectives of 
Public Law 162 are to be achieved. 
One of the greatest advantages of such unified supply would be 
Government-wide standardization of items. Through this, plus single 
control, stocks could be mobilized rapidly either for civilian defense or 
the armed forces, should emergency arise. If there were no other 
advantage than this, the unified service would be justified. 
Finally, as one important feature of war preparation, the armed 
forces and the planners for civilian defense should standardize hospital 
assemblies. It has been proven that items can be standardized. This 
can and should be done also as to assemblies. It will not be possible 
to predict which hospital assemblies will be needed for the Army, the 
Navy, the Air Force, or civilian defense. They should, like their com- 
ponent parts, be standard and interchangeable. We understand prog- 
ress toward this end is being made. It should be accelerated. 
For such unified procurement enterprise to operate, there would of 
course have to be one law regulating the methods of procurement 
authorized which would be applicable to the entire function. For 
example, Public Law 413 of the Eightieth Congress allows negotiated 
purchasing, rather than formal advertising and bid, under certain 
conditions in procurement for the armed forces. The same provisions 
would have to be extended to include the part of the proposed pro- 
curement conducted for the benefit of the civilian agencies. 
83 Chapter XIV 
PROVISION FOR CONTINUING STUDY AND TOP- 
LEVEL SUPERVISION OF MEDICAL SERVICES 
At best, there must, because of special military needs, continue to 
be at least two major separate Federal medical services. Further, mili- 
tary medicine itself will probably be divided among the three armed 
services. While coordination among the armed services is provided 
for in the above recommendation for the deputy and the advisory com- 
mittee to the Secretary of Defense, the plans which we have so far pro- 
posed do not bridge the gap between the military and the nonmilitary 
Federal medical organizations. Therefore, a top-level mechanism for 
over-all study, supervision, and coordination is requisite. The studies 
made by our committee should be the beginning, not the end, of such 
surveys and appraisals. In the time available, our work could provide 
only an outline of organization, a few signposts, evidence of the real 
need for such studies, and some indication of what might be saved by 
them. Such a continuing study properly conducted, and accompanied 
by top-level supervision, could pay for itself hundreds of times over, 
and help to assure the most effective use of our limited professional 
resources. 
The function includes positive coordination and supervision as well 
as fiscal review. The first should afford a continuing and dynamic 
appraisal of all the interrelationships within Federal medicine, and 
between Federal medicine and the civilian medical economy in all 
fields. The second; fiscal review; by its very nature is essentially a 
negative operation. 
Under present Federal organization, the Bureau of the Budget is 
the logical office to discharge both types of responsibility. The powers 
of the Director of the Budget are far broader than the responsibility 
for fiscal review which the title of his office connotes. However, the 
Bureau of the Budget has customarily centered its attention on essen- 
tially fiscal matters. This might tend to overshadow the positive 
dynamic studies and coordinating activities which are our principal 
concern. The Bureau’s Hospital Division has assembled valuable 
data and has shown a grasp of the fiscal and organizational problems 
of Federal medicine ; it is well equipped for the fiscal review function. 
We are not concerned that there will be an inadequacy in this area; we 
are concerned as to the establishment and exercise of the other function. 
84 Since the Chairman of the Commission is himself making recom- 
mendations concerning the organization of the Office of the President, 
it may be that some new organizational provision will be made for the 
kind of positive activity we recommend so strongly. If not, the broad 
powers of the Director of the Budget should be employed for it. 
To assist in the guidance of this important work, we recommend 
a medical advisory committee. Such advisors should be completely 
separate from, and independent of, the operating agencies. 
85 Chapter XV 
THE NEED FOR INCREASED EMPHASIS ON 
THE CONTROL OF DISEASE 
Federal medicine shares with all medicine and other healing arts 
an intense preoccupation with the diagnosis and treatment of disease. 
In fact, in the mind of the layman this constitutes medicine. As meth- 
ods of greater precision and certainty have developed, both diagnos- 
tic studies and curative treatment have required more and more hospi- 
tal beds. The fact must not be forgotten that the hospital as we know 
it today is a product of this century. Society has had less than 50 
years’ experience with this institution in its present form. 
We have outlined the cost and the problems that provision of 
medical service—in varying degrees—for one-sixth of the population 
has already imposed on the Federal Government. This has been 
measured in the convenient unit of a hospital bed, but this unit fails to 
measure the constant need for replacement of the rapidly outmoded 
equipment and apparatus of the modern hospital, the cost of expensive 
drugs and biologicals, and the increasing needs for manpower. We 
have expressed our concern about, and based recommendations on, 
the fact that the existing plant and commitments have already out- 
stripped the supply of medical personnel. 
Attention has been called to the expectation that in the hospital 
care of veterans alone, unless earlier rates of hospitalization for 
diseases are decreased, there will be under present policies between a 
twofold and a threefold increase required as World War II veterans 
grow older, with a staggering annual cost for many years. Even if no 
veteran with nonservice-connected disability should be hospitalized 
except for chronic diseases, 250,000 beds will be needed by 1975 for 
veterans, and more than three-fourths of these would be for mental 
patients, according to an actuarial study just made for our committee 
in the Metropolitan Life Insurance Co. 
We have noted from responsible nongovernmental sources, disturb- 
ing reports of financial deficits in the voluntary hospital system, of 
inadequate philanthropy and of only partially fdled community chests 
Is there no end, society may well ask, to this demand for more 
and more beds? Are the doctors, through their discovery of new and 
better ways of treating disease, quite unintentionally creating a burden 
that is already irksome, and threatens to prove intolerable? If we 
think solely in terms of the provision of medical care as it exists today, 
86 we agree that the outlook is alarming. But there are certain courses 
that, if followed, may provide a way out. 
The first of these, except in very limited degree, is beyond any 
direct influence of the Government. The pattern would need to be 
established first by nongovernmental medicine through bringing about 
a closer integration of the hospital and its community, with.the ob- 
jective of diminishing the need for hospitalization through a relative 
increase of ambulatory care. Before the Government can even ap- 
proach this problem, we have noted that a clear definition of its policies 
in relation to certain beneficiaries would need to be established. The 
Government is now committed to quite the reverse policy, at least in 
the care of nonservice-connected disabilities of veterans, who consti- 
tute the great bulk of its beneficiary population. In their case, the 
Government in effect is using the inconvenience of hospital admission 
as a means to check the flood demand of ambulatory care that would 
result if this were to be provided. Under present circumstances, we 
cannot question the wisdom of such a course, except in tuberculosis, 
mental illness, and syphilis, not only because professional manpower 
for such an undertaking is nonexistent, but because the cost would be 
prohibitive. The pharmacy costs alone for adequate ambulatory 
treatment would be fantastic. 
The second course, and the one that should be followed vigorously, 
is one in which the Federal Government in recent years has often times 
exerted leadership, and with courage and imagination forged ahead 
of non-Federal medicine. This is research and development in public 
health and preventive medicine. 
It is necessary to define preventive medicine to achieve clarity of 
thinking in regard to it. The prevention of disease may be achieved 
by specific measures that protect the individual from contracting a 
disease. If communicable disease is involved, such measures generally 
reduce the incidence of the disease in the community and prevent 
explosions in epidemic form. This is a limited definition of preventive 
medicine, best exemplified by vaccination for smallpox. Preventive 
medicine also includes the prevention of death and disability through 
early recognition and treatment of disease that is already established. 
Aside from the benefits to the individual, the effect of this form of 
preventive medicine in communicable disease may also extend as pro- 
tection to other individuals in the community. For example, in tuber- 
culosis the best preventive measures are incident to an early diagnosis 
and treatment that detects and isolates the case and so removes the 
source of contagion from the community. It can thus be seen that 
preventive medicine merges on the one hand with public health and on 
the other hand with remedial medicine, depending on the point of view. 
The combined action of these two phases of preventive medicine, as 
we have defined it, constitutes what is commonly hailed as the progress 
of scientific medicine. It is quite true that at the present time this 
87 progress can be accused of having added complexity, and also, from the 
economic standpoint, its dollar balance on the ledger may still be in 
red ink. But scientific medicine has scarcely started toward its goal. 
It is not inventing new diseases—it is carefully sorting out the same 
old diseases and one by one bringing them under control. 
We are likely to forget the significance of those many serious ill- 
nesses that have already been checked or eliminated. It is obviously 
impossible to give more than the roughest approximate estimates in 
money savings. Perhaps these should not be attempted at all, because 
no one can assign a dollar value to the health of an individual and the 
productivity of a great Nation. A few illustrations will suffice: 
Diphtheria 
Some 50,000 more persons would have died of this disease in 1947 if 
the 1900 mortality rates had prevailed. The 1947 cost to the Nation 
would thus have amounted to $30,000,000. The actual expense was 
$600,000. 
Typhoid and Paratyphoid 
Over 40,000 lives were saved in 1947 as a result of the decline in 
typhoid mortality since the ijurn of the century. The cost of the 
disease was reduced from $45,000,000 to SBOO,OOO. 
Diarrhea and Enteritis 
One hundred and fifty thousand more deaths from diarrhea, and 
enteritis would have occurred in 1947 if mortality from this cause had 
remained at its 1900 level. Savings are estimated to be greater than 
either in diphtheria or typhoid fever. 
Tuberculosis 
The annual mortality rate among males aged 25 to 34 has been 
reduced in the present century from 275 per thousand to only 39. 
Without such control, 25,000 additional men of those ages would have 
died in 1946. 
At the present time we are drafting men from 19 to 25 and, because 
of the progressive reduction in deaths from tuberculosis, 150,000 men 
subject to the draft are now alive, available for call to military service, 
who would have been dead had the death rate from this disease con- 
tinued as it was at the time they were born. 
In the armed forces, X-ray and other screening at induction kept 
200,000 cases of tuberculosis out of service. The incidence of this 
disease among active duty personnel and among veterans since the war 
was reduced to about one-tenth of that during and following World 
War I. Savings in dollar cost to the Federal Government for chronic 
88 care are of incalculable magnitude and there is respectable expert 
opinion that maximum effort could bring tuberculosis under control 
within measurable time. 
Malaria 
The remarkable effectiveness of the control over malaria is brought 
out by the experience of the armed forces in the Pacific. During 
1943 in the Southwest Pacific, hospital admissions from malaria rose 
to 250 per thousand. Peak rates were even higher. Several addi- 
tional divisions were made available for combat by the application of 
antimalarial measures which reduced these rates to less than 50 per 
thousand. 
It will be noted that all of these illustrations fall into the category 
of infectious diseases and that control measures for them developed 
on the basis of research discoveries both in natural science and medical 
science. 
The extraordinary advance made in the control of these and other 
infectious diseases has prevented death and improved the health chiefly 
of persons under 45 years of age. This advance can be reckoned as one 
of the several factors that account for the increase in life expectancy 
illustrated by the fact that white males at birth now have a life ex- 
pectancy of 67 years contrasted with that of 50 years as of the beginning 
of the century. 
Compared with the advance in the control of infectious diseases, 
however, relatively little has been accomplished for the chronic dis- 
eases, the incidence of which begins to rise sharply after 40 years of 
age. The magnitude of this problem can be estimated from the calcu- 
lation that, of the 2,000,000 man years lost annually by the Nation’s 
labor force, more than two-thirds is lost on account of chronic dis- 
eases. This discloses a problem that is not only large but increasing, 
because of the greater span of life just noted. At present, there are in 
the population 39,000,000 persons aged 45 or over. It has been 
estimated that there will be 59,000,000 in 1980. 
These statements have peculiar significance when applied to the 
population of veteran beneficiaries. We have presented the judgment 
that chronic disease disability in the veteran leads to almost automatic 
identification with inability to pay, and on justifiable grounds. Just 
now, we are in the peak load of chronic care for veterans of wars prior 
to World War 11, whose average age is close to 60. The average age 
of World War II veterans is but 30, The two groups numerically 
stand in the ratio of 4,000,000 to 14,500,000. It is easy to see that 
when the latter group passes 45, there will begin an unprecedented 
demand for hospitalization by the Federal Government. 
A term used in relation to disease in recent years now requires 
definition—control. It embraces not only preventive medicine in the 
89 broad sense in which we have defined it, but research and education. 
Education includes not only doctors, but all persons working in the 
health area, as well as the chain of research workers that extends 
back to the laboratories of natural science. Control, then, is meas- 
ured by high grade medical service oriented toward preventive meas- 
ures, research, and education. 
Cognizant of the task the Government is facing in chronic disease, 
it is important to inquire what it is doing toward control. This can 
be estimated by considering the amount expended for medical re- 
search, aside from education, which is the control measure indicated 
to anticipate the increasing task ahead. 
In the year 1948, over 85 percent of the Federal medical expend- 
itures in the United States was for medical service—thatis the care of 
established disease among the Government’s particular beneficiaries. 
Only 8.9 percent was spent for all projects related to public health and 
preventive medicine for the population as a whole, and but 3.9 
percent for research. 
It is true that the total expenditures for research have been 
increased very considerably in the past decade, but comparison of rela- 
tive amounts convinces us that the necessity for even greater expend- 
iture has not been faced. Increases in expenditure for medical care 
are outstripping relatively those for control. The reverse should be 
the case. 
Our understanding of chronic disease is still in its infancy. Strate- 
gists in medical science have already mapped it as the next great 
theater of operations. Although there is no guarantee that because 
one disease has been conquered another will fall, there is every reason 
for confidence and optimism in the great potential of our national 
research capacity. The broad three-pointed program of control yields 
appreciable results even while the spearhead of research is seeking a 
breakthrough. This is the present situation in cancer. The full ap- 
plication of existing knowledge can greatly diminish the human suffer- 
ing and economic wastage of this disease. 
We stand confident then in the recommendation of a courageous 
approach to the control of chronic disease, rather than a passive 
acceptance of the immeasurable cost that lies ahead. Funds invested 
in research and education at this time will not only return dividends 
in dollar savings in the future, but a still greater reward in health 
and productivity in the Nation. 
90 Chapter XVI 
CONCLUSION 
Congress has asked you to recommend changes necessary to pro- 
mote economy, efficiency, and improved service. You have asked us 
to make such recommendations in regard to Federal medical services. 
We have done so. In this process, we have used figures of excesses 
which exist and economies which might be effected. These are not 
offered as precise appraisals, but merely as illustrations that large 
areas of savings can be opened by sound organization. We have 
attempted to outline a method which we hope will correct the extrava- 
gance resulting from the present series of unrelated projects, and weld 
these together into an integrated, orderly whole. With such an or- 
ganization, staffed by outstanding personnel, it should be possible to 
utilize our unequaled medical resources to the maximum, and by 
intelligent planning take steps which will make us a healthier and 
stronger Nation. 
818374°—49 8 
91 Appendix A 
ORGANIZATION OF THE WORK OF THE COM- 
MITTEE ON FEDERAL MEDICAL SERVICES 
Following the example of the Commission, we delegated major 
areas of work to task forces, which were assisted by the full-time staff 
of the committee and by such special assistants and advisors as the 
heads of the task forces desired. 
Dr. Edward D. Churchill, as vice chairman, and Dr. Ray Lyman 
Wilbur assisted the chairman in giving general guidance to the com- 
mittee’s task. 
In medical care the most expensive and damaging policy is to 
continue to center expenditure on hospitalization and the care of 
diseases while neglecting research, preventive medicine, and public 
health. We, therefore, gave a high priority of attention to these. 
Medical Research 
We set up a task force in this field and to head it arranged for the 
addition of Dr. A. N. Richards to our committee. He had served as 
chairman of the Committee on Medical Research of the wartime Office 
of Scientific Research and Development. He was assisted by Dr. 
O. H. P. Pepper, and had Dr. A. R. Dochez as an advisor. 
Public Health 
We secured the addition to the committee of Dr. Hugh R. Leavell, 
professor of Public Health Practice at Harvard, to make the study in 
this field. We endeavored to coordinate this work with that of the 
Brookings Institution in its study of Welfare. 
Neuropsychiatry and Tuberculosis 
Approaching our problem from an entirely different angle, we in- 
stituted special studies in the two great chronic diseases—tuberculosis 
and psychiatric illnesses—which together account for 60 percent of all 
Federal hospitalization. These, because of their chronicity, make al- 
most all patients medically indigent, and are the greatest expense to 
the Federal Government. In the psychiatric field, Dr. William C. 
Menninger headed our study. For tuberculosis we consulted Dr. Es- 
mond R. Long, perhaps the foremost authority in the country, and 
with his aid and advice obtained Dr. Robert Plunkett from the New 
93 York State Department of Health. Dr. Plunkett directed the study; 
Dr. Long served as consultant. The conclusions represented their 
joint opinion. 
Hospitalization 
Studies of hospital and medical services were divided in several 
ways. As to the armed forces, they were under Dr. Paul R. Hawley, 
formerly the Army’s Chief Surgeon in the European Theater of Opera- 
tions, and later Chief Medical Director of the Veterans’ Administration. 
Dr, Michael E. Deßakey, Dr. Hugh J. Morgan, and Dr. Menninger 
were also members of this task force. Through liaison with Dr. 
Howard A. Rusk and Dr. Richard L. Meiling, our work was integrated 
with that of your Committee on National Security Organization. 
Under the parent Task Force on Hospitalization, of which the 
chairman was Dr. Allen O. Whipple, surveys were made of all Federal 
hospitals in several representative areas; a special study was made of 
residency training; and a study was made of the need for possible aid 
to medical education. In addition to the members of Dr. Hawley’s 
task force, the other members of the Subcommittee on Hospitalization 
were Drs. Frank R. Bradley and R. C. Buerki, Messrs. Henry P. 
Isham and Charles F. Rowley. Drs. Basil Mac Lean and Maxwell 
E. Lapham served as advisors in special parts of the work. 
Medical Manpower 
We created a task force on medical manpower, and for this pur- 
pose arranged to add to the committee Dr. Edward D. Churchill, who 
had previously studied this problem as chairman of Secretary of War 
Patterson’s Medical Advisory Committee. Mr. Goldthwaite H. Door 
also served on this task force. 
Medical Supply 
A special study was made of medical supply by persons experi- 
enced in military medical supply during the war. In this the chair- 
man of our committee personally participated. Mr. Herman Hangen 
and Mr. C. W. Harris served as advisors in this work. 
Organization 
Since the ultimate objective of all our efforts was to provide a 
sound organization for medical services, a special subcommittee on 
organization, under the chairmanship of Mr. Dorr, was created for 
continuous consideration of this ultimate goal. Dr. Deßakey, Dr. 
Hawley, and Mr. Tracy S. Voorhees served as members of this 
subcommittee. 
Both formally and more often informally, representatives of all 
of the major Federal agencies affected, the principal professional 
94 groups concerned, and several of the veterans’ organizations were in- 
vited to present their views orally or in writing to the committee as a 
whole. 
Gen. Edward S. Greenbaum and Dr. Gilbert W. Beebe assisted in 
the preparation of the final report. Dr. Eli Ginzberg assisted the 
committee as an advisor in the earlier phases of its work. 
Staff 
The committee’s staff also conducted extensive fact-finding in- 
vestigations. The staff consisted of Dr. Howard M. Kline as execu- 
tive director, Messrs. Marshall Hornblower, Daniel I. Rosen, Edward 
A. Lew (as actuary), Leslie T. Roach, Thomas Dolgoff, Jack Col- 
clough, Joseph C. Corie, W. V. Charters, William Schweitzer, and 
Mrs. Amy W. Firfer. 
Special staffs for the task forces included: Mr. William McPeak 
for manpower; Dr. Jack R. Ewalt for neuropsychiatry; Dr. Richard 
Nauen and Dr. Edward X. Mikol for tuberculosis; Dr. Julius Comroe, 
Jr., for research; Dr. James Troupin for preventive medicine; Dr. 
E. Richard Weinerman for hospitalization; and Dr. H. F. Currie and 
Dr. B. C. Fenton for medical supply. 
Miss E. Hildegarde Hillberg and Miss M. Louise Williams directed 
the secretarial staff of the committee. 
95 
U. S. GOVERNMENT PRINTING OFFICE: 1949