76th Congress 
1st Session 
HOUSE OF REPRESENTATIVES 
Document 
No. 120 
HEALTH SECURITY 
MESSAGE 
FROM 
THE PRESIDENT OF THE UNITED STATES 
TRANSMITTING 
THE REPORT AND RECOMMENDATIONS ON NATIONAL HEALTH 
PREPARED BY THE INTERDEPARTMENTAL COMMITTEE TO COORDI- 
NATE HEALTH AND WELFARE ACTIVITIES 
Kanuary 23, 1939.—Referred to the Committee on Ways and Means and ordered 
to be printed with accompanying papers 
Vo the Congress of the United States: 
In my annual message to the Congress I referred to problems of 
lealtli security. I take occasion now to bring this subject specifically 
io your attention in transmitting the report and recommendations on 
lational health prepared by the Interdepartmental Committee i » 
Coordinate Health and Welfare Activities. 
The health of the people is a public concern; ill health is a major 
pause of suffering, economic loss, and dependency; good health is 
essential to the security and progress of the Nation. 
Health needs were studied by the Committee on Economic Security 
vhich I appointed in 1934 and certain basic steps were taken by the 
Congress in the Social Security Act. It was recognized at that time 
hat a comprehensive health program was required as an essenti 
nk in our national defenses against individual and social insecurity, 
arther study, however, seemed necessary at that time to determine 
I Kays and means of providing this protection most effectively. 
in August 1935, after the passage of the Social Security Act, I 
ointed the Interdepartmental Committee to Coordinate Health 
Welfare Activities. Early in 1938, this committee forwarded to 
eports prepared by their technical experts. They had reviewed 
et health needs, pointing to the desirability of a national health 
'ram, and they submitted the outlines of such a program. These 
arts were impressive. I therefore suggested that a conference be 
to bring the findings before representatives of the general public 
-nd of the medical, public health, and allied professions. 
★1-26-39 2 
More than 200 men and women, representing many walks of life 
and many parts of our country, came together in Washington last 
July to consider the technical committee’s findings and recommenda- 
tions and to offer further proposals. There was agreement on two 
basic points: The existence of serious unmet needs for medical 
service; and our failure to make full application of the growing powers 
of medical science to prevent or control disease and disability. 
I have been concerned by the evidence of inequalities that exist among 
the States as to personnel and facilities for health services. There are 
equally serious inequalities of resources, medical facilities, and services 
in different sections and among different economic groups. These 
inequalities create handicaps for the parts of our country and the 
groups of our people which most sorely need the benefits of modern 
medical science. 
HEALTH SECURITY 
The objective of a national health program is to make available in 
all parts of our country and for all groups of our people the scientific 
knowledge and skill at our command to prevent and care for sickness 
ind disability; to safeguard mothers, infants, and children; and to off- 
set through social insurance the loss of earnings among workers who 
are temporarily or permanently disabled. 
The committee does not propose a great expansion of Federal 
Tealth services. It recommends that plans be worked out and 
administered by States and localities with the assistance of Federal 
grants-in-aid. The aim is a flexible program. The committee points 
out that while the eventual costs of the proposed program would be 
considerable, they represent a sound investment which can be expected 
to wipe out, in the long run, certain costs now borne in the form of 
elief. 
We have reason to derive great satisfaction from the increase in the 
average length of life in our country and from the improvement in the 
average levels of health and well-being. Yet these improvements in 
the averages are cold comfort to the millions of our people whose 
security in health and survival is still as limited as was that of the 
Nation as a whole 50 years ago. 
The average level of health or the average cost of sickness has little 
meaning for those who now must meet personal catastrophes. To 
know that a stream is 4 feet deep on the average is of little help to 
tnose who drown in the places where it is 10 feet deep. The recom- 
mendations of the committee offer a program to bridge that stream by 
reducing the risks of needless suffering and death, and of costs and 
d vpendency, that now overwhelm millions of individual families and 
s p the resources of the Nation. 
I recommend the report of the interdepartmental committee for 
reful study by the Congress. The essence of the program recom- 
ended by the Committee is Federal-State cooperation. Federal 
legislation necessarily precedes, for it indicates the assistance which 
may be made available to the States in a cooperative program for the 
Nation’s health. 
Franklin D. Roosevelt. 
The White House, 
January 23, 1939. HEALTH SECURITY 
3 
January 12, 1939. 
The President, 
The White House, Washington, D. C. 
Dear Mr. President: In accordance with responsibilities assigned 
to the Interdepartmental Committee to Coordinate Health and 
Welfare Activities, I have the honor to submit the accompanying 
report and recommendations on national health. 
This report is based on the results of an extensive review and analysis 
of data on health and opportunities for its improvement made during 
the past 2 years by our Technical Committee on Medical Care, which 
includes members of the staffs of the Children’s Bureau, the Social 
Security Board, and the United States Public Health Service. The 
report and recommendations of the technical committee have already 
been transmitted to you, and at your suggestion were laid before a 
national health conference in Washington, July 18-20, 1938. At those 
meetings and subsequently the interdepartmental committee has had 
opportunities to confer with representatives and members of a wide 
range of professional groups, farm and labor groups, employers, welfare 
administrators, and the general public. The interdepartmental 
committee believes that the findings and proposals of the technical 
report, which is appended, are amply corroborated by professional and 
lay experience and opinion. Many helpful suggestions proposed by 
these groups have been carefully considered in the preparation of the 
report of the interdepartmental committee. 
The interdepartmental committee has at its disposal a wealth of 
information arising from the activities of the Federal agencies repre- 
sented in its membership and the special studies of our technical sub- 
committee. We will be happy to place further information at your 
disposal or to give any further assistance desired by you or by the 
Congress. 
Respectfully submitted. 
Josephine Roche, Chairman. 
REPORT AND RECOMMENDATIONS ON NATIONAL 
HEALTH BY THE INDEPARTMENTAL COMMITTEE TO 
COORDINATE HEALTH AND WELFARE ACTIVITIES 
There can be no doubt that the general level of health in the United 
States is higher today than at any other time in the Nation’s history. 
The steady gain throughout the past half century in the average 
length of life and in the vigor of life is specific evidence, if evidence 
were needed, of the knowledge and skill of our scientists, sanitary 
engineers, medical and allied practitioners, and of our health and 
welfare administrators. At the same time, the evidence is equally 
clear that not all of the American people have shared adequately in 
this progress. There are large areas of the United States where 
existence still is shadowed darkly by disease which could have been 
prevented or can be cured. In all parts of the country, moreover, 
in the rich States and in the poor, there are large groups of persons 
for whom life is still as uncertain and as brief as if the scientific progress 
of the past half century had not occurred. 4 
HEALTH SECURITY 
In approaching the task assigned to it in August 1935, it has been 
the purpose of the Interdepartmental Committee to examine specfi- 
cally the relations of sickness and insecurity. A wealth of evidence 
now available shows that, in good times and in bad, sickness remains 
the most constant cause of poverty and dependency. Except in 
years of widespread unemployment, sickness is the principal cause of 
insecurity. At all times, the direct and indirect costs of sickness 
weigh heavily on the national economy. 
It is obviously not within the province of the committee to recom- 
mend, or even to consider, methods of treating disease. A clear 
distinction must be made, and has been made in our studies and de- 
liberations, between the methods of treating sickness and the pro- 
cedures to be used to ensure that in all parts of our country all those 
who need the protection of preventive medicine, the care of skilled 
practitioners, and the services of hospitals and other medical institu- 
tions have access to the best that the health and medical sciences 
can offer. Treatment of the sick person must always be an individual 
matter left to the judgment of those with the requisite professional 
skills. To ensure that such treatment is available to all who need 
it is, on the other hand, a basic public concern. 
About a century ago the United States recognized that public 
safety and public economy, as well as the ideals of a democracy, 
demanded that the opportunity for an education be open to all. 
Today we are at the point of recognizing and making effective an 
equal opportunity for health and life. 
In their experience as administrators in various Federal departments 
and agencies, the members of this committee have had an oppor- 
tunity to observe the relationship of public health to the well-being 
of American families and its bearing on our national economy. It is 
the conviction of the committee, derived from this experience, that 
at the present time there is no greater public need, from the standpoint 
of individual and social security, than a comprehensive program to 
safeguard and improve the Nation’s health. The committee believes, 
in brief, that it is both possible and necessary to embark on a long- 
range plan to put science to work so that, within the limits of present 
knowledge and potential resources, all of the American people will 
have the greatest possible opportunity to live out their lives in health 
and vigor, free to the maximum possible degree from the unhappiness 
and the economic burdens that result from sickness, disability, and 
premature death. 
As a foundation for its studies, the committee has had the benefit 
of a mass of factual data gathered by Federal, State, and local health 
organizations in the course of their administrative duties and of special 
studies made by these and other groups. The task of reviewing, 
coordinating, and summarizing this material was delegated to our 
Technical Committee on Medical Care, which includes members of 
the staffs of the Children’s Bureau, the Social Security Board, and the 
United States Public Health Service. The findings of that technical 
subcommittee and its recommendations have already been incor- 
THE NEED FOR A NATIONAL HEALTH PROGRAM HEALTH SECURITY 
5 
porated in two special reports transmitted to you and, at your sugges- 
tion, laid before the National Health Conference in July 1938.1 
From these and other data, it is clear that the need for a national 
health program may be measured both in the lack of essential resources 
for the prevention and care of sickness and in a massive and unneces- 
sary burden of sickness, death, and poverty. The nature and extent 
of that need may be broadly outlined as follows: 
Public-health services for the prevention and control of sickness are 
largely undeveloped in many rural areas and are grossly inadequate 
in many smaller cities. 
Hospital services for persons with low incomes are insufficient in 
many cities; at the same time, many hospital beds in private or semi- 
private rooms stand empty because patients are unable to pay the 
private rates. In rural areas, general hospitals and clinic services 
are grossly insufficient and in many places wholly lacking. Govern- 
ment hospitals for tuberculosis and mental disease are generally over- 
crowded and, in many States, inadequately supported. 
Tuberculosis, pneumonia, cancer, malaria, mental and nervous 
disorders, industrial injuries, and occupational diseases—these and 
other specific ailments—are far more prevalent or more deadly than 
they need to be. The suffering and the premature deaths which they 
cause can be greatly reduced. 
Maternity, infancy, and childhood are very inadequately protected, 
especially in rural areas. Between one-half and two-thirds of the 
maternal deaths, nearly one-half of the stillbirths, and between one- 
third and one-half of the deaths among new-born infants are pre- 
ventable. Here is an opportunity to save more than 70,000 lives a 
year. 
Preventable sickness and death among children are still much too 
common. Tens of thousands die unnecessarily each year. Hundreds 
of thousands are crippled by disease or accident. Millions are left 
with scars which handicap them for their future lives. Much of this 
is a needless waste of young life and a blight on the familes of the 
Nation. 
On an average day of the year, about 5,000,000 persons are disabled 
by sickness to such an extent that they cannot go about their usual 
work or other routine. Of these 5,000,000, about half get well, sooner 
or later, and resume their ordinary life; about half remain permanently 
disabled. Among those permanently disabled, nearly 2,000,000 are less 
than 65 years of age. 
During the course of a year, sickness and disability cost the Ameri- 
can people nearly 2,000,000,000 days’ absence from work, school, or 
household duties. 
Not including individuals who are already permanently disabled 
workers who are in the labor market lose a billion dollars or more 
each year in wages unearned because of sickness. Industry and the 
Nation as a whole suffer additional losses. 
The costs of medical services exceed $3,000,000,000 a year. About 
four-fifths of this amount is paid directly by families. On the aver- 
1 The Need for a National Health Program, report of the Technical Committee on Medical Care, February 
14,1938: and A National Health Program, report of the Technical Committee on Medical Care, submitted 
to the National Health Conference, Washington, D. C., July 18-20, 1938. 6 
HEALTH SECURITY 
age, families spend between 4 and 5 percent of their incomes for 
medical care. 
Average costs, however, are misleading. Sickness costs are uneven 
and unpredictable for the individual or for the family. Usually they 
cannot be postponed or controlled. What matters is not the average 
year, but the year that comes sooner or later to almost every family, 
when sickness bills are burdensome or even overwhelming—when 
they use up savings, require heavy sacrifices, or leave debts for the 
future. 
Including the costs of medical and health services, the loss of wages 
because of sickness and the loss of potential future earning power 
because of premature death, the Nation’s bill for sickness and post- 
ponable death amounts annually to about $10,000,000,000. 
The general picture presented by such facts as these is the more 
startling when the effect of sickness on specific groups of the popula- 
tion is examined. Sickness comes oftener and lasts longer, and death 
comes earlier to the homes of the poor than of the well-to-do. It is a 
plan fact—and a shocking fact—that the chance for health and even 
for survival is far less among low-income groups than among those 
who are in moderate or comfortable circumstances. This association 
of sickness and poverty bears upon the whole population in costs of 
dependency. 
Wage earners in families whose annual incomes are less than $1,200 
suffer, on the average, more than twice as many days of disability a 
year as those in families with incomes of $3,000 or more. Children 
in relief families lose nearly a third more time from school and play 
because of illness than do those who live in homes where the income 
is moderate or comfortable. A comprehensive study made several 
years ago of deaths among boys and men of working age showed that 
the general death rate among unskilled workers was nearly twice that 
of professional men or proprietors, managers, and officials. Among 
the poor in our large cities, death rates are as high today as were 
those of the Nation 50 years ago, before the beginning of the spec- 
tacular advance of public health and medical science. 
In this connection it is of moment that, despite their greater and 
more frequent need for care, low-income families receive far less medi- 
cal service than is purchased by the well-to-do. It is significant also 
that, in spite of the provisions of tax-supported and charitable services 
and the generosity of medical practitioners, families with small 
incomes now spend larger percentages of their incomes for medical 
care than do those who are in moderate or comfortable circumstances. 
It is of little value to argue whether sickness and premature death 
are more the cause or the result of proverty. In some instances a 
clear connection can be traced between the circumstances in which an 
individual lives and his chances of ill health or loss of life. The point 
can be readily illustrated by inspecting the relationship between a 
man’s occupation and his chances of living a normally healthy life. 
A few basic facts may be cited: 
A study of sickness reports received from various industries indi- 
cates that iron and steel workers had consistently higher rates for 
pneumonia of all forms than occurred among employees in other 
industries. For the period 1922 to 1928, inclusive, the pneumonia case 
rate in the steel industry was nearly 70 percent above the rate in the 
reporting public utilities, and nearly 50 percent higher than that in 
all other reporting industries as a group. HEALTH SECURITY 
7 
It is estimated that about 1,000,000 persons are exposed to hazard- 
ous siliceous dust in the United States. It is further estimated that 
of this number 250,000 have silicosis in some stage. It is well 
known that individuals with silicosis are abnormally susceptible to 
tuberculosis. The prevalence of the disease in a group of silicotics 
is about 10 times greater than among the general population. 
A large and important group of organic diseases, especially signifi- 
cant in adult life, shows strikingly the effects of industrial exposure. 
The death rates are two and three times as high as in nonindustrial 
groups during the active working years of life. In the hazardous 
industries, where workers are exposed to harmful dusts, metals, 
gases, vapors, or other injurious substances, excessive heat, humidity, 
sudden changes of temperature, defective lighting, or to noise, the 
effects on health and length of life are very serious. These effects 
may be noted in reduced efficiency, in long periods of illness and dis- 
ability, and especially in cases of heart or kidney disease which strike 
men and women down prematurely. 
At age 20, the expectation of life of men engaged in industrial 
pursuits is 42 years. That is, they may expect on the average to attain 
the age of 62. On the other hand those who are not engaged in 
industry may expect an additional 50 years at age 20. There is, 
therefore, a difference of about 8 years in the average expectation of 
the two groups. 
Differences in the sickness or death rates among occupational 
groups should not be charged altogether to the specific effects of 
industry; other factors associated with occupation play large roles, 
such as economic status, race, education, and so on. It is clear, 
nevertheless, that if a single item were to be selected among the 
determining factors in the health of men and women, occupation 
would probably lead all others. These considerations are fundamental 
in our reasoning as to the place of economic factors in general plans 
for health services; industrial hygiene must have an important place 
in any list of specific health measures. 
What matters fundamentally in the association of sickness and low 
income is that the vicious circle can be broken by well-tested methods 
to prevent and check illness and so to prevent the poverty it brings. 
There is incontrovertible evidence that the level of health has been 
raised for whole communities by the application of simple, accepted 
methods to provide public-health services and ensure facilities for 
medical care. Application has been made only meagerly and unevenly 
of the widely accepted public-health slogan; “Public health is pur- 
chasable. Within natural limitations, any community can determine 
its own death rate.” 
In summary, the committee finds after careful review of the evidence 
that the need for a national health program can be expressed in terms 
of five broad categories: 
1. Services to prevent sickness are grossly insufficient for the 
nation as a whole. 
2, Hospitals and other organized facilities are too few, too small, 
or wholly lacking in many communities, particularly in rural areas. 
The financial support of hospital services is meager and uncertain, 
especially the support of services for patients who cannot pay for the 
care they need. 
3. One-third of the population, on relief or in the low-income 
brackets, receives no medical service or inadequate service. 8 
HEALTH SECURITY 
4. A far larger part of the Nation suffers from the economic burdens 
created by illness. The largest of these burdens arise from the vari- 
able costs of medical services, costs which can be budgeted by the 
large group as a whole but not by the individual family. 
5. Wage earners and their families need protection against loss of 
income during periods of temporary or permanent disability. 
The needs thus briefly summarized are large and urgent. These 
continuing deficiencies deprive the Nation of much of its potential 
vigor and well-being. These needs can be met only through proper 
application of the resources of the Nation. Neither individuals, 
families, voluntary groups, localities, or States, alone and unaided, 
can cope with the problems. An adequate program must be national 
in its dimensions if it would come to grips with problems which are 
also national in their breadth and depth. 
THE SCOPE OF A NATIONAL HEALTH PROGRAM 
A program to deal with the problems which have been outlined 
must be no less comprehensive and no less varied than the circum- 
stances it confronts. The interdepartmental committee recognizes 
that it may not be deemed wise or even possible to attempt to meet 
at once all of the present and urgent needs. The committee finds 
it vital, however, that the broad objectives of a national health pro- 
gram be recognized and defined and that any measures which may be 
adopted now or later should be such as to further those objectives 
and to constitute part of an interrelated whole. The committee 
believes, further, that there are certain elements which must be con- 
sidered in evaluating any specific proposals leading toward a national 
health program. 
Objectives.—The objective of a national health program, the com- 
mittee finds, can be nothing less broad than the assurance that all 
areas of the country and all members of the population shall have the 
protection of adequate public-health services and an opportunity to 
avail themselves, in accordance with their medical needs, of adequate 
care in sickness. It is a subordinate but nevertheless essential aspect 
of such a program that provision should be made to compensate workers 
for periods of disability, temporary or permanent, during which they are 
unable to earn. 
Available resources.—In efforts to attain these broad objectives, 
certain considerations are basic to any sound and economical plan. 
It goes without saying that a national program must build upon, 
and utilize fully, all present resources effective in meeting the needs 
of sickness. Both needs and resources vary widely in different areas 
of the United States. So also do present or potential expenditures 
from public or private funds for health services and medical care and 
for the alleviation of the dependency caused by sickness. Any further 
step, moreover, must recognize fully and must meet, insofar as is 
compatible with continuing progress, the differing customs and 
habits of communities in their health practices. 
Federal aid jor State programs.—As a consequence of this wide 
range of social organization and economic resources among the several 
States, the committee finds that a national health program should 
be built, insofar as the provision of public health and medical services 
is concerned, upon a partnership in which the States take the initiative and assume the basic responsibility, and the Federal Government 
cooperates through grants-in-aid for State programs which meet cer- 
tain basic conditions requisite for Federal approval. It is believed 
further that Federal grants to the States should be determined by 
some formula of variable-matching grants which permits recognition 
of the varying needs of the States and of the unequal resources actu- 
ally or potentially available to meet these needs. The committee 
is of the opinion that the principle of Federal-State cooperation, which 
has proved so effective in the various health and welfare programs of 
the present Social Security Act, permits the flexibility essential to 
services as important and intimate as those for health, and that, at 
the same time, it offers protection to those of the American people, 
especially those in rural areas, whose communities have only limited 
means. The committee believes that the function of the Federal 
Government in this field is primarily to give technical and financial 
aid to the States. Advancement of opportunities for health among 
the States, through variable Federal grants-in-aid, should be supple- 
mented by advancement of opportunities within the States through 
corresponding intrastate measures. 
Hospitals, clinics, and other institutions.—As a consequence of the 
diversity of needs and resources among communities and States, there 
are many areas in which the basic institutional facilities for the care 
of the sick are inadequate or lacking. Hospitals and laboratories are 
the workshops of the medical profession. The committee finds that 
such facilities for modern medical practice must be available through- 
out the United States to enable our practitioners to give the level of 
care for which they are trained and ready. 
Prevention— In considering the services to be comprised in a na- 
tional health program, it is believed that the prevention of sickness 
is basic. That fact is recognized in present provisions of the Social 
Security Act, but the means to apply preventive methods through 
public-health services are still far from adequate. Prevention of 
suffering and distress requires special attention to the needs of mothers, 
infants, and children. In the early years of life the foundation must 
be laid for future capacity to play one’s part in the life of the family, 
the community, and the Nation. The committee therefore finds that 
an effective and economical program of national health must give ex- 
plicit and generous recognition to the provision of adequate services for 
public health, including the prevention and control of disease and re- 
search in the cause and cure of disease, with special recognition of the 
needs of maternity, infancy, and childhood. 
The history of health services in the United States shows clearly, 
however, that no rigid lines can be drawn between the services re- 
quired for the prevention of disease and those essential for the care of 
the sick. Prevention of a lifetime of invalidity may hinge upon re‘ady 
access to facilities for diagnosis and services for prompt and adequate 
care. Public provisions to isolate and care for persons sick with com- 
municable or mental disease are older than the Nation. Progress in 
the control of tuberculosis, one of the most spectacular achievements 
of our generation in mitigating suffering and preventing orphanage 
and dependency, has been effected not only by the well-tried preven- 
tive methods but also by means of detecting the disease in its first 
insidious inroads and making medical, nursing, and hospital service 
available to protect the patient, his family, and his community. 
HEALTH SECURITY 
9 
★PI. Doc. 120, 76-1 2 10 
HEALTH SECURITY 
Research.—An essential of any preventive program is the provision 
of adequate funds for research into the cause and cure of disease. 
Research must be recognized as an instrument of continued progress. 
There are large and serious groups of diseases—notable among them 
costly chronic diseases such as cancer, mental disease, heart and kid- 
ney diseases and arthritis—for which we must look to further scien- 
tific knowledge to save hundreds of thousands of lives and millions of 
dollars. These diseases most commonly strike in adult life. Their 
importance grows as our population ages. Any development in the 
extent of health and medical services must be paralleled by concomi- 
tant studies to evolve more effective and economical methods of achiev- 
ing the objectives of prevention and cure. Present provisions for the 
investigation of disease and study of administrative methods in the 
field of health are wastefully inadequate. 
Provision oj medical care.—The committee finds that the objective 
of a national health program, and in particular the objective of pre- 
venting needless sickness, death, and dependency, requires that services 
for adequate care in sickness be made available, by one method and 
another, to all who are in need of care. It is incompatible with the 
ideals of a democracy and with the requirements of economical 
government and national safety that access to services required to 
maintain health, self-support, perhaps even life, should be seriously 
limited, as at present, by the inability to pay for them. The barrier 
of costs, which creates a wall between persons in need of care and the 
professions which stand able and ready to serve them, must be broken 
down. 
Services for needy and low-income groups.—In considering the popu- 
lation to be served, three groups may be distinguished. There are, 
first, those who are now dependent upon public funds for the means of 
subsistence—some twenty million persons, about one-sixth of the 
Nation. There already is recognition in State legislation that medical 
service is no less essential than food and shelter. Many recipients of 
relief cannot hope to attain self-support until they achieve higher 
levels of health and vigor. As one of many examples of a situation 
that spells public waste and private tragedy, it may be pointed out 
that the prevalence of tuberculosis in a large sample of the relief 
population has been found to be 6 times that among families with 
annual incomes of $3,000 or more; in certain regions, the incidence of 
tuberculosis in the relief population is 10 times that found among 
families in comfortable circumstances. 
Just above the economic level of families on relief is another group, 
comprising also about 20,000,000 persons, among whom family income 
barely suffices for survival. In this group, as among those on relief, 
sickness and disability are far more prevalent than among families 
who' are in moderate or comfortable circumstances. The means to 
pay for medical care, other than the simplest and most inexpensive, 
obviously are lacking. In such families, who maintain at best a 
precarious hold on self-support and independence, a single severe ill- 
ness almost inevitably means economic catastrophe. 
The committee is of the opinion that consideration of a national 
health program must include provision of public funds to meet the 
costs of medical care for that third of our people who are dependent 
or have incomes which provide for little more than bare subsistence. 
Medical costs among self-supporting groups.—For the upper two- 
thirds of the population, the average present costs of medical care HEALTH SECURITY 
11 
would be within the reach of individual family incomes. If certain 
wasteful and nonproductive expenditures were eliminated, adequate 
medical services could be provided to large groups of families for about 
the aggregate amount that families now spend privately. This 
amounts to some 4 to 5 percent of aggregate family income. Yet 
in any given year hundreds of thousands of households run into eco- 
nomic disaster because of sickness even when family income is moder- 
ate or ample. Among all but the fortunate few with very large means, 
sickness costs are a constant specter. 
Except by chance, families do not incur the average costs. Some 
go through a year luckily, with no medical bills and no loss of earnings 
from sickness and disability. Some are faced with costs or losses they 
can meet out of income or savings. But each year there are many—• 
and no one can predict who those will be—for whom these costs and 
losses are disastrous. For the population as a whole and for large 
groups within the population, the costs of medical care and the income 
losses from disability can be predicted with a substantial degree of 
accuracy. For the individual family these costs and losses are almost 
wholly unpredictable and almost wholly uncontrollable. In this, they 
are unlike any other basic items that ordinarily appear in family 
budgets. 
The committee finds that no consideration of the Nation’s health 
will be well grounded which fails to recognize the nature of this indi- 
vidually, unpredictable and uneven risk of sickness, or fails to extend 
the present limited application of risk-sharing devices. 
The consequences of the risk of sickness may be stated in economic 
terms; that is, in the costs and losses suffered by individual families 
and the consequently precarious support of medical practitioners and 
hospital services. The risk, however, is even more serious in that it 
affects both the quantity and the quality of the medical service to 
which most of the population has access. Too often both the patient’s 
chances and the doctor’s efforts are impeded by the fact that medical 
service is not called for promptly, or that the doctor is not able to 
bring into play all the skills of his profession because he knows that 
the costs will be prohibitive for his patient. As a consequence of this 
situation we have the anomaly of professions whose services are not 
fully used and whose recompense is often precarious, and of hospitals 
with empty beds, while at the same time many individuals in the 
population—many of them with incomes adequate for their other 
requirements—are without access to needed services which modern 
medical science can offer. We have patients without doctors and 
doctors without patients. 
The committee is convinced that private and public burdens can be 
lightened and that greater freedom can be afforded the professions and 
institutions concerned with the care of the sick to give the services to 
which they are dedicated. The committee believes that progress on 
this economic front in the health field depends for the most part on a 
more effective and more economical use of the money now spent and 
of the services now available. The method of achieving that use is to 
apply to the costs and losses of sickness the devices that long have 
proved effective in meeting risks that are measurable and tolerable for 
a population, but unpredictable and unbearable for the individuals 
who compose it—that is, to spread the costs over groups of people and 
over periods of time. 12 
HEALTH SECURITY 
Tax support and social insurance.—There arc two ways of spreading 
a risk which is so extensive and so serious as to affect the well-being 
and safety of a people. One is by the use of general or special tax 
funds; the other by contributions under a system of social insurance. 
Both of these methods are in effective use in the provisions on which 
reliance now is placed for the social security of the Nation. The 
committee believes that present experience and present need point 
to the wisdom of extending that use more widely and more fully for a 
coordinated attack on the insecurity that arises from sickness. It 
believes that in such extension both of these principles can and should 
be used. 
MAINTENANCE AND ADVANCEMENT OF QUALITY OF MEDICAL CARE 
The interdepartmental committee and its Technical Committee on 
Medical Care have, from the beginning, been profoundly concerned 
with the need to maintain high quality in health and medical services 
which may be provided through new programs. They have been 
equally concerned with the need to encourage the development of new 
and stronger incentives for continuous improvement in the quality 
of service. The subject of qualitative standards has been explored at 
length in numerous meetings with representatives of many profes- 
sional groups, and many proposals of value have been developed. 
Discussions with committees of physicians, hospital representatives, 
public-health officials, dentists, nurses, and welfare workers have all 
brought out the high importance of quality of service and the essential 
interest of these professional bodies in the maintenance and improve- 
ment of quality. The committee recognizes that the technical quality 
in the performance of a professional service must be considered in 
association with the sufficiency of the service in amount and scope 
necessary to meet the needs of a population. Quality, scope, and 
amount of service taken together make up the inclusive concept of 
adequacy. 
The committee’s discussions with those professional bodies and its 
own deliberations lead to the following comments on the maintenance 
and improvement of quality of care. 
First should be mentioned the education of physicians and other 
professional persons. The advance in standards of undergraduate 
medical education has been one of the notable contributions of Ameri- 
can medicine, aided by generous public and private gifts during the 
present generation. Present standards must be maintained and im- 
proved, with due regard for the number of physicians needed in various 
parts of the country. While much activity is under way to promote 
postgraduate medical education, that field is regarded by the profes- 
sional bodies as in a less satisfactory state and as presenting the great- 
est educational need at the present time. 
Research and its encouragement through generous public and private 
aid underlie the advancement of medical science and the quality and 
flexibility of professional education. 
Significant among the contributions to the maintenance and 
advancement of medical service has been he advancement in our 
hospitals and clinics in the organization of their professional staffs. 
Quality in service is greatly pro noted by the professional association 
of physicians with one another in cooperative work on hospital and HEALTH SECURITY 
13 
clinic staffs; by the systematically organized mutual criticism in 
which general practitioners and specialists share as such staff mem- 
bers; and through the opportunities which well-organized hospitals 
and clinics afford physicians to utilize economically much expensive 
equipment and the aid of technical personnel. The professional 
societies of physicians and hospitals have been largely responsible 
for these advances. Great forward steps have been thus taken toward 
the organized maintenance and improvement of the quality of pro- 
fessional care and the opportunities of physicians who are associated 
with hospitals and clinics to obtain these advantages. It is to be 
noted, however, that a considerable proportion of physicians do not 
at present have access to these advantages. 
Systematic supervision of the work of professional men and women 
is recognized as one of the essential requirements for the maintenance 
and improvement of quality; the staff organizations of hospitals and 
clinics constitute one measure through which such supervision is 
organized within a professional group itself, under the auspices of a 
governing body usually representing the general community interests, 
whether governmental or nongovernmental. In professional services 
outside hospitals, clinics, and public-health agencies, professional 
supervision is exercised to a certain extent through professional 
societies. It also appears in the organized plans of medical care which, 
especially in recent years, have been extending services in the homes 
of the sick, chiefly under local governmental auspices. Whereas in the 
hospital and clinic field there is a generation of growing and tested 
experience in methods of maintaining quality through professional 
organization and supervision under community auspices, in home 
services the experience appears to be neither ample nor satisfactory. 
Our conferences have brought out the increased recent attention given 
to this matter and the pending formulation of professionally acceptable 
standards. 
There are also economic considerations which affect the quality of 
service: Adequate compensation for physicians and other professional 
persons who furnish medical care in institutions or elsewhere; the 
establishment of high standards governing the qualifications, appoint- 
ment, and tenure of office of salaried physicians and others; and the 
assurance of adequate income to nonsalaried practitioners. 
Attention has often been directed to the importance of a personal 
relationship between the physician and patient as a stimulus toward 
quality, and likewise to the right of the patient to select a physician 
in whom he has confidence. Our studies and conferences have 
impressed upon us that the personal relation required between phy- 
sician and patient is much more varied today than formerly, owing to 
the greater specialization of medicine and the varying requirements of 
different specialities. Urban life and greater mobility of population 
have combined with specialization to render the maintenance of 
personal relationship much more difficult than formerly, and also to 
render the choice by the patient among physicians and other medical 
resources much more complex and difficult than was the case when 
medical services were fewer in variety and simpler. 
The committee wishes to emphasize that all its studies and delibera- 
tions indicate clearly that its recommendations can be carried out 
not only without sacrifice in quality, but—more particularly—with 
the concurrent development of new opportunities and methods to 14 
HEALTH SECURITY 
strengthen existing safeguards and to advance the quality of medical 
care. The committee has already received assurances of utmost 
cooperation from the professional groups toward the attainment of 
these goals. 
THE NATIONAL HEALTH CONFERENCE 
We have already referred to the fact that the studies and recom- 
mendations of our technical subcommittee were submitted, at the 
suggestion of the President, to the National Health Conference, held 
in Washington, D. C., July 18-20, 1938. That conference included 
members of the professions concerned with public health and medical 
care, representatives of farm and labor groups and of employers, 
administrators of public welfare, educators, and members of the 
general public. The conference considered carefully the technical 
reports laid before its members. There was no significant disagree- 
ment as to the facts or as to their demonstration of broad and urgent 
unmet needs. 
The members of the conference were not asked to take action on 
our subcommittee’s recommendations, which were put forward only 
for discussion. 
Since that conference, and largely growing out of the intense public 
interest displayed in the work of the conference, the interdepart- 
mental committee has received a large volume of formal communica- 
tions and informal correspondence concerning these proposals. All 
these expressions of opinion have been weighed carefully in the 
formulation of the recommendations submitted in this report. The 
committee finds that its view of the need for a national health program 
and its statements of the objectives to be attained by such a program 
are substantiated by the direct experience of a very wide representa- 
tion of the American people, including those to be benefited as patients, 
those concerned as employers or public servants, and those whose 
daily work is the prevention of sickness or the care of the sick. 
RECOMMENDATIONS 
In line with its review of the facts and with the considerations out- 
lined in the preceding paragraphs, the committee submits four specific 
recommendations. These recommendations envisage a program de- 
veloped over a period of time. It is believed that the method of 
Federal-State cooperation, in which the program is grounded, will be 
surer and more effective, though necessarily less rapid, than any 
effort to provide a less flexible approach to the problem. These rec- 
ommendations envisage also the eventual provision of considerable 
sums of money. It should be pointed out that, in large part, such 
amounts represent a redirection of existing expenditures for more 
effective, humane, and equitable use; it may be anticipated further, 
that additional costs will be offset to a considerable extent by pre- 
vention of present burdens of dependency. 
The committee wishes to emphasize its intent, in formulating these 
recommendations, to present a plan which provides the protection 
and support of a national approach but leaves wide latitude for State 
initiative and freedom for State choice of the appropriate methods of 
meeting a common objective. While it is believed that such methods 
should vary, and that there should be variance in the dates at which HEALTH SECURITY 
15 
they are made effective, the committee is of the opinion that no ob- 
jective less wide than that which has been stated will serve to marshal 
the resources now available or in need of development to promote the 
health of the Nation. 
The committee’s specific recommendations may be stated briefly as 
follows: 
A. The committee recommends the expansion and strengthening of 
existing Federal-State cooperative health programs under the Social Secu- 
rity Act through more nearly adequate grants-in-aid to the States and, 
through the States, to the localities. 
1. General public-health services.—Fundamental to an expanding pro- 
gram of preventive services is the strengthening and extension of organ- 
ized public-health services in the States and in local communities. In 
addition to the strengthening of public-health administrative services 
and organizations generally, the expanded program should be directed 
specifically toward the eradication of tuberculosis, venereal diseases, 
and malaria; the control of mortality from pneumonia and from cancer; 
the development of more effective programs for mental hygiene and 
industrial hygiene, and related purposes. In addition, the program 
should include special provisions for the training of skilled personnel 
and for studies and investigations designed to advance knowledge and 
skill useful in carrying out the purpose of the program. 
2. Maternal and child-health services.—Included in this part of the 
recommended program are provisions for medical and nursing care of 
mothers and their newborn infants; medical care of children; services 
for crippled children; consultation services of specialists; more ade- 
quate provisions for the postgraduate training of professional personnel; 
and for studies and investigations of conditions affecting the health of 
mothers and children. The objective sought in this phase of the com- 
mittee’s recommendation is to make available to mothers and children 
of all income groups and in all parts of the United States the services 
essential for the reduction of our needlessly high maternal mortality 
rates and death rates among newborn infants, and for the prevention 
in childhood of diseases and conditions leading to serious disabilities 
in later years. 
B. The committee recommends grants-in-aid to the States for the con- 
struction, enlargement, and modernization of hospitals and related facili- 
ties where these are nonexistent or inadequate hut are needed, including 
the construction of health and diagnostic centers in areas, especially rural 
or sparcely populated, inaccessible to hospitals. The committee also 
recommends grants toward operating costs during the first years of such 
newly developed institutions to assist the States and localities in taking 
over responsibilities. 
Our technical subcommittee finds hospital accommodations and 
hospital and clinic services throughout the country not altogether 
well adapted to the varying needs of people living under different 
social, economic, and geographical circumstances. A long-range pro- 
gram is urgently needed to meet accumulated deficiencies, with special 
reference to the needs of rural areas and of low-income groups and to 
bring about such expansion of facilities as is necessary if preventive 
and curative services are to approach adequacy for the Nation. 
We need scarcely emphasize that hospital and related facilities 
should be built only after careful examination has shown the need in 
particular communities or areas, taking account of all available facili- 
ties useful for the service of the localities. 16 
HEALTH SECURITY 
C. The committee recommends that the Federal Government provide 
grants-in-aid to the States to assist them in developing programs of 
medical care. 
A State program of medical care should take account of the needs 
of all persons for whom medical services are now inadequate. Atten- 
tion has often been focused on those for whom local, State, or Federal 
Governments, jointly or singly, have already accepted some degree of 
responsibility through the public-assistance provisions of the Social 
Security Act and through work relief or general relief, and upon those 
who, though able to purchase food, shelter, and clothing, are unable 
to pay for necessary medical care. The committee’s studies show, 
however, that attention should more properly be focused on the needs 
of the entire population or, at least, on the needs of all low-income 
groups. Medical services are now inadequate among self-supporting 
people with small incomes as well as among needy and medically 
needy persons. 
The committee believes that choice of the groups to be served, the 
scope of the services furnished, and the methods used to finance the 
program should be made by the States, subject to conformity of 
State plans with standards necessary to insure effective use of the 
Federal grants-in-aid. 
To finance the program, two sources of funds could be drawn upon 
by the States: (a) General taxation or special tax assessments, and 
(b) specific insurance contributions from the potential beneficiaries of 
an insurance system. The committee recommends grants-in-aid to 
States which develop programs using either method, or a combination 
of the two, to implement programs of medical care. 
The committee believes it is of fundamental importance that a 
medical-care program developed by a State should be a unified pro- 
gram applicable to all groups to be served. It would be unsound to 
have one system of medical care for a relief population and another 
for self-supporting groups. A unified program might be developed 
through tax support for public medical services for all included 
groups; or through an insurance system financed by contributions, 
including contributions from public funds on behalf of persons in 
need; or through other arrangements. 
D. The committee recommends the development of social insurance to 
insure partial replacement of wages during temporary or permanent 
disability. 
The committee believes that insurance against temporary disability 
should be established through Federal-State cooperative arrange- 
ments. Advantage may be taken, in the design of a specific program, 
of experience already accumulated in the operation of unemployment 
compensation. An insurance system against temporary disability 
could furnish substantial benefits at a cost very considerably less 
than that involved in unemployment compensation. Some specific 
characteristics of temporary disability insurance and alternative 
methods of financing it have been studied by the Social Security 
Board. 
The committee believes that insurance against permanent disability 
should be established through liberalization of the Federal old-age 
insurance system, so that benefits become payable at any time prior 
to age 65 to qualified workers who become permanently and totally 
disabled. The costs could be met for many years to come from taxes HEALTH SECURITY 
]_7 
now levied for old-age insurance. Additional costs of modest size 
would have to be met 10, 20, or more years later. 
The committee believes it essential that in measures to effect any 
of these recommendations provision be made for concurrent study and 
evaluation, to insure the progressive development of health and med- 
ical services and the prompt application of new knowledge and skill 
for the benefit of all our people. 
A NATIONAL HEALTH PROGRAM: REPORT OF THE 
TECHNICAL COMMITTEE ON MEDICAL CARE 1 
A Summary 
The study of health and medical services in the United States made 
by the Technical Committee on Medical Care indicates that defi- 
ciencies in the present health services fall into four broad categories. 
1. Preventive health services for the Nation as a whole are grossly 
insufficient. 
2. Hospital and other institutional facilities are inadequate in many 
communities, especially in rural areas, and financial support for hos- 
pital care and for professional services in hospitals is both insufficient 
and precarious, especially for services to people who cannot pay the 
costs of the care they need. 
3. One-third of the population, including persons with or without 
income is receiving inadequate or no medical service. 
4. An even larger fraction of the population suffers from economic 
burdens created by illness. 
The Committee submits a program of five recommendations for 
meeting with reasonable adequacy existing deficiencies in the Nation’s 
health services. Estimates of the total additional annual costs to 
Federal, State, and local governments of Recommendations I, It, and 
III are also submitted. The Committee does not suggest that it is 
practicable to put into effect immediately the maximum recom- 
mendations. It contemplates a gradual expansion along well-planned 
lines with a view to achieving operation on a full scale within 10 years. 
Except insofar as they overlap and include portions of the first three 
recommendations, Recommendations IV and V involve chiefly a re- 
vision of present methods of making certain expenditures, rather than 
an increase in these expenditures. 
RECOMMENDATION I! EXPANSION OF PUBLIC HEALTH AND MATERNAL 
AND CHILD HEALTH SERVICES 
The Committee recommends the expansion of existing cooperative 
programs under title VI (Public Health Work) and title V (Maternal 
and Child Welfare) of the Social Security Act. 
A. EXPANSION OF GENERAL PUBLIC-HEALTH SERVICES (TITLE VI) 
Fundamental to an expanding program of preventive health services 
is the strengthening and extension of organized public-health services 
in the States and in local communities. It is recommended that 
1 Accepted and endorsed by the Interdepartmental Committee to Coordinate Health and Welfare Activ- 
ities. Presented to the President, February 14, 1938. See Explanatory Statement, p. 37. 
★H. Doc. 120, 76-1 3 18 
HEALTH SECURITY 
Federal participation in the existing cooperative program should be 
increased with a view toward equalizing the provision of general 
public-health services throughout the Nation. The Committee 
further recommends that increasing Federal participation be utilized 
to promote a frontal attack on certain important causes of sickness 
and death for the control of which public health possesses effective 
weapons. 
The Committee tentatively estimates that, at its peak, an adequate 
program of expanded public-health service would require additional 
annual expenditures by Federal, State, and local governments of 
$200,000,000 for these purposes: strengthening of public-health 
organization; the eradication of tuberculosis, venereal diseases, and 
malaria;-the control of mortality from pneumonia and from cancer; 
mental hygiene; and industrial hygiene. The Committee recommends 
that approximately one-half of these increased funds be provided by 
the Federal Government. 
B. EXPANSION OF MATERNAL AND CHILD-HEALTH SERVICES (TITLE V) 
Included in this part of the recommended program are provisions 
for medical and nursing care of mothers and their newborn infants; 
medical care of children; services for crippled children; consultation 
services of specialists; and more adequate provisions for the post- 
graduate training of professional personnel. The objective sought 
in this phase of the Committee’s proposed program is to make avail- 
able to mothers and children of all income groups and in all parts of 
the United States minimum medical services essential for the reduc- 
tion of our needlessly high maternal mortality rates and death rates 
among newborn infants, and for the prevention in childhood of dis- 
eases and conditions leading to serious disabilities in later years. 
The Committee recommends a gradually expanding program 
reaching at least by the tenth year a total additional expenditure of 
$165,000,000, distributed as follows: 
Maternity care and care of newborn infants $95, 000, 000 
Medical care of children 60, 000, 000 
Services for crippled children 10, 000, 000 
The Committee recommends that approximately one-half of the cost 
of the expended program should be met by the Federal Government. 
RECOMMENDATIONS II, III, AND IV: EXPANSION OF MEDICAL SERVICES 
AND FACILITIES 
The Committee has also explored the adequacy of services for the 
sick, the sickness experience of, and the receipts of, professional and 
hospital services by broad groups of the population. The Committee 
finds that the needs for diagnostic and therapeutic services to indi- 
viduals are greatly in excess of such accomplishments as might be 
effected by a strengthened program of preventive services—important 
as such services may be as a first step. Indeed, it has been recognized 
in Recommendation I that certain important causes of sickness and 
death require for their eradication or control, the application of 
diagnostic and therapeutic procedures through services to individuals 
in need of such care. 
The Committee finds that current practices in the provision of 
medical services and facilities fall far short of meeting these needs. It has taken account of personnel and facilities, financial support of 
services required by persons who are themselves unable to pay for the 
care they need, the sickness burdens of self-supporting persons, 
methods of paying for medical care and of assuring income for work- 
ers who are disabled by sickness. It finds that these needs warrant an 
expansion of medical services and facilities on a broader front than 
that contemplated in Recommendation I alone. 
HEALTH SECURITY 
19 
RECOMMENDATION II. EXPANSION OF HOSPITAL FACILITIES 
The Technical Committee has made a special study of deficiencies 
in existing hospital and other institutional facilities. It is impressed 
with the increasing part which hospitals play, year after year, in the 
health and sickness services. Without adequate hospitals and clinics, 
it is impossible to provide many of the importance services which 
modern medicine can furnish. 
The Committee finds hospital accommodations and hospital organ- 
ization throughout the country ill-adapted to the varying needs of 
people living under different social, economic, and geographical cir- 
cumstances. In hospitals offering general care, the percentage of 
beds supported by patients’ fees is out of proportion to the ability 
of the population served to pay, hence many general hospital beds 
are empty a large part of the time. Conversely, there are too few 
low-cost or free beds to satisfy the needs. By far the greater majority 
of these are found in our large metropolitan centers. There are wide 
areas—some 1,300 counties—having no registered general hospitals; 
others are served only by one or two small proprietary institutions. 
Only through hospitals located in the larger cities have out-patient 
clinics been developed to any considerable extent. Governmental 
tuberculosis sanatoria and mental institutions tend to be overcrowded, 
or are otherwise restricted in funds or personnel for rendering the 
community service which they should be equipped to give. 
The Committee recommends a 10-year program providing for the 
expansion of the Nation’s hospital facilities by the provision of 360,000 
beds—in general, tuberculosis, and mental hospitals, in rural and in 
urban areas—and by the construction of 500 health and diagnostic 
centers in areas inaccessible to hospitals. These new hospitals or 
units would require financial assistance during the first 3 years of 
operation. Special Federal aid for this purpose is suggested. 
Averaged over a 10-year period, the total annual cost of such a 
program, including special 3-year grants for maintenance of new 
institutions, is estimated at $147,400,000, divided as follows: 
S-year 
Construction maintenance 
General and special . $63,000,000 $21,600,000 
Tuberculosis . 15,000,000 6,000,000 
Mental 32,500,000 7,800,000 
Diagnostic centers 1,500,000 
Total average annual cost... 112,000, 000 35, 400, 000 
The Committee recommends that approximately one-half of this 
total annual cost be met by the Federal Government. It points out 
that a hospital construction program should not be undertaken unless 
there is a concurrent program to give continuing aid toward the cost 
of free services such as is included in Recommendation III. 20 
HEALTH SECURITY 
RECOMMENDATION III. MEDICAL CARE FOR THE MEDICALLY NEEDY 
The Committee is impressed with the evidence now available that 
one-third of the population which is in the lower income levels is re- 
ceiving inadequate general medical services. This applies to persons 
without income and supported by general relief, and to those being 
supported through old-age assistance, aid for dependent children, or 
work relief, and also to families with small incomes. These people are 
doubly handicapped. They have higher rates of sickness and disable- 
ment than prevail among groups with larger incomes, and they have 
lesser capacities to buy and pay for the services they need. Current 
provisions to assist these people—though generously made by many 
State and local governments, by voluntary organizations, and by pro- 
fessional practitioners—are not equal to meet the need. 
The Committee recommends that the Federal Government, through 
grants-in-aid to the States, implement the provisions of public medical 
care to two broad groups of the population: (1) To those for whom 
local, State, or Federal Governments, jointly or singly, have already 
accepted some responsibility through the public assistance provisions 
of the Social Security Act, through the work relief programs, or 
through provisions of general relief; (2) to those who, though able to 
obtain food, shelter, and clothing from their own resources, are unable 
to procure necessary medical care. It is estimated that, on the average, 
$10 per person annually would be required to meet the minimum 
needs of these two groups for essential medical services, hospitaliza- 
tion, and emergency dentistry. This part of the program might be 
begun with the expenditure of $50,000,000 the first year and gradually 
expanded until it reaches the estimated level of $400,000,000 which 
would be needed to provide minimum care to the medically needy 
groups. The Committee recommends that one-half of the total annual 
costs be met by the Federal Government. 
RECOMMENDATION IV. A GENERAL PROGRAM OF MEDICAL CARE 
The Committee directs attention to the economic burdens created 
by sickness for self-supporting persons. There is need for measures 
which will enable people to anticipate and to meet sickness costs on a 
budget basis. 
No conclusion has emerged more regularly from studies on sickness 
costs than this: The costs of sickness are burdensome more because 
they fall unexpectedly and unevenly than because they are large in the 
aggregate for the Nation, or, on the average, for the individual family. 
Except in those years when unemployment is widely prevalent, sick- 
ness is commonly the leading cause of social and economic insecurity. 
Without great increase in total national expenditure, the burdens of 
sickness costs can be greatly reduced through appropriate devices to 
distribute these costs among groups of people and over periods of time. 
The Committee recommends consideration of a comprehensive 
program designed to increase and improve medical services for the 
entire population. Such a program would be directed toward closing 
the gaps in a health program of national scope left in the provisions 
of Recommendations I and III. To finance the program, two sources 
of funds could be drawn upon: (a) General taxation or special tax HEALTH SECURITY 
21 
assessments, and (6) specific insurance contributions from the poten- 
tial beneficiaries of an insurance system. The Committee recommends 
consideration of both methods, recognizing that they may be used 
separately or in combination. 
Such a program should preserve a high degree of flexibility, in order 
to allow for individual initiative, and for geographical variations in 
economic conditions, medical facilities, and governmental organiza- 
tion. It should provide continuing and increased incentives to the 
development and maintenance of high standards of professional prep- 
aration and professional service; it should apportion costs and timing 
of payments so as to reduce the burdens of medical costs and to remove 
the economic barriers which now militate against the receipt of ade- 
quate care. 
Planning for a program of medical care of a magnitude to serve 
the entire population essentially must be approached as an objective 
to be fully attained only after some years of development. The role 
of the Federal Government should be principally that of giving 
financial and technical aid to the States in their development of sound 
programs through procedures largely of their own choice. 
RECOMMENDATION VI INSURANCE AGAINST LOSS OF WAGES DURING 
SICKNESS 
The Committee recognizes the importance of assuring wage earners 
continuity of income through periods of disability. A disability com- 
pensation program is not necessarily part of a medical care program, 
but the cost of compensating for disability would be needlessly high 
if wage earners generally did not receive the medical care necessary 
to return them to work as soon as possible. 
Temporary disability insurance can perhaps be established along 
lines analogous to unemployment compensation; permanent disability 
(invalidity) insurance may be developed through the system of old- 
age insurance. 
COSTS OF THE PROPOSED PROGRAM 
The maximum annual cost to Federal, State and local governments 
of Recommendations I, II, and III (with duplications eliminated) is 
estimated at about $850,000,000. This figure is the estimated total 
annual cost at the full level oj operation within a 10-year period, and is 
presented primarily as a gage of need. 
The estimated total includes (1) $705,000,000—the additional 
annual expenditures for certain general health services to the entire 
population and for medical services to limited groups of the popula- 
tion—the public assistance and otherwise medically needy groups— 
which should be reached within a 10-year period, and (2) $147,400,000— 
the approximate average annual cost of hospital construction and 
special grants-in-aid in the 10-year program proposed under Recom- 
mendation II. It is suggested that the Federal share of this amount 
would be approximately one-half. 
Recommendation IV is presented primarily as a more economical 
and effective method of making current expenditures for medical 
care, though it also makes provision for the medical care of persons 
who are not now receiving even essential services. An adequate 
general program of medical care is proposed in the form of alternative 22 
HEALTH SECURITY 
arrangements which may cost up to a maximum of $20 per person a 
year, i. e., no more than is already being spent through private pur- 
chase of medical care. Annual aid from Government funds would be 
necessary to provide services for the care of the medically needy as 
proposed in Recommendation III and for the parts of Recommenda- 
tion I which are included in the broad program set forth in Recom- 
mendation IV. 
The Committee calls attention to the fact that, in some important 
respects, the five recommendations present alternative choices. How- 
ever, the Committee is of the opinion that Recommendations I and II 
should be given special emphasis and priority in any consideration of a 
national health program more limited in scope than that which is 
outlined in the entire series of recommendations. 
The Technical Committee on Medical Care is firm in its conviction 
that, as progress is made toward the control of various diseases and 
conditions, as facilities and services commensurate with the high 
standards of American medical practice are made more generally 
available, the coming decade, under a national health program, will see 
a major reduction in needless loss of life and suffering—an increasing 
prospect of longer years of productive, self-supporting life in our 
population. 
Chairman, Martha M. Eliot, 
I. S. Falk, 
Social Security Board. 
Joseph W. Mountin, 
George St. J. Perrott, 
Clifford E. Waller, 
Public Health Service. 
Children's Bureau. 
Expansion of General Public Health Services 
PART I. THE NEED FOR EXPANDING PUBLIC HEALTH SERVICES 
Some recognition of the necessity for protection of the public health 
is to be found in the legal enactments of all States and in most of 
their political subdivisions. Unfortunately, the existence of a health 
department does not always indicate that the community has a com- 
plete or adequate health program. For example, less than a third 
of the counties and even a smaller proportion of the cities employ 
full-time, professional health officers. The village and township 
health officer more often than not is some local lay citizen who takes 
time out from his other work to inspect nuisances or tack up quaran- 
tine signs. 
States expend through their health departments, on the average, 
11 cents per capita, while some State appropriations fall as low as 
3 cents. Many local official health organizations have budgets which 
figure out to be no more than a few cents per capita. Health depart- 
ments are fairly high on the scale when their annual appropriations 
reach 50 cents per capita, while the very few organizations, mostly 
large city health departments, having budgets that approach $1 per 
capita fortunate indeed. With budgets of this low order, health 
departments are expected to provide service in vital statistics, labo- 
PUBLIC HEALTH ORGANIZATION HEALTH SECURITY 
23 
ratory diagnosis, communicable-disease control, maternal and child 
hygiene, protection of food supply, environmental hygiene, and to 
discharge other responsibilities that may be placed on this agency. 
A preventive program designed to reach any reasonable degree of 
intensity obviously is out of the question under such limitations. 
A start towards remedying this situation was made with the passage 
of the Social Security Act, title VI, Public Health Work. The 
relatively small sums of Federal money thus far provided have made 
possible some leveling up in local health organization and some enrich- 
ment of health service generally. The impetus toward an expanding 
public health program created by the Federal participation is reflected 
in the increase in rural health services during the two and a half years 
of operation under title VI. At the beginning of the calendar year 
1938 there had been a net gain of 623 in the number of counties under 
full-time health administration over the number reported at the close 
of 1934. There are now 8 States in which all counties are served by 
full-time health units or districts, as compared with the 3 so organized 
at the close of the calendar year 1935. However, it should not be 
inferred that even in the counties now under full-time health ad- 
ministration the service at present is adequate. Many of the counties 
are being served by extremely “thin” district health units. Of only 
a very small number may it be said that the service is even fairly 
adequate. 
The situation in many of our smaller cities, and in some of the larger 
ones, is almost as bad as that existing in a large part of our rural area. 
There are numerous urban communities throughout the country in 
which health activities today are under the direction of part-time 
physicians engaged in private practice or lay health officers, neither 
possessing training in modern public health administrative practice. 
In some of these communities such health protection as has been 
afforded has been largely incidental to improvements instituted for 
economic and esthetic reasons, or to ready access of the population to 
good medical care, rather than to the activity of the health depart- 
ment. In many of our cities the principal health department activity 
still consists in the inspection of private premises for nuisances having 
little bearing on public health, and in an attempt to control com- 
municable diseases by quarantine procedure—a method admitted by 
leading health workers to be of little avail in reducing the incidence of 
communicable diseases. More specifically, many of the milk supplies 
for urban communities are still far from being as safe as they should 
be, and the unsightly, open-back, insanitary privy still exists in the 
outlying sections of most of our small cities, with the result that 
typhoid fever is rapidly becoming more prevalent in towns and small 
cities than in the rural areas. 
The need for Federal aid is not confined to rural and urban health 
organizations. Not more than half of the State health departments 
are adequately staffed or satisfactorily equipped to render the services 
which they alone can give, regardless of the extent to which local 
facilities may be developed. 
The gains made in response to the stimulus afforded by Federal 
participation in State and local health work assume their deepest 
significance as evidence of the practicability and desirability of an 
expanding program of general public health services. Existing needs, 
however, far outweigh the gains and serve as a warning against the 24 
HEALTH SECURITY 
assumption of a complacent attitude with respect to recent accom- 
plishments. There still remain large sectors of the United States 
where the very foundation of a health program has not been laid— 
namely, a nucleus of full-time, competent, and well-trained persons 
having a professional point of view. Without such a minimum in 
staff organization, even the elementary services are not possible on an 
effective scale. Neither can there be an orderly enlargement of 
community health services without the framework expressed by a 
properly constituted health department. 
SPECIFIC PUBLIC HEALTH PROBLEMS 
In addition to strengthening health organization for general pur- 
poses, there is a need for concerted attack on specific problems of 
national health. The needs as well as the program of action in 
maternal and child health are covered in another section of the 
Technical Committee’s report. Service of comparable intensity 
should be developed in tuberculosis, venereal diseases, pneumonia, 
cancer, malaria, mental hygiene, and industrial hygiene. With pro- 
grams of proper magnitude, the eradication of tuberculosis, venereal 
disease, malaria, and certain occupational hazards may be envisioned; 
lowering of mortality from pneumonia and cancer is possible; and in 
the case of mental disorders, morbidity can be reduced. Each of 
these problems will now be considered individually. 
Tuberculosis.—Students of this problem are in substantial agree- 
ment to the effect that programs now may be planned with a view 
to final eradication of tuberculosis, or at least to effect a reduction 
to a point where this disease is no longer a significant factor in mor- 
bidity and mortality. Despite the great reduction in death rate that 
has been accomplished, tuberculosis is still a major cause of death and 
disability in the United States. While for the whole population it 
ranks seventh as a specific cause of death, for the age group 15 to 45 
years, its position is second only to that of accidents. The disease 
works its greatest havoc among Negroes, among workers in certain 
occupations, and generally among persons of low income. 
On the average, 70,000 persons die of tuberculosis annually; and 
for each death there are estimated to be about five living cases; thus, 
in any year, the active disease probably is represented by 420.000 
individuals. Within their families, these cases expose over a million 
persons to infection. By the working of this cycle alone, there is 
maintained a tuberculous population numbering 1,500,000. 
Venereal diseases.—Legislation enacted by the last Congress may 
be cited as evidence of the growing appreciation which representative 
bodies now have for the public health importance of syphilis and 
gonorrhea. Funds appropriated by this act, coupled with those of 
State and local health agencies, will make possible improvement of 
laboratory service, organization of additional and better treatment 
facilities, and the free distribution of standard remedies for use by 
public clinics and private physicians. The sums of money now avail- 
able, large though they may seem in comparison with previous annual 
appropriations, will prove sufficient only for beginning the type of 
attack on venereal diseases that is indicated. 
To substantiate this point, no more data than the following need 
be adduced: It is estimated that approximately 518,000 new patients HEALTH SECURITY 
25 
infected with early syphilis seek treatment each year; the gonorrhea 
cases coming to medical attention number about 1,037,000. It is 
probable that even these figures, particularly the latter, grossly under- 
state the amount of recent infection. Some 60,000 cases of congenital 
syphilis occur annually; syphilitic involvement of the heart and blood 
vessels and of the nervous system result in 50,000 deaths each year 
in addition to those specifically assigned to syphilis. At least 10 
percent of first admissions to hospitals for mental disease are attributa- 
ble to syphilis in its manifestation as general paralysis. 
Early and adequate treatment of syphilis and gonorrhea is the best 
method, in fact it is the only feasible one knowm at the present time, 
for cutting dowrn the incidence of these diseases and for mitigating 
their consequences. 
Pneumonia.—Effective serums are nowr available for treating the 
more common forms of pneumonia. If serums were used generally, 
it is estimated that the gross pneumonia mortality could easily be 
reduced by more than 25 percent. The possibility it offers for saving 
of lives may be appreciated w'hen one understands that 150,000 deaths 
each year are charged to pneumonia either as a primary or contribu- 
tory cause of death. 
According to the best information at hand, 5 percent would be a 
liberal estimate of the pneumonia cases amenable to serum therapy 
that now receive therapeutic serum. Perfected, or concentrated, 
serum is a new product wliich has not yet been sufficiently popularized; 
the cost is still high, varying from $25 to $75 per case. Moreover, 
serum therapy is not feasible except where rapid and accurate labora- 
tory diagnostic service is available. In other words, the prevention 
of pneumonia mortality is an expensive job that requires certain 
special facilities and a scheme for coordinating the resources of public 
agencies with those of practicing physicians. Present activities in 
this field are generally inadequate. Only 8 of the 48 States have 
active programs for accurate diagnosis by typing and for free dis- 
tribution of serum. In 15 States, no health department laboratory 
facilities are available for rapid typing of pneumococci, and 29 percent 
of American cities of 100,000 population and over have made no 
provision for pneumonia typing as an activity of their health depart- 
ment laboratories. 
Cancer.—A hopeless attitude with respect to the outcome of all 
cases of cancer is no longer justified in view of the results obtained 
by modern therapy. Cancer in accessible parts of the body yields 
to varying combinations of surgery and radiation. Cancers at these 
sites account for over 40 percent of the mortality. Should success be 
achieved in only half of these cases, an annual saving of 30,000 lives 
would be effected. 
Programs for prevention of mortality from cancer, like so many 
other public health services involving individual care of patients, have 
been slow in starting. At the present time, only 7 States have active, 
State-wide programs. Isolated tumor clinics may be found in some 
of the better organized out-patient departments of hospitals, but these 
are usually located in the larger cities. Notwithstanding the limited 
facilities now available, sufficient experience has accumulated to guide 
administrative practice. 
Malaria.—The malarious area in the United States has gradually 
receded during the past 75 years. However, the Mississippi Delta 
★H. Doc. 120, 76-1 4 26 
HEALTH SECURITY 
and certain of the Southeastern States remain endemic foci. Even 
in these regions, it is now largely a rural disease, but there it shows 
little tendency toward spontaneous decline. In theory, the disease 
should be eradicated easily by control of the Anopheles mosquito and 
other established procedures. In practice, however, economic diffi- 
culties stand in the way. 
Of late, substantial progress in the application of malaria-control 
measures has been accomplished through work-relief projects financed 
by the Works Progress Administration. These programs entailed 
drainage operations designed to eliminate mosquito breeding places. 
While it is expected that additional progress may be made in this way 
in the future, the need for malaria-control measures of a diversified 
nature is of sufficient importance to justify a more permanent basis of 
financial support. 
Mental hygiene.—Problems of mental ill health are represented only 
in part by the half million persons confined to institutions. At large 
in the general population, there is a somewhat greater number of 
people who are psychotic or defective in varying degrees. In addition, 
there is an indefinite but still larger proportion of persons below par 
from the standpoints of intelligence or emotional balance. Because 
of their personality make-ups they encounter difficulty in school, in 
industry, and in their relations with others. Such people, without 
treatment or guidance, contribute little to national progress. Aside 
from the economic and social problems associated with these more 
obvious groups, many people in all walks of life are unable to experience 
the happiness and fullness of life associated with mental and physical 
health. Because of individual emotional disturbances, family discord 
grows apace, antisocial behavior is bred, and industrial differences 
often end in unnecessary strife. Sufficient knowledge is at hand, 
which, if more generously applied, could resolve many of these emo- 
tional conflicts. 
In the absence of specific therapy for so many of the mental dis- 
orders, the whole problem must be approached on a broad front. 
Persons who are seriously psychotic, those of very low mentality, and 
the habitually criminal, must be found and given appropriate institu- 
tional care. The benefits of modern diagnostic treatment and guid- 
ance methods must be made more generally available for the border-line 
groups. A program involving Federal assistance toward the expan- 
sion of both custodial and preventive facilities and services is indicated. 
Industrial hygiene.—The health of more than 15 million people who 
constitute that important segment of our population engaged in 
industrial occupations, and on whom the lives and health of so many 
depend, should be of paramount concern to those entrusted with the 
welfare of this Nation. It is the object of industrial hygiene to protect 
and improve the health of this large group. This is best accomplished 
through the recognition of certain fundamental requirements of 
industrial hygiene. 
The problem of determining the extent of illness among industrial 
workers remains one of the major functions of industrial hygiene. Any 
health program is dependent upon the standards and completeness of 
the health supervision provided industrial workers. At the present 
time, inadequate services exist, especially in plants employing 500 or 
less workers, representing some 62 percent of the working population. 
The need for industrial health education and training of professional HEALTH SECURITY 
27 
personnel is general throughout the country. Important work must 
also be done in treating and caring for workers affected by exposure to 
toxic substances or other detrimental environments. The development 
of control and preventive measures for reducing occupational diseases 
needs attention. Laboratory and field research are also functions 
which must be maintained and enlarged, since new substances and 
environments are constantly being developed which may affect the 
health of exposed workers. 
PART II. RECOMMENDATION 1-A 
The Technical Committee on Medical Care submits for considera- 
tion a program containing five specific recommendations. The first 
recommendation is concerned with the expansion of present Federal- 
State programs for public-health work and material and child-welfare 
services under the Social Security Act. 
In view of the fact that a good beginning has been made in more 
recent years toward carrying out health activities through well-planned 
and directed effort, the Committee therefore proposes: 
Recommendation 1-A: Expansion of the Existing Federal-State Coopera- 
tive Program Under Title 17 (Public Health Work) of the Social 
Security Act 
It is recommended that Federal participation in State and local 
health services under title VI be extended through increased authori- 
zation for grants-in-aid to the States. Increasing Federal participa- 
tion and leadership should promote the inauguration and expansion of 
fundamental and accepted health services and the extension of newly 
developed services requiring special administrative techniques, under 
State and local operation and control. 
PUBLIC HEALTH ORGANIZATION 
The Technical Committee recommends that primary consideration 
be given to the development of local health organization with special 
reference to units for counties and large cities, and to the provision 
in the State and Federal agencies of consultants who are equipped to 
serve the local departments. Local health services will be directed 
by full-time health officers who will have as assistants an adequate 
staff of trained public-health workers. The maintenance of facilities 
for the training of additional public-health personnel and allied pro- 
fessional workers should continue. 
To further the development of a basic health department structure 
for the Nation, the Committee recommends the addition of not less 
than $23,000,000 annually to the amount now available from all 
sources—Federal, State, and local. This would be utilized largely 
for providing additional full-time health officers, epidemiologists, 
public health nurses, sanitary engineers, sanitarians, laboratory tech- 
nicians, and other personnel. 
SPECIFIC PUBLIC HEALTH PROBLEMS 
The Committee further recommends that the part of the proposed 
national health program concerned with the expansion of public 28 
HEALTH SECURITY 
health services under the Social Security Act be directed particularly 
toward reducing disability and premature mortality from certain 
important causes of sickness and death, with which public health is 
already equipped to deal in an effective manner through measures of 
proven value. 
Tuberculosis.—A control program of the kind recommended by 
health authorities for the eradication of tuberculosis embraces case- 
finding, especially by X-ray examination of contacts to known cases; 
isolation and treatment (usually bed-care) of persons with active 
disease; and periodic observation of those whose disease is latent or 
quiescent. All of these procedures should be followed in an aggressive 
manner throughout the United States. 
The Technical Committee on Medical Care recommends preven- 
tion of the spread of tuberculosis through just such a program of case- 
finding, directed particularly toward persons in areas of economic 
need and in age groups among whom the incidence of the disease is 
high; of providing adequate clinics under the direction of medical 
specialists for the examination of all cases, especially contact cases; 
of more extensive hospitalization of incipient cases; of the isolation of 
open cases; and of follow-up and rehabilitation of arrested cases. 
Leadership may be expected of public health agencies, but, first, 
sufficient funds for defraying the costs of an active campaign must 
be placed at their disposal. Over and above the amounts specified 
in Recommendation II for tuberculosis hospital construction and 
temporary maintenance, the Technical Committee recommends that 
$43,000,000 be made available annually from all sources for other 
elements of the tuberculosis program. Of this amount, $37,500,000 
would be used toward defraying the costs of hospital care for tuber- 
culous patients; the remaining $5,500,000 would be set aside for case- 
finding and other field services. 
Venereal diseases— The Technical Committee recommends a gradual 
increase in Federal, State, and local appropriations for the control of 
the venereal diseases until a level of $50,000,000 per annum has been 
reached. Such a program would be developed along the well-estab- 
lished lines now being pursued. 
Pneumonia.—For the development by States of programs for 
reducing pneumonia mortality, the Committee recommends annual 
appropriations from all sources amounting to $22,000,000. One- 
half of this amount would be available for the purchase of serum; 
the other half would be used for the support of laboratories, nursing, 
and other field services. For the provision of serum, however, this 
estimate deals with the medically needy only. 
The extension of typing facilities, the provision of free serum for 
every case of pneumonia requiring it, as well as adequate medical and 
nursing care, either in the home or in hospitals, for all persons unable 
to pay the cost of such services, are inherent in the effectiveness of 
a pneumonia control program. Such a program should also provide 
for training of administrative and technical personnel required in its 
development as an accepted public health activity, and should in- 
tegrate the efforts of the private physician on whom rests the ultimate 
responsibility for the success of the program. 
Cancer.—The prevention of mortality from cancer necessitates the 
setting up of diagnostic and treatment centers in sufficient numbers 
to be accessible for people in all parts of each State. Such facilities HEALTH SECURITY 
29 
may be organized as new and self-contained units, or they may operate 
in conjunction with preexisting general hospitals. The latter scheme 
can be made an important adjunct of a central State hospital. In this 
way, the resources of the State are made a part of general medical 
care and incorporated into preexisting facilities. Every cancer 
center, however, should have certain prerequisites. Among these 
may be mentioned a medical staff on which is represented the various 
specialties of medicine associated with the diagnosis and treatment of 
cancer, a pathological laboratory, X-ray equipment for deep therapy, 
radium, and hospital beds. Since cancer is a chronic disabling illness 
that entails high costs for diagnosis and care, it is essential that 
facilities be financed in very large measure from sources other than 
patients’ fees. 
Public clinics are at present totally inadequate to meet the need for 
the diagnosis of cancer. The Committee recommends the immediate 
extension of such diagnostic facilities, with modern equipment and 
operated by trained medical and technical personnel. The develop- 
ment of treatment centers for ambulatory cases requiring periodic 
application of radium or X-ray therapy is required, as well as the 
provision of medical and nursing care, either in the home or hospital, 
for persons unable to purchase such services. Such cases will require 
supervision after their release from treatment. In addition, a basic 
plan of lay education, emphasizing the importance of early diagnosis 
of cancer, should be a part of the general cancer program. 
The Technical Committee recommends for the prevention of 
mortality from cancer, additional appropriations, from Federal, State, 
and local sources, of $25,000,000. These funds would not be used for 
fundamental research, since no duplication of present Federal effort 
is contemplated in the Committee’s program. Provision for an inten- 
sive program of cancer research, under Federal leadership, has been 
made in the National Cancer Act of 1937. The funds recommended 
by the Committee would be used by the States in the establishment of 
diagnostic and treatment centers and for assisting in meeting the costs 
of hospital care. During the early years, expenditures for facilities 
would be relatively large, but once these had been established, pro- 
portionately more could be devoted to the actual care of patients. 
Malaria.—The Committee recommends the establishment in State 
and Jocal health departments, within malarious areas, of definite units 
that will give particular attention to all the aspects of malaria control. 
In addition to extending and maintaining drainage systems already 
begun, a malaria program would embrace a concerted attack on the 
mosquito and an attempt to eliminate residual parasites in clinical 
cases and in “carriers” of the infection. Obviously such a program 
will involve considerable expense. The Committee recommends 
annual Federal, State, and local appropriations of $10,000,000 to be 
expended by health agencies in this field. 
Mental hygiene.—Another section of the Committee’s report 
(Recommendation II) contains a program involving Federal assistance 
toward enlarging institutional facilities for the care of the mentally ill 
and defective. In addition to supplying needed beds, the funds pro- 
posed in Recommendation II should be used to improve diagnostic 
and treatment facilities. Thus, State institutions will be in a better 
position than most of them now are to exert influence in a sound 
program for mental hygiene. It seems only proper that these insti- 30 
HEALTH SECURITY 
tutions should be the agencies through which the program for mental 
hygiene should be developed. From the viewpoints of economy, 
efficiency, and practicability, therefore, it is possible to visualize the 
initiation of a mental hygiene program in the several States with such 
institutions serving as centers for the provision of necessary services. 
In the contemplated program of mental hygiene, provision would 
be made for voluntary admission of patients for intensive treatment 
of acute and recoverable forms of mental illness, with a view toward 
preventing permanent disability and restoring such patients to the 
community. The proposed mental hygiene centers would also provide 
clinics for the diagnosis, treatment, and guidance of persons suffering 
from maladjustments not requiring hospital care. The staff of the 
center would also provide consultation services to local physicians, 
health authorities and the courts. The resources of schools, churches, 
and industry for mass instruction would be used under the guidance of 
the center to teach the basic principles of mental health. 
The development of a field service, extending to surrounding areas, 
and equipped to provide such diagnostic, consultant, and guidance 
services would require additional funds for the employment of phy- 
sicians, auxiliary personnel, and for other expenses of such a service. 
Over and above the sums designated in Recommendation II for 
structural improvements in State institutional facilities for mental 
disease control, the Committee therefore recommends appropriations 
for the provision of field programs in mental hygiene. The funds 
appropriated from all sources should reach the sum of $10,000,000 as 
rapidly as possible and should continue annually thereafter. 
Industrial hygiene.—Recent developments in organization for in- 
dustrial hygiene demonstrate what may be accomplished under the 
leadership of the Federal Government. Prior to January 1936, only 3 
States and 1 city had programs for industrial health. The very 
limited funds available since then through title VI of the Social Secur- 
ity Act have made possible the organization of units in 21 additional 
State health departments and 3 city health agencies. The plan of 
development should continue until a unit has been established in every 
State and in those local health jurisdictions where the problem justifies. 
Once the basic frame work of organization has been built up, technical 
personnel, laboratory facilities, and the necessary number of field con- 
sultants should be added. An appropriation of not less than $20,- 
000,000 is needed annually by the health agencies for essential research 
and for preventive work in the States. 
TOTAL COSTS 
The estimated maximum annual costs of the expanded programs 
which have been outlined would be as follows: 
1. Public health organization $23, 000, 000 
2. Tuberculosis 43, 000, 000 
3. Venereal diseases 1 47, 000, 000 
4. Pneumonia 22, 000, 000 
5. Cancer 25, 000, 000 
6. Malaria - 10,000,000 
7. Mental hygiene 10, 000, 000 
8. Industrial hygiene 20, 000, 000 
Total 200,000,000 
i $3,000,000 already appropriated by the Federal Government for the current Federal fiscal year. HEALTH SECURITY 
31 
The preceding table showing services needed in addition to those 
now provided under existing appropriations indicates in each instance 
the total estimated amounts required from all sources—Federal, 
State, and local—at the time when the recommended programs 
would reach their maximum intensity. The Committee wishes to 
make it clear, however, that the estimated maximum amounts are, 
to a certain extent, tentative in character. It is difficult to forecast 
very accurately just how much money would be needed for certain 
programs at their peak of operation. Much more accurate estimates 
undoubtedly could be made after opportunity were afforded to see 
how far the amounts estimated and presented here would go in meeting 
the specific problems. The Committee does not suggest that the 
maximum amounts recommended for operation at the peak should 
be made available during the first year. Before these programs can 
be organized and placed in operation successfully, the necessary 
technical and professional personnel must be recruited, additional 
physical facilities provided, and States and local communities must 
have time to make additional appropriations. 
It should be pointed out here that certain programs with which 
this section of the report deals provide for some services which would 
be covered to a considerable extent by programs presented in other 
parts of the Committee’s report. To the extent that costs may be 
duplicated by provisions in succeeding parts of the whole program, 
the amounts recommended in this section could be reduced if the 
funds were provided under the other programs. 
While the operation of the programs recommended would call for 
considerable sums during the years of full operation, it need not be 
assumed that expenditures for all of the items would have to remain 
at the maximum level indefinitely. Indeed, should the proposed 
activities prove as effective as it is believed they would, the costs of 
maintaining services for the control of certain preventable diseases 
might be expected to diminish progressively and be greatly reduced 
in the future as the eradication of these diseases is effected. 
Of the total amount recommended in this report for the expansion 
of preventive health services, it is considered proper that the Federal 
Government might be expected to contribute approximately half for 
the country as a whole. However, this should not be interpreted to 
mean that matching necessarily would be required on a 50-50 basis 
in each State. The basis for determination of State allotments and 
requirements set up for matching obviously should take into account 
such factors as the extent of each problem, the status of financial 
resources in each State, and other factors that might be given con- 
sideration. 
It is suggested that in a 10-year program, the probably necessary 
increases in appropriations by the Federal Government for grants-in- 
aid to the States and for administration, demonstration, and investiga- 
tion, exclusive of the expected State and local expenditures, might 
start at $10,000,000 for the first year, and gradually increase until a 
maximum of $100,000,000 was reached at the beginning of the seventh 
year. 
With respect to the administration of such additional Federal 
appropriations as might be provided, the Committee is of the opinion 
that the procedure which now obtains in the administration of Federal 
funds available for grants to the States under title VI of the Social 32 
HEALTH SECURITY 
Security Act might well serve as a desirable guide for the future. It is 
proposed that the Federal Government would continue to provide 
leadership and technical advisory services which it now offers in 
addition to financial aid to the States. Plans for the work would be 
initiated in the State health departments. The actual administration 
and control of activities carried on within the States would remain, 
very properly, in the hands of the State and local authorities. The 
chief function of the Federal Government should be that of acting as 
an equalizing agent among the several States in order to overcome 
inequality in financial resources and public health problems, to provide 
the leadership and guidance essential to the successful establishment 
and maintenance of a properly coordinated, Nation-wide attack on 
the important causes of disability and mortality in the country as 
a whole. 
Expansion of Maternal and Child Health Services 
The need for an expanded program of maternal and child health 
services has been pointed out by the Technical Committee on Medical 
Care in its report to the Interdepartmental Committee. It is the 
opinion of the Committee that in any plan for a national health pro- 
gram, primary consideration must be given to developing adequate 
provision for maternity care and for safeguarding the health and 
growth of the Nation’s children. 
Since the first grants to the States for maternal and child health 
under the Social Security Act became available in 1936, the public 
health agency in every State, the District of Columbia, Alaska, and 
Hawaii has strengthened and extended its maternal and child health 
program. Our two and a half years’ experience with this program 
and with Federal grants to the States for services for crippled children 
has made us aware of where these activities fall short and has given 
us a basis of administrative experience on which we can plan for 
needed expansion. 
The most serious deficiency in the present maternal and child health 
program is lack of provision for medical care for mothers and children 
who are so situated that they cannot obtain needed care without some 
form of assistance from the community. 
The advances that have been made in scientific knowledge and pro- 
fessional skill in conserving the lives and health of mothers and 
children place upon us the obligation to find the ways and means 
whereby the whole population can benefit from this knowledge and 
skill. 
PART I. EVIDENCES OF NEED FOR AN EXPANDED PROGRAM 
SPECIAL NEEDS OP MATERNITY AND INFANCY 
The health and security of children depend to a great extent on the 
life and health of the mother. 
Each year a birth occurs in the households of 2,000,000 families in 
the United States, an event, the cost of which must be rated in the 
category of major medical expenditures. To society the outcome of 
these 2.000,000 births in terms of the survival and health of the 
mother and child is of sufficient significance to warrant the provision 
by government of facilities to insure the best possible care for all who 
are unable to provide it from their own resources. HEALTH SECURITY 
33 
Today there is a great and unnecessary wastage of maternal and 
infant life, and impairment of health is widespread among mothers 
and children. 
Each year about 14,000 women die from causes connected with 
pregnancy and childbirth; about 75,000 infants are stillborn; nearly 
70.000 infants die in the first month of life, four-fifths from causes 
associated with prenatal life or the process of birth; and at least 
35.000 children are left motherless. Physicians estimate on the basis 
of experience that from one-half to two-thirds of the maternal deaths 
are preventable; that the stillbirth rate can be reduced possibly by 
two-fifths; and that the deaths of newborn infants can be reduced 
at least one-third and probably one-half. This would mean the sav- 
ing each year of more than 70,000 lives. 
The maternal mortality rate in the United States is high, and there 
has been but slight decline during the 22 years for which we have 
records. In 1936, the rate was 57 deaths per 10,000 live births. 
Rates varied widely in different States, from 40 in New Jersey and 
Rhode Island to 91 in Arizona and 90 in South Carolina. In indi- 
vidual counties, the range was even wider, from no maternal deaths 
at all for a 5-year period to rates of more than 200 per 10,000 live 
births. It is well recognized that major reductions in deaths from 
toxemias of pregnancy and from sepsis associated with delivery 
could be made at once if facilities for proper prenatal and delivery 
care were to be made universally available. These two causes to- 
gether account for nearly two-thirds of all maternal deaths. Where 
proper facilities have been made available, the maternal death rate 
has been reduced to about one-half that of the country at large. 
In the death rate of infants under one month of age, there has been 
but slight decline during the 22 years of record, and no decline in the 
death rate on the first day of life. These deaths are closely associated 
with the problems of maternity care and, as in the case of stillbirths, 
reduction in rate should result from more skillful care. Nearly one- 
half of all deaths in the first month of life are among prematurely 
born infants. With proper care of the mothers, many premature 
births could be prevented, and with proper care of the infants, a larger 
proportion could be saved. 
Notwithstanding the progress that has been made in reducing 
infant mortality in the first year of life, there are still each year some 
53.000 deaths of infants in the second to the twelfth month of life. 
That these deaths are closely associated with economic conditions is 
too well known to need discussion. In spite of great gains, there are 
still areas of the country and special groups in which the mortality 
in this age group is practically as high today as it was for the country 
as a whole 20 years ago. Since 1929, infant mortality in rural areas 
has been higher than in cities. If preventive measures so successfully 
applied in many places can be made available in all cities and rural 
areas, they should bring a further reduction in our infant mortality. 
A few salient facts will indicate the inadequacy of present provisions 
for maternal and infant care. Recent studies have shown that many 
women receive no prenatal care or inadequate care. In 1936 nearly 
a quarter of a million women did not have the advantage of a physi- 
cian’s care at the time of delivery. In 1936 only 14 percent of the 
births in rural areas occurred in a hospital, as contrasted with 71 
percent in cities. For the great majority of the 1,000,000 births 
★II. Doc. 120, 76-1— 34 
HEALTH SECURITY 
attended each year in the home by a physician, there is no qualified 
nurse to aid in caring for the mother and baby. 
Although progress is being made under the Social Security Act in 
developing maternal and child health services, there are still about 
1,000 counties in which no public health nurse is employed to serve 
rural areas. In some rural areas one nurse must serve a population 
of as many as 25,000 or more, whereas in cities she serves, on the 
average, a population of about 5,000. Such a nurse is one of the 
first essentials of an educational maternal and child health program. 
She should also be available to aid the mother at time of delivery, 
but funds have not been sufficient to provide nursing care at delivery 
or medical care, except to a limited extent on an experimental basis. 
It is estimated that more than 1,100,000 births occur each year in 
families that are on relief or have total incomes (including home pro- 
duce on farms) of less than $1,000. Health officers report that many 
expectant mothers, because of lack of funds, go without proper pre- 
natal care or hospital care and do not seek the services of a physician 
until too late to save them from serious illness or death. 
In most communities resources are limited for providing medical, 
nursing, and hospital care at the time of childbirth. Certain com- 
munities, mostly urban, have provided a physician’s care and hos- 
pital care through public or private effort, but there has, heretofore, 
been no planning on a national scale to make medical and nursing 
care at the time of delivery available, either in the home or in the 
hospital, for mothers in families that cannot provide such care 
unaided. 
•The increasing proportion of persons in the older age periods has 
been accompanied by a decline in the proportion of children in the 
population. The conservation of child life is, therefore, imperative 
as a measure for maintaining in the future the proportion of people 
in the productive ages necessary to an economically productive 
nation. 
During childhood, exclusive of the first year, the probability of 
dying is less than in adult life, but the probability of being sick is 
greater than that for adults. Although the average duration of ill- 
ness is less than in later years, such illnesses often result in protracted 
or permanent disability. In the recent National Health Survey in 
83 cities it was found that of all children under 15 years of age having 
illnesses that disabled them for 7 days or more, 28 percent had had 
neither a physician’s care nor hospital care. The proportion going 
without such care was largest among children in families with incomes 
■of less than $1,000 a year but not on relief (33 percent), larger even 
than among children in families on relief (29 percent). 
In the period 1934-36, on the average, 14,000 children under 15 
years of age died annually from whooping cough, measles, diphtheria, 
and scarlet fever; 35,000 from pneumonia and influenza; 19,000 from 
diarrhea, enteritis, and dysentery; 15,000 from accidents; 4,000 from 
cardiac conditions largely rheumatic; and 4,000 from tuberculosis— 
an average annual total of 91,000 deaths. These figures represent 
■only a small proportion of the total number of children who are af- 
fected by these conditions and who, though they recover, may have 
■suffered permanent injury to their health. The proportion of deaths 
tthat are preventable is not known, but there is no doubt that many 
SPECIAL NEEDS OF CHILDREN HEALTH SECURITY 
35 
deaths and much subsequent ill health could be prevented by such 
measures as more adequate control of communicable disease, protec- 
tion of the milk supply, and systematic health supervision, and by 
early diagnosis and prompt treatment of conditions and diseases that, 
without such treatment, tend to become serious or chronic. 
In addition, there occur also in childhood many relatively minor 
conditions that interfere with growth and development or with the 
general health of the child. Prompt treatment of these is often as 
important in preventing future disability as is the treatment of more 
serious diseases. 
Child health centers and clinics, to which parents, otherwise unable 
to obtain service, may take their children for health supervision or for 
diagnosis and treatment, are still lacking or are insufficient in numbers 
in many areas. Reports from 43 States show that in 1937 there were 
approximately 6,000 child health centers serving 734 counties, towns, 
or other local units in rural areas. About two-thirds of the rural 
areas of the country are not yet provided with such centers. 
It is estimated that over 6 children in every 1,000 of the population 
under 21 years of age are crippled or seriously handicapped by disease 
■or conditions such as poliomyelitis, tuberculosis, birth injuries, 
injuries due to accidents, and congenital deformities, who may be 
benefited or entirely cured with proper treatment. It is estimated 
that in the northern parts of the country at least 1 percent of school 
children have rheumatic heart disease, a condition largely remediable 
with prolonged care. Approximately 30 percent of all children under 
15 years of age have defective vision due to refractive errors. Ap- 
proximately 5 percent of school children have impaired hearing. 
Approximately two-thirds of all school children have dental defects. 
Wide-spread inadequacy of nutrition is responsible for many cases 
of the deficiency diseases in children, for increased severity of much 
illness, and for retardation in recovery. 
Great progress has been made under the crippled children provisions 
of the Social Security Act in making available orthopedic and plastic 
surgical service, hospitalization, and after-care. There is need of 
further provision, however, for children crippled or handicapped from 
heart disease, diabetes, congenital syphilis, injury due to accident, 
and other conditions that require prolonged care to insure recovery 
or restoration leading to self-support. The need of facilities for hos- 
pital or convalescent care of children with early rheumatic heart 
disease is particularly urgent in the northern parts of the country. 
There is great need for discovering early, children with defects of 
vision and of hearing, and those with dental defects and for providing 
proper treatment to prevent and to remedy serious impairment. 
When it is realized that 13,000,000 of the 35,000,000 children under 
15 years of age in the United States are in families with incomes of 
less than $800 a year or on relief, it becomes apparent that such 
families are able to pay but little toward the medical care necessary 
to meet their children’s needs and that the problem of providing 
sufficient care must be the concern of government through health 
and welfare authorities. The provision of social services as a basic 
component part of a strong, well-coordinated health program is 
essential. Medical care is more adequate and more economical when 
provision is made for discovery and for assistance in overcoming the 
adverse social factors related to disease or disabilitv. The relation of 36 
HEALTH SECURITY 
measures directed toward the improvement of the economic basis for 
family life to those for the prevention and control of diseases and 
disability is obvious. 
THE NEED FOR CONSULTATION SERVICE 
The general practitioner gives, and will continue to give, the 
largest amount of medical service to mothers and children. 
However, for dealing with many conditions of maternity, for 
diagnosing and treating many diseases of childhood, and for guiding 
development of effective preventive measures in a community, the 
general practitioner frequently needs to consult with a specialist in 
obstetrics or in pediatrics. There are many areas in the United 
States where such specialists are not available or are so inaccessible 
that the cost of consultation service is prohibitive. A few State 
agencies provide for a limited obstetric consultation service, but in 
most States such service is not available through public resources. 
Hospitals with special services for children are not well distributed 
geographically so as to be available for diagnosis and treatment of 
children in difficult cases. Well-equipped diagnostic centers stra- 
tegically situated would fill a great need. 
THE PROBLEM IS NATIONAL 
In attempting to plan for more adequate provision of maternal 
and child health services, certain facts must be considered concerning 
the distribution of children among the several States and geographic 
areas, especially as it may be compared with the distribution of adults 
in the productive age groups who must support the children, the 
national income, facilities for care now available, and such indexes of 
adequacy of care as infant mortality. 
The ratio of births or of children under 15 to the adult population 
which must support them and the financial resources available for 
their support vary to a considerable extent in the different States. 
For instance, 12 States in the Northeast and the District of Columbia, 
caring for 29 percent of the Nation’s children, receive 41 percent of 
the national income; whereas, 11 States in the Southeast, caring for 
25 percent of the children, receive only 12 percent of the national 
income. Adults of productive age living on farms must support 
nearly twice as many children proportionately as do adults of the 
same age groups in the largest cities. And yet it is in the rural areas 
and in States receiving the smallest proportion of the national income 
that the infant and maternal mortality rates remain high and the 
facilities for care are least adequate. Any plan for extending and 
improving maternal and child-health services must take into consider- 
ation these facts. 
PART II. RECOMMENDATION I~B 
With respect to expansion of the maternal and child health program, 
the Technical Committee made the following recommendations to the 
Interdepartmental Committee. In presenting its report, the Com- 
mittee expressed the opinion that the recommendations relative to 
maternity care and medical care of children, as well as those for general 
public health services, should be given special emphasis and priority 
in any consideration of a national health program more limited in 
scope than that outlined in the complete series of recommendations. HEALTH SECURITY 
37 
■Recommendation I-B: Expansion of the existing Federal-State coopera- 
tive program for maternal and child welfare services under title V, 
parts 1 and 2, of the Social Security Act 
EXPANSION UNDER SOCIAL SECURITY ACT, TITLE V, PART I MATERNAL AND CHILD 
HEALTH 
It is recommended that Federal participation in maternal and child 
health services under title V, part 1, of the Social Security Act be 
extended through increased authorization for appropriation for grants- 
in-aid to States over and above the $3,800,000 now available each 
year. Increasing Federal participation should allow for a program 
to provide facilities for care in two general areas: (a) Medical and 
nursing care of mothers throughout the period of maternity and of 
their newborn infants throughout the neonatal period; and (6) health 
supervision and medical care of children. 
A plan of orderly expansion during the next few years, which is 
'compatible with sound administration, and a reasonable program for 
training personnel, follows. It assumes (1) a gradual development of 
the program of maternity care and care of newborn infants with a 
view to reaching the maximum Federal contribution as soon as may be 
possible, but at least not later than the tenth year, and (2) a gradual 
approach to a general program of health supervision and medical care 
for children, which would not reach desirable proportions until the 
full medical care program contemplated in Recommendation III or 
IV is in effect. Administrative procedure would be designed to allow 
for continued expansion of the program of health supervision and 
medical care of children under title V, and for cooperation with other 
plans which may develop for medical care. 
Plan oj expansion.—Fundamental to the expansion of the program 
for maternity care and medical care of children is further increase in 
the basic local health services, including health supervision of preg- 
nant women and of infants and preschool children by local physicians, 
public health nursing services, health supervision of school children, 
and the services of dentists, nutritionists, health educators, and 
medical social workers. 
Expansion and improvement of the program should be along three 
lines; 
1. Expansion of facilities for conservation of health of mothers and 
their newborn infants should provide for— 
Medical care of mothers and their newborn infants throughout the 
period of maternity and the neonatal period, including care of the 
mothers at delivery in the home or in hospital, and of their newborn 
infants, by qualified local physicians witli the aid of specialized con- 
sultants, assisted by nurses, preferably public health nurses, trained in 
'obstetric nursing procedure. 
Facilities for expert diagnosis and care in diagnostic or consultation 
•centers and in the home. 
Hospital care as necessary for medical, social, or economic reasons. 
2. Expansion of facilities for the conservation of the health of 
•children should provide for— 
Health supervision, medical care, and, when necessary, hospitaliza- 
tion of older infants and children—the health supervision and medical 
care to be provided by qualified local physicians, with the aid of spe- 38 
HEALTH SECURITY 
cialized consultants, in local consultation or diagnostic centers, or else- 
where when the ill child cannot be brought to the center. 
3. Increased opportunities for postgraduate training of professional 
personnel—medical, nursing, and medical-social—will be essential in 
order to provide qualified personnel to carry out the program. Addi- 
tional centers for such training, especially for postgraduate instruction, 
would have to be established. 
Estimates of cost of 'proposed program.—-To provide for such an 
expanding program, authorization for increased appropriations for 
grants-in-aid to States under title V, part 1, of the Social Security 
Act, would be necessary. Estimates of cost of care and of the amounts 
to be authorized for appropriation by the Federal Government have 
been made (1) for maternity care and care of newborn infants, and 
(2) for health supervision and medical care of children.. The estimates 
for (1) maternity care are based on the needs of families on relief or 
with incomes (including home produce on farms) of less than $1,000 a 
year. There are in these families approximately 1,100,000 births 
annually (live births and stillbirths). The estimates for (2) care of 
children are based on the number of children under 16 years of age 
in that third of the population in need of financial assistance in obtain- 
ing basic health and medical services, approximately 13,000,000. 
Estimates for maternity care and care of newborn infants; Esti- 
mates have been prepared including cost of (1) medical, nursing, and 
hospital care; (2) development and maintenance of 10,000 additional 
maternal and child health consultation centers to serve smaller cities, 
towns, and rural areas; (3) development of centers for postgraduate 
education of physicians, nurses, medical-social workers; and (4) 
Federal and State administration. 
The total cost to Federal, State, and local governments for mater- 
nity care and care of newborn infants in families at the income levels 
specified, is estimated to be approximately $95,000,000. Maximum 
Federal participation, including cost of administration, demonstration, 
and investigation, is estimated to be approximately $47,500,000. It is 
recommended that for the first year of the expanding program author- 
ization for appropriation under title V, part 1, of the Social Security 
Act, be increased for maternity care and care of infants by approxi- 
mately $4,500,000. Further increases would depend on the rate of 
expansion of the program, but it is estimated that an appropriation 
by the Federal Government of not less than $25,000,000 should be 
reached by the fifth year and the full amount in at least 10 years. 
Estimates for health supervision and medical care of children: The 
unit cost of providing a minimum of essential medical services for 
children is estimated to be, on the average, $10 per child per year; it 
is recognized, of course, that in individual cases the actual expenditures 
would vary from much less to much more than this average figure. 
The average cost is intended to include increased facilities for health 
supervision by local physicians and public health nurses, minimum 
essential services of general practitioners and specialists for the care 
of sick children, necessary medical social services, hospitalization, and 
other types of special services in minimum amounts. This estimate 
is supplementary to the sums now being spent for medical care of 
children by individual families with low incomes or by communities, 
and represents about half the cost of reasonably adequate services 
such as are contemplated under Recommendation IV. HEALTH SECURITY 
39 
The over-all cost of providing medical care at this rate to the 
13,000,000 children under 16 years of age in the third of the popula- 
tion in need of financial assistance in obtaining basic health and 
medical services would be approximately $130,000,000 a year. 
To make available at this time a portion of this amount in connec- 
tion with the program of health supervision of infants and children 
under title V, part 1, it is recommended that sums to provide for a 
gradually expanding program under this title be authorized for ap- 
propriation by the Federal Government. For the first year of the 
program it is estimated that an authorization for appropriation of 
$3,000,000 would be needed. Annual increases thereafter would de- 
pend on the rate of expansion of the program, but it is estimated that 
an appropriation by the Federal Government of not less than 
$15,000,000 should be reached by the fifth year and not less than 
$30,000,000 at least by the tenth year. It is recognized that these 
amounts are considerably less than the full amounts needed for a 
complete program. However, the difference would be reduced by the 
provisions of Recommendations II and III, which would supplement 
the recommendations submitted here. 
EXPANSION UNDER SOCIAL SECURITY ACT, TITLE V, PART 2—SERVICES FOR CRIPPLED 
CHILDREN 
It is recommended that Federal participation in services for 
crippled children under title V, part 2, of the Social Security Act be 
extended through increased authorization for appropriations for 
grants-in-aid to States over and above the $2,850,000 now available 
each year for the purpose of meeting the needs of additional children 
who by reason of serious physical handicap require prolonged care of 
the kind already provided under existing programs. Increasing 
Federal participation should allow for an expansion of program as 
follows: 
Increased facilities for orthopedic and plastic services for the care of 
children who are crippled or suffering from conditions that lead to 
crippling from diseases of bones, joints, or muscles. 
Increased facilities for care of children who are suffering from heart 
disease, injury due to birth or accident, or other diseases or conditions 
that require prolonged care to insure recovery or restoration leading 
to self-support. 
This program should be closely related to the proposed expanding 
program of general health and medical services to children under 
part 1 of title V, and should be directed toward the care of children 
whose physical needs or social needs arising out of their physical 
condition require especially intensive service. For the first year of 
the expanded program it is estimated that authorization for an 
additional appropriation of Federal funds of $2,000,000 would be 
needed and that an amount of not less than $5,000,000 would be 
needed by the fifth year. The amounts required after that period 
woidd be determined on the basis of experience. 
FEDERAL PARTICIPATION AND PARTICIPATION BY STATES AND LOCAL COMMUNITIES 
The first few years of expansion of the programs for maternity 
care and health conservation and medical care of children and services 
for crippled children may be expected to be a period of development 40 
and equalization of services and, therefore, one in which Federal 
financial participation would be relatively large, supplementing 
present expenditures by the States or local communities. Increasing 
financial participation by the States would be encouraged. In de- 
termining the extent to which each State would be eligible for Federal 
aid, account would he taken of (1) the ability of States to provide 
for support of necessary services, and (2) the need for maternal and 
child care as shown by mortality and morbidity rates, present facilities 
for care of mothers and children, personnel in need of training and 
facilities for training, and the need for services for crippled children 
as shown by the number of such children in need of care and the cost 
of providing care. 
HEALTH SECURITY 
SUMMARY 
The opportunity is before us to make a major gain in our provision 
for the health of mothers and children. The proposed program calls 
for extension of our health services into all parts of the United States, 
for an expansion of the program to fill gaps in existing services, for 
more adequate facilities for training professional workers, and for 
cooperation of public agencies with the medical, dental, nursing, and 
social service professions to make sure that medical and related services 
are available to mothers and children of all income groups and in all 
parts of the United States. 
The proposed program contemplates during the first year an in- 
creased expenditure by the Federal Government through grants to 
States as follows: 
Maternity care and care of newborn infants $4, 500, 000 
Medical care of children 3, 000, 000 
Services for crippled children 2, 000, 000 
During succeeding years, the program would be expanded gradually, 
reaching at least by the tenth year a proposed Federal expenditure of 
$47,500,000 for maternity care and care of newborn infants, $30,000,- 
000 for medical care of children, and $5,000,000 for services to crippled 
children. 
Hospital Facilities 
No scheme for promoting the Nation’s health can be considered 
complete or wholly effective that does not give due consideration to 
hospitals. The growing importance of these institutions arises from 
a variety of causes. Chief among these is the fact that the home and 
the family structure are less suited to the needs of the sick than they 
were even a generation ago. As medicine advances scientifically, the 
facilities represented by a hospital become more essential for accurate 
diagnosis and proper care. Every indication suggests that this trend 
will continue and perhaps at an accelerating rate. While general 
statements such as these apply to all hospitals, a special set of cir- 
cumstances with respect to status and need is associated with hos- 
pitals of separate categories. Sufficient definition of these points is 
attained by classifying hospitals according to three medical types; 
General, tuberculosis, and mental. Because Federal hospitals admit 
selected beneficiaries drawn from the Nation as a whole, they have 
been omitted from the estimates of needs since this report is a dis- 
cussion of community facilities that may be assigned in some measure 
to population groups. 
PART I. STATUS AND NEED OF HOSPITAL FACILITIES HEALTH SECURITY 
41 
The growth of general hospitals in this country has been closely 
Telated to advances in surgery. In the main, their development may 
be credited to charitable impulse and to private enterprise. Accord- 
ing to returns of 1937, general hospitals which meet the registration 
requirements of the American Medical Association n umber about 
4,500. Slightly more than half of these are operated by corporations 
not organized for profit, roughly one-third are proprietary and con- 
ducted without restriction as to the use of income, while State and 
local governments participate to the extent of about 15 percent as 
operating agents. These proportions change somewhat when facili- 
ties are computed on the basis of beds, since Government hospitals 
tend to be large, nonprofit of medium size, and the proprietary very 
small. The 410,000 beds in general hospitals are distributed by 
control as follows: About 27 percent are in hospitals of State and local 
governments, 62 percent in nonprofit hospitals, and about 11 percent 
are in proprietarily owned hospitals. 
Source of income.—Closely allied to control of hospitals is their 
source of income. Governmental hospitals, as one might expect, are 
supported mainly through taxation; on the other hand, fees collected 
directly from patients furnish 70 percent of the income for nonprofit 
hospitals, and for the proprietary group, more than 90 percent. 
Endowments produce about 6 percent of the income for nonprofit 
hospitals and they obtain in gifts an amount of perhaps the same 
magnitude, but income from these sources is negligible for the pro- 
prietary group. Payments made by governments to nonprofit and 
proprietary hospitals for the care of public charges were larger in 1935 
than the total of all private gifts. Thus, one may observe that most 
of the free and part-pay service of voluntary hospitals must be ac- 
complished by passing the costs on to patients who,, through payment 
of over-charges, create the necessary reserve. Individual hospitals, 
particularly in large cities, may constitute an exception to this 
general rule. 
Distribution.—The general hospital is predominantly an institution 
of population centers. Among the counties of the United States, 
1,338, or over 40 percent, do not contain a registered general hospital. 
True, most of these counties are not populous, yet nearly one-third 
of them have 15,000 or more inhabitants; and in the aggregate, 
counties without hospitals contain about 17,000,000 people. Remote- 
ness from metropolitan centers, a very small percentage of urban 
population, and low tax income also characterize the counties without 
hospitals. 
The ratio of beds per 1,000 population exceeds 5.2 in 23 of the large 
•city-counties having more than 200,000 inhabitants and averages 4.9 
for all of the counties of this type, the population of which totals 
47,000,000 persons. When hospital facilities according to States are 
related to the combined population residing in areas designated as 
metropolitan in character by the United States Census Bureau, to- 
gether with counties immediately adjacent thereto, it is found that 
hospital facilities exceed 4.7 beds per 1,000 persons in such areas for 
25 percent of the States. In the areas beyond these metropolitan 
counties 3.1 beds or more per 1,000 are found in 25 percent of the 
States. Voluntary hospitals, be it recalled, are predominant among 
those of general medical type. Therefore it is to be expected that 
GENERAL HOSPITALS 42 
HEALTH SECURITY 
economic opportunities must have had greater weight than social 
needs in determining the present distribution of hospitals with 
respect to population. 
Self-evident, though often overlooked, is the fact that mere presence 
of a hospital in a county or one adjoining may have little meaning to 
underprivileged people unless funds for meeting the costs of service are 
assured. Previously, it was stated that proprietary hospitals subsist 
almost exclusively on fees collected directly from patients, and those 
classed as nonprofit derived more than 70 percent of their income from 
this source, and that governmental hospitals are as a class supported 
through taxation. On combining location with ownership, the data 
indicate very clearly that general hospital service is not available to a 
very large segment of the population either through faulty location of 
the hospital or because the potential patient is unable to purchase 
service. Specifically, the data at hand show that among the 1,737 
counties with local general hospitals, 519 have nothing but proprietary 
institutions; 786 are served by nonprofit hospitals alone or in conjunc- 
tion with those proprietarily owned; and only 432 counties contain 
local tax-supported facilities. 
The counties with city-county institutions represent a total popula- 
tion of about 59,000,000, which is largely urban in character. Other 
checks such as per capita expenditures by governments for hospitali- 
zation, and days of care reported by representative samples of popula- 
tion emphasize over again that people of low income obtain little hos- 
pital service except in areas having a reasonable proportion of tax- 
supported or endowed beds. In the smaller towns and rural areas, 
admission of the poor to bed care usually signifies an acute emergency 
necessitating surgical intervention. Exceptions to this statement are 
found in a few counties where governmental general hospitals, and in 
a few States where State-supported general hospitals meet a part of 
the need. 
The amount of chronic disease and the need and economy of ade- 
quate care has been demonstrated by the National Health Survey. 
Some chronic patients require diagnostic and treatment services- 
equivalent to those of an acute hospital case; others need only skilled 
nursing or custodial care after their condition has been diagnosed. 
Use of hospital facilities.—The average daily census of patients in 
general hospitals is equivalent to 70 percent of the bed capacity. 
Broadly speaking, the facilities of large and medium-sized capacity 
are utilized more fully than those of small. Average occupancy of 
beds is less than 50 percent of full capacity in those hospitals that 
depend for revenue on payments by patients, while the great majority 
of tax-supported beds approach full utilization. At certain seasons 
of the year, many tax-supported hospitals experience overcrowded 
conditions. In the range between these extremes, occupancy of 
hospital beds is inversely related to the percentage of income that is 
derived from patients. The proportion of hospital income that is 
obtained from different sources may therefore be used as a measure 
of their ability to serve different economic groups in the population. 
Obviously the economic barrier between need and service must work 
its greatest hardship in those areas where no provisions are made 
in the scheme of hospital finance for necessitous persons. 
Stability of hospitals.-—Another point bearing on service for a com- 
munity is the assurance of uninterrupted hospital operation. In HEALTH SECURITY 
43 
relation to this point, the data show continuity of existence during the 
study period (1928-36) for 83 percent of government hospitals, 73 
percent of hospitals classed as church and corporation, and 37 percent 
of those operated by individuals and partners. It is impossible to 
separate the effects of management from finance on this behavior, 
since the two are so intimately tied together. Sufficient is the ob- 
servation that the constant needs of illness cannot be met by such 
ephemeral institutions as the proprietary group. 
TUBERCULOSIS SANATORIA 
In that section of the Technical Committee’s report entitled “Ex- 
pansion of General Public Health Services,” recommendations are 
made with respect to case-finding procedures and grants-in-aid for 
bed care of the tuberculous. Therein it was also contemplated that 
the sanatorium should take a vital part in an integrated program for 
control of the disease. This scheme of health organization is not 
possible for many sections of the United States because the institu- 
tions do not exist or they lack resources in the way of personnel and 
funds. 
Existing facilities.—Facilities for the United States as a whole are 
represented by 65,000 sanatorium beds and 22,000 beds set apart for 
the care of the tuberculous in hospitals of other types. Of the beds 
in sanatoria proper, 80 percent are operated by State and local govern- 
ments and 20 percent by nonprofit and proprietary agencies. The 
great majority of those beds not in sanatoria also are under govern- 
mental control. More than half of them are attached to institutional 
infirmaries and therefore are not available for a general control 
program. 
Source of support and use of tuberculosis facilities.—As in the case of 
general hospitals, source of financial support is the main factor deter- 
mining the extent to which available beds are used For example, 
occupancy of beds rises to 92 percent of capacity where less than 10 
percent of the cost is defrayed through fees collected from patients; 
and it falls to 67 percent when patients furnish more than 90 percent 
of the revenue. Bed care in tax-supported institutions, as a rule, is 
furnished without cost to the patient, while the opposite financial 
arrangement obtains in private sanatoria, except for a fairly signifi- 
cant proportion of persons that are maintained there at public expense. 
Since such a small proportion of patients meets the costs of their care, 
financial barriers that commonly exist between patients and medical 
service offer no great handicap to reasonably full use of existing 
facilities for bed care of the tuberculous. The immediate need, 
insofar as institutional care may be concerned, is for increasing the 
existing number of beds. 
For all practical purposes, institutional care of persons with mental 
disorders may be regarded as a monopoly of State and local govern- 
ments. Together they operate 509,000 beds or about 96 percent of 
the total in mental hospitals. The State government being the 
principal operating agency, institutions are large and service is 
organized on a State-wide basis. While it is true that there are 52 
institutions of nonprofit and 182 of proprietary classification, these 
MENTAL INSTITUTIONS 44 
HEALTH SECURITY 
places maintain only 4 percent of the beds. Furthermore, private 
institutions serve in particular the well-to-do. 
Data wliich describe the manifest demands on facilities for mental 
patients are found in the percentage of occupancy reported by hospitals 
under the various types of control. The median, or middle, nonprofit 
hospital reported 80 percent of all available beds in use, while 63 
percent of the beds were occupied in the median proprietary hospital. 
Tax-supported mental hospitals reported crowded conditions. In 
the median hospital, under State control, 96 percent of all beds were 
utilized, while an occupancy of 94 percent was reported by the median 
city or county hospital. Governmental hospitals for persons with 
mental disorders may be characterized as follows: They are large and 
they are fully occupied. Nongovernmental hospitals on the other 
hand, are small and less completely filled. 
FUNCTIONS OTHER THAN BED CARE 
Out-patient services.—Ambulatory sick in any community exceed in 
number those requiring bed care. The hospital out-patient depart- 
ment, commonly spoken of as the free dispensary, is a device that has 
demonstrated many advantages for meeting the needs of the sick poor 
who are able to come to some fixed point. Aside from lowered service 
costs that accrue from volume of work, the clinic brings together 
specialists representing various branches of medicine at a place where 
they have access to laboratory services, X-ray, and similar aids to 
diagnosis and therapy. Since hospital out-patient departments may 
be utilized in carrying out Recommendation III (Medical care for the 
medically needy), this type of facility should be considered in any 
scheme of hospital organization. At the present time out-patient de- 
partments are not sufficiently numerous or widespread to afford a 
basis of operation. 
By using organized out-patient departments of general hospitals as 
a measure of resources, both the deficiency and the uneven distribu- 
tion of such units become even more apparent than was the case for 
hospital beds. According to available information, there are some 
770 organized out-patient departments that operate in connection 
with general hospitals. About 35 percent of government hospitals 
and 20 percent of nonprofit hospitals afford this type of service for the 
destitute and very low-income groups of the population. Clearly 
defined departments of this type do not seem to be a feature of pro- 
prietary hospitals. Even more than hospitals, general out-patient 
departments are institutions peculiar to large cities. Each of the 
cities above 250,000 population reports one or more out-patient de- 
partments, while only 2 percent of cities below 10,000 have such 
resources. It is not until cities reach 50,000 that more than half of 
them are provided with this type of service. 
As a general rule, mental and tuberculosis hospitals are not so 
situated that organized out-patient departments can become a regular 
feature of their service. Services for patients of these types are more 
frequently associated with general hospitals. In all, 145 out-patient 
departments reported psychiatric clinic divisions, and of these, 115 
were associated with general hospitals. Similarly, of the 201 depart- 
ments reporting tuberculosis clinic divisions, 140 had general hospital 
sponsorship. HEALTH SECURITY 
45 
Development through hospitals of service for the ambulatory sick 
is contemplated in the proposed program of hospital development. 
In some instances, the arrangement can be quite informal, involving 
little more than the use of regular hospital equipment. Where the 
problem of caring for dependent and medically needy persons is of 
sufficient magnitude, an out-patient department should become a 
definite unit in the hospital organization. For areas remote from 
hospitals, it will be necessary to develop centers with special equip- 
ment for diagnosis atid treatment. Such facilities may be used jointly 
by the practicing physician and the public health agencies. 
Influence on medical practice.—Over and above the bed care and 
the ambulatory service commonly associated with hospitals, many 
students of administrative medicine conceive of the hospital as having 
in its own right a reputation and a body of traditions—in other words, 
an institution with a personality. The Committee believes it is 
feasible, through proper equipment and staff arrangement, for hos- 
pitals to become institutions for elevating medical practice and for 
extending various types of care to all groups of the population. 
PART II. RECOMMENDATION II 
From the foregoing facts and from others that might be adduced, 
one should readily perceive that there are deficiencies in the present 
scheme of organization which serve to limit the usefulness of hospitals 
to patients and circumscribe their influence on medical practice. 
These deficiencies include insufficient number of institutions and beds, 
improper location, incomplete services, and inadequacy of financial 
support; they apply in varying combinations to hospitals of different 
classification. In some degree, recommendations submitted by the 
Technical Committee regarding public support of hospital care for 
necessitous persons will bring about greater use for existing facilities. 
Such action alone would be only a half-way measure; further con- 
struction, additions to equipment, extension of services, and broaden- 
ing of the basis for financial support are indicated. To this end, the 
Technical Committee submits— 
Recommendation II: Federal grants-in-aid for the construction oj needed 
hospitals and similar facilities, and special grants on a diminishing 
basis towards defraying the operating costs of these new institutions 
in the first 3 years of their existence 
EXPANSION OF GENERAL HOSPITALS 
Since the demand for service in general hospitals is conditioned 
so largely by ability of patients to pay, local experience with respect 
to use may not always be taken as a reliable measure of need. This 
is particularly true of rural areas since there so large a percentage of 
the beds are supported by fees from patients. For urban areas, 
especially the populous ones, beds in more reasonable proportions 
are free or obtainable at less than maintenance cost; there the ratio 
of beds may run as high as 9.5 per 1,000 population, while for the 
median city-county containing more than 200,000 inhabitants, the 
ratio is 4.3 per 1,000 population. 
Again taking for a base metropolitan areas as designated by the 
United States Census Bureau plus counties immediately adjacent. 40 
HEALTH SECURITY 
the average ratio is 4.1 per 1,000 population. Despite the financial 
restrictions which now limit hospital utilization, 72,000,000 people 
residing in such trade areas have seen fit to establish average facilities 
approaching the standard of adequacy so frequently set by professional 
judgment, namely, 4.5 hospital beds per 1,000 population. 
Bed accommodations also vary with States from 1.26 to 5.5 per 
1.000 population, with a figure of 3.1 representing the median State. 
To bring all State averages up to 4.5 will require the addition of 
180.000 beds. Some of these beds would be added to existing hos- 
pitals, but most of them would call for new units to be located in 
areas now without hospitals or having hospitals whose physical or 
financial deficiencies preclude their becoming true community insti- 
tutions. There is need for at least 500 hospitals in areas largely rural 
in character. Those hospitals would be primarily small (30 to 60 bed) 
institutions. The large number of beds needed for chronic patients 
should usually be provided in association with general hospitals. 
EXPANSION OF TUBERCULOSIS SANATORIUM FACILITIES 
By following the generally accepted measure of institutional 
accommodations, namely, beds per annual death, one finds that the 
ratio for the United States as a whole is 1.15. Ratios for individual 
States vary from 2.75 down to 0.20; only 5 States have two or more 
beds per annual death, while in 26 States this figure is less than one. 
Nine States do not make legal provision for sanatoria; five of these 
subsidize care at local institutions, but in four States no State-wide 
provisions are made for hospitalizing patients. Clinical experience 
has demonstrated that two beds per annual tuberculosis death are 
required for hospitalization of the tuberculous in areas having a 
reasonably aggressive case-finding program. To bring facilities of 
the whole country up to this standard after allowing for a continuing 
reduction in number of deaths would require the addition of approxi- 
mately 50,000 beds. Some of these beds may be incorporated into 
existing general hospitals and sanatoria, but in several States entirely 
new institutions should be established. 
EXPANSION OF MENTAL INSTITUTION FACILITIES 
The ratio of beds to population varies with the States from 6.88 
down to 1.96. The State represented by the upper quartile has 4.8 
beds per 1,000, while 3.86 beds expresses the median State. States 
on the upper 25 percent performance level contain about one-fourth 
of the total population of the United States. While no absolute figure 
in beds can be taken to express the needs for institutional accommoda- 
tions, there is every reason to suppose that provisions already made by 
States in the upper 25 percent group are not in excess of actual demand 
as shown by occupancy in excess of rated capacity. The lower figure 
for this group, namely, 4.8 beds, may, therefore, be taken as a reason- 
able standard that is amply supported by experience. 
To bring the ratios of beds to population in all States up to this 
standard of 4.8 would require the addition of 130,000 beds to existing 
accommodations. Most of these new beds woidd serve to augment 
facilities especially of those States now having insufficient accommo- 
dations. Existing institutions might be enlarged or new units could 
be established as local circumstances warrant. HEALTH SECURITY 
47 
TEMPORARY, 3-YEAR, MAINTENANCE GRANTS 
Attention is here directed to the financial need of newly constructed 
hospital accommodations of the several classes—general, mental, and 
tuberculosis. Since most of these beds are to be placed in areas of 
low wealth, States and local communities might encounter some diffi- 
culty in taking over rapidly the added financial burden. A special 
program is therefore contemplated to provide Federal grants in-aid 
for the maintenance of new institutions or additional beds during the 
first three years of their operation. 
ESTIMATED COSTS FOR CONSTRUCTION 
General hospitals and diagnostic centers.—When computed on the 
basis of $3,500 per bed, exclusive of land value, the construction costs 
of general hospitals, aggregating 180,000 beds, entails an outlay of not 
less than $630,000,000, of which approximately $60,000,000 would be 
for rural hospitals. In remote rural areas, not readily accessible to a 
hospital center, provision should be made for the construction of 
health and diagnostic centers to serve both the practicing physicians 
and the public health agencies. As an initial development, not less 
than 500 such centers should be contemplated, entailing a gross 
expenditure of, roughly, $15,000,000. 
Tuberculosis hospitals.-— By assuming an average cost per bed of 
$3,000, the total expenditure thus incurred for construction of 50,000 
beds would be in the neighborhood of $150,000,000. 
Mental institutions.—The erection of mental hospitals to accommo- 
date 130,000 beds costing $2,500 each would necessitate a total outlay 
of about $325,000,000. 
On the construction program as outlined above, the Committee 
recommends Federal grants-in-aid equivalent to 50 percent of the 
construction costs as estimated above, thus entailing a total outlay 
of $552,250,000 on the part of the Federal Government. 
ESTIMATED COSTS OF TEMPORARY MAINTENANCE GRANTS 
Kecommended Federal grants are computed on a basis of $300 per 
bed per annum for general and tuberculosis hospitals and $150 for 
mental institutions. The aggregate for the Nation as a whole is not 
to exceed 50 percent of the actual patient-day costs, with curtailment 
stipulated at each year so as to disappear after 3 years. 
If all the hospital construction outlined above were undertaken, 
these special maintenance grants would involve a maximum total 
Federal cost of about $177,000,000, distributed over a period of years 
beginning with the completion of the first hospital and ending 3 years 
after the completion of the last institution built under the program. 
SUMMARY 
The Technical Committee finds hospital accommodations and the 
scheme of organization ill-adapted to the varying needs of people 
living under different social, economic, and geographic circumstances. 
In hospitals offering general care, the percentage of beds that must be 
supported through fees from patients is out of proportion to the in- 
come distribution of the population, hence many of these full-pay 
beds are empty a large part of the time. Conversely, there are too 48 
HEALTH SECURITY 
few low-cost and free beds to satisfy needs; those already provided 
are concentrated in centers of wealth and population. Some 1,300 
counties have no hospitals, another 520 contain one or more small 
proprietary institutions only; and 423 counties have local tax-sup- 
ported facilities. In this combination of circumstances can be found 
reasons why the rich and the poor of large cities secure proportion- 
ately more service than those of moderate means; why rural people 
generally have less hospital care than those residing in large cities; 
and why admission of the poor to hospital beds in rural areas and the 
smaller towns is confined very largely to emergency surgery. 
Recommendations which the Committee offers for expanding 
hospital accommodations, together with making them more generally 
accessible, are given numerical expression in the following summary 
table. 
In another section of the Committee’s report, recommendation is 
made for the payment of public funds to defray the cost of hospital 
care of medically needy persons. This, in large measure, should pro- 
mote the use of unoccupied beds in existing institutions and of the 
beds that are to be added through the proposed construction program. 
Hospital facilities in the United States—Present status, needs, and Federal grants for 
new construction, in 10-year program 
Medical type of hospitals 
Present status 
Beds 
needed 
Proposed Federal grants 
Number 
of hos- 
pitals 
Number 
of beds 
Construction 
Maintenance 
3 years 
Total 
General _ _ _ _____ _. 
4, 560 
1,042 
552 
410,024 
82, 591 
531,445 
180,000 
50,000 
130,000 
$315,000, 000 
75, 000,000 
162,500,000 
$108,000,000 
30.000. 000 
39.000. 000 
$423,000,000 
105,000,000 
201,500,000 
6,160 
1, 024, 060 
360,000 
552,500,000 
177,000,000 
729, 500.000 
7, 500,000 
500 health and diagnostic centers. 
Total 
737.000,000 
Much has been said and written about free clinics, but this device 
is not a factor of any moment in medical care for the country as a 
whole; only 17 percent of general hospitals operate out-patient depart- 
ments and nearly half the service is rendered in the 5 largest cities 
having over a million inhabitants. 
Tuberculosis and mental hospitals differ from general hospitals in 
that the preponderance of beds are supported by taxation. While 
existing facilities thus are available in large measure to all classes, the 
accommodations in most States are not sufficient for the population. 
Moreover, many plants are in need of modernization. 
Even more than general hospitals, those of tuberculosis and mental 
classification have failed to develop services for ambulatory patients. 
Another defect of hospitals, though less tangible than physical facilities, 
is the failure of hospitals in so many places to become an integral 
part of the community program for medical service. 
Medical Care for the Medically Needy 
The formulation of a national health program implies acceptance of 
the principle that the maintenance of the health of its citizens is a HEALTH SECURITY 
49 
responsibility of government. The conservation of national health 
requires the provision of adequate facilities and services designed to 
prevent disease, and, when sickness strikes, to secure its adequate 
treatment; but the lack of a unified public policy creates a barrier to 
the achievement of this objective. 
Through its local and State health departments, government has 
assumed responsibility for the provision of preventive health services 
distributed on a community-wide basis. However, as previous 
reports of the Technical Committee on Medical Care indicate, wide 
variation exists throughout the country in the practical application 
of this policy. A more serious situation arises from the inertia of 
governmental bodies in the field of medical care of the needy sick. 
The majority of States have laid the legal framework providing for 
medical care of certain groups of public charges, but the practical 
results obtained under this essentially permissive legislation are 
meagre due to lack of funds necessary to implement the program. 
Furthermore, with the exception of a few States, no legal basis exists 
for the provision of medical services to the self-sustaining population 
above the relief level, whose financial status, precarious at best, is 
particularly threatened by the costs of sickness. Although there are 
some important exceptions, medical care remains, on the whole, “an 
economic commodity” which is purchased and paid for directly by 
the individual who needs it. The fact that this “economic com- 
modity” is chiefly a professional service does not alter* the basic fact. 
It, therefore, results that the ability of the individual to purchase 
medical care differs according to his economic status, and the indi- 
vidual with low income obtains the smallest amount of care. 
PART I. THE EXISTING NEED 
THE MEDICALLY NEEDY POPULATION 
There are in the United States today probably 40 million persons— 
almost one-third of our population—living in families with annual 
incomes of less than $800. Current studies on the cost of living indi- 
cate that this sum supports the average family of four persons only 
at an emergency level, and leaves a margin for the purchase of medical 
care at the risk of deprivation of food, clothing, shelter, and other 
essentials equally necessary for the maintenance of minimum standards 
of health and decency. Included in this group as of April 1938, 
is an estimated total of about 11 million persons in families on work 
relief rolls, 6 million in families receiving general relief, more than 
1 million in families of persons enrolled in the Civilian Conservation 
Corps, more than half a million in families receiving Farm Security 
subsistence grants, over 2 million in households receiving old-age 
assistance, over 1 million in families receiving mother’s aid or aid to 
dependent children, and 60,000 in families receiving aid to the blind, 
under Federal, State, or local provisions for these several types of 
assistance. This group, comprising a total of over 20 million persons, 
is dependent on government for food and shelter, and similarly de- 
pendent on public funds or private philanthropy for medical care. 
In the emergency of sickness, some 20 million persons in the marginal 
income class above the relief level, otherwise self-sustaining, become 
dependent on public aid for the provision of medical care. 50 
HEALTH SECURITY 
Some indication of the magnitude of the problem of meeting the 
medical needs of the sick poor may be obtained from a consideration of 
the case load of illness in this group of 40 million medically needy 
persons. It is estimated that approximately 20 million cases of 
disabling illness will occur in this population during a year, of which a 
minimum of 8 million cases will cause disability of at least a week’s 
duration. Under the conditions prevailing in 1935, about 2 million 
of the more seriously disabling illnesses will receive no medical care; 
and the 6 million medically attended cases of this category will include 
over 2 million patients in general hospitals. 
The variety of medical services required for the care of these cases 
is indicated b}7- a consideration of the incidence of illness due to certain 
specific causes; only the more serious illnesses (disabling for a week or 
longer) are included in these estimates. 
Over 1 million cases of acute infectious diseases will ocpur in the 
child population; these cases will require adequate medical care to 
reduce their frequently serious sequelae and needless loss of life, and 
to prevent infection of the well. Approximately 250,000 cases of 
pneumonia, incident in the total population during the year, will 
require skilled and intensive medical and nursing care. Surgical 
treatment will be required by a large proportion of some 425,000 cases 
of tonsillitis, and 190,000 cases of appendicitis occurring in the group. 
Accidental injuries will account for the disability of about 700,000 
cases, of which about 250,000 will require hospital care. Approxi- 
mately 175,000 persons in the group will be found with severely 
crippling orthopedic conditions, and the majority of these persons 
will be totally disabled. 
The major chronic diseases of later life—cancer, rheumatism, 
diabetes, the cardiovascular and renal diseases—will account for some 
million cases of illness; and the high costs of these cases, due to their 
long average duration and their special requirements for diagnosis 
and treatment, will tax severely the resources of low-income families 
providing independently for their medical care. Among persons of 
any age, long-term invalidity creates needs for treatment and rehabil- 
itation which must be met largely by public provision. The special 
problems presented by care of the tuberculous and mentally diseased 
have been reviewed in previous sections of the report. These diseases 
also result in “high-cost’ illnesses, which place a special burden on the 
poor. 
THE CASE LOAD OF ILLNESS 
THE UNEVEN DISTRIBUTION OF MEDICAL FACILITIES AND PERSONNEL 
Previous reports of the Technical Committee have indicated that 
the uneven distribution of hospitals, outpatient departments, and 
medical and nursing personnel constitutes a serious defect in our 
national resources for the maintenance of health. In many rural 
areas, in 'which the number of physicians and nurses is low, and hos- 
pital facilities are limited, rich and poor alike encounter difficulty in 
obtaining adequate medical care. At the next level of adequacy, 
represented by small cities remote from metropolitan areas, the poor 
suffer the effects of limited facilities to a greater degree than the rich. 
With increasing urbanization, the supply of medical facilities and 
personnel becomes more abundant for rich and poor, and clinics, HEALTH SECURITY 
5J 
visiting-nurse service, and tax-supported hospital care supplement the 
resources of low-income families. The widespread attention given 
to the availability of these free medical services to the poor overlooks 
the fact that their benefits are largely restricted to the poor in the 
metropolitan areas, who comprise only part of the medically needy 
population. A large proportion of medically needy persons is found 
in small cities and rural areas, in which limited hospital facilities, 
restricted tax support of hospitals, and insufficient medical and nursing 
personnel create an additional obstacle to the receipt of adequate 
medical care. 
SICKNESS AND ECONOMIC STATUS 
The restriction which inadequacy of income, coupled, in certain 
areas, with inadequacy of medical facilities and personnel, places on 
the receipt of medical care by this low-income group has serious im- 
plications, arising from the fact that its medical needs exceed those of 
families at higher economic levels. Death rates are an index of the 
end results of sickness. It is, therefore, significant that the death 
rate is considerably higher for the poor than for the well-to-do. This 
is evident from general death rates examined by occupation, from 
infant mortality rates, from tuberculosis rates, and from mortality 
statistics for other important causes of death. 
Though death rates reveal the annual loss of human lives, they 
measure only a fraction of the toll which sickness exacts. Indeed, 
counting only severe disabling illnesses (i. e., those lasting for 1 week 
or longer), for each death there are about 16 illnesses that mean loss 
of work for the family breadwinner, inability of the housewife to go 
about her normal duties, or absence from school of the school child. 
The association of sickness with low income has been demon- 
strated by numerous surveys which have taken account of economic 
status. The most recent data bearing upon this point were obtained 
in the National Health Survey made in 1935-36. Records of dis- 
abling illness and the receipt of medical care in a 12-month period 
were obtained for about two and a quarter million persons, of whom 
some 429,000 persons were members of families which had received 
relief during the survey year, and an additional group of 562,000 was 
in families in the marginal income class above the relief level. The 
canvassed population was drawn from 83 cities and 23 rural areas in 
18 States, and the results thus indicate the experience of families 
meeting the limitations of low income under the varying environmental 
conditions of the Northeast, the South, the central region, the far 
West, and of the large and small city, and the rural area. 
The findings of the survey indicated that in large and small cities 
in all regions of the country, and in the rural areas, the frequency and 
severity of illness was uniformly higher in relief and marginal income 
families than in any other income class. For all urban areas, the 
excess in the frequency rate of sickness in the relief population, in 
comparison with that of the highest income class, was 62 percent; for 
the marginal income class above the relief level, the excess was 23 
percent. In the relief population, the annual days of disability per 
capita amounted to 16 days, in the marginal income class, to 12 days; 
among persons in the highest income class, the rate was only 7 days 
per capita. 
Among children in relief families, the annual days of disability per 
capita was 17 percent higher than the average for children among 52 
HEALTH SECURITY 
families in comfortable economic circumstances. The average aged 
person in families of the highest income class was disabled by illness 
for 3% weeks in the survey year; among the aged in relief families, the 
rate was slightly over 8 weeks. One in every 20 family heads in the 
relief population was unable to work because of chronic disability, as 
contrasted with only 1 in 250 heads of families with incomes of $3,000 
and over. 
Among all surveyed relief families, the tuberculosis case rate was 
more than 6 times as high as that of families above the $3,000 income 
level; among southern relief families, the rate was 10 times as high 
as in families of the upper income group. Illness due to the major 
chronic diseases of later life—cancer, rheumatism, diabetes, the 
cardiovascular and renal diseases—was over one and one-half times 
as frequent among relief families as among those in comfortable 
circumstances. 
The illustrations of the association between sickness and poverty 
derived from the National Health Survey have special weight because 
of the size and representative nature of the population canvassed, 
but the results are by no means isolated, nor peculiar to conditions 
prevailing in 1935. A similar conclusion was forecast by the results 
of earlier investigations of more limited groups of the population. 
The combined evidence of numerous studies of sickness and death 
rates among various economic classes of the population indicates that 
sickness occurs more often and with greater severity among the poor 
than among those in moderate or comfortable economic circumstances. 
MEDICAL CARE AND INCOME 
While sickness among the poor is more frequent in occurrence, and 
of greater severity, than among families in the upper economic groups, 
numerous surveys indicate that, notwithstanding their greater need, 
the poor obtain less medical care than the well-to-do. For example, 
a study made in the last prosperous years before the depression set 
in showed that well-to-do sick persons received nearly three times as 
many services from physicians, six times as many in each 100 received 
dental care, two and one-half times as many had health examinations 
as did self-sustaining families with incomes under $1,200 a year. The 
proportion who went through a year of life without professional care 
was more than three times as high among the poorest as among the 
wealthiest families, despite services furnished to those in the lower 
income class without charge. The amount of general hospital care 
(per capita) received by low-income families in this survey was approxi- 
mately the same as that received by families in the highest-income 
class. Surgical operations, however, were almost twice as frequent 
among persons in the well-to-do group as among the poor. 
The results of the National Health Survey contribute additional 
evidence on the inadequacy of medical services received by the 
medically needy in 1935: 
Hospital care in the large cities, in terms of the proportion of illnesses hospi- 
talized, was approximately the same in amount among rich and poor, a fact 
explained by the relatively large supply of hospital beds supported by public 
funds in the metropolitan areas. In the smaller cities, in which hospital facilities 
are less adequate, the rich maintained the proportion of hospitalized illnesses at the 
level of the metropolitan centers, but among relief and marginal income families, 
the proportion declined progressively with city size. HEALTH SECURITY 
53 
Medical care in the home, clinic, or physician’s office however is the type of 
service adaptable to the requirements of the majority of illnesses. Among relief 
and marginal income families, both the proportion of illnesses receiving such care, 
and the average number of consultations per case, were consistently lower than 
among families in comfortable circumstances in all parts of the country. Although 
the proportion of hospitalized illnesses among these low-income families in the 
small cities was markedly lower than in the metropolitan areas, no compensating 
increase was observed in the proportion of cases receiving extra-hospital medical 
care. 
Clinic supervision provides adequate medical care for certain ambulatory cases 
of illness, but the concentration of out-patient facilities in the large cities, greatly 
restricts the benefits of these services. Clinic care was received by 15 percent of 
the illnesses of the canvassed relief population in the metropolitan centers, but in 
the small cities under 25,000 population, 2 percent, and in the rural areas, only 
0.2 percent of illnesses in relief families received clinic care. While the proportion 
of illnesses in the relief and marginal income groups was approximately the same, 
54 percent of all cases receiving clinic care were in relief families and only 19 percent 
in the marginal income group. 
Bedside nursing care by a private duty nurse was received by only a small 
proportion of illnesses in relief families—less than 1 percent, compared with 7 
percent among families in comfortable circumstances. Bedside nursing care pro- 
vided by visiting nurses was relatively frequent in the relief group of the large 
cities, reaching 13 percent of the cases; in cities of less than 100,000 population, 
the proportion was somewhat lower, the figure being 9 percent. In the rural 
areas, only 3 percent of the illnesses received visiting nursing care—approximately 
one-fourth of the average for the large cities. As in the case of clinic care, a 
much larger proportion of visiting-nurse service was absorbed by the relief group 
than by the marginal income class. 
Dental care is notably inadequate among low-income families. In one of the 
large cities canvassed in the National Health Survey, information was obtained 
on the receipt of dental care. In families of skilled, semiskilled, and unskilled 
workmen, the proportion of adults who had never received dental care was almost 
twice as high as in the families of white-collar workers. In a recent survey of 
families in California cities, the proportion of persons requiring, but not receiving, 
dental treatment was four times as high in families of the lowest income class as 
among the well-to-do. 
The effect of the inadequacy of medical care among the poor assumes 
greater significance when considered in relation to certain groups of 
the population, or to particular diseases in which mortality is high, or 
■disability is severe. Among children under 15 years of age, the dis- 
parity in medical attendance of illness at various income levels was 
found to be even greater than among adults, and, although apparent 
in all areas, was particularly marked in the South. In the small 
cities of the South, about one-sixth of tke deliveries of white women, 
and almost one-half of the deliveries of Negro women in families with 
income under $1,000 took place without the attendance of a physician. 
The average case of illness attended by a physician among aged persons 
in families in comfortable circumstances received almost twice as much 
■care, exclusive of hospital treatment, as the average case among 
aged persons on relief. 
Among Negro families in the relief and marginal income groups in 
the South, the average length of hospital-stay per patient with tubercu- 
losis was 94 days, compared with 159 days for the average hospitalized 
case in white families oj this class in the South, and 174 days for the 
Northeast. In the large cities, the proportion of cases of certain 
chronic diseases—cancer, rheumatism, diabetes, the cardiovascular 
and renal diseases—receiving hospital care was approximately the 
same among rich and poor, being somewhat higher for relief families, 
however, than for the marginal income class. In the small cities, 
except in the East, the inadequacy of hospital facilities resulted in a 
marked reduction in the proportion of these chronic cases hospitalized 54 
HEALTH SECURITY 
in low-income families, but families in comfortable circumstances 
maintained about the same proportion as in the large cities. 
The point should be emphasized that measurement of the amount 
of medical services received by the poor suffers no distortion by com- 
parison with the services received by those in comfortable economic 
circumstances, since the well-to-do themselves on the average do not 
obtain care which is adequate in comparison with professional stand- 
ards. Thus, in a recent study, it was found that families in the class 
with annual income between $5,000 and $10,000 received only two- 
thirds as many services from physicians, only three-fifths as many 
days of general hospital care, and less than one-half as much dental 
care as professional opinion considered necessary on the basis of their 
expected illness rates. 
The findings of the National Health Survey and of earlier repre- 
sentative studies therefore provide quantitative support for the 
generally recognized fact that the receipt of medical care depends 
largely on income, and that people of small means, or none at all, 
though having the greatest need for care, receive, on the whole, 
the least service. 
The group of some 20 million persons without income, dependent 
on public support for general living, is similarly dependent on public 
funds, or philanthropy, to meet its costs of medical care in sickness. 
To what extent, then, does government contribute to the support of 
medical services for this group? In 1935, expenditures from govern- 
mental funds for health and medical services amounted to about 
one-sixth of the total medical bill in that year, or approximately 
$520,000,000. Of this amount, approximately $72,000,000 was used 
for hospital care of patients in Federal institutions. About $157,- 
000,000 was absorbed by hospital care of the tuberculous and the 
mentally diseased. Expenditures for general hospital care (includ- 
ing special hospitals, except tuberculosis and mental hospitals) 
amounted to about $105,000,000, representing an expenditure of 
approximately $75,000,000 for care given in governmental hospitals, 
and $30,000,000 for care of medically needy persons in nongovern- 
mental hospitals. The national hospital and public welfare associa- 
tions have recently agreed upon policies whereby the use of public 
funds for care of the medically needy in nongovernmental hospitals 
will be made most effective. 
PRESENT FINANCIAL BASIS OF PUBLIC MEDICAL CARE 
Included in the total of $520,000,000 is approximately $130,000,000 
used for the support of the public health services provided by local 
and State health departments. The exact amount of governmental 
expenditures for medical care of the sick poor, exclusive of hospital 
care, is not known, but is estimated to be about $25,000,000. 
Excluding governmental support of hospital care in Federal institu- 
tions, and hospital care of the tuberculous and mentally diseased, total 
expenditures for tax-supported medical care amount to some $130,- 
000,000 annually. This sum, however, is drawn upon to support care 
not only of the medically needy population as here defined, but of 
other persons with income somewhat above the marginal level. 
There is, furthermore, uneven distribution of these governmental 
funds, some States and communities, in particular the large cities, HEALTH SECURITY 
55 
spending very much more than others in proportion to their total, or 
medically needy, population. 
The inadequacy of this expenditure for tax-supported medical 
care—roughly $130,000,000 annually—is emphasized by its compari- 
son with the estimated cost of supplying essential medical services at 
an emergency level to the medically needy, which would amount to 
about $400,000,000 annually. Tliis sum would provide only a 
minimum amount of medical care; a volume of medical service 
consistent with professional standards of adequacy secured by in- 
dividual purchase on a standard fee basis would entail costs of approxi- 
mately five times this amount. 
It is apparent, therefore, that the handicap of insufficient funds 
severely limits the ability of public welfare agencies to meet the medical 
needs of the public-assistance group. The effective distribution of 
public medical care is further impeded by lack of established pro- 
cedures in its administration. Welfare officials have become in- 
creasingly concerned by the problems arising in connection with the 
provision of adequate medical care to the sick poor. A recent report 
of the American Public Welfare Association presents the results of an 
analysis of these problems based on the experience of welfare officials 
throughout the country. The report indicates that the present 
administration of public medical care is characterized by division, 
overlapping and duplication of authority, lack of a satisfactory policy 
for the determination of eligibility for care, and insufficiency and low 
standards of medical service. 
For medical care of the group of some 20 million persons in self- 
sustaining families above the relief level, the present policy of public 
welfare agencies is casual and uneven. Expenditures for even mini- 
mum medical services constitute a serious burden for these families 
living at the emergency level, and a high-cost illness necessitates 
adjustments in the budget which endanger standards of health. If 
serious sickness strikes the breadwinner, the costs of medical care, 
combined with the loss of wages resulting from a protracted period 
of disability, frequently places the family in the dependent class. 
PART II. RECOMMENDATION III 
The foregoing evidence points clearly to the need for further public 
financing of medical care for the group of medically needy persons 
who are unable from their own resources to pay the costs of care on 
any basis. In many communities and some whole States, local fiscal 
capacity is insufficient to support adequate public medical care with- 
out the aid of Federal funds. The charity of private physicians and 
the resources of voluntary institutions are inadequate to meet the 
demands of this group for medical care. The Technical Committee 
therefore believes that some plan of financial cooperation between the 
State and Federal Governments is necessary to secure adequate 
medical care of the medically needy population, and submits the fol- 
lowing recommendation; 50 
Recommendation III: Federal Grants-in-Aid to the States Toward the 
Costs oj a Medical Care Program for Recipients of Public Assistance 
and Other Medically Needy Persons 
HEALTH SECURITY 
It is proposed that the Federal Government, through grants-in-aid 
to the States, implement the provision of public medical care to two 
broad groups of the population: (1) To those for whom the local, 
State, and Federal governments, jointly or singly, have already ac- 
cepted some responsibility through the public assistance provisions 
of the Social Security Act, through the work relief program or through 
provision of general relief; (2) to those who, though able to obtain 
food, shelter, and clothing from their own resources, are unable to 
procure necessary medical care. 
The program would be developed around and would be based upon 
the existing preventive health services. It would be in addition to 
the programs and costs involved in Recommendations I and II but 
would need to be closely related with the services provided under 
those recommendations. The program contemplated in the present 
recommendation would provide medical services on the basis of 
minimum essential needs. It would include medical and surgical 
care, with necessary diagnostic services, medicine, and appliances, 
hospitalization, exclusive of the period of maternity and of care of 
the tuberculous and mentally diseased, bedside nursing care, and 
emergency dental care. 
The use of nongovernmental hospital beds for medically needy per- 
sons, paid for on a proper basis by public funds, is presumed as a part 
of this program wherever local conditions render this policy necessary 
or expedient. It is taken for granted that the medical and allied 
professions and institutions will participate in the administration of 
this program as has been the case in many States and communities. 
SIZE OP THE POPULATION TO BE SERVED 
In the previous discussion, the medically needy population has been 
estimated to include some 40 million persons. At the present time, 
this figure includes only the public assistance group, and persons in 
families with annual incomes under $800 providing a standard of 
living at the emergency level on the basis of recent studies of costs of 
living. While the adoption of an annual income of $800 or less as a 
basis for determining the estimated number of the medically needy 
is somewhat arbitrary, the size of the population to be served has 
been estimated on this basis, and the costs of the recommended pro- 
gram determined with reference to a total of 40 million persons. For 
future planning, it would be desirable to extend the definition of the 
medically needy to include families up to the $1,000 level. Local 
estimates of the medically needy population will necessarily take into 
account regional variation in costs of living. 
COSTS OF THE RECOMMENDED PROGRAM 
The annual minimum cost of such essential medical services, hos- 
pitalization as specified, and emergency dentistry has been estimated 
at $10 per person in the population served. Applied to the 40 million 
persons, including recipients of public assistance and other medically 
needy persons, the total annual cost would be $400,000,000. Of this HEALTH SECURITY 
57 
amount, the proposed Federal contribution might amount on the 
average to 50 percent, or $200,000,000, to be matched on the average 
by an equal contribution from the States. Total expenditures, in- 
cluding Federal, State, and local contributions, might amount, in the 
first year, to $50,000,000, in the fifth year, to $150,000,000. While 
it is estimated that the maximum annual expenditure would not be 
attained before the tenth year, a more rapid rate of development 
would bring the program to maturity at an earlier date. 
It must be emphasized that the estimate of $10 per person per year 
for the cost of providing medical care to the medically needy is based 
on a consideration of minimum medical needs. Adequate care, 
exclusive of dentistry, might cost more than twice tliis amount. 
Although a minimum estimate, the recommended figure probably 
exceeds the per capita expenditure for public medical care made by 
any State at the present time, and is several times higher than the 
Eresent average expenditure for this group in the country. It must 
e recalled also that this amount is supplemental to the preventive 
services already supplied by organized health agencies, and that it will 
be augmented by the provisions of Recommendation I-A for expanded 
public health services including control of tuberculosis, mental disease, 
cancer, venereal disease, pneumonia, malaria, and the industrial 
hygiene program, and by the provisions of Recommendation I-B for 
expansion of maternal and child health services, if Recommendation 
III be adopted. 
It should be noted that this program is exclusive of the provisions 
for maternity care presented in Recommendation I-B, but includes 
its provisions for medical care of children. If the present recom- 
mendation be adopted, it would therefore cover the costs of the special 
program for children presented in Recommendation I-B. 
METHOD OF ALLOCATING GRANTS 
Since fiscal capacity, and the availability of medical facilities and 
personnel vary from region to region, it is proposed that the $200,000,- 
000 Federal contribution be allocated to the States on a basis which 
takes account of two factors: (1) The number of the population in each 
State which is dependent or otherwise medically needy; (2) the 
financial status and resources of the State. It is assumed that the 
States themselves will take into account the wide variation in needs 
and resources among different areas within their own boundaries. 
Primary administrative and operative responsibilities would rest 
with the State governments. Eligibility for Federal grants-in-aid 
would depend upon the meeting of certain minimum conditions 
regarding the service to be rendered to dependent and other medically 
needy persons and upon provision of funds by the States for their 
share of the costs. 
SUMMARY 
In the United States today there are probably 40 million persons 
in families with income supporting only an emergency standard of 
living. Some 20 million persons in this group are in families without 
private income, dependent on public funds for food and shelter, and 
likewise dependent upon public aid or philanthropy for medical care 
in sickness. For the additional group of 20 million persons in self- 
sustaining families of the marginal income class, individual income is 58 
HEALTH SECURITY 
insufficient to meet the costs of sickness without serious curtailment 
of expenditures for food, shelter, and other essentials equally necessary 
for the maintenance of minimum standards of health and decency. 
A large proportion of the needy population lives in small cities and 
rural areas in which limited hospital facilities and medical and nursing 
personnel create an additional obstacle to the receipt of adequate 
medical care. 
While the death rate is higher and sickness more frequent and 
severe among the poor than among those in comfortable circumstances, 
the evidence of numerous studies indicates that the poor, on the whole, 
receive less medical care than the well-to-do. The present system of 
public medical care offers no satisfactory solution for the problem of 
providing adequate care to the medically needy. Its restricted legal 
basis permits care chiefly to general relief clients, providing unevenly 
for other recipients of public assistance, and recognizing only to a 
limited degree the needs of otherwise self-supporting persons whose 
private income is insufficient to meet the costs of medical care. The 
practical operation of the system is further impeded by lack of funds, 
overlapping of authority, and insufficiency and poor standards of 
medical service. The Technical Committee therefore believes that 
the medical needs of this large group of the population can be met 
only by a program of Federal-State cooperation providing the addi- 
tional public funds necessary to support minimum medical services. 
The success of the program will depend upon the full cooperation 
of physicians and others involved in giving medical services, of public 
and private hospitals and clinics, of health departments and welfare 
agencies. No one plan will meet the diverse needs of the States, and 
considerable latitude must be allowed in the details of State and local 
programs. But the problems of executing the program must not be 
permitted to obscure the need for Federal aid in securing to these 
needy citizens their rights to health. 
A General Program of Medical Care 
The Technical Committee on Medical Care has called attention to 
the notable advances made in recent years in the prevention and cure 
of disease. The Committee has also called attention to the fact that 
there are serious inadequacies in the health services of the Nation. 
In the report transmitted by the Interdepartmental Committee to the 
President in February, the existing deficiencies were summarized in 
four broad categories. Of these, there have already been considered: 
(1) Expansion of public health, and maternal and child health 
services; 
(2) Expansion of hospital, clinic, and other institutional facilities; 
and 
(3) Provision for the medical services of needy and of medically 
needy persons. 
Attention may now be directed to the fourth major problem: The 
financial burdens and the economic insecurity which sickness creates 
for self-supporting persons. HEALTH SECURITY 
59 
PART I. SICKNESS BURDENS OF SELF-SUPPORTING PERSONS 
When outlining a national health program, the Committee placed 
first emphasis on prevention of disease. Recognizing the importance 
of private medical practice, of hospitals, clinics, sanatoria, health de- 
partments, and other institutions and agencies for the provision of 
modern medical service, the Committee has recommended a program 
to meet existing deficiencies. 
Preventive services and hospital facilities are necessary, but of them- 
selves they are not sufficient. A large proportion of illness is not yet 
preventable. Only a fraction of all illnesses requires hospitalization— 
though many more cases require or can profit from organized clinic 
service. But regardless of the number, distribution, technical pro- 
ficiency, and quality of services available from hospitals, clinics, dispen- 
saries, sanatoria, physicians, dentists, and nurses, these services are of 
no direct benefit to persons who do not use them. Society must not 
only have an armament against disease but must also see that it is 
effectively utilized. Between the individuals or institutions equipped 
to serve the sick and the millions of people in need of their services 
stand barriers, the most important of which is an economic wall which 
both groups are anxious to scale. 
The cost of medical care—including in this phrase the costs of 
services furnished by physicians, dentists, nurses, hospitals, labora- 
tories, etc.—must be brought within the means of the public. Fur- 
thermore, insecurity and dependency created by loss of earnings during 
periods of disability must be reduced as far as available means permit. 
If a national health program is to bring health security to the popu- 
lation, it must include provision against the burdens created by 
medical costs and by loss of earnings during periods of disability. 
TOTAL COSTS AND PRIVATE EXPENDITURES 
The purchase of medical services is still mainly a matter of private 
and individual action. Though government (Federal, State, and local) 
spends considerable sums, and though organized groups pay an 
important part of the Nation’s bill for sickness, the individual patient 
still carries the principal share of the costs through private payments. 
In 1929 the total expenditures in the United States for all kinds of 
health and sickness services were about $3,700,000,000, of which 
patients paid 79 percent and government 14 percent. Philanthropy 
and industry accounted for the remaining 7 percent. In 1936, the 
total expenditures had declined to $3,200,000,000, of which patients 
paid 80 percent and government 16 percent. In 1937 and in the 
current year, government expenditures have probably further in- 
creased, offsetting reductions in expenditures by philanthropy and 
industry; but private and individual expenditures still remain approxi- 
mately 80 percent of the total. 
INCOME AND HEALTH NEEDS 
If medical services are to be effective, they must be geared to need. 
The need for community-wide preventive services is substantially 
uniform among all classes of people; but the need for individual 
services is not. HEALTH SECURITY 
60 
The association of sickness with low income has been demonstrated 
by numerous surveys which have taken account of economic status. 
By way of illustration, we may cite a survey among representative 
white families in many communities of the United States during the 
years 1928-31. It was found that in families with annual incomes of 
$3,000 and more, there were 3.8 days of disability a year for each 
person; in families with incomes under $1,200 a year, there were 8.9 
days of disability a year per person. 
A comprehensive review of the statistics on sickness and poverty 
would be too lengthy for inclusion here. Every substantial sickness 
survey, whether in urban or in rural communities, whether made by 
government, by philanthropy, or by business concerns, serves only 
to furnish additional proofs that sickness and disability are more 
prevalent among people of small means than those who are in better 
economic circumstances. This is the basis for the conclusion that 
the poor and those in low-income classes need more medical care than 
the well-to-do or the wealthy. 
The higher sickness rates that prevail among people with small in- 
comes might lead one to assume that they would receive more medical 
services than those in better circumstances. But the contrary is the 
fact. Either those in the lower income classes get too little care or 
those in the upper income classes get too much. A study of this point 
showed that the well-to-do were not, in general, receiving too much 
service as judged by professional standards. The only alternative 
conclusion possible is: the poor receive too little. 
Studies of this kind do not show merely a special contrast between: 
the poor at one extreme and the wealthy at the other. On the con- 
trary, they show a more or less regular gradation from the lowest to 
the highest income groups. The large majority of the population 
which falls between the income extremes shows the same phenomenon; 
they receive medical care not according to their need but according to 
their income level. For an overwhelming majority of the entire pop- 
ulation and for an even larger proportion of self-supporting persons, 
medical care must be purchased privately, and the frequency of pur- 
chase depends largely upon the purchase price. 
INCOME AND RECEIPT OF CARE 
UNEVEN BURDEN OF MEDICAL COSTS 
Why do self-sustaining people with low incomes receive inadequate- 
care? The first basic reason is found in the irregular and unpredict- 
able occurrence of illness and of sickness costs. 
Families spend, on the average, 4 to 5 percent of income for medical 
care, the proportion being fairly constant up to an annual family in- 
come of $5,000, beyond which it tends to decline slightly. These 
average figures do not, however, give a realistic picture of the burden 
created by medical costs. The need for medical care by a family is 
uneven and unpredictable. In one year little medical service or none 
may be required; in another year the family may suffer one or more 
severe illnesses among its members and may require medical service 
costing large amounts. No particular family knows any month or 
any year whether it will be among the fortunate or among the unfor- 
tunate. When serious illness comes, it may bring large costs and may HEALTH SECURITY 
61 
•descend with catastrophic force on the current budget, on savings, on 
freedom from debt, or the economic independence of the family. 
Every substantial study of medical costs shows that they are burden- 
some more because of their uncertainty and variability than because 
■of their average amount. And this is equally true for the urban 
family of the industrial wage earner and for the rural family of the 
farmer or farm laborer. 
Nor do the statistics of actual family expenditures tell the whole 
story. Knowing in advance that they cannot pay large medical bills, 
many families ask for “free” care, and many go without medical 
attention. Nor is it difficult to picture the distress of those families 
which incur large bills and undertake to pay them. In one case or 
another, the savings of a lifetime may be wiped out, the hopes and 
dreams for a home or farm thwarted, educational opportunities sacri- 
ficed, the family deprived of those things which make life pleasant 
and living worthwhile. Nor do the statistics leave any doubt why 
physicians and hospitals have difficulty in collecting their bills. Is 
all this necessary or inevitable? Is there no remedy? Is our system 
of providing, buying, or paying for medical care the best that can be 
devised to meet our present needs? 
The burden of sickness costs is mitigated in some measure by the 
arrangements whereby fees are adjusted to ability to pay. But the 
sliding scale operates only in limited ways and is open to very serious 
abuses. Though free and part-pay services and facilities have been 
extensively developed, especially in the large cities, though physicians 
give generously of their services, and though governments have greatly 
increased tax support for services furnished to the poor, the fact 
remains that large costs still fall on small purses. 
MEDICAL CARE AND ABILITY TO PAY FOR ADEQUATE CARE 
The uneven burden of medical costs is the first cause of inadequate 
care. There is a second cause of great importance. A considerable 
proportion of the population is too poor to be able to pay, through 
their own resources, the full cost of adequate care. The increasing 
cost of good care, the more extensive public demand for it, and the 
strengthened determination of society to conserve the health of the 
people join in the creation of a new class of persons. These are people 
who may be self-supporting and independent for all their other basic 
needs but who are unable to afford the costs of necessary medical care. 
The problem created by the irregular incidence of illness and of 
medical costs cannot be solved by an increase in average family in- 
come. If the national productivity were in some way doubled and 
everyone’s income were correspondingly increased, the medical care 
problem of self-supporting people with doubled income would be 
alleviated somewhat, but would be far from eradicated. 
Recent studies provide a basis for estimating the cost of adequate 
medical care as defined by competent professional judgment. If pur- 
chased on an individual basis for minimum fees, such care (exclusive of 
the costs of community services, dentistry, medicines, or appliances) 
would cost, on the average, about $76 per person a year or about $310 
for a family of average size. Obviously, such expenditures for medical 
care would be possible for the great majority of all families only with 
extraordinary adjustments in the distribution of income, in budgets, 
and in standards of living. 62 
HEALTH SECURITY 
Alternatively, the cost of adequate care may be estimated crudely 
on the assumption that care is purchased by groups rather than by 
individuals. From the experience of various organized medical 
service and insurance plans, about $17.50 per person a year appears 
to be a reasonable minimum estimate of the cost of furnishing adequate 
care, exclusive of dentistry. Adequate dental care would cost at 
least an additional $7.50 per person a year. This gives $25 per person 
or $100 for a family of four as an estimated minimum cost of adequate 
care purchased collectively by groups rather than by individuals. 
Expenditures of this amount would mean approximately doubling the 
average sum spent by families at the $1,000 income level, adding one- 
third for families with $1,500 a year and one-fifth for families with 
$2,000 a year. Families with $2,000 a year or less represent, in dif- 
ferent years, about 60 to 80 percent of all the families of the Nation. 
Self-sustaining families with less than $1,000 a year and those whose 
incomes must be supplemented would have to be aided even more. 
Families with incomes of $3,000 and more spend more than $100 a 
year for medical care. 
The conclusion is inescapable that considerable proportions of the 
Nation’s families are too poor to afford the cost of adequate medical 
care from their own resources. If they are to receive such care, some 
part of the cost must be borne by the more prosperous. This is not a 
new principle; it has long been practiced in the payment for medical 
care, and the medical profession has always insisted that people should 
pav for medical care in proportion to ability to pay. 
Sickness has become a hazard like death or unemployment in that 
it entails losses which may be greater than the individual can meet 
unaided from his own resources. The need for food, shelter, and 
clothing can be budgeted by the individual family; sickness costs can 
be budgeted only by a large group. If medical care is to be made avail- 
able to all families with small or modest incomes at costs they can 
afford, the costs must be spread among groups of people and over 
periods of time. Some arrangement must be worked out whereby 
individuals will make regular periodic contributions into a common 
fund out of which the costs of medical care will be defrayed for those 
who are sick. Thus, in each year, the majority who require little or 
no medical care will help pay the bills of the minority who happen to 
need much medical care. One year, some will be the fortunate ones, 
will have small sickness needs, and another year they may be among 
the unfortunate and so need the help of others. 
INCOMES OF PRACTITIONERS AND INSTITUTIONS 
The inadequate incomes earned by many professional practitioners 
deserve careful consideration. The uneven burden of medical costs 
upon individuals and families has its counterpart in the uneven dis- 
tribution of income among the physicians, dentists, and nurses who 
minister to them. Even in the prosperous year 1929, for every 
physician who earned more than $10,000 as an annual net income from 
his professional practice, there were two who earned less than $2,500. 
For every dentist who earned more than $10,000, there were four who 
earned less than $2,500. This was the unhappy state of affairs in a 
peak year of prosperity. Since then, the economic status of doctors, 
dentists, and nurses has been much worse. HEALTH SECURITY 
@3 
Inadequacies in the receipt of medical care are reflected in inade- 
quacies in the incomes of practitioners and hospitals. While doctors 
are only partly occupied, while nurses suffer from substantial unem- 
ployment, and while hospital beds stand empty, millions of persons in 
need of service do not receive it. 
It is significant to record the fact that every sound arrangement to 
reduce the burdens created by variable sickness costs for the public 
operates to stabilize and increase the incomes of those who furnish the 
services. 
INADEQUACY OF VOLUNTARY INSURANCE 
A brief reference may be made to the long and complex history of 
voluntary efforts to solve the problem of sickness costs which are 
unequal, unpredictable, and unbudgetable for individuals or families. 
The group payment of sickness costs is not a new concept but an old 
and well-established practice. Organized charity, the sliding scale 
of medical fees, commercial insurance, and other devices have long 
been practiced to reduce the burdens of sickness costs and to dis- 
tribute these costs among groups of people. They have not been 
and they are not now adequate to deal with the problem. 
Group payment through nonprofit insurance has become a more 
important practice. Most commonly, the group has been made up 
of employees of a single industry, banded in a “mutual benefit” or 
similar association. Usually, the employer and the insured persons 
share the costs. Some of these plans provide only medical benefits, 
many provide only cash benefits, and a few provide both. 
Group payment has recently received a strong impetus through the 
development of nonprofit community associations for insurance against 
hospital costs (group hospitalization). In a number of communities, 
group hospitalization authorities are studying the possibility of ex- 
panding the program to include not only hospital bills but physicians’ 
fees and other costs as well. 
These and other efforts to solve the problems of sickness costs 
deserve high commendation. The proof of their value, however, is 
not their good intentions but their actual accomplishments in achiev- 
ing coverage. Voluntary sickness insurance without subsidy or other 
encouragement through official action may be important as a method of 
experimentation with the technical and social problems of group 
payment, but it has nowhere shown the possibility of reaching more 
than a small fraction of those who need its protection. After decades 
of effort, about two million persons in the United States receive com- 
prehensive or even substantial medical care through voluntary in- 
surance arrangements, and one and a half million persons (some of 
them the same persons) are members of so-called approved, non- 
profit hospital insurance associations. In the face of needs which 
are vital and urgent for at least 100 million persons in the United 
States, the Technical Committee on Medical Care cannot find the 
answer to the Nation’s problem in voluntary insurance efforts. 
PART II, RECOMMENDATION IV 
The Technical Committee on Medical Care has reached the con- 
clusion that Government must assume larger responsibilities than it 
has carried in the past if it is to help self-supporting people meet the 
problems of medical costs. 64 
HEALTH SECURITY 
A program to provide a rational basis for the financing of medical 
costs cannot start in a vacuum; it must take account of existing 
customs, facilities, and practices. Wide variations in existing per- 
sonnel, institutions, and economic conditions require that a national 
program must be flexible and must be adaptable to diverse social and 
economic conditions in different areas of the country. The program 
must aim at the eradication of socially undesirable differences, but 
it must recognize that this can be effected only over a period of years. 
Such considerations lead the Committee to the conclusion that 
effective operating programs should preferably be designed and 
administered on a State-wide basis. On this basis, the role of the 
Federal Government should be principally to give financial and 
technical aid to the States in their development of sound programs. 
Accordingly, the Technical Committee on Medical Care submits as its 
fourth recommendation: 
Recommendation IV: Federal Grants-in-Aid to the States Toward the 
Costs of a More General Medical Care Program 
The implications of this recommendation may first be examined in 
respect to programs which may be developed at the State level. 
If effective medical services are to become a reality, people of small 
means must be able to obtain these services without facing the costs 
at the time the services are needed. The costs can be distributed 
among groups of people and over periods of time through the use of 
taxation, or through insurance, or through a combination of the two. 
EXPANSION OF PUBLIC MEDICAL SERVICES IN THE STATES 
It has been pointed out that tax-supported public medical services 
already involve annual expenditures of about $500,000,000 to 
$600,000,000. The use of tax funds to pay for medical services is, 
of course, a very old method of distributing the costs. The principle 
of distribution is, however, applied in an extreme fashion, because, 
in general, public medical services are available to needy and, more 
recently, to medically needy persons and not to other taxpayers 
who provide the funds. A more general program, which would meet 
the needs of a larger proportion of the population to whom medical 
costs are burdensome, could be developed through expansion of 
existing public medical services, provided such services were made 
more generally available to the population. 
Existing public medical services are, broadly considered, of two 
kinds: (1) General services for the needy, and (2) limited classes or 
categories of service for special groups in the population. The scope 
of services for the needy is well known, and the deficiencies are widely 
recognized. The categorical services are usually highly specialized; 
they include services which State and local governments have developed 
for persons afflicted with diseases infused with an element of public 
danger (e. g., the acute communicable diseases) or with diseases 
which, being long-continued or chronic, or involving highly specialized 
care, create costs which are beyond the ability of individual families 
to meet (e. g., cancer, infantile paralysis), or which, because of lack 
of care, precipitate dependency and large social burdens (e. g., tuber- 
culosis, mental diseases). HEALTH SECURITY 
05 
The expansion of public medical services can be effected—as some 
think they should—through this categorical approach. On this 
basis, government would make particular kinds of services available 
to the public, some only to the needy, some to the medically needy, 
and some to wholly self-supporting persons or to the entire com- 
munity. Some of the possibilities in these directions have already 
been discussed; only their expansion to all or most income groups is 
involved here. 
It is fitting to note two objections against the expansion of public 
medical services through this categorical approach. First, each lim- 
ited development brings additional administrative and organizational 
complications because of the diversity of the separate services that are 
made available, and because of the gaps that remain between them and 
also between them and privately purchased services. In many of our 
cities today, the complexity of these categorical services already defies 
the understanding of even the expert, and much evidence shows the 
confusion in the public mind concerning what is and what is not avail- 
able, who is and who is not eligible. Second, the limitation of particu- 
lar services to particular groups in the population piles up further com- 
plexities because of the necessity of investigating the financial status 
of the person who needs the care. People who are self-sustaining for 
the other necessities of life have profound objections against a means 
test for medical services, whether this means test is administered by 
a government agency, a social worker, or by a private medical practi- 
tioner. 
If functional arrangements are to be simplified rather than be made 
more complex, if medical care is to become available without a means 
test for those who need service, if the public is to have ready access to 
these services, it seems essential to contemplate expansion of public 
medical services as a general program and not through a categorical 
approach. Such a program would produce a close similarity between 
public medical care and public education. 
Medical care in the United States now costs approximately three 
and a quarter billion dollars a year. Subtracting the amount already 
being spent by governments (Federal, State, and local), a general pro- 
gram of public medical care for the Nation would require about two 
and three-quarter billions a year. A limited program of public medical 
services could be designed to cost considerably less; the services could 
be of less than complete scope; or—despite obvious objections—they 
could be restricted to people in the lower income levels; or, as has 
been done in Recommendation III previously discussed (medical care 
for needy and medically needy persons), they could be limited in both 
respects. In any case, a program of sufficient size and scope to come 
to real grips with the national needs must involve new tax expendi- 
tures involving between one and three billion dollars a year. These 
sums include the expenditures that would be involved in carrying out 
Recommendation III, which calls for an outlay of about 400 million 
dollars. The possibilities in this direction deserve careful exploration, 
with special regard for the forms of taxation which may be feasible to 
raise the necessary funds. 
It should be emphasized that the new tax funds for public medical 
services would not represent a new kind of expenditure by the popula- 
tion; most of these sums are already being spent from private funds. 66 
HEALTH SECURITY 
The essential change would be to effect a wider distribution of medical 
costs by changing the method of payment. 
DEVELOPMENT OF HEALTH INSURANCE BY THE STATES 
The raising of the funds required to finance a program of public 
medical services through general revenue taxation may be expected to 
present some difficulties. A general program of medical care can also 
be financed through insurance contributions. Health insurance 
designed to provide adequate care could be financed principally by 
direct, earmarked contributions. Like public medical care, health 
insurance is a method of budgeting expenditure so that each family 
carries a budgeted, rather than, as at present, a variable and uncertain 
risk. As is shown by large experience, the insurance procedure is 
entirely compatible with freedom of all practitioners to participate 
in the plan, with free choice of physician by the patient, and with 
wide latitude left to physicians as to the method of their remuneration. 
Health insurance by itself is limited in its capacities to reach all 
who need its protection in much the same way as are other social 
insurance schemes. National coverage of all persons, or of all with 
earnings below a specified income level, may be difficult to effect; self- 
employed persons, domestic servants, and farm laborers cannot be 
easily brought within the plan, because of the anticipated difficulty of 
collecting regular contributions from them. However, experience 
with compulsory systems abroad, and with voluntary systems in the 
United States as well as in other countries, indicates that these diffi- 
culties are not insuperable, especially if insurance contributions are 
combined with general taxation or special assessments. 
A health insurance system might properly be limited to individuals 
under a specified income level (e. g., $3,000 a year), or might cover all 
persons in specified employment groups through contributions levied 
on income up to, say, $3,000 a year. In order that the establishment 
of an insurance system should not lead to one program for the purchase 
of medical care for insured gainfully employed persons and another 
for noninsured dependent groups, the system should make provision 
for the inclusion of persons without income through contributions on 
their behalf from public funds. Thus, tax payments would be used 
jointly with insurance contributions to support a unified scheme for 
self-supporting and needy persons. The insurance benefits of this 
system should be distinguished from insurance against wage loss, 
which will be discussed separately. Under such a general system to 
meet medical costs, medical need might disappear if contributions 
were related to income. 
A comprehensive system of health insurance nationally developed 
would call for total funds equal to 4 or 4 % percent of income of the 
covered population. The major portion of these funds should be 
obtained from the direct contributions of insured persons, with assist- 
ance from employers and from government. 
The costs of health insurance do not represent new expenditures. 
Inasmuch as the over-all cost is estimated to be substantially what is 
already being spent by individuals, health insurance would be pri- 
marily a method of substituting average for variable costs. Only to 
the extent that part of the cost is placed on employers or is shifted to 
government and is not in turn shifted back to the insured persons, is 
the impact of medical costs changed from its present pattern. HEALTH SECURITY 
67 
STATE CHOICE OF PROGRAM 
A choice between public medical service and health insurance in- 
volves many alternative considerations. Public medical service is 
potentially applicable to whole areas and to entire populations; it can 
be used wherever the taxing power of government reaches. Health 
insurance is somewhat more easily applicable to industrial than to 
agricultural areas, though this limitation is by no means an absolute 
one. 
The two procedures are not mutually exclusive alternatives. On 
the contrary, each may have substantial advantages for particular 
areas or for particular portions of the population to be served. Ex- 
perience in many countries suggests health insurance for urban and 
industrial areas and public medical services for rural and agricultural 
areas. In countries where health insurance is widely practiced, it is 
always supplemented by public medical provisions, even in urban 
areas. For example, it is common to find hospital service largely 
financed through tax funds and serving nearly all the population in 
countries with extensive systems of health insurance. The relative 
usefulness of either method by any State would depend upon the 
characteristics and the composition of the State. One State, more 
highly industrialized and urbanized than another, may find the in- 
surance technique generally or extensively applicable. Another State, 
more generally agricultural and rural, may find the method of pay- 
ment through taxation or special assessment more widely useful. The 
choice of method or combination of methods should, in the opinion 
of the Technical Committee on Medical Care, be made by the States 
rather than by the Federal Government. 
When making decision as to the program to be developed, many 
States would need to give careful consideration to the unequal financial 
resources of areas within the State. The same kind of public policy 
that is the basis for Federal aid to the States dictates State aid for 
underprivileged areas within the State. 
Federal aid to assist the States in the development of sound pro- 
grams should be equally available to the States for the development 
of public medical services, health insurance, or a combination of the 
two. Recommendation IV should, therefore, be understood to mean 
that Federal grants-in-aid to the States should be available within 
reasonably wide limitations as to the procedure, categories of services, 
or population groups which a State may decide to assist. Federal 
grants-in-aid should be geared to approved classes of expenditures 
under a State program rather than to the administrative or financial 
techniques used by the State. 
It is scarcely necessary to emphasize that the development of a 
sound State program for medical care need not wait, in States where 
financial resources are adequate, on the availability of Federal aid. 
AN ESTIMATE OF FEDERAL COSTS 
The cost to the Federal Government of a program developed under 
Recommendation IV cannot be estimated closely until the essential 
features of the plan are determined. Furthermore, a complete pro- 
gram could be attained only after some years of development. Ac- 
count must be taken of: (a) The rate at which States would be pre- 
pared to develop programs; (6) their ability to cover the populations 0g 
HEALTH SECURITY 
which should be protected by health insurance or by public medical 
services; and (c) their ability to develop effective distribution of 
professional personnel, hospitals, and other facilities in areas where 
these are now deficient. 
A rough estimate of the Federal cost might be made only to indicate 
its order of magnitude. The over-all cost of services to be furnished 
through health insurance or analogous public medical services, or both, 
may be estimated to be about $2,600,000,000 a year, assuming a 
theoretical population coverage of 130,000,000 persons1 and provision 
of such services as could, on the average, be furnished for $20 per 
person.2 This would be the eventual cost for complete national 
coverage. If one-tenth of the total might be made effective in the 
first year and the Federal share of the cost were assumed to be some- 
thing between a minimum of one-fifth and a maximum of one-third 
of the total involved in furnishing services, the Federal cost at the 
outset might fall between $52,000,000 and $87,000,000 a year. The 
growth of the State systems would occur through expansion of the 
population covered and through increasing completeness in the variety 
of services furnished. If the grants-in-aid continue to be necessary, 
the annual Federal cost would presumably increase tenfold in perhaps 
10 years, reaching an eventual maximum falling between one-fifth 
and one-third of the two and six-tenths billion dollars over-all cost. 
These estimates of Federal cost include (and duplicate) several items 
arising out of preceding recommendations. They include considerable 
portions of Recommendations I-A and I-B for the expansion of public 
health, maternal and child health services, and all the cost involved in 
Recommendation III dealing with grants-in-aid toward medical care 
for needy and medically needy persons. Recommendation IV pro- 
poses a more general program which embraces the more limited 
programs, submitted in Recommendations II and III. 
Development of public medical services and health insurance 
through Federal aid such as is suggested above might not be as rapid 
as may be desired. If this is a meritorious objection to the grants-in- 
aid plan, more rapid development can be effected through a uniform 
payroll tax (with a tax-offset arrangement) as in unemployment 
compensation. 
Insurance Against Loss of Wages During Sickness 
We have already pointed out that sickness brings economic burdens 
not only because medical services involve costs but also because 
disability of the wage earner leads to wage loss. Loss of income in 
turn makes the purchase of medical services all the more difficult. 
PART I. THE INCIDENCE OF DISABILITY 
On the average day of the year, there are probably at least five to 
six million persons who are temporarily or permanently disabled by 
illness. These persons are unable to work, to attend school, or to 
pursue their other customary activities. 
TOTAL AND AVERAGE INCIDENCE OF DISABILITY 
1 Including persons with and without income. 
2 This figure excludes services already provided through tax funds, takes account of reasonable economies 
which can be made, and excludes certain current wasteful, valueless, or even harmful expenditures. HEALTH SECURITY 
69 
Among gainful workers, the rate of disability varies considerably, 
depending on age, sex, economic level, occupation, and other factors. 
Taken by and large there are probably between 7 and 10 days of 
disability per person a year among the gainfully employed, but the 
figures range from as little as 3 or 4 days up to 15 or more days a year 
per person for different groups in the population. These figures 
understate the incidence of disability because they do not fully take 
account of those who have fallen out of gainful employment by reason 
of long-continued disability. 
If all our gainful workers were employed and earning an average 
wage of $4 or $5 a day, a disability rate of 9 working days per year 
would mean that disability wage loss would amount to $36 or $45 
per person a year. A more conservative estimate may be based on 
the assumption that those who are gainfully employed suffer an aver- 
age disability of about 7 working days a year. For a period like the 
year 1929, the wage loss due to disability was nearly two billion dollars; 
for a period like the present, when there is widespread unemployment, 
it would be at least one or one and a half billion dollars. These 
figures take no account of the larger losses to industry and to society 
generally. 
UNEVEN INCIDENCE OF DISABILITY 
Stating the wage loss from disability in terms of averages or of 
total costs is significant but also somewhat misleading—just as average 
or total costs for medical care may be misleading. If each worker had 
the average annual disability and the average annual loss of earnings 
we should not have a problem worthy of extended discussion. Un- 
fortunately, a wage earner does not suffer average illness or average 
loss, except by chance. Disabling illnesses are not all of 7, 8, or 9 
days’ duration. On the contrary, disabling illness ranges from less 
than a day to the entire year, and in some cases the disability is 
permanent. Whether an illness will be mild and nondisabling, or 
severe and disabling, whether disability will last a day, a week, a 
month, a year, or the remainder of the individual's lifetime depends 
upon many factors which in general cannot be foreseen or predicted 
by or for the individual. Though we can forecast with substantial 
accuracy what will happen in a large group of workers, the individual 
cannot know in advance what will happen to him. This is the essen- 
tial reason why the averages are misleading and why disabling sickness 
is a constant threat to the security of the individual and the family 
of small or modest means. 
The effects of temporary disability are in all important respects like 
the effects of temporal unemployment; each deprives the worker 
and his family of income for a shorter or longer period. The effects 
of chronic, long-continued, or permanent disability are like the effects 
of old age, except that unlike old age, disabling disease is not confined 
to the last and relatively nonproductive periods of life. Disability 
affects persons at all ages. When the worker has dependents to sup- 
port, its consequences are most severe. 
AN ESTIMATE OF THE PERMANENTLY DISABLED 
Of the 5 or 6 million disabled persons on an average day of the 
year, perhaps one-half, more or less, are suffering from temporary 
disabilities from which they will recover sooner or later. The other 70 
HEALTH SECURITY ' 
half are permanently and totally disabled from disease and other 
disabling conditions. Four-fifths of these persons, or nearly 2,000,000, 
are in the ages under 65. Many of these persons have families and 
dependents; in many instances, these disabled persons have been the 
sole support of their families. A rough estimate which takes account 
of the immediate families of these disabled persons suggests that 
between 8 and 10 million persons are probably quite directly affected 
by their permanent disablement and loss of earning capacity. 
Under the present social security program, workers are assured some 
continuance of partial income, in lieu of their regular wages, when they 
become unemployed and are able to work. Under the workmen’s 
compensation laws, most of them are protected against wage loss 
resulting from accident or injury arising out of employment. But 
generally they have no protection against wage loss resulting from 
nonindustrial sickness or accident. A limited number of workers do 
have some such protection through voluntary insurance schemes, 
commercial or nonprofit; but they are a small minority in the total. 
If the wage earner becomes unemployed for lack of a job, he is in- 
sured for some continuity of income between jobs (if he is in employ- 
ment covered by unemployment compensation); but if he becomes 
unemployed because he is unable to work, he is thrown back upon such 
private and individual resources as he can command. Experience 
has shown the need for more substantial protection. 
The Technical Committee on Medical Care therefore submits as its 
fifth recommendation: 
PART II. RECOMMENDATION V 
Recommendation V: Federal action toward the development of programs 
for disability compensation 
DIFFERENT INSURANCE PROVISION FOR TEMPORARY AND PERMANENT DISABILITY 
There is good reason to believe that the insurance against disability 
can best be treated not by a single insurance system but by two systems 
closely coordinated. There is, first, the problem of the temporarily 
disabled worker—the workers who has an actute illness and for whom 
there is every reason to expect that, after a few weeks or a few months, 
he will recover and return to work. There is, second, the problem of 
the permanently disabled worke—the worker who, by reason of 
crippling or chronic illness, will probably never again be able to enter 
gainful employment. The administrative problems to be met in 
paying benefits to the first worker are quite different from those which 
arise in the case of the second worker, and there are important reasons 
for believing that the rate of benefits provided through insurance 
should not be identical. An arbitrary line may be drawn between 
temporary and permanent disability, defining the first, for example, 
as disability lasting less than 26 weeks and the second as disability 
lasting more than 26 weeks. 
Temporary disablement is much like temporary unemployment. 
Insurance against temporary disablement may be patterned after 
unemployment compensation, with repetitive certification of disability 
by a physician as a procedure analogous to repetitive registration at 
an employment office. HEALTH SECURITY 
71 
Permanent disablement is more like old-age retirement. The 
permanently disabled worker leaves the labor market in the same sense 
as does the aged person; both of these classes of persons permanently 
cease to have earnings. The disabled worker is generally younger 
than the retired worker and therefore more often has a dependent 
spouse and dependent children. Hence, assurance of some income is 
at least as urgent, socially, for the disabled as for the aged. Not 
involving the need for repetitive certification (except for those cases 
in which recovery or rehabilitation is possible), permanent disability 
(invalidity) insurance is similar to old-age insurance where certification 
of retirement age establishes the basis for the award of a retirement 
annuity. Permanent disability insurance may, therefore, be con- 
veniently patterned after old-age insurance and may actually be 
established by introducing invalidity benefits into the present old-age 
insurance system. 
Temporary disability compensation, patterned after unemployment 
compensation, would involve a cost of approximately 1 percent of 
wages. With a substantial but not unreasonable waiting period—7, 
10, or 14 days—this would probably support benefits calculated at 50 
percent of wages for a maximum of at least 26 weeks. The allocation 
of the cost may have to be different from that which is customary in 
unemployment compensation. 
Permanent-disability insurance with benefits geared to old-age 
benefits, would probably cost 0.1 to 0.2 percent of wages at the outset 
and the cost may be expected to rise in the course of years, attaining 
between 1 and 2 percent of wages in 20 years and perhaps 1.5 and 3 
percent a generation or two later, the exact cost depending upon the 
benefits provided and upon numerous other factors. 
A disability compensation program is not primarily part of a medical- 
care program. Nevertheless there are important interrelations 
between the two. The cost of compensation for disability would be 
needlessly high if wage earners generally did not receive essential 
medical care. Hospitalization and other institutional care, and 
vocational rehabilitation for workers who are disabled, are essential 
if those who can be restored to working capacity are to receive the 
necessary care. Without such facilities and services, the cost of 
invalidity annuities would be unnecessarily burdened. These and 
similar considerations indicate some of the interrelations between 
disability insurance and a general health program. 
CONCLUSION 
This discussion of Recommendations IV and V submitted by the 
Technical Committee on Medical Care has probably raised more 
questions than it has answered. The Committee’s purpose has been 
to present the needs which exist and to outline, only in broad terms, 
the general pattern of programs to meet these needs. 
It is obvious that Recommendations IV and V deal with somewhat 
different procedures, but both bear on common problems. The funda- 
mental objectives involved here are; First, conservation of health 
and vitality; and, second, reduction of the role of sickness as a cause 
of poverty and dependency. 
This report from the Committee began by dealing with the needs 
of self-supporting persons. It has inevitably come to deal both with 72 
HEALTH SECURITY 
them and with the more unfortunate. A general program of medical 
care therefore makes provision simultaneously for both. No one 
wants two systems of medical care—one for the self-supporting and 
another for the needy—any more than two systems of education. 
Though not explicitly stated, it has been assumed throughout the 
Committee’s report that any general program would provide for 
effective coordination between preventive and other services. It has 
also been assumed throughout that such a program, by furnishing a 
strengthened economic base, provides new opportunity for improve- 
ment in the quality of medical services through the concerted activities 
of official agencies, educators, and practitioners. 
In good times and in bad times, sickness is a major cause of poverty, 
destitution, and a large part of all dependency. Through periods of 
prosperity and of depression, sickness still remains the most constant 
factor in dependency. It occurs more frequently and for longer 
periods among the unemployed than among the employed, among the 
poor than among the rich. It is associated with various other mani- 
festations of social disorganization, such as unemployment, low income, 
poor housing, and inadequate food. If we are to lessen destitution 
and poverty, if we are to penetrate to the causes of dependency, we 
must strike simultaneously at this whole plexus of social evils within 
our society. It is of little avail to employ modern techniques in 
solving the problems of unemployment, housing, and low wages if 
we leave to the forces of laissez faire the problem of sickness which 
pervades and contributes to these other factors in dependency, because 
so frequently it strikes down otherwise self-supporting persons. 
During the last quarter of the nineteenth century, public health 
authorities and medical practitioners made a brilliant and successful 
record through a mass attack on unhealthful environments and on 
communicable disease. But we cannot be satisfied with the great 
achievements of the past. A similar attack is needed now on the ail- 
ments and disabilities of individuals. Our primary concern at present 
is not with catastrophic plagues, but with ever-present diseases 
responsible for the disabling illness of 5 or 6 million persons. 
We have been derelict in failing to work more actively to prevent 
dependency. Many widows and orphans are now being supported at 
public expense who have been deprived of their natural support by 
preventable accidents and equally preventable diseases. Many 
persons are now among the unfortunate whom we label as the “unem- 
ployables” solely because they could not afford the medical care that 
would have kept them employable and independent. So long as we 
fail to provide adequate programs for medical care and for protection 
against loss of earnings, just so long are we permitting the creation of 
a permanent class of disability dependents. The sick do not gather 
in crowds on the streets of our cities, but their needs are not less 
urgent. 
The Committee submits this report with the hope that the recom- 
mendations may serve as a basis of discussion on which to crystallize 
a program to meet the basic essentials of a Nation’s health. HEALTH SECURITY 
73 
Explanatory Statement 
In the fall of 1937 the President’s Interdepartmental Committee 
to Coordinate Health and Welfare Activities charged the Technical 
Committee on Medical Care to survey the health and medical care 
work of the United States Government. 
As the study progressed, two facts became increasingly clear to the 
Technical Committee: First, that existing services for the conserva- 
tion of national health are inadequate to secure to the citizens of the 
United States such health of body and mind as they should have; 
second, that nothing less than a national, comprehensive health 
program can lay the basis for action adequate to the Nation’s need. 
These facts were impressed upon the Committee from a general 
review of current health and medical services, from the substantial 
bodies of information available to various branches of the Govern- 
ment, and from recent surveys conducted by governmental and non- 
governmental agencies. The Committee records its indebtedness to 
the numerous groups which have generously supplied information. 
In spite of the gains made in the preservation of life during recent 
years, the utilization of health and medical services has been irregular 
and uneven. There are serious inadequacies everywhere in the health 
services of the United States, and the deficiencies are acute in many 
areas and among large groups of the population. Unaided, States and 
local communities cannot deal with their existing problems. The 
Technical Committee, therefore, has submitted recommendations on 
Federal participation in a national health program, giving special 
consideration as to how best, and to what extent, the Federal Govern- 
ment may discharge its responsibilities in the field of health conserva- 
tion, while leaving due and ample place for the work of State and local 
governments, and for voluntary action. 
The Technical Committee presented a program containing a series 
of specific recommendations, five in number (see pp. 1-4). Some of 
the recommendations are broader than others; one may include all or 
part of what is proposed in another. Each recommendation deals 
with a certain phase of the problem. In some important respects 
the five present some alternative choices, especially in respect to the 
scope of a program to be undertaken. They complement one another 
and lead, all together, to an inclusive program of health and medical 
services to all the people. Action is needed on all the fronts repre- 
sented in the five recommendations, and as rapidly as resources, per- 
sonnel, and public opinion make possible. 
The report of the Technical Committee on Medical Care was con- 
sidered in detail by the Interdepartmental Committee to Coordinate 
Health and Welfare Activities, and after discussion, it was accepted 
as a report of the Interdepartmental Committee. It was submitted 
to the President on February 14, 1938. The section of the report 
dealing with the Need for a National Health Program was made 
available for distribution in order that it might be fully discussed. 
On March 8, 1938, the President wrote to the Chairman of the 
Interdepartmental Committee: 
I suggest that your Committee give consideration to the desirability of inviting 
at some appropriate time representatives of the interested public and of the 
medical and other professions, to examine the health problems in all their major 
aspects and to discuss ways and means of dealing with these problems. 74 
HEALTH SECURITY 
Following this suggestion, the Interdepartmental Committee to 
Coordinate Health and Welfare Activities called the National Health 
Conference to meet in Washington, July 18 to 20, 1938, to present 
and discuss the needs of the people of this country for preventive and 
curative service in illness and for the reduction of the economic bur- 
dens caused by illness, as revealed by governmental and other studies; 
and to discuss steps which may be taken to meet these needs, as pro- 
posed by representatives of the Government and by members of the 
Conference. 
Invitations were sent to approximately 275 men and women from 
the medical professions, from agencies actively interested in health 
and medical services, and from labor, agriculture, and other groups 
of citizens. A total of 176 of those invited attended the Conference 
and participated in its discussions. 
As stated by the Chairman of the Interdepartmental Committee to 
Coordinate Health and Welfare Activities, those in attendance at the 
National Health Conference were not asked to endorse any of the 
specific recommendations of the Technical Committee on Medical 
Care. The recommendations were laid before the Conference and 
the country for attention and constructive criticism.