DISREGARD OF PROFESSIONAL ADVICE

In 1956 the Surgeon General employed outside medical experts to survey representative PHS hospitals and make an official report to the Government. These were:

Ray E. Brown, superintendent, University of Chicago Clinics (Illinois)

Dr. Frank Bradley, M.D., and member of Barnes Hospital, New Orleans, La. Dr. Russell A. Nelson, director Johns Hopkins Hospital, Baltimore, Md.

Dr. G. Otis Whitecotton, Medical Director of Alameda County Institutions. Alameda, Calif.

Dr. Albert W. Snoke, Grace-New Haven Community Hospital, New Haven Conn.

These outstanding leaders agreed in effect that the Public Health Service hospital program had great potential but was being strangled by budgetary restrictions which could only diminish the quality of the service and destroy staff morale. Their recommendations were basically unheeded and only when Senator Lister Hill forced the matter into the open did the Bureau of the Budget allow the barest minimum funds to be even considered.

Why did the Bureau resist adequate provision for care of PHS beneficiaries in the face of these expert reports?

CONGRESSIONAL POLICY OF LONG STANDING

The national policy of the Congress firmly provides for medical and hospital care for merchant seamen-a policy that has been sustained since 1798. This policy is not only geared to prevention of disease importation from abroad but in its composite recognizes the necessity for able bodied seamen to promote our export and import commerce and provide for our national defense.

Is the hospital elimination plan of the Bureau of the Budget, as expressed in the Health, Education, and Welfare release of January 19, 1965, in conflict with this longstanding congressional policy and is it a step toward the elimination of marine hospitalization program itself?

DISREGARD FOR CONGRESSIONAL COMMITTEE ADVICE

In 1962, the U.S. Senate Committee on Appropriations for Independent Offices "noted a practice by the Bureau of the Budget and, in turn, the General Services Administration to withhold approval of capital improvements and repair projects for Public Health Service hospitals except in instances of the most emergent nature or where the actual safety of the occupants is involved. This practice has apparently been based upon consideration by the Bureau (as early as 1958) of closing some of these hospitals or transferring them to non-Federal agencies."

The committee then pointed out "that this hospital program has been in effect for well over a century and a half and that its continuance is a matter of congressional policy-not one of abstract executive discretion." It further stated that "the committee believes that these Public Health Service hospitals should be maintained in good and serviceable condition in accordance with modern standards." (U.S. Senate Committee on Appropriations. Independent offices appropriation bill (fiscal year 1963), Rept. 1923 to accompany H.R. 12711, 87th Cong., 2d sess., Aug. 27, 1962, p. 11).

Is not the action of the Bureau of the Budget expressed by Health, Education, and Welfare on January 19, 1965, the exact opposite counterpart of the congressional committee declaration?

REJECTION OF CONGRESSIONAL REQUEST

The U.S. Senate Committee on Appropriations for the Departments of Labor and Health, Education, and Welfare and related agencies noted in 1964 that funds for repairs and maintenance of the Public Health Service hospitals were included in the 1965 estimates but that "the amounts and projects requested appear to reflect only the minimum necessary for emergency repairs to keep the hospitals in operation. Many of the Public Health hospitals are obsolete and overcrowded and in need of major modernization." The committee then

took a very firm position. It stated that "the committee will, therefore, expect to be presented with a plan for the modernization of the entire Public Health Service hospital system before January 1, 1965, and expects the 1966 budget

estimates will contain the funds necessary to initiate this plan." (Italic supplied). (U.S. Senate Committee on Appropriations, Department of Labor and Health, Education, and Welfare and related agencies, Rept. 1460, Aug. 17, 1964, to accompany H.R. 10809, p. 27).

Does not the Health, Education, and Welfare announcement of January 19, 1965, to close seven hospitals and proceed with a study for transferring the remainder to the Veterans' Administration constitute a complete disregard of this congressional position?

The abolition of hospitals is a far cry from presenting a plan for modernizing the entire Public Health Service hospital system. Does not the public announcement representing decisions already reached by the executive conflict with this clear congressional request and constitute a disregard of the process of congressional review and determination?

ULTIMATE TRANSFER OF ALL HOSPITALS TO VETERANS' ADMINISTRATION

On page 10 of the Health, Education, and Welfare public release of January 19, 1965, it is stated that the Office of Science and Technology will weigh the merits of transferring the health care program for American seamen and the operation of the five modernized hospitals from the Public Health Service to the Veterans' Administration. Page 2 of the same release already makes the decision that beneficiaries will be referred to Veterans' Administration and other hospitals. Weighing the merits of transferring the health care program to Veterans' Administration (p. 10), therefore, could imply that the transfer of the entire processes, including hospital facilities, Administration and professional hospital services is also envisaged. Seamen and many other beneficiaries will simply get lost in the Veterans' Administration hospitalization complex.

Is this not a subtle device to gradually eliminate by Executive action what the executive branch of Government does not want to leave to Congress?

LEGAL COMPLICATIONS TO HEALTH, EDUCATION, AND WELFARE PROPOSAL Section 249 of 42 United States Code provides that merchant seamen and other approved beneficiaries are entitled to medical and hospital care in the Public Health Service (not the Veterans' Administration). Section (e) authorizes care in other hospitals under very limited conditions. This is spelled out in a report by the House Committee on Interstate and Foreign Commerce in the 78th Congress. The language states as follows:

"Subsection (e) would authorize treatment of Service beneficiaries in other hospitals, at the expense of the Service, as provided in regulations. This provision, which would afford a statutory basis for present regulation, is designed to meet overflow conditions and cases where beneficiaries may be remote from the Service hospital." (H. Rept. 1364, the report of the House Committee on Interstate and Foreign Commerce, on H.R. 4624, 78th Cong., 2d sess., p. 20.) This subsection (e) appeared as section 322 (e) of H.R. 4624 which bill became Public Law 410, 78th Congress, 2d session, and now appears in the United States Code as section 249, subsection (e) of Title 42: Public Health and Welfare.

Doesn't the Health, Education, and Welfare proposal violate the intent of Congress?

ONLY CONGRESSIONAL ACTION CAN BE LEGALLY GOVERNING

It is clear that subsection (e) is to be used only under conditions of overcrowding or at remote locations. It did not intend the transfer of the entire function from the Public Health Service to another agency. Both the wholesale closing of the seven hospitals or the ultimate transfer of the remaining five hospitals to VA would be outside Executive authority under this law and would require action by the Congress. Were it possible to do so under the Reorganization Act of 1939, it must still be recommended to the Congress by the President. No action under the Economy Act of such consequence could possibly be sustained.

Is not the action of HEW as announced on January 19, 1965, illegal under existing law and a usurpation of congressional responsibility?

EXPANSION OF TRAINING AND RESEARCH

One of the reasons given for closing the seven Public Health Service hospitals is to provide planned expansion of the training potential and greater

research development. It is an indisputable fact that the budgetary privation policies of the Bureau of the Budget have been the prime factor in stymieing the training and research efforts of Public Health Service hospitals. The most glaring examples can be supplied for the record. Yet, in spite of this, some 10 or 12 hospitals have had programs in existence, thanks to the ingenuity of a highly trained and capable and dedicated staff.

Health, Education, and Welfare implies that smaller hospitals are not conducive to proper training and research activities. This position becomes suspect in terms of the following:

Dr. Albert W. Snoke, director of the Grace-New Haven Community Hospital hired by HEW to survey Public Health Service hospitals in 1956 stated, "the potentials of this medical care program for teaching, research and services are great. They are in grave danger of being destroyed by budgetary restrictions that go beyond economy to eventual deterioration and self-destruction."

This statement says there is nothing wrong with training and research potentials other than their destruction by budgetary privation. Following this report HEW accepted it wholeheartedly.

Why does HEW now suddenly take a complete 180° turn in this matter?

CONTRADICTORY GOVERNMENT POSITIONS ON RESEARCH AND TRAINING

As late as December 1964 the President's Commission on Heart, Cancer, and Stroke asked that "the Division of Hospitals of the Public Health Service be appropriated funds necessary for renovation and the development of research space in existing facilities and for increased research and training activities." This is devastating to the Bureau of the Budget's claim and HEW's announcement of January 19, 1965. The same President's Commission continues by urging also "that the smaller but still significant Public Health Service hospital system, which has taken promising steps toward an increased research and training program in recent years be supported in the development of its full potential for research and training, as well as patient care.”

This statement was officially issued by the President's Commission almost the same month that HEW was stating the exact opposite as an excuse to close the same smaller Public Service hospitals.

In addition, on October 9, 1963, the present Surgeon General wrote Senator Yarborough, of Texas, stating that "the Galveston hospital offers a rich source of clinical training and research material. The Public Health Service and the University of Texas Medical School are collaborating in joint research and training programs." He pointed out that the program was being hampered by bad physical facilities and lamented the lack by budgetary support.

Do not these conflicting positions by highly placed experts in the medical profession demolish the excuses offered for closing these hospitals. Should not these irreconcilable positions be thoroughly examined to determine if the real purpose back of these proposed closings arise solely from budgetary motives and the will of the Bureau of the Budget to do away with the Service?

MODERNIZING FIVE REMAINING HOSPITALS

The new proposals call for "modernizing and expanding the five largest hospitals" and increasing their bed capacity by over 400 beds. For the past decade the medical experts have proposed this. Budget restrictions and a ban on any appreciable repair or capital improvements has been the response while progressive deterioration took its toll. Why the sudden change?

Is it not because the Bureau of the Budget sees an opportunity to seize these five larger hospitals for VA purposes to avoid building new VA hospitals and thus administer the final coup de grace to the long service of the marine hospital program?

MORE CONVENIENT LOCATIONS

The announcement of January 19, 1965, states as a part of the plan to close hospitals that it will provide "a system which will permit many Public Health Service beneficiaries to obtain more convenient locations." This apparently is an attempt to justify the closings by conveniently reinterpreting the late President Kennedy's words when he said, "I have directed the Secretary of Health, Education, and Welfare to develop a plan for providing more readily accessible hospital care for seamen, etc." President Kennedy didn't say "abolish the existing facilities." He did not say "end the Public Health Service hospital program."

What could be more accessible for seamen than the present coastal locations of Boston, New York, Baltimore, Norfolk, Savannah, New Orleans, San Fran cisco, Seattle, and for river and lake seamen-the interior locations of Detroit, Chicago, and Memphis.

If it is desirable to increase service in still further convenient locations by utlizing other hospital facilities, could not this still be done at other locations where overcrowding, remoteness, or lack of convenience factors would apply under title 42, section 249, subsection (e) of the existing law?

HOSPITALS UNDER 200 BEDS

The announced plans are predicated in part on the assumption that hospitals under 200 beds cannot offer as comprehensive care or service. We believe you will find about 50 percent of all the hospitals in the United States are 200 beds or under. In the class of hospitals categorized as "private" or "community" hospitals, there may be some truth to this claim. In hospitals such as the original "marine hospitals" or the Public Health Service hospitals, the very foundations of the entire service is centered around the "comprehensive" nature of the care, including even dental service. The staff of PHS hospitals have proudly and persistently proclaimed the comprehensive nature of the service, particularly in its marine hospitalization program which is keyed to the needs of shipping. Public Health Service staff members have held that the only impediment to this comprehensive care has been the policy of budgetary restrictions.

Is it not true that increasing the accessibility of the service does not depend upon or require the abolition of hospitals? May not the abolition of these PHS hospitals work against their very theory of accessible service as future case overload and population increase augment demand for medical care?

OPERATIONALLY FEASIBLE HOSPITALS

The proposed program submits that patient load may decline to a point where a hospital is no longer operationally feasible or administratively warranted. This is a sound position and where current or prospective patient load fails to justify continuation, other action must be taken. Of the seven hospitals scheduled for closing, certainly Boston, Norfolk, Galveston, and Detroit do not fall in such category. While Detroit is relatively smaller, it is strategically located for lake seamen and because of closed and open seasons on the lakes, should be judged only upon its peak season. Chicago, Memphis, and Savannah should be studied further in depth and action taken on the merits.

Should not the general PHS hospital program be sustained with adjustments to meet the requirements of operational feasibility?

ADVANTAGES OF INTEGRATED HOSPITAL AND CLINICAL CARE

The Department of Health, Education, and Welfare, as late as 1957, studied the problem and concluded as follows:

beneficiaries can best be (Report of study group

"The comprehensive service required by PHS legal given with integrated hospital and clinical services." on Bureau of Budget's projected closing of four PHS hospitals. See "Medical and Hospital Care for Merchant Seamen," vol. I, p. 184.)

The position of HEW now makes a complete reversal, apparently forced by the Bureau of the Budget.

Should not this inconsistency be thoroughly investigated to determine the basic reasons for basic change?

GREATER ECONOMY THEORY

Claim is made that it is more economical to close PHS hospitals and transfer patients elsewhere. This is a subject for detailed and expert study. We doubt that any appreciable savings will result.

The Health, Education, and Welfare Department reviewed this matter in 1957 and concluded to the contrary. The wording of its findings is as follows:

"Use of alternate hospital facilities would be more expensive than use of the PHS hospitals in each of the four cities, (Chicago, Detroit, Memphis, and Savannah) even when the cost of needed improvements in the PHS hospital system was taken into account."

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The Department questioned the availability of other facilities in three of the areas studied. A part of the cost factors upon which their judgment was based was contract hospitalization in private and community hospitals which, under medicare, now is estimated at $61.75 per day (latest figure) as against an average of $27.81 in PHS hospitals (1963).

The transfer of patients to veterans hospitals would be slightly higher in cost, with no direct savings. The plan envisages greater contract hospitalization which would substantially increase costs.

Staff conclusions at that time were that closing of hospitals at Detroit, Chicago, Memphis, and Savannah "would neither serve the interest of economy in Federal expenditures, nor make it possible to provide care of the scope and extent available patients in PHS hospitals."

Why do we have a complete reversal of this position?

THE SAVINGS THEORY

Mr. Celebrezze, in his testimony before the Appropriations Subcommittee of the Senate hearing the hospital closing problem stated:

"The compelling reason was not the saving, that was not the reason standing by itself, but it was that these hospitals used primarily to train our public health officials were not of sufficient capability."

This is strange indeed. Mr. Celebrezze's announcement of hospital closings released on January 19, 1965, is so prolific in statements centered on the matter of savings as to leave the clear impression that this is a basic underlying motive. Certainly it is from the Bureau of the Budget's position. Further, the statement that training capability is in question is in direct contradiction to the findings of five medical experts hired by HEW in 1956 to survey these hospitals. These experts attested to the great training potentials and condemned the budgetary privation that hindered it. Further, a study group in PHS sustained this view and a little over a year ago Surgeon General Luther Terry advised Senator Yarborough, of Texas, of the rich source of training and research material in the Galveston hospital.

Do not these conflicting statements indicate the disparate position in which the agency finds itself in trying to comply with the overriding Bureau of the Budget drive to close them out?

THE DETERIORATION FACTORS

The Health, Education, and Welfare Secretary, in testimony before the Senate Appropriations Subcommittee on Labor, Health, Education, and Welfare and Related Agencies, stated in connection with Public Health Service hospital closings:

"It was a question that had to come to a head sooner or later because many of these hospitals were deteriorating fast, and the administration, with the Office of Science and Technology and with the Budget Bureau and with the Veterans' Administration, continued their search to find a solution to the problem."

How right that they are deteriorating fast and how important it is to note that the Bureau of the Budget has used most any device to bring it about, chief of which is its famous order of April 16, 1958, barring for the most part any capital improvements and major repairs. The Office of Science and Technology has now been given the job of executing the coup de grace.

Are these agencies actually trying to find solutions or are they charged with the job of coming up with the only solution the Bureau of the Budget will permit; namely, complete abolition of the Public Health Service hospitals?

HOW CAN CONTRACT HOSPITALIZATION SAVE MONEY?

Mr. Celebrezze, in his testimony before the Senate Subcommittee on Appropriations hearing the hospital closing problem stated:

"Arrangements had been made where the Veterans' Administration can take patients, and we also consider it with the local hospitals where there are local hospitals in a community to render service."

Speaking of the Boston hospital ard the services to be rendered he continues:

"Also, we will do it by contract with local hospitals in the Boston area; for example, when we answer those requests, we will contract it with the local hospitals that do it."