characteristics in certain areas of the country, such as

rural America.

Unfortunately we saw in this past year a total disregard for the special needs of rural areas when HEW publised their first set of guidelines on hospitals. It was only after 55,000 letters from all across the country, and cajoling from Members of Congress that HEW became sensitive to the

problem.

Therefore, to ensure that such a situation will not be repeated and to sensitize HEW to rural America, we propose an amendment which would require the Secretary of HEW to include separate quidelines for rural areas when it was determined that the needs of the rural areas are not adequately addressed by national guidelines.

These amendments have been developed in response to the concern of many involved in rural health care. We believe that the passage of these will better orient health planning to the needs of rural America. I thank you very much for giving me this opportunity to testify. I am sure that you will give these amendments your full consideration.

6

Senator JAVITS. Our next witness is Robert McGarrah, of the American Federation of State, County, and Municipal Employees.

We will put your entire statement in the record, and would you just brief it for us, please?

STATEMENT OF ROBERT E. McGARRAH, JR., PUBLIC POLICY COUNSEL, PUBLIC POLICY ANALYSIS DEPARTMENT, AMERICAN FEDERATION OF STATE, COUNTY, AND MUNICIPAL EMPLOYEES, AFL-CIO, WASHINGTON, D.C.

Mr. McGARRAH. Thank you, Senator Javits.

We appreciate the opportunity to appear here today. Our union represents 750,000 members, and over 150,000 of them work in public general hospitals throughout the country.

I would like to address three major concerns that we have with the health planning amendments.

The first is the issue of excess hospital beds. Our union is well aware of the fact that nationally, we suffer from an excess of at least 100,000 beds, which costs us around $2 billion a year, according to HEW figures.

We have long attempted to encourage HEW action to curtail and close down excess beds. The approach in these particular amendments we think is one that may have some good potentials, but we believe that it has some specific problems for employees.

Specifically what this would do would be to provide a sum of money directly to hospital administrators to pay off first of all designated groups in other words, the mortgage holders and bondholders-and then to take all the rest of the problems of conversion payment for machinery, payment for salaries and so forth, and out of that pool of money, the hospital is supposed to attempt to provide some kind of retraining and severance pay. And all of this is supposed to be overseen by HEW.

Now, we have some very serious concerns, because the Department of Health, Education, and Welfare, in its attempt to administer the employee protection provisions of the health revenue sharing, which deals with deinstitutionalization in the mental health field, and also with developmental disabilities, which deals with mental retardation deinstitutionalization, the Department has never even issued regulations, after 3 years, when Congress specifically enacted employee protection provisions.

HEW has never even issued any regulations to do this. We believe that the Secretary of Labor, who has been specifically charged by Congress under the Urban Mass Transportation Act of 1964, and also has a specific division in the Labor Department to deal just with employee protection-we believe the Secretary of Labor should have the authority to review and approve and essentially sign off on any employee protection provisions, and those provisions should be mandated in each hospital closure or termination of services.

We think that is critical to this bill, and we believe that the Secretary of Labor is best capable and best suited to performing this function. The second thing I would like to discuss is the very excellent amendments that you have added into the bill, dealing with public general hospitals.

As you know, our Union represents employees of public general hospitals, and we are very, very aware of the fact that these financially strapped institutions are the last resort for poor people's health care.

As you have mentioned, the emergency rooms of public general hospitals serve as neighborhood doctors in the cities of this country, and they also do in rural areas. And these hospitals are legally required to treat anyone who comes to their doors. They cannot simply stabilize the condition and then throw the person out to another hospital, as is the case with private hospitals.

We think that the attempt in this legislation to provide funds for life safety and licensure provisions, to encourage these hospitals to get up to standards, are absolutely critical.

In fact, we would like to see the authorizations raised to an even higher level. As you probably know, in the last few years, the number of public general hosiptals that have actually closed their doors, curtailed services, or been forced to transfer over to privately operated cooperations has rise ndramatically because of the financial difficulties that cities and counties are having in running those facilities.

Philadelphia General Hospital, the only public hospital in the city of Philadelphia, has recently closed, because the city just did not have the funds to keep that hospital's facilities up to par.

And in fact, the estimates we had from Philadelphia General were that it would cost around $75 million just to rehabilitate that facility. They were talking obviously about some new construction, as well.

So that we would like to see even a higher level-perhaps $200 million for fiscal 1979 and increasing to $250 and $300 million by 1981. We think these are very important amendments.

And lastly, as far as consumer participation goes, we support the efforts of the Consumer Coalition for Health, to get better consumer involvement in HSA's.

We think the amendments that have been proposed are excellent. We would add to it that we think that consumers need to have their own staff, accountable to them, and we would like to see some funds set aside for the consumers to hire their own consultants-just as providers do to assist them within their deliberations on HSA's. Thank you.

Senator JAVITS. Thank you, Mr. McGarrah.

I would like to ask you one question about this increase that you recommend in the authorization for public hospitals. I would like to get some factual backup on that.

Do you have it, or how do you suggest we get it?

Mr. MCGARRAH. Well, I suggest first of all that I can provide you with the figures that Philadelphia General Hospital would have needed to have rehabilitated their physical plant, and I can also, from our union in New York City, get you the figures for the estimates that they would approximate for improving hospital facilities thereand you are well aware, of course, of the situation in New York.

In addition, I think that the proposal that was included within the urban initiative that, unfortunately, the President rejected-had a section in it on public general hospitals. I do not know whether you have seen it or not, but I would be glad to supply that for the record, and the figures there are totaling approximately $500 million to do everything, ranging from improvement of outpatient departments to

community-based centers for health care in public general hospitals. Senator JAVITS. Now this last report you referred to, would you describe that again?

Mr. McGARRAH. Yes. This is a memorandum to Assistant Secretary Robert Embry of the Housing and Urban Development Department from Under Secretary Hale Champion of HEW, which lists the urban initiative proposals of HEW. Included in it is a particular provision for public general hospitals.

Senator JAVITS. All right. My staff tells me that we have taken that into consideration in making our amendment.

Now, the other thing I would like to ask about Philadelphia General, that hospital closed-

Mr. MCGARRAH. That is right.

Senator JAVITS [continuing.] Because of safety requirements?

Mr. MCGARRAH. Well, not solely safety. It cost approximately $17 million a year, not only for improvements, just meager improvements, but also for just paying for medically indigent. And the city had the idea that it would be cheaper to provide care as a contractual basis with voluntary hospitals. And I understand that has not proven to be the case.

Senator JAVITS. It has not?

Mr. MCGARRAH. No.

Senator JAVITS. Have people been denied care, as far as you know? Mr. MCGARRAH. Well, according to some reports-I have not yet seen them in writing yet, but I have some reports from our members in Philadelphia-the newspapers there have been running a series where people actually have been denied care, and in some cases it is costing more money, because the voluntary hospitals' costs are just simply that much more. They do not have salaried doctors, for example.

Senator JAVITS. Was that the only public hospital in Philadelphia? Mr. McGARRAH. That was the only one in the city, that is right. It was the oldest hospital in the United States, in fact.

Senator JAVITS. So now, the responsibility has reverted to nonpublic hospitals, and that is being paid for on a contract basis?

Mr. MCGARRAH. This is basically correct. There is a small inpatient facility that the city decided to purchase from the State, to provide for long-term care for paraplegics and the like.

Senator JAVITS. All right. We will look into this question very carefully. I will ask HEW to give us an accounting of why they have not made rules and regulations about municipal employees let go, for retraining, et cetera, and the things you speak of, and we will see what the facts are.

Thank you very much.

Mr. McGARRAH. Thank you.

[The prepared statement of Mr. McGarrah follows:]

TESTIMONY OF ROBERT E. MCGARRAH, JR.

DEPARTMENT OF PUBLIC POLICY ANALYSIS

AMERICAN FEDERATION OF STATE, COUNTY AND MUNICIPAL EMPLOYEES,

AFL-CIO

BEFORE THE

SUBCOMMITTEE ON HEALTH AND SCIENTIFIC RESEARCH

OF THE

SENATE COMMITTEE ON HUMAN RESOURCES

ON

S. 2410, "THE HEALTH PLANNING AMENDMENTS OF 1978"

February 6, 1978

Mr. Chairman, members of the Committee, I am Robert E. McGarrah, Jr., Public Policy Counsel in the Public Policy Analysis Department, of the American Federation of State, County and Municipal Employees, AFL-CIO. Our union represents more than 750,000 members, over 150,000 of whom work in public general hospitals throughout the country.

The Health Planning Amendments of 1978 focus on three major problems in our national health planning system: excess hospital beds, under-funded public general hospitals and consumer participation in

health systems agencies.

Our union has consistently supported strong federal action to stop excess hospital construction. In 1975, we petitioned HEW for a moratorium on hospital building.

Characteristically, the Ford

Administration took no action on the petition.

But when the present