To the Congress of the United States:
     The health of our nation is a key to its future - to its economic vitality, to the morale and efficiency of its citizens, to our success in achieving our own goals and demonstrating to others the benefits of a free society.
     Ill health and its harsh consequences are not confined to any state or region, to any race, age, or sex or to any occupation or economic level. This is a matter of national concern.
     More than twenty-five billion dollars a year - over 6 percent of our national income - is being spent from public and private funds for health services. Yet there are major deficiencies in the quality and distribution of these services.
     The dramatic results of new medicines and new methods - opening the way to a fuller and more useful life - are too often beyond the reach of those who need them most.
     Financial inability, absence of community resources, and shortages of trained personnel keep too many people from getting what medical knowledge can obtain for them.
     Those among us who are over 65 - 16 million today in the United States - go to the hospital more often and stay longer than their younger neighbors. Their physical activity is limited by six times as much disability as the rest of the population. Their annual medical bill is twice that of persons under 65 - but their annual income is only half as high.
     The nation's children - now 40 percent of our population - have urgent needs which must be met. Many still die in infancy. Many are not immunized against diseases which can be prevented, have inadequate diets or unnecessarily endure physical and emotional problems.
     These and other problems of health care can and must be met. Only a part of the responsibility rests with the federal government. But its powers and resources make its role essential in four areas for improving health care: social insurance, facilities, personnel and research.

     Twenty-six years ago this nation adopted the principle that every member of the labor force and his family should be insured against the haunting fear of loss of income caused by retirement, death or unemployment. To that we have added insurance against the economic loss caused by disability. But there remains a significant gap that denies to all but those with the highest incomes a full measure of security - the high cost of ill health in old age. One out of five aged couples drawing Social Security benefits must go to the hospital each year. Half of those going to hospitals incur bills in excess of $700 a year. This is over one-third of the total annual income of atypical couple, more than a modest food budget for an entire year. Many simply do not obtain and cannot afford the care they need.
     The measure adopted by the Congress last year recognized the problem of those needy aged requiring welfare assistance to meet their medical costs. But now we must meet the needs of those millions who have no wish to receive care at the taxpayers' expense, but who are nevertheless staggered by the drain on their savings - or those of their children - caused by an extended hospital stay.
     In our Social Security and Railroad Retirement systems we have the instruments which can spread the cost of health services in old age over the working years - effectively, and in a manner consistent with the dignity of the individual. By using these proved systems to provide health insurance protection, it will be possible for our older people to get the vital hospital services they need without exhausting their resources or turning to public assistance. The self-supporting insurance method of financing the cost of such health services is certainly to be preferred to an expansion of public assistance, and should reduce the number of those needing medical care under the public assistance program. The State and local money thus freed should be further used to help provide services not included in this proposal, and to assist those not covered.
     For it should be stressed that this is a very modest proposal cut to meet absolutely essential needs, and with sufficient "deductible" requirements to discourage any malingering or unnecessary overcrowding of our hospitals.
     In essence, I am recommending enactment of a health insurance program under the Social Security system that will provide the following benefits:
     First, inpatient hospital services up to 90 days in a single spell of illness, for all costs in excess of $10 per day for the first 9 days (with a minimum of $20), and full costs for the remaining 81 days. Because hospital costs place by far the heaviest and most unmanageable burden on older persons, it is these services that should receive major emphasis in any health insurance program.
     Second, skilled nursing home services up to 180 days immediately after discharge from a hospital. To provide an incentive for use of these less expensive facilities, an individual could, in short, receive two days of skilled nursing home care in place of one day of hospital care when this satisfies his requirements.
     Third, hospital outpatient clinic diagnostic services for all costs in excess of $20. These services, too, will reduce the need for hospital admissions and encourage early diagnosis.
     Fourth, community visiting nurse services, and related home health services, for a limited period of time. These will enable many older people to receive proper health care in their own homes.
     I propose that these insurance benefits be available to all persons aged 65 and over who are eligible for social security or railroad retirement benefits.
     This program would be financed by an increase in social security contributions of one-quarter of one percent each on employers and employees, and by an increase in the maximum earnings base from $4800 a year to $5000 which would amply cover the cost of all insurance benefits provided. The system would be self-supporting and would not place any burden on the general revenues.
     This program is not a program of socialized medicine. It is a program of prepayment of health costs with absolute freedom of choice guaranteed. Every person will choose his own doctor and hospital.
     No service performed by any physician at either home or office, and no fee he charges for such services, would be involved, covered or affected in any way. There would be no supervision or control over the practice of medicine by any doctor or over the manner in which medical services are provided by any hospital. The program is a sound one and entirely in accordance with the traditional American system of placing responsibility on the employee and the employer, rather than on the general taxpayers, to help finance retirement and health costs.

     The ability to afford adequate health care is to no avail without adequate health facilities. The financial support which will be available under the health insurance program I am recommending will, in itself, stimulate more facilities and services. But our communities need additional help to provide those services where everybody can use them.

A. Nursing Home Construction Grants.

     There is now a shortage of 500,000 beds in long-term facilities for people who are sick but who do not require the special services of a general hospital. We must move with greater speed in the construction of more skilled nursing homes; particularly if our new program is to encourage recuperation, if impossible at home, in this kind of facility instead of in our overcrowded hospitals. I am submitting to Congress legislation to double the present authorization of $10 million in matching grants for this construction program.

B. Grants To Improve Nursing-Home and Home-Nursing Services.

     Increasing the number of nursing home beds will not alone remedy the deficiency in care. Good operation, good service, and proper safety are essential. Nor do all the aged sick and chronically ill need to be cared for in hospitals or nursing homes. At some stages in their illness many people can fare better in their own homes if proper care is available. But most communities do not have home health services. Even limited home nursing services are available in less than 1,000 U.S. communities.
     I am therefore proposing stimulatory grants to the states, and through them to communities, to improve the quality of services in nursing homes - to develop organized community home-care health services for the aged and chronically ill - to develop health service information and referral centers - to train additional personnel required for out-of-hospital health services - and to assist in meeting the cost of studies and demonstrations of new and improved means of providing out-of-hospital care. An initial annual appropriation of ten million dollars will lay the groundwork for more efficient and better balanced care for the aged and chronically ill.
     To insure maximum Federal attention to the rapid development of this program, I propose that the Congress enact legislation enabling the Public Health Service to create a new Bureau of Community Health to provide the necessary leadership and assistance to states and communities.

C. Hospital Research and Development.

     Hospitals account for more than 6 billion dollars a year of the nation's gross expenditures. In this modern age, an enterprise of such size and importance requires continuous and substantial research and development as a basis for operations. Specifically, we need more intensive regional and area planning to attain the maximum economical use from these costly structures; and we need more research into how hospital facilities can be built, and how services within hospitals should be organized and administered, in order to provide the best possible medical care with the personnel available. I am therefore recommending that, in place of an arbitrary appropriations ceiling for research in this area, the Congress have the authority to determine each year the amount necessary for these purposes; and that the Surgeon General be authorized to make project grants for the construction of experimental or demonstration hospitals and other medical facilities.

     Adequate health care requires an adequate supply of well-trained personnel. We do not have that adequate supply today - and shortages are growing.
     We must increase sharply the rate of doctor and dentist training merely to keep pace with our growing population - and we need far more if, as part of our international responsibilities, we are to help meet critical medical needs in key areas of the world. But we not only fall short of our goal to help those nations by exporting sufficient numbers of doctors to provide the nucleus for a world health program, we are actually the beneficiaries of more than a thousand physicians a year who come from foreign lands to practice in the United States.
     We have now 92 medical and 47 dental schools. These graduate only 7,500 physicians and 3,200 dentists each year. If during the next ten years the capacity of our medical schools is increased 50 percent, and that of our dental schools by 100 percent, the output will still be sufficient only to maintain the present ratio of physicians and dentists to population.
     To do this we must have within the next 10 years substantial increases in enrollment in existing schools, plus 20 new medical schools and 20 new dental schools.
     But the great deterrent to the establishment and expansion of these schools is lack of funds. Modern medical and dental schools are extraordinarily expensive to build and operate. Teaching hospitals cost even more. A university which establishes a medical and dental school must do so with the expectation of a substantial drain on its financial resources, and most institutions are not able to find such funds.
     Moreover, the average cost to the student of four years of medical school is over $10,000 - a heavy burden to come on top of the cost of a four-year undergraduate education. Furthermore, once the student obtains his medical degree, he must still look forward to an average of 3 years of hospital experience, at little or no pay, before he can begin his life's work. It is not surprising that 40 percent of all medical students now come from the 12 percent of the families with incomes of $10,000 or more a year. Nor is it surprising, though disturbing, that while college enrollments generally have been soaring, the number of applicants to medical and dental schools has been dropping; and that many of these schools are having difficulty in securing enough qualified students who are able to afford such an education.
     The federal government has made substantial contributions through fellowships and training aid for graduate students in the physical and biological sciences, and for research training in health fields. The result has been a rapidly increasing number of recruits to these fields.
     In contrast there has been very little financial assistance of any kind available to medical and dental students. Only one medical student in 10 receives a scholarship from any source, and these average only $500 a year (compared to an average cost of over $2500). In dentistry even less scholarship aid is available.
     Decisive federal action is necessary to stimulate and assist in the establishment and expansion of medical and dental schools, and to help more talented but needy students to enter the health professions while bolstering the quality of their training.
     I have four recommendations to be combined in a single measure:
     (a) I propose an immediate program of planning grants to help our academic institutions plan new facilities for medical and dental schools and to explore ways of improving the whole educational process;
     (b) I recommend a ten-year program of matching grants to assist in the construction, expansion, and restoration of medical and dental schools to increase their capacity. This program should make available $25 million in the first year, and $75 million annually thereafter;
     (c) I recommend a program of federal scholarships for talented medical and dental students in need of financial assistance. Federal funds would be available for each institution in a total amount equal to $1500 for one-fourth of the newly entering students, to be awarded in individual four-year scholarships by the institution in proportion to the student's need, with no student being eligible for more than $2000 a year.
     (d) Finally, I recommend that the schools receive a cost of education grant of $1000 for each federal scholarship, to make certain that this program does not work further financial injury upon our medical and dental schools whose costs per pupil are never met by his tuition and fees. In addition to assisting our schools now operating, this feature would also give some encouragement to 'institutions now doubtful about the burden of establishing new medical and dental schools.
     For nursing, I must add, the need and shortage are also great; but the problems are different and more complex. We intend to develop for nursing, as we have for medicine and dentistry, a formulation of needs and training requirements; and appropriate proposals will be submitted to the Congress when completed.

     While meeting the health needs of the older groups in our population, we cannot neglect the needs of the young. One-fifth of our children under five have not been immunized against poliomyelitis. Since 1950, our country has slipped from 6th to 10th place among the advanced nations of the world in the saving of infant lives. Each year some 400,000 babies are born with congenital malformations - and untold numbers of others begin life mentally retarded, afflicted by cerebral palsy or suffering from other serious conditions which require prompt and effective care and additional research.
     A. I am recommending that there be established in the National Institutes of Health a new National Institute of Child Health and Human Development, which will include a Center for Research in Child Health as well as other broad-ranging health research activities not now covered by the specialized work of the existing institutes.
     B. I am recommending to the Congress an increase in appropriations for the existing Maternal and Child Health, Crippled Children and Child Welfare programs of the Children's Bureau. By this means, the fruits of our research can move at a faster pace to those who need them most.
     C. In order to provide more unified administration and increased effectiveness of federal efforts for physical fitness, I am designating the Secretary of Health, Education, and Welfare as the Chairman of the President's Council on Youth Fitness. I am asking him to mobilize the full resources of his Department and other interested agencies toward encouraging public and private agencies and individuals to improve the physical fitness of our nation's youth; and I am further asking him to report at an early date on the adequacy of existing school health programs and what changes, if any, are needed in the Federal Government's role in the stimulation of such programs.

     This administration intends to see that the rehabilitation of disabled Americans and their return to active and useful lives is expanded as rapidly as possible. Our Federal-State program of vocational rehabilitation and the cooperating voluntary agencies must be assisted in providing more nearly adequate facilities and services to reach the thousands of persons who become disabled every year. We need their talents and skills if our economy is to reach a high level of performance. To this end I shall recommend to the Congress an increase in federal matching funds to expand the vocational rehabilitation program.

     The next ten years will require a vast expansion of this nation's present total effort in medical research, if knowledge is to keep pace with human progress. I recommend:
     A. Extension and expansion of the present program authorizing matching grants for the construction of research facilities.
     B. Removal of the current limitation on the federal payment of indirect costs of medical research projects, which has handicapped many universities and other research institutions.
     C. An increase in the funds for medical research requested in the Budget previously submitted.

     The measures I have recommended recognize and strengthen the indispensable elements in a sound health program - people, knowledge, services, facilities, and the means to pay for them. Taken together, they constitute a necessary foundation upon which to build.
     The health of the American people must ever be safeguarded; it must ever be improved. As long as people are stricken by a disease which we have the ability to prevent, as long as people are chained by a disability which can be reversed, as long as needless death takes its toll, then American health will be unfinished business.
     It is to the unfinished business in health - which affects every person and home and community in this land - that we must now direct our best efforts.