Proposed Closings of Public Health Service Hospitals by HEW

Published by the Government Accountability Office on 1971-03-10.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                                  a                                     II,
                       United States General Accounting Office                                     -
                               Washington, D. C. 20548

                                                                 Expected at 1O:OO a.m. EST
                                                                 Wednesday, March 10, 197'1

                                    PAUL G. DEMBLING
                                HOUSEOF REPRESENTATIVES
                              THE PROPOSED CLOSINGSOF PUBLIC
                                AND WELFARE(M. CON. RES. 98)

     Mr. Chairman and Members of the Subcommittee:
           We appreciate      this    opportunity   to appear before your subcommittee

     to present our views on Ii. Con. Res. 98 and similar            resolutions       on the
     proposed closings       of the Public Health Service Hospitals        by the Depart-
     ment of Health,       Education,     and Welfare.   The purpose of these resolutions
     is to express the sense of the Congress that the existing                facilities    be
     maintained     for the present and be considered        as an integral     part of the

     nation's     health   delivery     system.
           As you know, the proposed closSngs have been the subject                 of two legal

     opinions     rendered by the Comptroller        General; one in June, 1965 and the

     most recent one of February 23, of this year.             Last month's opinion was
     rendered to the Chairman of the House Committee on Merchant Marine and

     Fisheries,     in response to his request for our current         views on this
matter.      I have copies of this            opinion,      if you wish to have it inserted

in the record.

       As was made clear in those opinions,                    we would view action by the
Department of Health,            Education,     and Welfare to close down the entire
Public Health Service hospital                system as an unwarranted extension                   of

the legal       authority     contained     in the Public Health Service Act of 1944

.under which the Secretary              operates and manages these facilities.                     In

our view such action by the Secretary would run contrary                               to the intent
of the Congress as manifested               in the 1944 act.             As we indicated      in our
February 23rd letter,            that Act codified          then existing       Public Health
Service laws which trace their                origin     back to 1798, at which time
authority    was given to the President                to construct        the first      Marine

       There are numerous indications                  in the 1944 Public Health Service
Act that the Congress intended the Public Wealth Service to continue                                    to

operate and maintain            its own medical facilities.                3he act is replete
with references        to the "institutions,             hospitals,       and stations      of the

Service. "       Section 321 provides          authority       to the Secretary to operate
and maintain       Public Health Service hospitals.                     Section 322 sets forth
the obligation        of the Secretary         to care for seamen and other listed
beneficiaries       at Service institutions,               hospitals,      and stations;      sec-

tion   301 provides         authority     to admit and treat            at "hospitals      and stations

of the Service"        persons not otherwise             eligible,       for purposes of study;
Section 324 confers authority               on the Secretary            to provide medical,

surgical,       and hospital       services      and supplies      to Bureau of Rnployee

Compensation beneficiaries,                another authority        that can only be exercised
at institutions,           hospitals,      and stations       of the Service;         section      326

entitles       certain     Coast Guard personnel            and public     health     service      officers

to medical and surgical             treatment       and hospitalization            by the Service;

provision       is also made for treatment                of narcotic     add-icts and persons

'afflicted      with leprosy       at specially       equipped Service hospitals                 (sec-
tions      331, 341, and 344);            and section       328 provides      for the sharing of
facilities       and resources by the Public Health Service hospitals                             and other
community health           care facilities.          It seems clear that these provisions
would be inoperable            and meaningless in the absence of institutions,

hospitals,       and stations       of the Service,          and that there is no reasonable
way to read these provisions                  except as imposing an obligation                on the
Secretary to establish             and maintain       such facilities         for the care of those
who are by the statute             entitled      to it.
         Moreover, as pointed           out in our February 23 opinion,                this      interpre-

tation       of the 1944 Public Health Service Act is the only one in accord

with the long history            of the predecessor           of the Public Health Service,
the Marine Hospital            Service,     which was established            by the act of July 16,

1798.        This act conferred         authority     on the President            to construct      hospi-

tals     specifically       for seamen. The legislative                 history     of that act
clearly       indicates     that the construction            of a marine hospital             system was

contemplated.            As we stated in our letter            of February 23, 1971, the

obligation       to provide medical care and the concomitant                        obligation      to
maintain      a hospital    system to provide      such care have been characteristic

of the Public Health Service ever since the passage of the 1798 act.                        In
enacting the 1944 Public Health Service Act, it seems clear that the

Congress assumed the continued maintenance of the existing                  system as a
necessary condition         to the effective      implementation   of the act's    essential

provisions,      as I have just     outlined.
       It should also be noted that in a legal             opinion by the Assistant

General Counsel of the Department of I-EN dated December 17, 1963, he

             "We would thus conclude that there is no question
      but that the Public Health Service Act represents the
      congressional. intent that a hospital system be operated
      and maintained by the Service to carry out the obliga-
      tions imposed by or implicit   in the several statutory
 /    provisions noted."    "      *     i

      With respect to the authority             of the Veterans Administration      to pro-
vide care for beneficiaries          of the Public Health Service,         we pointed     out

in our February 23rd letter          that we see no legal      objection    to periodic
arrangements for cross-servicing           of VA and Public Health Service benefi-
ciaries.       Since merchant seamen are not beneficiaries           of the VA, the

admission of merchant seamen to VA hospitals              would involve     interagency
services      under section    601. of the Economy Act bf 1932, 31 U. S.C. 686,
which authorizes       Federal departments and agencies to place orders for
goods and services         with other Federal agencies on a reimbursable           basis.

Section 601 also requires         that the requisitioned       Federal agency be in a
position      to provide the services      requested,    which has been construed by

the Comptroller        General to mean that the rendering              agency can do so

without     necessitating     construction     or other capital         expenditure     which
would be unnecessary if the requested services                 were not to be provided.

In view of this and the fact that under 38 U.S.C. 611 the Administrator
of the VA may furnish        hospital    care to non-VA beneficiaries               as a humani-

tarian     service    in emergency cases, it is generally              recognized     that

kublie     Health Service beneficiaries         may under such circumstances             be

admitted to VA Hospitals         on 8 space available         basis.      However, providing
such services        under the Economy Act is at best a secondary or incidental
function     of the agency rendering         the service   and section       601 certainly

was not intended to be a basis for transferring                  a primary admindstrative
function     fromone     agency to another.       Accordingly,         the VA coubd not assume
overall     responsibility     for Public Health Service beneficiaries                 under

such authority.
         Whether the Publie Health Service should be authorized                     to close the
marine hospitals        is a matter of policy      for the Congress to determine and
one on which we would make no recommendation.                  We agree, however, that

the Resolutions        under consideration      by your Committee, which express the
sense of Congress that the present I?ubllic Health Service Hospital                          System
be maintained        and considered as an integr&L,        though smell, part of the

nation's     medical care facilities         are consistent      with present        law and with

the long history        of the Public Health Service Hospital              System in this