Proposed Closings of Public Health Service Hospitals by HEW

Published by the Government Accountability Office on 1971-03-08.

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

                   United States General Accounting Office
                           Washington, D. C. 20548

                                                                  Expected at 1O:OO a.m. EST
                                                                  Monday, March 8, 1971


                           PAUL G. DENBLING
                         SUJJCOMMITTEE ON BEALTH,
              SENAT~COMMITTEE:   0MLABORANDPwBLIcwELFARE           \.

                          UNITED STATESSENM!E
                       Mm WELFAm (se CON. REs. 6)

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

to present     our views on S. Con, Res. 6 on the proposed closings                of the
Public Health Service Hospitals         by the Department of Health,            Education,
and Welfare.      The purpose of the resolution             is to egress     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

      As you know, the proposed closings            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 c~xr 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 faci3ities.                         In

    our view such action by the Secretary would mn 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 Health Service to continue to

    operate and maintain          its      own medical facilities.                The 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 hployee

Coqensation                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     l
               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

oblfgation             to provide          medical        care and the concomitant                          obligation          to

maintain       a hospital    system to provide    such care have
                                                            r    been characteristic

of the Public Health Service ever since the passage               of the 1798 act.         In

enacting       the 194-4 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 HEWdated December 17, 1963, he
              "We would thus conclude that there is no question
       but that the Public Health Servi-ce Act represents the
       congressional inte,nt that a hospital system be operated
 I     and maintained by the Service to carry out the obliga-
       tions imposed by or implicit   in the several statutory
 #     provisions noted."    '      *     '
 n     With respect to the author%ty,of           the Veterans-Administration      to pro-
v&de care for beneficiaries           of the Public Health Service,       we pointed     out
im our February 23rd letter           that we see no legal objection       to periodic

arrangements for cross-servicing            of VA and Public Health Service benefi-                   s

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 of 3.932, 31 U.S.C. 686,
which-authorizes        Federal departments and agencies to place orders for
goods and services          with other Federal agencies onsa 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
Publie Health Service beneficiaries               may under such circumstances             be

admitted to VA HospitsLLs on a space available                  basis.      Nowever, 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 administrative
function     from one agency to another.            Accordingly,         the VA could not assume
overall     responsibility       for Public Health Service beneficiaries                 under
such authority.
         Whether the Public 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 wald            make no recommendation.          We agree, however, that
the S. Con. Res. 6 which expresses the sense of Conmess that the present

Public Health Service Hospital              System be maintained          and considered as an
integral     part of the nation's          medical care facilities          is consistent        with

present law and with the long history               of the Public Health Service Hospital

System in this        nation.