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2. With respect to insurance against wage loss due to sickness (in the form of cash benefits), we recommend that this form of insurance should be provided in the same general manner as unemployment compensation. The members of our advisory committees and of our staff are unanimously in favor of the separate administration of insurance against wage loss and of insurance against the costs of medical care, and we are in agreement with this view.

3. We recommend that provision should be made for the further study of the occurrence of permanent disability and of measures to furnish protection against this risk.

4. With respect to insurance against the costs of medical care (medical benefits and so-called health insurance), we recommend a Federal-State permissive system in which any State will receive a specified Federal subsidy, provided it meets certain basic Federal safeguards.

In submitting these recommendations we wish to make some general observations that appear to us to be pertinent.

Our plan for disability insurance would give assurance of some income to wage-earners who become disabled and would reduce the burdens which communities bear in the care of the disabled sick and the dependent.

Our design for health insurance leaves to the States the initiative in creating systems of insurance. The Federal Government would undertake to lay down general safeguards and to give financial aid to the States. The costs to the Federal Government would be small, especially in the light of the large benefits which would accrue to the national welfare.

On the subject of health insurance, our recommendations are especially conservative; but we believe that they offer a proper basis for the sound beginning of practices which will give to millions of men and women security against serious economic effects of sickness, combined with the advantages of disability insurance, health insurance would free millions of families from the spectre of sickness costs.

Our plan for health insurance would give to those who need care easier access than they now have to those who are prepared to furnish it. At the same time this plan would vastly reduce the burdens of medical costs to individual families and would increase and stabilize the incomes of practitioners and hospitals serving people of small and moderate means.

The system of health insurance which we recommend rests upon the basic principle that the private practice of medicine and of the allied professions should be continued and strengthened. We have been especially careful to encourage high standards of professional service and to provide new incentives for their continued improvement. No single existing pattern, American or European, has been followed. Our proposals take account of experience at home and abroad and are designed to meet the needs of the American people under the conditions which exist in our States and local communities. In making this recommendation, we have carefully considered the interests not only of the public but also of the medical professions. We believe that these interests have been properly safeguarded and that our proposals are in accord with the views expressed by President Roosevelt in his address to the Conference on Economic Security, November 14, 1934, and will lead to "a system which will advance and not hinder the remarkable progress which has been made and is being made in the practice of the professions of medicine and surgery in the United States." We contemplate only those actions which will be quite as much in the interests of the members of the professions concerned with health and sickness as of the families with low incomes.

There still are broad gaps in our proposals; the measures we recommend will not give complete security against all the risks of illness nor will they meet the needs of all the people who need protection. There remains the need for more extended study of deficiencies in many communities in the supply of hospitals, institutions for the chronic sick and of other necessary facilities, for a careful Investigation of insurance to provide against permanent disability, and for study and experimentation on ways and means of giving protection to particular groups of people who cannot easily be served by the measures which have been proposed. We are confident, however, that we have devised proposals which will enhance the economic security of a large proportion of the population through the conservation of health and the mitigation of the economic burden laid upon families with low incomes by sickness and ill health.

We recommend that legislation be enacted to make a prompt beginning to give security against wages lost on account of illness and against the costs of medical care.

APPENDIX A

Some Further Suggestions for a State Health Insurance Law Professional Relations, Responsibility and Remuneration

(1) Adequate recognition and responsibility should be given to the medical professions in respect to the control of professional personnel and practices, the supervision of professional service, the maintenance of high standards of practice, the solution of professional problems, and disciplinary actions for practitioners guilty of the infraction of professional agreements or of ethical standards;