This section is from the "The Subvention In The State Finances Of Pennsylvania" book, by Frederic B. Garver.
If, however, it be assumed that the expenditure for some of the various services now supported by the state could not be reduced without serious impairment of those services, it is still true that the revenues of the state should be devoted to those uses which are, from the point of view of the state as a whole, most important.
One of the principal objections to the grants to privately managed hospitals is that the service they render is purely local in character and that the state, therefore, should not contribute to their support." As was pointed out in Chapter II, there is no sharp distinction between local and state services. But it is safe to say that when a service can be efficiently performed by local governments, when the units of equipment are of necessity able to serve only a restricted area, and when neglect in performance affects chiefly the people in the district where such neglect occurs, that service should be locally supported and administered. The service performed by free hospitals for the sick and the injured is largely of the kind described. There is, at the present time, little reason to believe that a system of state hospitals would be more efficient than a large number of locally administered hospitals. And there is less reason to suppose that the present haphazard method of subsidizing hospitals conduces to anything like efficiency. In the second place, it cannot be denied that an ordinary hospital serves a very restricted area. The insane, the deaf-mutes, the blind and the feeble-minded can be gathered together from large areas into state institutions. But the injured and those suffering from infectious and malignant diseases cannot in a majority of cases be so assembled. Finally, if a local community neglects to provide adequate accommodation for the indigent sick, the remainder of the state is not very directly affected. No doubt the lessening of the productive power of the people and the dispersion of families which may result from the neglect of this type of charitable relief is far-reaching in its effects, but these effects are less controllable than are those resulting from neglect of education, of treatment for the insane, and of custodial care for defectives.
99 See for example Board of Public Charities, Report (1902), Report of the Committee on Lunacy, p. 8. No objection was so frequently mentioned to the writer by people in the various parts of the state with whom he discussed the subsidy system.
We may conclude, therefore, that the care of the insane and of the defective classes is a function that the state should perform before it undertakes to establish or to aid ordinary hospitals. In Pennsylvania the legislature has seen fit to spend very large sums for the support of such hospitals when it is the opinion of the Committee on Lunacy,100 and of an independent expert that present provision for the insane is inadequate. Only in this sense have grants to privately managed charities caused neglect of state institutions. But there can be little doubt that the influence of the grants to hospitals has been to restrict the appropriations for services that are peculiarly adapted to performance by the state and that are state-wide in importance.