[House Hearing, 108 Congress]
[From the U.S. Government Publishing Office]



 
   INVESTIGATION INTO HEALTH CARE DISPARITIES OF U.S. PACIFIC ISLAND 
                              TERRITORIES

=======================================================================

                                HEARING

                               before the

               SUBCOMMITTEE ON HUMAN RIGHTS AND WELLNESS

                                 of the

                              COMMITTEE ON
                           GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED EIGHTH CONGRESS

                             SECOND SESSION

                               __________

                           FEBRUARY 25, 2004

                               __________

                           Serial No. 108-160

                               __________

       Printed for the use of the Committee on Government Reform


  Available via the World Wide Web: http://www.gpo.gov/congress/house
                      http://www.house.gov/reform





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                     COMMITTEE ON GOVERNMENT REFORM


                     TOM DAVIS, Virginia, Chairman
DAN BURTON, Indiana                  HENRY A. WAXMAN, California
CHRISTOPHER SHAYS, Connecticut       TOM LANTOS, California
ILEANA ROS-LEHTINEN, Florida         MAJOR R. OWENS, New York
JOHN M. McHUGH, New York             EDOLPHUS TOWNS, New York
JOHN L. MICA, Florida                PAUL E. KANJORSKI, Pennsylvania
MARK E. SOUDER, Indiana              CAROLYN B. MALONEY, New York
STEVEN C. LaTOURETTE, Ohio           ELIJAH E. CUMMINGS, Maryland
DOUG OSE, California                 DENNIS J. KUCINICH, Ohio
RON LEWIS, Kentucky                  DANNY K. DAVIS, Illinois
JO ANN DAVIS, Virginia               JOHN F. TIERNEY, Massachusetts
TODD RUSSELL PLATTS, Pennsylvania    WM. LACY CLAY, Missouri
CHRIS CANNON, Utah                   DIANE E. WATSON, California
ADAM H. PUTNAM, Florida              STEPHEN F. LYNCH, Massachusetts
EDWARD L. SCHROCK, Virginia          CHRIS VAN HOLLEN, Maryland
JOHN J. DUNCAN, Jr., Tennessee       LINDA T. SANCHEZ, California
NATHAN DEAL, Georgia                 C.A. ``DUTCH'' RUPPERSBERGER, 
CANDICE S. MILLER, Michigan              Maryland
TIM MURPHY, Pennsylvania             ELEANOR HOLMES NORTON, District of 
MICHAEL R. TURNER, Ohio                  Columbia
JOHN R. CARTER, Texas                JIM COOPER, Tennessee
MARSHA BLACKBURN, Tennessee          ------ ------
------ ------                                    ------
------ ------                        BERNARD SANDERS, Vermont 
                                         (Independent)

                    Melissa Wojciak, Staff Director
       David Marin, Deputy Staff Director/Communications Director
                      Rob Borden, Parliamentarian
                       Teresa Austin, Chief Clerk
           Phil Barnet, Minority Chief of Staff/Chief Counsel

               Subcommittee on Human Rights and Wellness

                     DAN BURTON, Indiana, Chairman
CHRIS CANNON, Utah                   DIANE E. WATSON, California
CHRISTOPHER SHAYS, Connecticut       BERNARD SANDERS, Vermont 
ILEANA ROS-LEHTINEN, Florida             (Independent)
                                     ELIJAH E. CUMMINGS, Maryland

                               Ex Officio

TOM DAVIS, Virginia                  HENRY A. WAXMAN, California
                      Mark Walker, Chief of Staff
                Mindi Walker, Professional Staff Member
                        Danielle Perraut, Clerk
          Richard Butcher, Minority Professional Staff Member




                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on February 25, 2004................................     1
Statement of:
    Camacho, Felix Perez, Governor of U.S. Territory of Guam; 
      Juan Babauta, Governor, Commonwealth of the Northern 
      Mariana Islands, accompanied by Dr. James U. Hofschneider, 
      Secretary of Health; Togiola Tulafono, Governor, American 
      Samoa; Jefferson Benjamin, Secretary of Health, Department 
      of Health, Education, and Social Affairs, Federated States 
      of Micronesia, Pacific Island Health Officers Association; 
      and Dr. William McMillan, administrator, Guam Memorial 
      Hospital Authority.........................................    76
    Cohen, David, Deputy Assistant Secretary, Office of Insular 
      Affairs, U.S. Department of Interior; and Nathan Stinson, 
      Jr., Deputy Assistant Secretary, Office of Minority Health, 
      U.S. Department of Health and Human Services...............    21
Letters, statements, etc., submitted for the record by:
    Babauta, Juan, Governor, Commonwealth of the Northern Mariana 
      Islands, prepared statement of.............................    91
    Benjamin, Jefferson, Secretary of Health, Department of 
      Health, Education, and Social Affairs, Federated States of 
      Micronesia, Pacific Island Health Officers Association, 
      prepared statement of......................................   124
    Bordallo, Madeleine Z., a Delegate in Congress from American 
      Samoa, letter dated February 25, 2004......................    14
    Burton, Hon. Dan, a Representative in Congress from the State 
      of Indiana, prepared statement of..........................     5
    Camacho, Felix Perez, Governor of U.S. Territory of Guam, 
      prepared statement of......................................    81
    Cohen, David, Deputy Assistant Secretary, Office of Insular 
      Affairs, U.S. Department of Interior, prepared statement of    23
    Cumings, Hon. Elijah E. Cummings, a Representative in 
      Congress from the State of Maryland, prepared statement of.   150
    McMillan, Dr. William, administrator, Guam Memorial Hospital 
      Authority, prepared statement of...........................   144
    Stinson, Nathan, Jr., Deputy Assistant Secretary, Office of 
      Minority Health, U.S. Department of Health and Human 
      Services, prepared statement of............................    32
    Tulafono, Togiola, Governor, American Samoa, prepared 
      statement of...............................................   113


   INVESTIGATION INTO HEALTH CARE DISPARITIES OF U.S. PACIFIC ISLAND 
                              TERRITORIES

                              ----------                              


                      WEDNESDAY, FEBRUARY 25, 2004

                  House of Representatives,
         Subcommittee on Human Rights and Wellness,
                            Committee on Government Reform,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 2:05 p.m., in 
room 2154, Rayburn House Office Building, Hon. Dan Burton 
(chairman of the subcommittee) presiding.
    Present: Representatives Burton, Watson, and Cummings, and 
Delegates Faleomavaega and Bordallo.
    Staff present: Mark Walker, chief of staff; Mindi Walker 
and Brian Fauls, professional staff members; Nick Mutton, press 
secretary; Danielle Perraut, clerk; Richard Butcher, minority 
professional staff member; and Cecelia Morton, minority office 
manager.
    Mr. Burton. Good afternoon. A quorum being present, the 
Subcommittee on Human Rights and Wellness will come to order. I 
ask unanimous consent that all Members' and witnesses' written 
and opening statement be included in the record. Without 
objection, so ordered.
    I ask unanimous consent that all articles, exhibits and 
extraneous or tabular material referred to be included in the 
record. Without objection, so ordered.
    Today the subcommittee has the honor of being joined on the 
dais by my esteemed colleagues, the Honorable Madeleine 
Bordallo, the Delegate to Congress from Guam, whom I had not 
had an opportunity to talk to when I was over there, but I'm 
glad she's with us today. And the Honorable Eni Faleomavaega, 
who's the Delegate to Congress from American Samoa, and a good 
golfing buddy of mine when we have a chance to get out and 
play.
    In the event of other Members of Congress joining us at 
today's hearing, I ask unanimous consent that they be permitted 
to serve as a member of the subcommittee for the day. Without 
objection, so ordered.
    I'd also like to take this opportunity to recognize a good 
friend of mine, the Honorable Pete Tonorrio, Representative of 
the United States from the Commonwealth of the Northern Mariana 
Islands. He's doing a wonderful job for the people of the CNMI 
here in Washington, and I hope 1 day to welcome him as a friend 
and duly constituted colleague here in the Congress.
    The subcommittee is convening today to examine disparities 
in the quality and access to health care experienced by the 
people of the U.S. Pacific Island Territories. We'll be 
discussing possible solutions that the Federal Government 
should seriously consider in order to alleviate these health 
burdens.
    The medical system in the Continental United States prides 
itself on the quality of medical services supplied to the 
millions of Americans under its care. Unfortunately, there are 
populations of underserved American citizens and nationals who 
do not have the same access to adequate and proper medical care 
in other regions of the world.
    These are the citizens of the U.S. Pacific Island 
Territories; namely the residents of Guam, American Samoa, the 
Commonwealth of the Northern Mariana Islands.
    In a post-September 11th society, many foreign nationals 
have been hesitant to travel to the Pacific Islands, which 
regrettably has taken a great toll on the economies of Guam, 
CNMI and the American Samoas. As a result, this has drastically 
increased rates of unemployment on the islands, and 
consequently has left tens of thousands of men, women and 
children without proper health insurance or the means for 
medical care.
    Due to these times of economic hardship, coupled with the 
caps placed on Federal Government services such as Medicaid, 
territorial governments are unable to afford the much needed 
equipment and qualified health professionals required to 
properly tend to the medical needs of their people. I had a 
chance to see that first hand during our visit over there. It's 
unconscionable that we don't do more to help those American 
citizens.
    Late last year, I had the opportunity, as I said, to travel 
to both Guam and CNMI and witness first hand the deteriorating 
health care conditions on the islands. Needless to say, I was 
extremely surprised and disappointed by the lack of sufficient 
medical resources on the islands, and thus was moved to convene 
this important hearing today to better educate my colleagues 
and the American people as well as our health agencies on the 
ongoing plight of our fellow citizens and nationals.
    One of the primary health care concerns encountered by 
these territories is the skyrocketing incidence of diabetes. 
That's something that should be researched, because there's no 
evident reason why that's happening, but it is happening. In 
recent years, the incidence of Type 2 diabetes, formerly known 
as adult onset diabetes, has reached epidemic proportions on 
these islands.
    Hundreds of these patients require constant medical 
intervention to survive, mainly in the form of dialysis 
treatments. Unfortunately, the territories are ill-equipped to 
deal with the ever-increasing demand for dialysis machines and 
trained technicians to operate them. This has resulted in long 
waiting lists and late night appointments for people in 
desperate need of life saving medical attention.
    These growing medical concerns place a tremendous budgetary 
strain on the already fragile economies of each territory.
    To further exemplify the severity of these disparities in 
health care, Guam, the largest of the U.S. Pacific Island 
Territories, has only one fully functioning civilian hospital 
to serve its nearly 170,000 citizens. Currently only about 150 
physicians reside on the island and must care not only for 
Guamanian patients but also thousands of patients who are 
transported to the territory every year from many of the 
smaller surrounding islands.
    To add insult to injury, the Guam Memorial Hospital 
Authority recently declared bankruptcy and is currently $20 
million in debt.
    Although the CNMI has a Commonwealth Health Center, the 
lack of proper equipment and health care staff forces thousands 
of patients to brave great distances overseas for care during 
medical emergency. Consequently, this is at the expense of the 
CNMI government. I think we had one case where the Speaker of 
the House had to be transported all the way to Hawaii for 
treatment because they didn't have any facilities to care for 
him on the islands.
    American Samoa unfortunately also faces these same 
predicaments, having only one medical center, LBJ Tropical 
Memorial, to service the health-care needs of its entire 
population of 60,000, much like the CNMI.
    Because the main area of concern deals with the shortage of 
qualified medical staff, the subcommittee will be receiving 
testimony from the Honorable Jefferson Benjamin, Secretary of 
Health for the Federated States of Micronesia, who will be 
speaking today on behalf of the Pacific Island Health Officers 
Association. Dr. Benjamin will discuss the ever-growing need 
for properly trained health care professionals on these 
islands. We'll also ask questions of other professionals from 
that area who will be part of the third panel.
    To gain further insight into these most important issues, 
the subcommittee has the honor of hearing today from the 
Honorable Felix Camacho, Governor of Guam; the Honorable 
Togiola Tulafono, Governor of American Samoa; and the Honorable 
Juan Babauta, Governor of CNMI.
    By the way, Governor Babauta, I would like to inform you 
that I did receive your letter regarding ``the stateless 
children of the CNMI,'' which we talked about earlier today. 
We've already instructed our staffs to start researching the 
``stateless children'' issue in order to explore how we can 
best address a case that at first glance looks to be a 
meritorious human rights concern. We thank you for bringing 
that to our attention.
    In addition, the Honorable David Cohen, the Deputy 
Assistant Secretary of Insular Affairs at the U.S. Department 
of Interior will testify on his personal experiences observing 
health care disparities in the territories. I don't know of 
anybody that's better informed than David is. I had a chance to 
spend a lot of time with you over there, David, and we're 
really appreciative of you being here and hearing your 
testimony.
    During my visit to Guam, I had the pleasure of meeting a 
very brave man, the Honorable Vincente Pangelinan, Speaker of 
the Guam Legislature. He was invited to testify today to share 
his own personal story of this recent cardiac medical scare 
that almost claimed his life, which may have been avoided if he 
had the proper access to immediate medical care. I think he 
went to Hawaii, as I said, to take care of that.
    Unfortunately, due to continued health concerns the speaker 
was unable to come before the subcommittee today. So on behalf 
of the members of the subcommittee, I'd like to wish him well 
and we hope that he has a speedy recovery.
    The U.S. Department of Health and Human Services has 
offices and programs in place to identify and directly assist 
with underserved populations, such as the residents of the U.S. 
Pacific Island Territories. The Honorable Nathan Stinson, M.D., 
Deputy Assistant Secretary of the Office of Minority Affairs, 
is with us here today. He will discuss current HHS initiatives 
created to help alleviate some of the problems that we're 
talking about.
    In closing, I'd like to add that the members of this 
subcommittee believe that it is one of our highest duties as 
Members of Congress to strive to find the best possible public 
policy solutions for ensuring that all Americans, any place in 
the world, have access to the highest quality health-care 
services.
    It's my sincere hope that the information shared today will 
help to provide the necessary assistance for our fellow 
Americans across the Pacific Ocean and ultimately alleviate 
this health care crisis.
    As I said to the Honorable Mr. Stinson, I hope that today 
the message will be carried back to our health agencies that 
additional resources need to be made available for these 
regions as quickly as possible, because are in dire need.
    [The prepared statement of Hon. Dan Burton follows:]
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    Mr. Burton. With that, Mr. Faleomavaega, would you have an 
opening statement you'd like to make?
    Mr. Faleomavaega. Thank you, Mr. Chairman, for your 
leadership and your sensitivity in calling this hearing this 
afternoon, as it pertains to the health care needs of the 
insular areas. And not only as the chairman of the full 
Committee on Government Reform but also a senior member of the 
House International Relations Committee that you and I have 
served on together, I cannot thank you enough, Mr. Chairman, 
for your initiative in calling this hearing to bring to the 
attention of the Members of the Congress the problems that we 
have and health care needs, not only of the CNMI and Guam, but 
also American Samoa, although you did not have the opportunity 
of visiting my district or territory.
    In the interest of time, Mr. Chairman, I would like to 
submit my statement to be made part of the record, as I'm quite 
certain that our Governor, who will be testifying later, will 
provide the members of the committee with a very comprehensive 
overview of the health care needs of the territory.
    I also would like to offer my personal welcome to Deputy 
Assistant Secretary David Cohen, representing the Department of 
Interior, and Dr. Stinson, representing the Department of HHS. 
And my personal welcome to the Governors of the insular areas, 
Governor Babauta, my dear friend, who previously served as the 
representative of the CNMI to Congress, and is currently the 
Governor of CNMI. And also Governor Tulafono, my good friend 
here, I certainly would like to welcome him.
    Mr. Chairman, as I said earlier, I will introduce later my 
Governor when he has the opportunity to testify before our 
committee. Again, I want to give you my highest commendation. 
One of the very few occasions that committees in the Congress 
have given specific direction to look into or to focus into 
this very important area that is most needful for the insular 
areas, and I want to thank you for your initiative in calling 
this hearing this afternoon. Thank you, Mr. Chairman.
    Mr. Burton. And I want to thank you for pointing out that 
sometimes it's difficult to say these various names like 
Faleomavaega. [Laughter.]
    You've been kidding me for years about that, and it's nice 
to know you stumble just a little bit once in a while. 
[Laughter.]
    Mr. Faleomavaega. I must say, Mr. Chairman, we ran a full 
schedule today----
    Mr. Burton. Don't give me any excuses. [Laughter.]
    We had a hearing this morning, and hopefully our good 
friend Mr. Tonorrio or whoever is going to be elected by the 
good people of the Northern Marianas to give full congressional 
authority to have a representation by the CNMI.
    Also, we had the hearing for which I wasn't able to make it 
to the delegate voting procedure, or hearing that we had in the 
resources committee. I had to help with Chairman Pombo's bill 
to recognize the 50 years of the Bravo shot, or the unique 
strategic relationship that we've had with the Republic of the 
Marshall Islands, which again thank you for your support, and 
for which Chairman Hyde and our ranking senior member, Mr. 
Lantos, and the members of our International Relations 
Committee approved the bill and the resolution.
    Hopefully it will be considered by the full House before 
March 1st, because that is the day we're looking at as the 
basis of which the resolution was introduced. We ought to 
recognize the tremendous contributions that the people of the 
Marshall Islands have given to our country in the last 50 
years. Many of the Americans don't even know that one of the 
best missile testing operations going on in the Pacific lies in 
the Marshall Islands. And the fact that the Marshal Islands 
also was the home port where we tested some 67 nuclear devices, 
which kind of kept us on the go in our competition with the 
Soviet Union and defeating communism. I would be remiss if I 
did not mention the fact that the people of the Marshall 
Islands have made a tremendous contribution, and hopefully, we 
will have a chance to go and visit those islands again.
    Thank you, Mr. Chairman, again, and you can call me John 
Wayne any time you want, Mr. Chairman, if Faleomavaega sounds 
too complicated. [Laughter.]
    Mr. Burton. You know, that very nice comment that you made 
about the Marshall Islands, I thought for a moment you were 
going to run for delegate from there.
    Ms. Bordallo.
    Ms. Bordallo. Thank you very much, Mr. Chairman.
    I want to say this before I begin my very short testimony 
here, that the territories have been very fortunate in the past 
month or so. We are getting visits from a number of Members of 
Congress and most recently the Secretary of Interior. I think 
that once you visit Guam, as you have, Chairman Burton, that 
you will be friend of the territories forever. Once you get out 
and visit the Pacific areas, meet our people, learn about our 
customs and our traditions, you will fall in love with the 
islands.
    So the more that we can invite Members of Congress to come 
and visit us, I think they will understand more about us and 
the difficulty we have on many issues.
    I want to thank you, Chairman Burton, for holding this 
hearing today on health care disparities in the U.S. Pacific 
Territories. And I want to especially welcome the Governor of 
Guam, the Governor of CNMI and the Governor of American Samoa, 
Presidents of the Senate are here, other distinguished visitors 
from several of our territories are in the audience today. I 
want to thank you very much. And of course, our Secretary David 
Cohen, who's been on the witness stand most of the day today, 
in different public hearings and all the others who are here.
    Mr. Chairman, as you said earlier, you have visited Guam 
and the Northern Marianas, and you have seen first hand the 
challenges that we face in providing quality health care for 
our communities. I'm particularly pleased that you had an 
opportunity to visit the Guam Memorial Hospital and that you 
were well briefed by Hospital Administrator Bill McMillan and 
the Director of Public Health on Guam, and the Director of 
Public Health on Guam, Mr. Peter John Camacho.
    The issue of disparities manifests itself in higher 
occurrence of serious and chronic diseases and in mortality 
rates that exceed national averages. The question here is 
whether these health disparities are further enhanced by the 
lack of adequate Federal funding. As you are aware, the 
territories have a Medicaid cap that limits the amount of 
Federal Medicaid funding to about 20 percent of actual costs 
for indigent medical care.
    The recent Medicare prescription drug benefit contains a 
new cap for the territories, which is a great concern to our 
constituents. While Medicare subscribers on Guam pay into the 
system, their prescription drug benefit would not be the same 
as a Medicare subscriber in one of the United States.
    We now have a new disparity, Mr. Chairman, in another 
Federal health care program. By every health indicator, the 
territories lag behind the States, and are now near Third World 
levels. Perhaps our distances and our remote locations 
contribute to this situation. However, the disparities may in 
fact be caused by the disparities in Federal programs, 
especially where these Federal programs directly impact the 
indigent population.
    The greatest irony is that these are the very same programs 
that are meant to extend the benefits of quality health care to 
the most vulnerable population throughout the United States. It 
is not just unfortunate that Medicaid and SCHIP and Medicare 
have caps, but it is tragic for those who depend on those 
programs for their basic health care needs.
    Mr. Chairman, I want to thank you for your commendable 
interest in these issues, and I hope the information we learn 
today from the territorial representatives will help us to 
formulate a strategy to address the caps in Federal health 
programs, and to put the Federal resources where they are 
needed the most.
    Mr. Chairman, I would like to enter into the record my full 
statement, along with a statement from Speaker Ben Pangelinan 
and Senator Luli Angararo.
    [The information referred to follows:]
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    Mr. Burton. Thank you, yes, we will put your whole 
statement into the record, without objection.
    Ms. Bordallo. Thank you.
    Mr. Burton. We will now swear in our witnesses. Will you 
both rise, so I can get you sworn? Raise your right hands, 
please.
    [Witnesses sworn.]
    Mr. Burton. Since you're a friend of mine after our trip 
over there, David, I think we'll start with you, the Honorable 
Mr. Cohen.

STATEMENT OF DAVID COHEN, DEPUTY ASSISTANT SECRETARY, OFFICE OF 
   INSULAR AFFAIRS, U.S. DEPARTMENT OF INTERIOR; AND NATHAN 
 STINSON, JR., DEPUTY ASSISTANT SECRETARY, OFFICE OF MINORITY 
      HEALTH, U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES

    Mr. Cohen. Thank you very much, Mr. Chairman. Thank you, 
members of the subcommittee and guest members for today.
    I'm pleased to appear before you today to discuss health 
care in Guam, American Samoa and the CNMI. I would summarize 
our assessment of health care issues in the Pacific Territories 
with the following observations. No. 1, we don't know enough. 
No. 2, what we do know causes us concern. Health care in the 
Pacific Territories faces many daunting challenges.
    One of the greatest challenges is that the last 
comprehensive study on health was published in the mid-1990's 
by the Institute of Medicine. The comprehensive health care 
data we use today are dated and inadequate. Existing evidence 
suggests that our own communities face the likelihood of poor 
health. Factors that contribute to this prospect are economic 
hardship, poverty, joblessness and under-employment, limited 
primary and specialty care, and the under-utilization of 
services.
    Health problems are exacerbated by a number of systemic 
problems. The tradition of heavily subsidized health care in 
the Pacific Territories can sometimes impede investment in 
health care. Health care management systems have not 
efficiently allocated the limited health care resources that 
are currently available. A perennial lack of funds is a problem 
for improving facilities, buying up to date equipment, 
purchasing sufficient supplies and drugs and paying for off-
island medical referrals, which are very important in the 
islands.
    Unlike the States, Medicaid reimbursements to the 
territories, as the Congresswoman has noted, are subject to 
caps. They are also subject to a reimbursement formula that is 
much less favorable than what States are eligible for.
    Like the general U.S. population, island communities suffer 
diseases related to the cardio and cerebral vascular system, 
cancer, and of course injuries. Nutritional diseases such as 
diabetes and obesity are also leading causes of death. Of the 
serious diseases faced by the resident of the territories, many 
are chronic diseases precipitated by lifestyle choices.
    Over the last 50 years, island populations have 
increasingly adopted our mainland diet, with its emphasis on 
processed foods that are high in fat, high in carbohydrates and 
low in fiber. Island residents have also moved toward more 
sedentary work. Smoking is another major risk factor.
    The good news is that lifestyle choices can eliminate many 
of the diseases discussed above. Educational efforts therefore 
could produce positive health results.
    The lack of funds dedicated to health care is an 
overarching problem. Isolation and distance from metropolitan 
centers contributes significantly to this deficit in resources. 
Shipping costs are vastly increased for all things needed by 
island health care systems. It's difficult to attract off-
island doctors, nurses and other personnel to the respective 
islands on a long term basis. Off-island medical referrals for 
specialized treatment consume large portions of each 
territory's health care budget. The acquisition of technical 
assistance for solving health care problems usually involves 
inordinate delays and complications.
    In addition, air travel makes the territories vulnerable to 
infections from the outside. Diseases such as tuberculosis and 
measles, which are less controlled in Third World countries 
than in the United States, make appearances from time to time 
in the territories. They must be dealt with on an emergency 
basis.
    Under the compacts of free association, approximately 6,900 
Freely Associated State's citizens are now in Guam and 2,100 in 
the CNMI. Respiratory disease seems to be more prevalent in the 
FAS than in the U.S. Territories. Marshallese women have five 
times the breast cancer rate of Caucasian women in the United 
States, and 75 times the rate of cervical cancer. With FAS 
migration, the health problems of the FAS become the health 
problems of Guam and the CNMI.
    Over the next 20 years, the Office of Insular Affairs will 
provide approximately $76 million in assistance to the 
Federated States of Micronesia and approximately $33 million in 
sector grants to the Republic of the Marshall Islands, under 
the revised compacts of free association. This assistance will 
include as a top priority funds targeted at improving health of 
the citizens of the FSM and RMI in their home countries.
    Assuming improved health, education and economic 
opportunity, there will be two benefits, we hope. One, fewer 
FAS citizens may find it necessary to migrate to Guam and the 
CNMI, and two, those FAS citizens who do migrate will likely be 
healthier.
    We also provide now compact impact funds under the compact 
to compensate not only for the health effects of migration and 
the strain of local health care budgets, but also education and 
other types of services as well, $14.2 million this year for 
Guam and $5.1 million for the CNMI.
    The Office of Insular Affairs provides a variety of types 
of technical assistance funds for a variety of health care 
needs. These are summarized in my written statement. Our 
technical assistance program is well received in the 
territories and our assistance, along with HHS grants, can only 
constitute a small part of each individual territory's health 
care financing.
    Mr. Chairman, we welcome the subcommittee's interest in the 
territory's health care challenges, and look forward to working 
with you on these important issues. Thank you.
    [The prepared statement of Mr. Cohen follows:]
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    Mr. Burton. Thank you, David. I hope you don't mind me 
calling you David instead of Mr. Secretary, since we were 
traveling together and everything over there.
    Mr. Cohen. I much prefer it.
    Mr. Burton. Thank you.
    Dr. Stinson.
    Dr. Stinson. Thank you very much.
    Good afternoon. My name is Nathan Stinson, Deputy Assistant 
Secretary for Minority Health and the Director of the Office of 
Minority Health in the Department of Health and Human Services. 
Thank you for the opportunity to testify today on the 
Department's activities on Guam, American Samoa and the 
Commonwealth of the Northern Mariana Islands. I will refer to 
them as the Pacific Island Territories in our oral remarks. A 
complete written testimony is submitted to the committee for 
the record.
    I appreciate the committee's interest in this region. The 
people of the Pacific Islands have many serious health problems 
and are medically underserved. Let me start with some of the 
particular barriers and challenges, many of which, Mr. 
Chairman, you are aware. The remoteness of the Pacific Islands, 
as well as the wide difference in the time zone redefines the 
term difficulty in access to care. The inadequate nature of the 
basic health infrastructure, as well as the manpower shortages, 
are factors complicating their ability to deliver quality of 
care to more than 180,000 residents.
    In order to better understand the Department's programs for 
the Pacific Island Territories, I would like to mention some of 
the other obstacles faced by providers and their patients 
alike. I will share with you a few examples of some of the 
stories that we have heard as far as issues that complicate 
their ability to provide the level of care they are interested 
in.
    There are oftentimes where medicines are in short supply or 
are routinely unavailable. For example, we heard the story of 
lack of the availability of insulin on American Samoa, that 
created a situation where a woman who was pregnant and diabetic 
could not receive the necessary insulin during the time of 
delivery. Specialists in tertiary care are severely limited. In 
Guam, a woman with breast cancer is much more likely to undergo 
a mastectomy as opposed to the possibility of breast conserving 
therapy, such as lumpectomy and radiation. The breadth of the 
treatment options that we have available in this country really 
aren't available to many of the jurisdictions in the Pacific 
Islands.
    Also, the lack of tertiary care generates enormous cost. As 
was just mentioned, many patients who need the attention of a 
specialist must be sent off-island for treatment. This consumes 
a significant share of the health budget.
    As far as the Department of Health and Human Services 
programs, they really are intended to focus in three specific 
areas. The areas of access, the areas of quality of care, and 
also to help educate and inform individuals on how to take 
charge of their health and what are the things they can do to 
improve their health, such as exercising and eating the proper 
diet.
    The Medicare and Children's Health Insurance Programs run 
through CMS work closely with the three territories to assure 
the provision of high quality health care and provide 
significant funding for pregnant women, families with children 
and people with disabilities. In fiscal year 2003, the Pacific 
Island Territories received through Medicaid $2.3 million and 
through the Children's Health Insurance Program $1.9 million. 
The Centers for Medicare and Medicaid Services, as well as the 
San Francisco regional office staff of the Department of Health 
and Human Services provides ongoing technical assistance to the 
territories, especially on eligibility, services and billing. 
And recently there were discussions around such priority areas 
as the provision of screening services, off-island referrals 
and the federally qualified health centers.
    The community health center program funded through HRSA's 
Bureau of Primary Health Care has established health centers in 
Guam and American Samoa. The community health centers 
experience incredible challenges in the recruitment and 
retention of providers, especially ones who come from or are 
knowledgeable of these communities. Qualified nurses are 
frequently recruited to higher paying jobs in Hawaii, as well 
as other States. And Mr. Chairman, as you know, even with the 
continental United States, we are currently under an incredible 
shortage of qualified nurses for our health care system.
    To meet these particular challenges, there has been a 
utilization of non-physician medical officers on the islands 
that are utilized for the provision of health care services, 
instead of fully licensed physicians. Many of the doctors who 
have come to the islands have come through the National Service 
Corps, which is a program funded through HRSA.
    One of the particularly innovative programs that the 
Department has in the Pacific Islands is its Special 
Populations Network for Cancer Awareness Research and Training. 
This is administered by the National Cancer Institute Center to 
Reduce Cancer Health Disparities in the National Institutes for 
Health. The goal is really to build the relationships between 
large research institutions and community based programs to 
address the burden of cancer in minority communities.
    A particular part of this is the Pacific Island Cancer 
Initiative, which has assembled a team to articulate the health 
needs of indigenous Pacific Islanders, and to focus on 
strengthening and sustaining community capacity and increased 
involvement of Pacific Islanders in the National Cancer 
Institute Program and Services is also envisioned.
    The community health centers, through their National 
Diabetes Collaboratives, as you mentioned, diabetes is just an 
incredible problem of the population in the Pacific 
Territories, in Guam, approximately 40 percent of the patients 
have a hemoglobin A1C with an average of 10, far above the goal 
of 7. And as a participant in the diabetes collaborates Pacific 
West clusters, clinicians in Guam have made a commitment to 
improving the quality of diabetes care. In addition to intense 
training on the elements of quality treatment, assistance is 
provided in communication and maintaining registers, which is 
important in tracking the development of complications.
    The last program I want to mention just very briefly is the 
State based diabetes prevention and control program. Again, 
designed to really talk about the ways to prevent the 
development of the illness by proper care, proper diet and 
proper exercise.
    In conclusion, I hope this brief overview of the 
Department's activities has been helpful to the committee in 
considering ways to improve the health care to the Pacific 
Islands. The task is considerable. But it is doable, and we 
must accomplish this. If we are willing to accommodate the 
unique aspects of the region, work with the territory leaders 
and residents in their culture and traditions while respecting 
the governing entities and policies, I believe that we can find 
solutions that will strengthen the capacity of the health care 
system and in turn the health status of the people of the 
Pacific Islands.
    Thank you for the opportunity to testify before you today.
    [The prepared statement of Dr. Stinson follows:]
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    Mr. Burton. Let me start the questioning by asking you, Dr. 
Stinson, how do the health agencies decide how much money goes 
to those territories out there in the Pacific? Is there a 
formula that they use, or do you know?
    Dr. Stinson. I'm not aware of there being any particular 
formula, or some type of quota, as it decides on how to utilize 
the resources that will go to the Pacific Island Territories, 
as well as other parts of the other funded programs throughout 
the Nation as a whole. The general tendency really has been to 
try to look at the development of specific programs, what would 
be the appropriate cost of those interventions as well as how 
you can buildupon the existing infrastructure and work with 
other partners to help in some of those programmatic aspects.
    Mr. Burton. Well, I hope today, this hearing will convey 
that back to our health agencies and maybe my colleagues and I 
can write a joint letter to the Secretary of Health and Human 
Services, our concern about the lack of resources out there. 
When you go out there and you see first and people stacked up 
in the halls to get dialysis treatment, and they're running 
those dialysis machines 24 hours a day, people are coming in 
the middle of the night, because they don't have the capability 
to take care of all of them, it's almost unconscionable.
    I was not aware until today that they are second class 
citizens, American citizens, second class citizens as far as 
Medicare and Medicaid is concerned, as far as the moneys that 
are available to them to take care of their health care needs. 
And our health agency, you know, HHS gets billions and billions 
of dollars. It's one of the largest appropriations of any 
agency of Government. I think it is the largest. We need to 
make sure that American citizens, not only here in the United 
States, but in the territories around the world where we have 
American citizens, get the same quality of care or as close as 
possible to it as they're getting here in the United States.
    Secretary Cohen, is there anything you think we ought to be 
doing that we're not doing that could help get additional 
resources and funding over there for the territories?
    Mr. Cohen. I guess I can only speak for my own department.
    Mr. Burton. Well, but you can go on beyond that if you want 
to, because you've seen first hand the facilities over there, 
and you've been with me at some of them.
    Mr. Cohen. Sure. And Mr. Chairman, I very much concur with 
the observations that you've made in terms of the lack of 
resources for health care in the Pacific. I'm sure we're going 
to hear a lot more about that today.
    One thing that we would like to initiate from the 
Interagency Group on Insular Areas, and that is an interagency 
group re-established by Executive order by President Bush in 
May to have all the agencies of the Federal Government come 
together to coordinate policy of the executive branch toward 
the insular areas, that's the four flag territories other than 
Puerto Rico, is to have a working sub-group so that HHS, 
Interior and others that might have something to contribute to 
this discussion can, No. 1, see if we can get better 
information or create better information on the health care 
needs of the territories, get a fuller picture of what the 
situation is building on some of this anecdotal evidence, and 
trying to get hard data, which is desperately needed, and then 
perhaps talk about solutions to these problems.
    But step one has to be getting better data. Of course, we 
don't need better data to see people stacked up in the 
hallways, or as the Governor of American Samoa will tell you 
about the sorry condition of the hospital there, and its 
propensity to be flooded, the over-use of dialysis machines and 
the lack of trained medical personnel, the difficulty of 
attracting proper medical personnel, both for financial reasons 
and getting people to remote islands.
    So all of these problems are things that I think we would 
like to get a better handle on, on the magnitude of them, and 
then talk to the various agencies to see if there are ways to 
work together to improve the effectiveness of the Federal 
resources that are brought out there.
    Mr. Burton. I hope that working group will, and I'm sure 
you will be working with the health officials on the islands to 
make a recommendation to the administration and our health 
agencies to increase the funding. Because I thought it was 
deplorable, the situation over there. When you go through those 
hospitals and you see the problems that they have, it's just 
heart wringing in many cases.
    I'd like to ask you one more question on another subject 
before my time runs out. There are about 30,000 citizens of 
Asian countries that are in the CNMI. Can you tell us how 
that's affecting the economic problems over there, and the 
unemployment?
    Mr. Cohen. Well, it's very complicated situation in the 
CNMI, because a lot of industries are almost entirely staffed, 
as you and I saw together, by the guest workers. So to the 
extent that guest workers are brought in, generally there is a 
need for them, and they are taking jobs that the locals, 
because of the lower pay rates for these jobs, may not be 
willing to take.
    But it certainly does create an added burden on the health 
infrastructure, as well as other infrastructures in the CNMI. 
And certainly the volume of foreign workers is something that 
has been very difficult for the health care infrastructure in 
Saipan and the rest of the CNMI to adjust to.
    And also the different nature, different types of diseases 
that may be brought in, there are health checks that are done 
in connection with granting entry permits. But still, the large 
migration of foreign workers does increase, it's widely 
believed that it does increase the propensity of certain 
diseases to show up in the CNMI, more than would be the case 
otherwise.
    Mr. Burton. The working group is working on that as well. 
Yes.
    Ms. Watson, you didn't make an opening statement, so if 
you'd like to make an opening statement, that will be fine.
    Ms. Watson. I want to thank you, Mr. Chairman, and I want 
to welcome Secretary Cohen and Dr. Stinson. It's good to see 
you both.
    I want to thank you, Mr. Chairman, and tell you how pleased 
I am that you have traveled to the Pacific Island Territories 
of Guam and the Commonwealth of the Northern Mariana Islands. 
It's really good when you have a first hand look yourself in 
this area. I was so honored to serve as the U.S. Ambassador to 
the Federal States of Micronesia.
    I would also like to thank my colleagues, Representative 
Faleomavaega of Samoa and Representative Bordallo of Guam, for 
being here at the hearing and contributing to the hearing, and 
their leadership in the Pacific Island Territories. As well, 
I'd like to welcome the Governors of Guam and the CNMI and 
American Samoa, and I appreciate your coming this distance to 
be here today.
    As Americans, we should be aware of all the United States 
Territories, Guam, the Commonwealth of Northern Mariana 
Islands, American Samoa, Puerto Rico and the Virgin Islands. In 
addition, the United States has a very special compact with the 
Freely Associated States of Micronesia, the Marshall Islands 
and Palau. Due to the geographic distance from the continental 
United States, some aspects of our social responsibility seem 
to fall through the cracks. The territories and the Freely 
Associated States are really out of our sight, but they should 
not be out of mind.
    As Americans, we take pride in our diversity. And it is our 
greatest achievement that based upon that diversity, whether it 
is economic, political, or cultural diversity, we have built a 
Nation that is dedicated to providing equal opportunity for 
all. But much needs to be done before we can say that we have 
accomplished that goal, most notably in the field of health 
care. Racial, ethnic and geographic minorities too often are 
denied the high quality care that most Americans receive.
    The Federal Government has recognized this serious problem 
and has set a goal of eliminating national health disparities 
by the end of the decade. House and Senate Congress Members 
have introduced legislation, the Health Care Equality and 
Accountability Act of 2003, that takes an important step toward 
making this goal a reality.
    We may have the finest health care system in the world, but 
too many of our people receive too little health care and are 
denied the right to lead full lives. The reality is that the 
health care needs of minority Americans are often greater than 
those of white Americans. The populations of the U.S. 
Territories are eligible for Federal assistance and suffer from 
similar situations to minorities in the continental United 
States of America.
    Minority populations disproportionately suffer from many 
varied diseases. Minority groups have greater rates of acute 
conditions, i.e,. tuberculosis and HIV/AIDS, chronic diseases 
such as diabetes, heart disease and stroke and many forms of 
cancer. In addition, minority women are at a greater risk than 
White women for pregnancy related complications and their 
babies are at higher risk of dying during their first year of 
life.
    Despite a substantial need for health care, minority groups 
often encounter obstacles in obtaining health care. Minority 
groups are less likely to have health insurance and less likely 
to receive appropriate health care services.
    So the testimony today will provide us with information on 
the territories that can be contrasted with trends across this 
Nation. According to a study by the Kaiser Family Foundation in 
June 2003, minority populations have substantially higher 
uninsured rates than white Americans, 12 percent. Hispanics are 
at 35 percent, Native Americans around 27 percent, and African 
Americans 20 percent, while Asian and Pacific Islanders are 
somewhere around 19 percent.
    In addition, while racial and ethnic minorities represent 
only one-third of the non-elderly U.S. population, they 
represent more than half of uninsured Americans. These numbers 
are exacerbated in the islands.
    So Mr. Chairman, our focus today on the Pacific Island 
Territories is a necessary focus. And I'm looking for the 
testimony from the Governors of the three Pacific Territories, 
and from the Pacific Island Health Officers Association, which 
can provide us a picture of the Freely Associated States.
    I commend the vision of this subcommittee and the 
dedication of this Chair to address and investigate these 
health care disparities. The people sitting up here in front of 
you are the dedicated and committed ones, to see that not only 
our citizens but those of you in our territories are not 
victims of being neglected. We, some of us really know the 
problems personally. And you are here to assist in telling your 
story so that we can make the policies that will improve the 
health care of all Americans, either in the continental United 
States or in our territories.
    I yield back the balance of my time, Mr. Chairman, and 
thank you very much.
    Mr. Burton. Thank you, Representative Watson.
    Mr. Faleomavaega.
    Mr. Faleomavaega. Thank you, Mr. Chairman, and I want to 
thank Dr. Stinson and Secretary Cohen for their fine 
statements. I do have a couple of questions I want to raise. I 
think it's important to get a sense of perspective or history 
on the evolution of how insular areas have been treated 
historically by our country, and what has always been the 
traditional Federal agency that has been the chief 
administrator of the needs of these territories, whether it be 
the Pacific or the Caribbean.
    And I make specific reference, of course, to Secretary 
Cohen's responsibility, a tremendous responsibility in 
overseeing the needs of the insular areas. I just wanted to ask 
Mr. Cohen a couple of questions. There's no question that the 
health care needs of the insular areas are different, perhaps 
even worse conditions than many of the areas that we have here 
in the United States. Testimonies have borne out this afternoon 
a reference to distance, sense of isolation from mainstream 
America simply because of our location and difficulty in 
accessibility to services and programs that are easily provided 
or can be provided if necessary here in the continental United 
States.
    As Mr. Cohen had alluded to earlier, we have established an 
interagency, inter-governmental work group, hopefully, to be 
composed of chief policymakers of the various Federal agencies 
that deal with insular areas or with the Pacific Territories. 
In fact, it was just a couple of days ago that we had this 
meeting with Secretary Norton for which we are very grateful, 
that we have some kind of a conduit or a way that we can 
express what our needs are.
    The problem I always have been faced with, this interagency 
working group says it's fine that we talk about the issues, but 
then when it comes to giving some sense of finality or results, 
this is where things get lost in the cracks, and then we go 
back again and we still discuss the very same issues that we've 
been discussing for the past several years.
    It's a tremendous gain on the part of the insular areas, 
we've become more politically developed, we've elected our own 
Governors, we've elected our own congressional delegates. We 
don't have two Senators. And for this very sake that we don't 
have Senate representation, for those of us who represent the 
insular areas, Mr. Chairman, I think we have to work about 10 
times harder. A lot of times it's been with the compassion and 
the interest taken by some, such as yourself, to date to help 
us bring out the issues, not only just for public discussion 
but hopefully to find results.
    As I had mentioned to Secretary Cohen in our meeting with 
the IGIA, and I want to ask Secretary Cohen, will the 
Department of Interior be willing to work with us as 
congressional delegates in crafting appropriate amendments to 
Federal laws that perhaps are not helping us? Because I always 
perceived the Department of the Interior as our partner in 
working, in providing the appropriate forum. Because unless if 
I'm wrong on this, Mr. Secretary, I would like a response.
    Or in each instance, if we have a problem with HHS, we've 
got to go to them. In other words, we end up having to go to 
about 50 or 100 different agencies before we have some sense of 
finality in resolving the problems? I wanted to ask Secretary 
Cohen that.
    Mr. Cohen. Sure, thank you, Congressman. You raise a lot of 
very good and important points. I think your questions, 
especially about the process, now that we have an interagency 
group on insular areas [IGIA], these are very good questions. 
I'd like to share with you some of the optimism I have about 
how the IGIA can address some of the concerns you've raised.
    As you pointed out, the Department of Interior has 
traditionally been the Department within the Federal Government 
that is responsible for the day to day relationship with all 
the territories. But also, all the agencies have independent 
relationships with each of the territories. So there's sort of 
a disparity between our knowledge of the territories, because 
we're the only office, my office, the Office of Insular 
Affairs, is the only office that is focused on the islands 24/
7. So it's a disparity between that and then the other agencies 
in the Federal Government that often make very large 
investments in the territories, but are not focused on the 
special needs of the territories.
    So it's always been our task, which has been a very 
challenging on, to work with each of the different agencies to 
try to raise the profile of island issues in each territory. To 
do that one agency at a time is very difficult. So one reason 
that I'm very excited about the reestablishment of the IGIA is 
it creates a forum that's mandated by the President of the 
United States for top policy officials, as you pointed out, 
from each of the agencies to come together and focus on the 
particular needs of the insular areas.
    Now, that in and of itself will not result in problems 
being solved, as you correctly pointed out. But it addresses 
the initial threshold problem of getting insular area concerns, 
the particular problems of the islands, on the radar of top 
policymakers in each of the executive branch agencies. That is 
really a major hurdle, because we have found, when people 
become familiar with the disparities, and when they become 
familiar with the particular issues, just as Congressman 
Burton, who took his first trip out with me to Guam and the 
CNMI, they start to have an understanding of, No. 1, the 
uniqueness of the problems, and No. 2, what each agency can 
perhaps do to address it.
    So the process isn't complete in that it won't result, it 
will not guarantee that all of these problems will be solved. 
But we'll guarantee that all the problems will be focused on 
and studied.
    Mr. Faleomavaega. Mr. Secretary, my time is running out, 
I'm sorry. I just want to cite a classic example. When the 
Northern Marianas established this covenant relationship with 
the United States, one of the most unique features of this 
covenant relationship, Mr. Chairman, and thanks to a gentleman 
that I'm sure all the insular leaders are well aware of his 
contributions, for the tremendous help that he gave, was that 
the Northern Mariana Islands became beneficiary to the SSI 
benefits, simply because the late Congressman Phil Burton was 
very much a key player in working that covenant relationship, 
for which NMI, God bless them, are beneficiaries to the SSI 
programs.
    But American Samoa does not get SSI benefits, Guam does not 
get SSI benefits. And every time we've made an effort, and 
Puerto Rico does not get SSI benefits. And I only use it in the 
sense of endearment, you've got a 900 pound gorilla with 3.8 
million Americans living in Puerto Rico. Every time they put us 
together with Puerto Rico, we are dead on the spot.
    So for years we've been trying to work out, how can these 
small, little insular areas, let's just not discuss Puerto 
Rico, where we have tried every way to include American Samoa 
and Guam for SSI benefits, but it's an impossibility. And for 
some reason or another, we say that they're not Americans. I 
suppose I can qualify that, we're U.S. nationals, we're not 
U.S. citizens. But we do fight and die in our wars, I suppose 
that might be a consolation, in our contributions to our 
national defense.
    But this has been the problem. And I'd like to ask 
Secretary Stinson, I've introduced legislation to give the 
Secretary of HHS discretionary authority that they can work in 
MOU relationship between Guam and American Samoa, so that in 
our own unique way, with 150,000 in Guam and 60,000 in American 
Samoa, we're not asking for the moon. Just enough so that it's 
practical and the services, and we need critically, for 
example, SSI benefits for many of our mothers or our residents 
that have this critical need.
    And God bless NMI, thanks to Phil Burton, they got the 
benefit, but we don't. And this is why I wanted to ask Dr. 
Stinson and Secretary Cohen, will you be willing to help us if 
we introduce legislation, even if just to give the Secretary of 
HHS discretionary authority to give us some of that benefit?
    I'm sorry, Mr. Chairman, I know my time's up.
    Mr. Burton. That's OK, we'll let them answer the question 
and we'll go to----
    Dr. Stinson. Yes, but essentially around the specific 
around working with you in relationship to SSI, that's, you 
know, SSI is really part of the Social Security Administration, 
which is not part of HHS any more. There was a time where it 
was part of it, but it did become its own separate agency.
    But I want to answer the bigger question that you really 
posed, and when we look at the needs and what really needs to 
be done to improve the health of the people in the Pacific 
Island Territories, it really does need to be looked at from a 
very, very comprehensive way, and it needs to be looked at 
across the organizational lines of the different agencies.
    To have the type of discussions and the type of engagement 
between Interior, Department of Energy also is a stakeholder 
out there in the Pacific Islands, HHS, Department of Justice. 
To sit down and really determine what are the things, what are 
all the components that adversely affect the likelihood that 
the individuals there can live a long and healthy life, and put 
everything on the table as options and develop some type of 
strategy, some type of plan to do it in a very, very 
comprehensive way. And the Department is very committed to 
doing that.
    Mr. Burton. Let me, before I yield to the delegate from 
Guam, just say that I'd be happy to work with all of my 
colleagues here in drafting a letter, we might have to take 
this one point at time, but to start off with the health issues 
and see if we can't make sure that American citizens and those 
who are from a territory that we control get fair treatment as 
far as health is concerned. That's the thing that bothered me 
the most when I was out there, seeing the deplorable 
conditions.
    With that, we'll go to Delegate Bordallo.
    Ms. Bordallo. Thank you very much, Mr. Chairman.
    We've spent quite a bit of time on discussing the 
processes, so I think I'd like to get to the substance. I'd 
like to ask you, Mr. Cohen, would you agree with me that 
utilization of the Medicaid program to cover Guam's providing 
of health care to citizens of the Freely Associated States who 
travel to Guam would be good public policy worth pursuing? This 
would and should be outside our current cap and with 100 
percent Federal matching assisted percentage. I'd just like to 
get your views on that.
    Mr. Cohen. Sure. As you know, Congresswoman Bordallo, I'm 
here representing the administration and would have to do as I 
always do, work quietly with my colleagues within the 
administration to actually get an official response to very 
specific questions such as that. But the larger point, of 
course, is that we are aware of the problems Guam has had for 
so many years, addressing the medical needs and other needs of 
those who migrate from the Freely Associated States pursuant to 
the compacts of free association.
    When I heard that proposal from your staff, I thought it 
was a very creative proposal. We would certainly work with you 
on a proposal like that. I'm very happy that we've taken what I 
think is a historic major step to addressing compact impact 
issues and now having an annual permanent mandatory 
appropriation of $30 million, of which Guam almost got half 
this year, and I guess maybe for the next 5 years, $14.2 
million, doesn't address the concerns that Guam has raised for 
going back to the beginning of the compact. But hopefully going 
forward, we'll do a much better job of addressing those needs.
    That is one proposal, and you know, we're certainly willing 
to work with you.
    Ms. Bordallo. So would you get back then on that?
    Mr. Cohen. Certainly. And of course, this isn't just 
something that Interior would approve, but it would be an 
administration wide issue.
    Ms. Bordallo. There is one further followup, Mr. Chairman, 
if I could. This is both to Secretary Cohen and Dr. Stinson. I 
would appreciate any comment that you could offer to us on the 
administration's position with respect to the Medicaid caps. 
Any thoughts on how we could best collectively and 
constructively begin to really address this disparity in 
treatment? I'd like to get your opinions. I suppose you're 
going to come back and say that, well, you'll have to check 
with the administration.
    Mr. Cohen. I would just say briefly, just because we've had 
a chance to address this issue through the auspices of the 
IGIA, that I guess HHS, well, HHS is here, so I won't presume 
to speak for HHS. But the issues that were raised in terms of 
linking Puerto Rico to the equation, which increases the costs 
by orders of magnitude, is an issue. And of course at the 
meeting yesterday, some other ideas were tossed out as interim 
solutions.
    But you know, the initial issue of whether caps are lifted 
for all five territories of course presents major cost issues, 
as I understand it, from the administration's standpoint. So if 
there are other creative solutions, it might provide a better 
scope for us to work together to address the problem.
    Ms. Bordallo. Dr. Stinson.
    Dr. Stinson. Yes, first of all, let me say I'm not an 
expert in Medicare and Medicaid. And as we're all aware, the 
provisions of the cap are really grounded in the statutory 
history here, even if there have been some modifications over 
the years. But I would like to say that clearly, the Department 
looks at the services that are provided through the Medicaid 
program as a mechanism of providing access to care. And it's 
certainly interested in the development and the support of 
solutions that will really maximize the ability for all U.S. 
citizens to be able to get the type of care that they need and 
that they deserve.
    Ms. Bordallo. Thank you very much. I'm just, when I was 
listening to my colleague here, Representative Faleomavaega, 
mentioning the SSI and how our neighbors benefit from this, and 
of course Guam, just being a short distance away, we do not 
have this benefit, nor does American Samoa nor Virgin Islands. 
I just wonder if we consider the three of us alone rather than 
bringing in Puerto Rico. They did it with CNMI, so could that 
be looked at, Mr. Secretary?
    Mr. Cohen. I'm sure it could be looked at, and of course, 
it's quite a different issue when it's framed in that way.
    Ms. Bordallo. Thank you.
    Mr. Burton. Well, we'll excuse you, gentlemen, but before 
you go, I hope that you'll stick around to hear what the 
Governors and the health officials have to say from the 
territories that we're going to be discussing. So if you 
wouldn't mind staying around a little bit, I'd really 
appreciate it.
    The one thing that I'd like to stress before you leave the 
table is that although some of the things we've discussed today 
may take legislative action to make positive changes, and 
sometimes that's very difficult, especially with the budgetary 
problems we have, HHS has a lot of money. And HHS has the 
ability to put more money into these territories if they so 
choose. That doesn't require legislative action.
    And I hope that the executives at HHS and your working 
group get together and say, look, we can't have these people in 
American Territories who are American citizens or live in the 
American Territories, we can't have them being second class 
citizens. They at least ought to get quality health care, and 
I'm going to tell you right now, from first hand visual 
evidence, I can tell you they're not getting it. That's just 
not right.
    But with that, thank you very much for your testimony.
    We'll now call to the table the Honorable Governor Camacho 
of the Territory of Guam; the Honorable Governor Babauta of the 
Northern Mariana Islands; and the Honorable Governor Tulafono, 
of the Territory of American Samoa. If my colleagues want to 
make any kind of introductions for these gentlemen, I'd be 
happy to have them do it.
    Mr. Faleomavaega.
    Mr. Faleomavaega. Thank you, Mr. Chairman.
    I want to offer my apologies, we up here on the dais, I got 
so nervous I forgot to even notice my good friend Felix 
Camacho, and I want to apologize. But I do want to thank 
Governor Camacho and Governor Babauta and Governor Togiola for 
the beautiful reception that we recently received, when 
Secretary North and Chairman Pombo and several members of our 
delegation visited these insular areas.
    I would like at this time, Mr. Chairman, to introduce, it's 
my honor to introduce our Governor. This gentleman is a 
homemade product, successful in getting his training as a 
member of the Honolulu police department. He was a law 
enforcement officer. And several years served as judge in our 
territory, and also served as senator and chairman of the 
various committees. He has been practicing law for the past 25 
years, and a graduate of Washburn Law School from Topeka, KS. 
Would you believe, Samoans living in Kansas, Mr. Chairman?
    And due to the untimely death of our late Governor, 
Governor Togiola had to take the reins since last April. Mr. 
Chairman, I'm very, very happy that he's here with us, and I 
look forward to hearing his testimony as it pertains to the 
health care needs of our territories.
    Mr. Burton. Very good. Would any other Members like to 
speak? Ms. Bordallo, do you have any comments?
    Ms. Bordallo. May I introduce my Governor?
    Mr. Burton. Sure.
    Ms. Bordallo. All right, thank you.
    My Governor is Governor Felix Camacho, and there are some 
very interesting twists and turns to his political life. He 
served as the civil service director, I think, correct me if 
I'm not right, Governor, with the Government of Guam for a 
number of years as director. He served many terms and he was my 
colleague in the Guam legislature as a Senator.
    What makes him most unique is that several years ago, his 
father, the late Governor Carlos G. Camacho, served as Guam's 
first elected Governor. And now these many years later, we have 
his son serving in this very high position.
    So Governor Camacho, we welcome you to Washington and we 
look forward to your testimony. Thank you.
    Mr. Faleomavaega. Mr. Chairman, I forgot to mention that 
our Governor has about a five handicap, if you really would 
like to play a round.
    Mr. Burton. I don't want to mess with anybody with a five 
handicap. [Laughter.]
    He would own my house.
    And I'll personally introduce Dr. Babauta, who is a good 
friend of mine. We had an opportunity to get to know each other 
in a more personal way, along with Governor Camacho, when I was 
visiting in that region. So Governor Babauta, welcome to you as 
well.
    Would you please stand so I can swear you in?
    [Witnesses sworn.]
    Mr. Burton. We'll start with you, Governor Camacho, and 
just go right on down the table there. Do you have an opening 
statement you would like to make? You can read your testimony 
or make an opening statement, whichever you would prefer.

 STATEMENTS OF FELIX PEREZ CAMACHO, GOVERNOR OF U.S. TERRITORY 
 OF GUAM; JUAN BABAUTA, GOVERNOR, COMMONWEALTH OF THE NORTHERN 
  MARIANA ISLANDS, ACCOMPANIED BY DR. JAMES U. HOFSCHNEIDER, 
   SECRETARY OF HEALTH; TOGIOLA TULAFONO, GOVERNOR, AMERICAN 
 SAMOA; JEFFERSON BENJAMIN, SECRETARY OF HEALTH, DEPARTMENT OF 
  HEALTH, EDUCATION, AND SOCIAL AFFAIRS, FEDERATED STATES OF 
MICRONESIA, PACIFIC ISLAND HEALTH OFFICERS ASSOCIATION; AND DR. 
    WILLIAM MCMILLAN, ADMINISTRATOR, GUAM MEMORIAL HOSPITAL 
                           AUTHORITY

    Governor Camacho. First of all, I would like to thank you 
very much for inviting me and my fellow Governors, the 
territorial Governors, here to Washington to provide testimony. 
We very much appreciate this opportunity, again.
    And the mere fact, Mr. Chairman, that you have personally 
been able to see for yourself the territories with your visit, 
to see first hand the situation of our health care on our 
islands and the many challenges we face. I think it makes a big 
difference. It's not too often that we have Members of Congress 
come out to the far distances in the Pacific to see for 
themselves the many challenges we face. We truly appreciate the 
visit you made there. And with that, I would like to begin my 
testimony.
    Mr. Chairman and members of the committee, Congresswoman 
Bordallo, Congressman Faleomavaega and Congresswoman Watson, 
thank you for inviting me to participate in your hearings on 
the disparities of health care in the Pacific Island 
Territories. I would like to express my appreciation to you for 
providing this opportunity to address the needs and concerns of 
the Pacific Islands on this most important issue.
    Our peoples' health is one of the highest priorities, and 
we are constantly striving to improve the quality of care 
available on the islands. However, in addition to facing many 
of the challenges that States are grappling with, Guam and our 
Pacific Island neighbors also have certain concerns that are 
unique to our region.
    Like many communities, we have difficulty in recruiting and 
retaining health care professionals, and providing basic health 
care in the face of skyrocketing costs and ensuring that every 
member of the public has access to quality health care 
services. But the challenges we face on Guam go far beyond 
these issues. Our small population base, relative isolation and 
constant mix and influx of people from areas with even fewer 
health options are among the many circumstances that contribute 
to the serious health care concerns on Guam.
    With our Department of Public Health and Social Services, 
it provides basic medical care and public assistance to our 
indigent population. The Department is additionally responsible 
for immunizations, health education, disease screening and 
monitoring, tracking the health status of Guam residents and 
safeguarding the vital statistics registry.
    Guam's public health department receives both Federal and 
local funding for indigent care. But Federal caps on Medicaid 
benefits to the island have resulted in the need for the 
government of Guam to bear an unusually large burden for 
indigent care. In fiscal year 2003, Federal funds paid for just 
$8 million of the total Medicaid bill of $15 million. The 
Government of Guam spent an additional $17 million on the 
medically indigent programs that were developed to cover the 
needs of our poor.
    Now, the influx of patients from the Freely Associated 
States [FAS], further burdens our public health system. Public 
health provided more than 188,000 services to residents in 
2003. And of these 24 percent were provided to FAS citizens. 
Citizens from these areas also have exceptionally low rates of 
insurance coverage, 29.4 percent of the FAS citizens surveyed 
in 2003 had no form of health insurance compared to Guam's 
uninsured rate of 21 percent of the adult population. By 
comparison, the uninsured rate for the United States as a whole 
was 14 percent in fiscal year 2002, the last year that U.S. 
statistics are available.
    Now, with an economy still struggling to recover from years 
of typhoons, geopolitical events, economic problems in Asia, 
the Government of Guam simply cannot afford to continue over-
matching Medicaid. We must have additional funding to provide 
the level of services needed by the population.
    I listened with interest, as you had mentioned, Congressman 
Faleomavaega, about the need to somehow separate Guam and the 
Northern Marianas and American Samoa from Puerto Rico as the 
equation. Because you can combine all our islands, land mass, 
population, even people that come and visit as tourists, and 
still we cannot match the level of population and impact of 
Puerto Rico.
    And it's convenient for policymakers, or those that are 
responsible in administering the programs to say, well, we 
simply can't give it to you in all fairness, because if we do, 
then we must also give it to Puerto Rico. But I think in all 
fairness, we understand the impact of that, but we must be 
given some reasonable exception to the equation and be 
separated out in consideration of Medicaid.
    This lack of funding has also led to serious deficiencies 
in our local facilities which are aging and in need of repair 
or replacement. These facilities have been built decades ago 
with the Hill-Burton funding. And as time has progressed and 
population has grown, our public health department is 
challenged to find adequate space to provide the myriad of 
health services it is mandated to provide.
    In May 2003, a local law was passed requiring clients in 
the medically indigent program to receive their primary health 
care services through the community health services. This was 
done to try and alleviate the impact upon our hospital. My 
administration, with the support of the Guam legislature, 
recognizes our obligation to provide basic primary health care 
services to our people. And because private health care 
providers are currently turning MIP and Medicaid patients away. 
We must identify a point of access for these patients.
    The need for expanding current facilities and acquiring 
additional funding for programs provided by our public health 
and social services department is reflected both in the 
department's difficulties and the health of our population. 
Guam has a high prevalence of both communicable and chronic 
diseases, as you well pointed out, Chairman Burton, which well 
funded and aggressive public programs would best be equipped to 
address.
    Again, you mentioned, Congressman Burton, that our diabetes 
rate for adult population ranges from 25 to 46 percent higher 
than adults in the United States. And while the Pacific Islands 
Health Officers Association meetings in 2003 led to the 
declaration of a war on diabetes, the $200,000 budget for that 
fiscal year seems a small amount to battle a disease that 
conservatively affects more than 10,000 adults on Guam.
    Communicable diseases also remain a major concern because 
of our proximity to Asia, where many new alarming diseases such 
as SARS and the more recent avian influenza outbreak 
originated. Despite our vulnerability to such outbreaks, Asian 
border States and territories were overlooked during a recent 
initiative to increase surveillance in border States for 
bioterrorism agents and emerging infectious diseases.
    With the Guam Memorial Hospital, Guam is served by one 
civilian hospital, which is a fully autonomous entity of the 
government of Guam. As the island's only hospital, GMH is 
mandated to provide treatment to every individual, regardless 
of ability to pay. This has caused serious financial problems 
for the institution, as 80 percent of its patients were 
uninsured self payors, 80 percent of its patients were 
uninsured in the hospital. They were uninsured self payors or 
recipients of medical assistance from the department of public 
health.
    Our hospital provides 1.1 inpatient acute care beds per 
1,000 population, a situation that will deteriorate with 0.92 
beds per 1,000 population by 2010. This is still less than half 
of the 2.1 inpatient beds per 1,000 population in division nine 
hospitals, according to a 2003 American Hospital Association 
report. The hospital's chronic financial problems, combined 
with challenges inherent to a relatively small population base, 
has forced the government of Guam to limit services available 
at the facility.
    However, unlike mainland U.S. patients who can simply drive 
to an appropriate facility, Guam's patients face the expensive 
prospect of flying between 3 to 8 hours to another medical 
center. You mentioned our Speaker, who had to fly off, and many 
thousands of others. The discomfort and cost of such trips, to 
say nothing of the hardship of such a flight on critically ill 
patients, makes access to care extraordinarily difficult for 
many families. Massive family fundraising projects are 
commonplace when a family member needs surgery or cancer 
treatment. And some individuals are unable to get appropriate 
care because of the high cost.
    Honestly, you may have seen it yourself, Mr. Chairman, 
you'd be driving down the highway and you'd find in the medians 
of our highways by the stop lights people with buckets and 
hats, and signs saying, my mother's sick and she needs a kidney 
treatment or open heart surgery, can you donate money. They 
knock on the doors of every politician, asking, can you 
personally help, can you appropriate money. Everywhere you look 
on this island, people have been gravely affected, without the 
ability to pay for medical care.
    The lack of certain services on Guam is perpetuated by the 
need for patients to seek care off-island. More than $30 
million in local insurance premiums each year is spent at 
facilities outside of Guam, robbing our hospital of the capital 
needed to develop and expand services. And to date, GHM per 
capita budget is one-third lower than district nine Pacific 
States, leading to an absence of critical services.
    GMH has no radiation oncology, no cardiac surgery, and 
despite mortality and morbidity rates that significantly exceed 
national averages, we have no kidney donor program or 
transplant service, despite higher than average diabetes rates 
and end-state renal diseases. In addition to the need to expand 
services and make care more affordable for all patients, GMH 
also seeks assistance in Medicare programs.
    A participant since 1986, GMH was granted an exemption from 
the prospective payment system. However, our hospital's 
reimbursement has slipped from cost based to less than cost, 
resulting in the loss of approximately $3 million from Medicare 
revenues of $12 million annually. Critical access hospitals 
receive 101 percent cost reimbursement, and special mechanisms 
are available for disproportionate share hospitals, rural 
referral centers and sole community hospitals. We believe that 
GMH can meet all of the criteria for these special categories, 
if reimbursement regulations can be modified slightly to 
recognize Guam's unique circumstance.
    I just have three other categories, and I'm done. Staffing 
concerns, across the Nation communities have grappled with 
shortages of nurses, medical technologists and other medical 
specialties. This situation is exacerbated on Guam, where it is 
often difficult to recruit and retain health care providers.
    As an example, I would like to share a brief story that 
occurred a few years ago. The island's only gastroenterologist 
decided to return to the U.S. mainland. In the weeks before his 
departure, his clinic was crowded until after 11 p.m., and 
later crowded with other physicians on-island who rushed in for 
checkups and treatments before he left the island.
    With increasing Federal grant funds to Guam, our geographic 
isolation and paucity of human and natural resources contribute 
to a higher cost of doing business on Guam. We believe that 
this cost could be addressed when Federal grants funds are 
allocated to Guam by raising the floor amounts of grants that 
use them, and instituting a minimum floor amount for those that 
do not, and then applying population based formulas for the 
distribution of the remainder of the grant funds.
    In summary, clearly there are a number of issues that need 
to be resolved to place Guam on par with other U.S. 
jurisdictions. And there must be a commitment by the Federal 
Government to help all Pacific Island Territories deal with the 
shortcomings that face each one of us in improving and 
providing the quality health care to our people.
    I thank you for your attention.
    [The prepared statement of Governor Camacho follows:]
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    Mr. Burton. That's a very, very good statement.
    We have two votes on the floor, and I have to run to the 
floor. This is unusual to ask this, but I think I'll ask Mr. 
Faleomavaega if he would to conduct the meeting in my absence. 
I'll be back in about 10 minutes, and then we'll get into 
questions and answers.
    So we'll go to Governor Babauta, we'll go to you next, and 
I'll be right back.
    Mr. Faleomavaega [assuming Chair]. Most unusual situation, 
that the good chairman has been so kind as to allow the 
minority to preside over a hearing. It's unheard of. But I know 
for his graciousness, and Governor Babauta, I know you have 
some very precious statements that you want to share with the 
chairman. I'm sure that the good staff director that we have 
here will take every word of your statement and make sure that 
Chairman Burton gets it.
    By the way, Governor, you've been here long enough to know 
that this is how the Congress and the congressional committees 
operate, and I know it's not lack of sensitivity, it's just the 
reality of the nature of the beast. This is how the Members 
have to be, on the floor to vote. They cannot vote by proxy.
    But please proceed.
    Governor Babauta. Well, you know, years ago I called you 
Mr. Chairman. And although it didn't work out, I can truly call 
you today Mr. Chairman, at least temporarily.
    Just as a way of opening remarks, I sat here thinking, when 
you and Congresswoman Bordallo were introducing your Governors, 
how totally unfair it was that I do not have a delegate up 
there to introduce me as well.
    Mr. Faleomavaega. How great an honor you had, in the fact 
that the chairman was introducing you, and the congressional 
delegates certainly don't have the same rights and privileges. 
[Laughter.]
    I think, Governor, you could not have gotten a better 
person to introduce you, in a much higher capacity than us 
humble congressional delegates. Please don't feel that bad.
    Governor Babauta. Let me get back to you on that point.
    Today, I'm honored to be accompanied by a number of elected 
officials from the CNMI. I want to recognize them by name, 
because I want their names to appear on the record as having 
borne witness to this very important hearing that Chairman 
Burton called for.
    We have the Senate President, Joaquin Adriano, and Senator 
Joseph Mendula, Senator Henry Senicholas, and Senator Tom 
Villagomez, Senator Louie Christastimo, and Congresswoman Janet 
Maratita. Just for the record also, Congresswoman Janet 
Maratita is the only female representative in the entire 
legislature. So we're very proud of her.
    Mr. Faleomavaega. Governor, I know exactly where you're 
coming from. It is annoying at times, when you feel like you're 
not really part of the team, or as a full fledged member. Just 
like when we have roll calls, we're left here, and the others 
get to go vote on the floor. You feel like perhaps you're a 
second class citizen in that respect, but that's just the way 
things are here in Washington. I know that every Member here 
doesn't feel we're being slighted, it's just the fact that as 
territorial delegates, we don't have the full rights and 
privileges allotted to Members who represent the various 
districts from each State. We understand that's just the way 
things are.
    As I had raised earlier the question with Secretary Cohen, 
traditionally the Department of Interior has always been our 
main advocate, I suppose, over the years, with the Federal 
agencies, with the White House, even with the Congress. I 
wanted to pursue that line of questioning, wanted to know if 
there's any disagreement with you in that regard.
    I know Dave is very good in being elusive and not saying 
exactly how he feels about some of these issues. But I was just 
wanting to know what your thoughts are.
    Governor Babauta. Mr. Chairman, I totally agree with you. I 
think legislation is part of the equation in addressing a lot 
of the discrepancies that the insular areas experience. The 
Medicaid, for example, and the equation of Puerto Rico, every 
time we talk about the territories, Puerto Rico having a 
population of about 6 million people, and the costs associated 
with the population of Puerto Rico is just, there's no 
comparison to us smaller ones. I think a special legislation 
would be absolutely in order for that.
    Mr. Faleomavaega. I think Congresswoman has a comment.
    Ms. Bordallo. Yes, thank you, Mr. Chairman.
    I'd like to mention to those in the room that we had two 
Members of Congress who had to leave abruptly, Congresswoman 
Watson, who was here, and I don't know if you noticed the 
gentleman at the end of the table, Congressman Cummings, who is 
the chairman of the Black Caucus. They were just called to an 
emergency meeting because of the situation in Haiti. I'd just 
like to say that they were interested and were present at the 
hearing. Thank you.
    Governor Tulafono. Congressman, if I could add to that 
dialog while we're preserving the time to assure the 
presentation by Governor Babauta there in the presence of the 
Chair, my attitude toward this whole thing is, first, it took a 
visit from the chairman to come to grips with the real 
situation, and with reality that we live with day in and day 
out. I think some of the testimonies that have been offered so 
far do provide some good suggestions. I think one of those 
suggestions is, I think we need to take a comprehensive look at 
these conditions.
    I don't think there's any question, and I will say that in 
my testimony again, that the fact that this hearing is convened 
and the recognition of the disparity is sufficient. For the 
first time in my estimation, we are here to provide some of the 
causes that we know from our respective jurisdictions to try 
and help the committee fashion perhaps some of the legislation, 
or some of the assistance to help us deal with the situation, 
help all of us deal with these situations in our jurisdictions.
    I also feel that as a result of what has come up, I think 
in addition to look at the situation itself, with respect to 
health care, I think also we need to look at the mechanism of 
financing health care in the territories. We have very unique 
situations that require considerations that are not common to 
everybody else. And I think that is sufficient reason to want 
to address those issues in a special way. I think that comes in 
the way of fashioning a financial mechanism or financial 
scheme, so that the issues of the territories are addressed 
specifically.
    Because if we continue to deal with them in a global sense 
across the Nation, they will never be addressed. They can never 
be addressed. And I don't know if there's any way that you can 
fashion anything from the existing schemes of today. But I 
think the fact that this hearing convened, I think it's the 
first time that I am aware of that a problem is identified, and 
we are here just to provide information to help, instead of 
trying to convince Congress that we have a problem. I don't 
think we need to convince Congress any more that there is a 
problem.
    Mr. Faleomavaega. You could not have stated it better, 
Governor. The problem that Madeleine and I have always had over 
the years is to have Members interested in issues relating to 
the territories. This is one of the things we always struggled 
with, is to get as many Members to come to our respective 
districts. Because that is the only way these Members are going 
to have some sense of attention, just as the fact that Chairman 
Burton was able to visit, and I suppose it wasn't just Guam and 
NMI, it was probably part of an overall delegation that he led 
to other areas of the Asia Pacific region.
    But the fact that this caught his attention, this is just 
the nature of how things operate here. I'm just so grateful 
that Chairman Burton has taken this initiative to do this.
    Now, we can make our requests, the fact that finally we're 
able to get the chairman of our House Resources Committee to 
come and visit the insular areas, and the fact that some of 
these Members have never heard of these insular areas, is an 
accomplishment in itself. I don't know how else I could relate 
to the difficulty there is in even getting anybody to come 
down. It's always a problem with Members even here in the 
continental United States to have other Members come and visit 
their districts, it's a very difficult situation.
    So again, our being here, like I said, and thanks to 
Governor Babauta and Governor Camacho for really getting the 
chairman's ear on issues related to health care needs of NMI 
and also Guam and American Samoa has also become a beneficiary 
because of this, and we have a chance to express our feelings 
about these needs. I sincerely hope that as a result of this 
hearing, we're going to come up with some strong 
recommendations, even by way of hopefully maybe even offering 
amendments to current Federal law that will be helpful in 
addressing some of these serious needs that we have as far as 
health care needs are concerned.
    Governor Babauta, I think Chairman Burton should be here in 
another couple of minutes. Maybe you can go ahead and proceed 
in that regard. But save your punch line for him when he's 
here. Does that sound OK?
    Governor Babauta. Sure, that's perfectly fine.
    Mr. Chairman, the names of the elected officials that I 
enumerated, it is good to have somebody other than myself come 
to this hearing to know just how much Chairman Burton means to 
all of us for his visit to the islands. This hearing is truly 
historic, because I have not seen a hearing in Washington held 
specifically on health issues in years that I have been here in 
Washington.
    Years ago, we had the Hill-Burton dispensaries. These were 
dispensaries that were constructed under the federally funded 
program, the Hill-Burton program. So a lot of dispensaries were 
built throughout the CNMI.
    Then came Philip Burton, of course, he singlehandedly gave 
CNMI the Social Security, the Supplemental Security Income. So 
we're grateful for the late Congressman Philip Burton. Then of 
course, Chairman Burton having come out to CNMI and then 
holding this historic hearing, I just want to say to the 
chairman that the people of CNMI are grateful, very grateful to 
individuals with the last name Burton. We are very honored and 
pleased with the chairman's visit to the islands. We appreciate 
his taking the long flight to the islands.
    And when he was there, taking the time to speak with 
individuals, both elected leaders and health officials and our 
ordinary people that he met, he took the time to have 
conversations with them. That was just extraordinary on his 
part.
    The CNMI has been a U.S. commonwealth since 1976. We had 
virtually no health care capacity when we entered the U.S. 
family about a quarter of a century ago. At that time, our main 
hospital facility consisted of an outdated Naval facility, long 
abandoned by the United States. Then in 1982, with the 
assistance of the United States, we developed a new hospital 
facility, that's the Commonwealth Health Center today. That 
facility is now 20 years old, overburdened and in need of 
critical repair, upgrade and expansion. It provides services to 
a much higher population of patients than was ever anticipated.
    In addition, our remote location poses other challenges. 
Our closest U.S. tertiary medical referral center is in Hawaii, 
some 3,000 plus miles away. We have issues regarding the 
adequate provision of health care services to a scattered 
population on three major islands, Rota, Tinian and Saipan. And 
occasionally, we have challenges with health care needs in the 
northern islands. Each island, although rural in nature, 
requires the development of a certain level of emergency and 
preventive and primary health care services.
    Mr. Chairman, we have a diabetes epidemic on our islands. 
The No. 1 health issue facing our commonwealth is the treatment 
of this disease. The prevalence of a CNMI person having 
diabetes is 300 percent more than a person in the 50 States, 
300 percent more. We have children developing Type 2 diabetes, 
and these children will require treatment for the rest of their 
lives. We need $3 million in assistance from this Congress to 
combat and treat this disease.
    Mr. Chairman, the advent of September 11, homeland security 
priorities and the emerging highly infectious diseases such as 
SARS, we have had to cope with upgrading and repair of our 
rapidly aging hospital facility. We need your assistance in 
funding $6 million in air circulation and water treatment 
improvements to the Commonwealth Health Center. We take issue 
with the way the Medicaid funding is provided for the CNMI, 
just as the other territories do.
    We receive millions less in Medicaid reimbursement than we 
would if regular State funding formulas were applied. This 
situation results in the CNMI being less able than the States 
to meet the health care needs of our people, again burdening 
not just the way we deliver health care, but our capability in 
terms of cost. We want the same Medicaid funding as States 
enjoy, and we ask, I ask this committee to end this funding 
discrepancy.
    We also are faced with the fact that many patients with 
complicated medical problems, such as cardiovascular diseases, 
must be referred off-island for definitive diagnostic and 
therapeutic services. We transport patients to Hawaii and other 
distant locations at increasing costs. Patients being referred 
off-island consume a significant portion of our health care 
budget. And with the help of Congress, we can reduce the cost 
of health care, and we can do this by developing a truly 
reasonable health care delivery system. We can do it by 
improving our capacity and with the blessing, with my good 
Governor from Guam, we can make Guam a reasonable health care 
center for the region.
    I ask for this committee's support in developing this 
regional health care program for the people of the CNMI and for 
the people of the region.
    Thank you, Mr. Chairman. I am accompanied today by the 
Secretary of Health, Dr. Hofschneider, to answer any specific 
and detailed questions that you may have. Thank you.
    [The prepared statement of Governor Babauta follows:]
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    Mr. Faleomavaega. Thank you, Governor.
    Governor Togiola.
    Governor Tulafono. Thank you, Mr. Chairman.
    Before I go on, I would like to thank you, sir, for that 
great introduction, and for conveying a handicap that I can't 
very well live up to. I just wish that number could be 
translated to some kind of a formula for obtaining funding to 
build a new hospital for American Samoa. I would just be right 
out of here. [Laughter.]
    Talofa to the Honorable Chair Burton and to the temporary 
chair, our own Congressman from American Samoa, the Honorable 
Faleomavaega. Thank you.
    I would also like to especially greet the Honorable 
Congresswoman Bordallo. It's been a pleasure serving with you 
as lieutenant Governors in the NCLG. And I'm very happy to see 
you in that chair.
    I am very honored to be here, and I would like to thank 
Chairman Burton for the opportunity and the honor to testify in 
this hearing on the issue of health care disparities from a 
U.S. Pacific Island territory, in this case American Samoa. The 
health care and medical issues faced by small islands such as 
American Samoa are insurmountable, due to our isolation and 
remoteness from specialized services unavailable on-island, 
retention and recruitment of medical staff and overburdened and 
outdated medical facilities.
    In addition, our dollars just aren't worth a dollar any 
more, especially in a remote location. And also, due to the 
very low percentage of Federal assistance dollars per capita 
that we receive in direct assistance.
    Mr. Chairman, I sincerely thank you for your humanity and 
initiative. If nothing else, the preamble to this hearing 
really is the recognition of the problem we face. There is a 
serious disparity in health care in these U.S. Territories in 
the Pacific. I would like to state for the record that in the 
treaties of cession involving the islands of American Samoa, to 
take care of the welfare of the people is a promised 
recognition that is enshrined in those documents. It's sad to 
say that it's very difficult for us to deliver and take care of 
that welfare when we cannot deliver appropriate medical and 
health care services to the people of American Samoa in an 
adequate way.
    It's always a struggle to meet the rising costs of health 
care in American Samoa. Our only hospital, the Lyndon Baines 
Johnson Tropical Medical Center, is 40 years old. It has been 
upgraded and expanded over the years, but it falls short of 
meeting the health care needs of our territory. It is one of 
the best facilities in the South Pacific region. However, it 
falls short in standards compared to health care in Hawaii and 
the mainland.
    Just May of last year, in 2003, during torrential rain, the 
whole facility was covered with mud, even including the patient 
wards. The cleanup was done around the patient beds while the 
patients were sitting on the bed, to try and remove the mud 
from the facility. We have unique problems that will require 
unique solutions to overcome. And I thank you for this hearing. 
I believe the recognition that is given to the problem gives us 
a little easier task today. That is not to come here to 
convince you that we have a problem; rather, we've been invited 
to try and help you recognize why there is a problem and try to 
help foster and forge solutions that will be beneficial to the 
U.S. Pacific Territories.
    The first of those issues I want to bring up to you is, our 
own natural environment, being a tropical climate increases the 
risk of diseases subject to natural disasters, as evidenced by 
recent flooding, mud slides and cyclone Heta in January, and in 
a very hard to reach island location.
    Second, our health care system is plagued by understaffed 
agencies, and a portion of staff is underskilled or 
inadequately trained to perform up to acceptable standards. 
Three, even our trained staff to maintain adequate care levels 
is difficult to attract, even at high salary levels, due to our 
isolated location and limited facilities. A classic example of 
that is, we offered recently $150,000 compensation package to 
hire a nephrologist. No one is interested. Nobody is 
responding.
    No. 4, the health care system is not adequately meeting the 
needs of the public, because the health care work force is not 
sufficiently trained to deliver high quality service. As 
identified by Dr. Stinson, we're constantly relying on medical 
officers to work as doctors, which they're not qualified to 
deliver. But that's the limit of the ability that we have.
    No. 5, medical equipment purchases and maintenance costs 
and pharmaceutical supplies are high, and have risen 
significantly during the last decade. No. 6, funding from local 
fees and Federal resources is continuing not to be sufficient 
to meet operational needs for a sound health care system. And 
efforts to bring in a reasonable health insurance program have 
failed due to low patient volumes and unreasonable offers from 
insurance providers. We put out an offer last year, and only 
one company responded, offering us a premium of $18 million a 
year, which is almost more than our whole health care system.
    No. 7, an underlying issue is our high growth rate also in 
American Samoa, which leads to increasing demands that will 
outstrip existing and planned improvements to health 
facilities. Last, due to limited tertiary care on-island, there 
is an unacceptably large proportion of health care dollars from 
the territory's budget absorbed by off-island medical care 
referral cases, especially to the State of Hawaii medical 
centers.
    The great percentage of total health dollars are spent on 
tertiary care overseas, and too small a sum is spent on 
preventive health programs and services in American Samoa. What 
are some of the causes of these disparities? It could be summed 
up quickly by saying that rapid population growth and changes 
in migration patterns has led to an escalation of immigrant 
families with greater health needs coming into American Samoa. 
That's document in our population report of the year 2000. 
Population growth and increased service demand has resulted in 
insufficient resources to meet public demands.
    The ever-increasing cost of health care due to inflation 
and the emergence of new technologies and equipment to support 
them are pushing the LBJ Tropical Medical Center past the point 
of being able to support its essential medical services for the 
community. A question arises whether improved health services 
encourages this immigration, thus helping to cause the stress 
on facilities and services. Also, we have improved our health 
and family planning education programs and services. But with 
our high end migration pattern, do these programs reach the 
people causing high birth rates and result in decline?
    A portion of the users of hospital services have limited 
funds, and are not able to pay increased fees to support 
improved health care. Is our responsibility to continue to 
provide health services, even if clients are unable to pay 
fees? And if we do so, how do we pay that cost? Only limited 
local revenue exists to expand our health facilities, and the 
territory is increasingly becoming dependent on limited Federal 
expenditures, such as funds from DOI, CBDG grants, and the CIP 
program.
    In 1996 to 2000, the expenditure was $40 million, or $8 
million per year. Presently, we receive $12 million for health 
care, $10 million from DOI and $3 million from Medicaid. 
Medicare provides at a one to one ratio to the mainland, even 
though the costs are much higher in American Samoa. The reality 
is that our government collects much less than it expends, and 
we face a serious dilemma on how to finance our needed service 
providers, and an expanded infrastructure to support our health 
delivery system.
    The lack of health and medical insurance in American Samoa 
further compounds our financial dilemmas in operating the 
services to the territory. All the respondents to our last 
offer, RFP, came from off-island. There are no insurance 
companies available on the island.
    The current financing method is both socially inequitable 
and unsustainable as the hospital authority can no longer 
support health care to a level that meets public expectations, 
standards of quality and scope of services. If health care 
costs are increased further and the health system continues to 
divert a large proportion of health care dollars for off-island 
tertiary care, the hospital will ultimately have to raise fees 
to the point that low income individuals will find basic health 
services inaccessible and essential health services will become 
eroded due to a lack of funding.
    Our remoteness and expensive, infrequent air service 
between American Samoa and Hawaii also adds to the difficulties 
in medical tertiary care. The passing of our late Governor 
Sunia last year is a case or testament of not having adequate 
tertiary care on-island, limited medical resources and flights 
that could have abated his untimely demise. He was forced to 
catch a flight to a foreign country to catch a flight to try 
and reach Honolulu in time. He passed away enroute.
    To meet the causes of these disparities, we have taken a 
number of actions in American Samoa. However, the reality is 
that it is difficult to provide quality health care in this 
environment, to deal with our natural disasters and overcome 
the attraction of being a U.S. territory to our neighboring 
countries. The late Governor Sunia formed a task force to 
investigate the effects of the rapid population growth we are 
experiencing. This included impacts and ways to overcome these 
problems, including those to our health delivery system. We 
have a committee to address population growth issues through 
implementing the recommendations of that population task force 
report in 2000.
    We need to work with our environment and the climate and 
natural disasters to which we are subjected. I ask you to 
understand that our challenge is greater than in other 
locations, and our needs are also greater. Remember that 
American Samoa represents the United States in this region. It 
is important that we put our best face forward.
    We look for assistance in terms of funding, but it is not 
just about money. We need help to recruit qualified health 
professionals, incentive programs to attack our staffing 
problems, and enable us to attract qualified physicians to come 
and provide the services so needed in the territory. We also 
need to develop and implement a health and medical insurance 
program in American Samoa to subsidize health care in order to 
operate, upgrade and deliver top health care to our residents.
    Finally, I cannot also negate the need to reevaluate and 
assess the current facilities if the capacity and staffing 
issues are resolved for much needed upgrades to medical 
buildings, technological improvements and to develop high 
tertiary care services to be made available to all residents of 
American Samoa.
    I hope this information will give you a perspective of the 
issues that we confront in American Samoa, as other Pacific 
Island Territories. It is my hope that you can assist us in the 
areas I have outlined that continue to plague us in providing 
health care services to all who reside in the territories.
    Thank you for your attention and I appreciate this 
opportunity to be here with the committee and share a 
perspective from a U.S. territory in the South Pacific. Again, 
we thank you for convening this hearing, and thank you for 
having us today.
    [The prepared statement of Governor Tulafono follows:]
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    Mr. Burton [resuming Chair]. Thank you. I want to thank 
Representative Faleomavaega for carrying on while I was gone.
    Let me just ask a few questions, then after they ask their 
questions, we'll go to your medical experts and try to find out 
exactly what in the way of money and other things we can do to 
help solve this problem.
    I'm just curious, Governor Tulafono, what did your 
predecessor die from? You said he died on the airplane.
    Governor Tulafono. Yes, he did. He was being evacuated to 
Honolulu because our hospital could not continue to treat his 
illness.
    Mr. Burton. Was it a heart condition, or cancer?
    Governor Tulafono. Well----
    Mr. Burton. If you'd rather not go into it, that's OK. But 
it was something that could have been treated had they had the 
facilities on the island?
    Governor Tulafono. I think he eventually suffered from a 
heart failure. But it was due to other medical conditions.
    Mr. Burton. And is it pretty certain that had they had the 
proper facilities on the island, he would have been able to 
survive?
    Governor Tulafono. That's correct. If the facilities had 
adequate treatment and physicians competent to treat his 
condition, he would have survived.
    Mr. Burton. That's really a tragic story, chief executive 
of a territory like that not even being able to get adequate 
treatment.
    Governor Camacho, your island had I guess a problem with 
the Guam Memorial Hospital Authority. They had a $20 million 
debt and they had to declare insolvency, I guess. Can you tell 
me a little bit about how that happened, how that occurred?
    Governor Camacho. I have our hospital administrator, Bill 
McMillan.
    Mr. Burton. We can wait until the next panel. I think he's 
going to be testifying, is he not?
    Governor Camacho. Yes, the hospital has not filed for 
bankruptcy.
    Mr. Burton. Oh, that's not true.
    Governor Camacho. They're still financially solvent.
    Mr. Burton. But they're having a tough time right now?
    Governor Camacho. Yes, the government had to step in and 
take money out of our general fund, and I believe even a 
portion of some grant money and money that we had available and 
bailed them out a couple of times for them to even make 
payroll.
    Mr. Burton. Is that right. The request that I presume 
you're going to be making, along with the other territories, 
will talk about how that can be dealt with?
    Governor Camacho. Yes, sir.
    Mr. Burton. I think you said, Governor Camacho, that over 
24 percent of the 188,000 medical services were rendered to 
patients from the Freely Associated States who are not American 
citizens or nationals. How do you compensate, how do you take 
care of those expenses?
    Governor Camacho. That's a very good question, Mr. 
Chairman. Basically it has to be absorbed by our medically 
indigent program. In fact, the amount of money owed to the 
hospital for uninsured services provided to our citizens and 
also others from other countries is absorbed by the general 
fund. Part of the problem or reason why they have not been able 
to make payroll or come close to not making payroll or paying 
their obligations, it's a burden that's been absorbed by the 
hospital and public health. And certainly it is a growing 
problem.
    We have, because it's only one civilian hospital, there is 
a responsibility we have to accept all patients, no matter 
what. And the funding and the payment for their care and 
services leaves a big dent and big hole in the hospital's 
finances. Their accounts receivable amount has been tremendous, 
and I give a lot of credit to our board and Mr. McMillan in his 
administration of the hospital. They've made great strides in 
running it as it should be run.
    But there are some problems that simply cannot be overcome. 
How do you tell a person, sorry, we can't provide services for 
you because you have no insurance or you have no way of paying 
for it. We simply take them in and somehow or other we will 
eventually try and find payment out of the general fund. But we 
have a growing problem under what's called the medically 
indigent program. Again, government and policymakers come 
forward with every good intention to provide for the needy and 
those that cannot afford medical care or medical insurance. And 
somehow or other, it's the government that has to bear that 
cost.
    Mr. Burton. And the Medicaid ceilings there are below what 
they are on the mainland?
    Governor Camacho. Definitely. Much, much lower. We have a 
cap and we continue to pay over and above. We've spent an 
additional $17 million just on the indigent care program, for 
those that don't have any insurance.
    Mr. Burton. Let me ask one more question to Governor 
Babauta. That diabetes Type 2, I think you alluded to that in 
your statement. I wasn't here, but I think I read that in your 
statement. Did you refer to that?
    Mr. Babauta. Yes, Mr. Chairman.
    Mr. Burton. What I wanted to find out, CNMI is third in the 
world among populations with that kind of diabetes, it's one of 
the worst places in the world as far as that's concerned, and 
what exactly do you need to compensate for that or deal with 
that?
    Governor Babauta. We definitely need to complete the 
extension of the hospital that is now under construction, 
adding additional 27 units for dialysis to treat the 
overflowing dialysis center that we now have, and making sure 
that the entire extension of the new hospital is well equipped 
with air circulation suitable for patients that are critically 
ill.
    Mr. Burton. And the total cost of that would be about how 
much?
    Governor Babauta. We're looking at a total cost of about 
$12 million, Mr. Chairman, all in all.
    Mr. Burton. That would be a one time cost for the expansion 
and taking care of the air handling and everything else?
    Governor Babauta. Yes, sir.
    Mr. Burton. Mr. Faleomavaega.
    Mr. Faleomavaega. Mr. Chairman, listening to the statements 
from our Governors, I think there is a common thread here in 
terms of the health care issues that we have, sharing together 
with the territories. I think diabetes, hypertension, and 
obesity are probably among the three or four top killers as far 
as the health care situation that we have. I can certainly 
speak on behalf of American Samoa, we have the same situation.
    And I don't have any questions for the Governors, except I 
want to commend them for their statements. As I've said 
earlier, Mr. Chairman, the issues and the problems are out 
there. And as you have expressed an interest in saying, funding 
is critically needed to provide for these, to take care of the 
problems that we have, and hopefully somewhere, somehow, we 
might be able to provide some assistance in that regard.
    Again, I want to thank our Governors for their fine 
statements and being here with us this afternoon to share their 
statements. Thank you.
    Mr. Burton. Ms. Bordallo.
    Ms. Bordallo. Thank you, Mr. Chairman.
    I too would like to thank the three Governors for their 
testimonies, and as I listened intently to each of the 
problems, it just seems so bleak. Certainly we in Congress will 
have to address this.
    I want to mention, there's someone in the audience, I 
think, who hasn't been introduced. That's Ambassador Jesse 
Marholou from FSM. He's been sitting through the entire 
afternoon. Ambassador, welcome to the hearing.
    Mr. Chairman, I just for the record want to mention that 
since we've heard all the problems, what are we doing. Well, 
there is some legislation that's been sponsored and is moving 
through the process here in Congress. One is H.R. 675, that's a 
bill that was introduced by Congresswoman Christensen and co-
sponsored by Eni and myself. The territories are all in this 
together. That has to do with lifting the Medicaid cap. That's 
H.R. 675.
    Then we have H.R. 3459, it's called the Health Care 
Equality and Accountability Act. This was introduced by the 
gentleman that came for a moment but was called away, 
Congressman Cummings, and co-sponsored by the members of three 
minority caucuses. That addresses health disparities of our 
minority population, which includes specifically the Medicaid 
caps for the territories.
    Then the third one is H.R. 3750, that's the Pacific Insular 
Areas Rural Telemedicine Act that I recently introduced, which 
is also sponsored by our sister territory, which would enable 
the Pacific Territories greater access to funding for telehelp 
and telemedicine applications. So I just want you to know that 
there is some movement now, but certainly it's just the 
beginning, it's the tip of the iceberg. We've got to continue 
to work very hard.
    And Mr. Chairman, I was hoping that maybe when we see these 
bills move through, that your support of them would certainly 
be helpful as they move along in the process. And of course, 
anything else that we can develop after this public hearing.
    Again, thank you to the three Governors, all very good 
friends of mine and it's nice to see you. Welcome to 
Washington. I know you're anxious to get home to warmer 
weather. Thank you.
    Mr. Burton. Thank you. Let me just say that I'll sure take 
a look at the legislation to see if I can be of help. During a 
time of severe budgetary problems like we're facing in the 
Congress, getting new legislation passed that is going to have 
a price tag attached can be rather difficult.
    What I would like to see, and maybe with all of us working 
together we can get it accomplished, is to talk to Health and 
Human Services initially and get them to get off the dime and 
appropriate the moneys that are necessary for the immediate 
problems, expansion of the hospitals, the dialysis treatment 
centers, and whatever else is needed, so that we can make sure 
that the quality of health care is improved very quickly. Then 
as far as the legislative proposals are concerned, we'll work 
on those as well.
    Ms. Bordallo. Thank you.
    Mr. Burton. So with that, Governor, did you have one more 
comment you wanted to make?
    Governor Camacho. Yes, I wanted to thank you, Mr. Chairman, 
and Congressman. As I listened to all our problems again, there 
are many common themes. In talking to Governor Babauta and 
talking to President Tommy Remegasal, Governor Oraecho from 
Yap, Peter Christian and also president from FSM, we all agree 
that we're trying to find ways, we understand as leaders that 
we're problem solvers. We're trying to find solutions and find 
ways to make things happen.
    So we have agreed that one approach we're taking is to try 
and work and help each other together as a region in the 
western Pacific, with the limited resources we have, we're 
going to find ways to help each other out, one way or the 
other. We have pride, we have dignity of our people.
    As we come to you, and as we come to Congress, it's with 
the idea that we're not necessarily blaming anyone, we're 
simply here, as my colleague Governor Tulafono had mentioned, 
we're here to express that yes, we do recognize the problems, 
but we're also trying to find solutions and help you in that 
way. From our perspective, we can point out the key areas where 
we definitely need the help and how you can help in 
legislation, working together we can resolve a lot of things.
    But we do have our pride, we do have our dignity. And 
working together as a region, we're going to make things 
happen. So we're doing everything we can on our end. We do need 
a little help from this end, too.
    Mr. Burton. We really appreciate that attitude. But I have 
to tell you that every State in the Union, every city in the 
Union, they come here on a regular basis with problems that 
need to be addressed to help their constituencies. It's not out 
of line for you to ask for fair treatment as well, any of you. 
So I think it's imperative that we do what we can while you're 
doing what you can to help make this thing work better.
    Let me now have the next panel come forward. I want to 
excuse this panel, thank you very much for your testimony. 
We'll have the Honorable Jefferson Benjamin, M.D., the 
Secretary of Health for the Department of Health and Education 
and Social Affairs for the Federated States of Micronesia. He's 
speaking for the Pacific Island Health Officers Association. I 
guess he's going to be the spokesman.
    But I'd also like to have Dr. Stevenson Kuartei, public 
health officer, Palau, come forward; Dr. William McMillan, 
who's the administrator of the Guam Memorial Hospital 
Authority; and Dr. James Hofschneider, Secretary of Health for 
CNMI, who's with Governor Babauta.
    Mr. Faleomavaega. Mr. Chairman, I have to go with my 
Governor right now, but I will come right back.
    Mr. Burton. Oh, sure. We'll receive his testimony.
    Gentlemen, will you raise your right hand? I'd like to have 
you sworn before answering questions.
    [Witnesses sworn.]
    Mr. Burton. Be seated.
    Since you're the spokesman, Dr. Benjamin, we'll let you 
give the overview, and then we'll go to questions.
    Dr. Benjamin. Thank you very much, Mr. Chairman. My name of 
course is Jeff Benjamin. And of course with me are Dr. 
Hofschneider, Dr. Kuartei, members of the PIHOA. We are Pacific 
Islanders who live in the Pacific and are here on behalf of the 
Pacific Island Health Officers Association.
    PIHOA is the association of the ministers, secretaries and 
directors of health for the U.S. Pacific Island jurisdiction, 
which includes Guam, American Samoa Commonwealth of the 
Northern Mariana Islands, Federated States of Micronesia, 
Republic of the Marshall Islands and the Republic of Palau. I 
want to thank you for this opportunity to tell the Pacific 
story.
    The U.S. Pacific insular areas are unique because of the 
challenges posed by the fast and isolated geographical setting, 
an area of the Pacific the size of the continental United 
States. At least nine distinct ethnic cultures, with varied 
socioeconomic and political conditions. A population of about 
half a million people, scattered over five time zones.
    Most of the things discussed are health indicators that are 
associated with health disparities in the region such as the 
rate of people living on the poverty line, which ranges from 25 
percent in Guam to as high as 91 percent in the FSA. Infant 
mortality rate, some as high as 37 per 1,000 compared to 6.8 
per 1,000 in the United States. Life expectancy is about 7 
years lower than in the United States, and in some areas, the 
difference is 10 years or more.
    All of the U.S. associated Pacific island jurisdictions are 
going through a state of transition, health morbidity and 
mortality. We stand in double jeopardy, having to do with 
illness of antiquity, such as leprosy and elephantiasis, as 
well as having to deal with issues of modernity, diabetes, 
heart disease, stroke and others. With globalization, our 
borders can no longer protect us from SARS, avian influenza and 
the ever-present threat of terrorism and global warming.
    These islands are also vulnerable to natural disasters. 
Because many of them are located along the Pacific Ring of Fire 
and the Pacific typhoon belt, which predisposes them to 
earthquake and typhoons.
    I am told that the U.S. Pacific Island jurisdictions score 
up to a maximum of 25 on the health professional shortage area 
score, something we are not proud of. This shortage is 
significant because the access to health is not only dictated 
by remote geography and limited financial resources, but also 
the lack of appropriate service delivery, availability such as 
basic primary health care.
    To further develop our population base and primary care 
services in this jurisdictions will require a realistic 
development and allow for them to attain an even playing field 
in terms of competing for Federal assistance with those of the 
U.S. based health care services.
    All tertiary care patients are referred out of the region 
for treatment. This does not only drain the jurisdiction's 
limited health budget, but also causes significant 
sociocultural dysfunction in the health care delivery for these 
patients who access such services. In some years, up to 30 
percent of the country's health budget has been spent on 
tertiary care, out of the region to Hawaii or the Philippines. 
Less than 1 percent of the population uses tertiary care, and 
yet this 1 percent consumes up to 30 percent of the total 
health budget, which places a significant burden on primary 
population base health care services.
    The disparities in health in the U.S. affiliated Pacific 
jurisdictions becomes more intense when it is eclipsed by the 
stagnated education system that is unable to produce students 
who are able to matriculate in health related fields, such as 
medical, dental, nursing and allied health schools. The 
shortage of physicians, dentists, nurses and allied health 
necessitates the recruitment of expatriates, which is not only 
expensive, it retards sustainable human resource development in 
health. The disparity is also exacerbated by the shortage of 
qualified health care managers and administrators.
    The application of domestic Federal health program 
requirements through this U.S. affiliated Pacific Island 
jurisdiction sometimes retards the appropriate progress in 
health care development as it tends to create inappropriate 
models of health care in the region.
    The digital divide even further isolate these islands 
through the lack of adequate communication capabilities. The 
Freely Associated States, FSA, Marshall and Palau Islands are 
adversely affected because they are not considered insular 
areas by the Federal Communications Commission and therefore, 
ineligible for the discounted telecommunication rates for 
health and communication offered by the universal service fund.
    The extreme distances and travel time not only among the 
jurisdiction but also distance to the U.S. complicates this 
digital divide. For example, Palau is one complete day, 13 time 
zones away, and 22 flight hours by commercial jet travel from 
Washington, DC.
    Appropriate and timely health information systems continue 
to play an integral role in failing to describe the full extent 
of these mentioned disparities. While there have been 
improvements so that now we are quoted as Pacific Islanders and 
not others, there continues to be a significant health 
information disparities in research and information collection 
analysis and translation.
    To this end, the Pacific Island Health Officers Association 
is grateful to the Department of Health and Human Services 
through HRSA, CDC and NIH and the Department of Interior Office 
of Insular Affairs, for all of their direct and indirect 
support for PIHOA. PIHOA is also grateful for the resources 
provided through the Department of HHS and its program, which 
includes the community health centers, National Health Service 
Corps, Community Action programs, human resources development 
programs, such as area health education centers and health 
career opportunity programs, and the many condition-specific 
programs, such as HIV/AIDS, STD, diabetes control and 
collaborating, tuberculosis, immunization, cancer prevention 
and control, and last, bioterrorism resources that come from 
CDC and HRSA.
    While there remain significant health disparities in the 
U.S. Pacific Island jurisdictions, there has been some tangible 
improvement. For example, in some of the jurisdictions, while 
the infant mortality rate is still high compared to the United 
States, there has been as much as six to one person reduction 
of infant mortality rate over the past 13 years.
    In conclusion, Mr. Chairman, PIHOA and the many indigenous 
populations of the Pacific jurisdiction thank you for this 
opportunity to tell our story. At the end of the day, we 
request that our quest for self-sufficiency in health be at the 
cornerstone of your delivery today and in the future.
    I thank you specifically for allowing me, a Pacific 
Islander, from the Pacific, to testify on this occasion. 
Because that in itself is a benchmark of your efforts to 
eliminate disparities among the U.S. affiliated Pacific 
jurisdictions, and the spirit of the Pacific peoples.
    Thank you for your attention, and I will submit the 
prepared statement for the record.
    [The prepared statement of Dr. Benjamin follows:]
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    Mr. Burton. Thank you very much, Dr. Benjamin.
    I guess the only real question I have of you, and it was 
pretty much the same question we had of the Governors, what are 
the needs, immediate needs of each one of the territories, and 
how could we best help you solve that problem. I think what I 
would like to have you do, if you would, is to give us that in 
writing, so that we can draft a letter and send it to the 
organization that the President has appointed where various 
agencies get together and try to come up with solutions of 
problems of the territories.
    We'll also send a letter to the head of HHS urging them to 
take positive action on the financial requests that will take 
care of your needs. That I think should be the focus of our 
hearing today. My colleagues who have been with us today have 
legislative proposals which may or may not reach fruition. We 
may or may not get them passed because as I said before, we 
have these budgetary constraints that are very severe.
    But at the same time, I think that if we collectively write 
a letter to as well as personally contact the people on this 
commission that the President has appointed, as well as the 
Secretary of Health and Human Services, we might be able to 
shake loose the funds that are necessary to get your various 
territories over the hump as far as immediate health care needs 
are concerned. I think that's the first thing that needs to be 
done. Then we can work on the legislative proposals that they 
talked about.
    And with that, do any of you have any comments you'd like 
to make to add to what Dr. Benjamin said? Dr. Hofschneider, do 
you have any comments you'd like to make?
    Dr. Hofschneider. Thank you, Mr. Chairman, for this 
opportunity. I'm here to elaborate more on the issues, 
especially affecting the CNMI and to give you more details 
about our needs. I also support the statement as a member of 
the Pacific Islands Health Officers Association, I support the 
statements and the priorities that have been discussed by Dr. 
Benjamin.
    Mr. Burton. When I met with you in Saipan, we went through 
your hospital, I think you pointed out some of the things you 
felt were necessary. You don't really need to go through them 
again with us today. What I really need, and what we really 
need is to have it very succinctly stated in writing what is 
needed, when it's needed, how much money is needed and why we 
need to get on with that as quickly as possible. I think that 
would probably be the best thing we could get. Then I'll try to 
get other Members of Congress who are not with us today to sign 
on to this letter and try to use their influence to shake loose 
the funds that are necessary.
    HHS has the money. It's just a matter of getting it 
allocated in the proper way so you folks are getting what needs 
to be allocated.
    Dr. McMillan.
    Mr. McMillan. Mr. Chairman, thanks for the promotion. It's 
just Mr. McMillan.
    There are two things I'd like to bring to your attention, 
sir. Guam's hospital is a Medicare participating hospital. And 
in my written testimony, we identify that our Medicare 
reimbursement is still subject to a TFRA count, because we're 
not part of the prospective payment system. And a very specific 
and actual thing to do would be to either re-base our TFRA 
count, that's the least popular alternative in my book. Second 
would be to either just eliminate the TFRA count completely for 
the hospital, or, and this would require a little bit of 
legislative work, allow Guam Hospital to be declared a critical 
access hospital. Those hospitals are reimbursed at 101 percent 
of the cost based reimbursement.
    Prior to coming here, I gave Governor Camacho a list of 107 
specific Federal funding vehicles, either grant programs or 
grants or loan guarantees that we intend to rebuild our 
hospital with. I'll be happy to supply some specific 
recommendations for your committee to pass on to the HHS.
    Mr. Burton. What we'll do, when we write and contact the 
health agencies regarding the requests that are being made 
today is we'll cite all the various avenues that could be 
followed to get that money. And so I would like to have, did 
you say 107?
    Mr. McMillan. Yes, sir.
    Mr. Burton. If you give us a list of 107, I'll make sure 
that it is attached to the letter as an addendum, saying you 
figure you can't take it out of your general budget over there, 
here's 107 other ways you can do it.
    Mr. McMillan. Sir, there's one other thing I'd like to 
mention. We're very heavily dependent on foreign health care 
workers. Wage scales are a little low and we're kind of far 
from home for not only physicians but also nurses and allied 
health practitioners. The cap on the H1B visa program severely 
limits our ability to bring in the nurses, x-ray techs and that 
sort of thing. There's an H1C visa program that if Guam was 
written into that specific visa program, we would be allowed to 
recruit a lot more nurses.
    Mr. Burton. That would probably now be under Homeland 
Security, I believe.
    Mr. McMillan. Yes, sir.
    Mr. Burton. It's either State Department or Homeland 
Security Act. Can you guys write that down, and let's check on 
that and see if we can't contact them about maybe changing the 
visa policies, so they can get more health professionals in 
there.
    Mr. McMillan. I realize that's not your purview, but I'm 
getting my licks in when I can.
    Mr. Burton. That's fine. It is, if it refers to the health 
care problems of the area. We certainly would like to help.
    [The prepared statement of Mr. McMillan follows:]
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    Mr. Burton. Dr. Hofschneider, I cut you off. I apologize. 
Did you have more you wanted to say, sir?
    Dr. Hofschneider. Thank you, Mr. Chairman.
    I just wanted to sort of reiterate that we have submitted 
testimony, written testimony to your subcommittee outlining the 
needs, the requests that we have in three specific areas. One 
is the funding for us to enhance our prevention and treatment 
of diabetes. As you know, as Governor Babauta noted earlier, 
our prevalence of kidney failure is five times compared to the 
national prevalence. We are the third in terms of, worldwide, 
for prevalence of Type 2 diabetes. Only the Pima Native 
Americans and Narauns have the higher prevalence that the 
indigenous people of the CNMI.
    So we will be asking for funding for prevention, as well as 
for treatment, including the treatment of the kidney 
complications. In addition, because of our aging infrastructure 
we need to upgrade our water system. Our water system, the 
water that is fed into the hospital is not suitable for medical 
uses, and it has to be treated. The system is now almost 20 
years old and needs to be upgraded. The demands have increased.
    In addition, we have a problem with our air conditioning 
and ventilation system. And in this age of SARS and anthrax, we 
need to upgrade that.
    Last, a big burden and really, this has been mentioned 
several times, is the Medicaid cap. Currently we spend $13.5 
million, that's the total obligation of the local government, 
the Federal Government gives us $2.5 million, which is 90 
percent, this is Medicaid and SCHIP. And I think this burden is 
preventing access to proper care. We give the care anyway, we 
don't deny any services to the poor. But we really need some 
relief, especially at this time when we have a downturn in our 
economy.
    In my recent statement, I also noted that we have a 21 
percent increase in our Medicaid population since last year. 
This issue of inadequate funding is very important. We have 
been in a situation where we have to practically beg Hawaii 
hospitals or California hospitals to take our sick child or a 
person with multiple medical problems, take them so they can 
get adequate medical care. So really, we can never bring Hawaii 
closer to us. What was expressed earlier by our Governor and 
the Governor of Guam is the idea of having some regionalization 
as part of the long term strategy.
    So we ask for your support for this request, and thank you 
very much again.
    Mr. Burton. Well, like I said, if we have that in writing, 
and I think the Governor mentioned part of that, we'll 
certainly--that regionalism you're talking about I think makes 
a lot of sense. It might help us when we're trying to get 
resources if we say that they're cooperating in a way to, 
because you know, for instance, Guam and Saipan are not that 
far apart. If there was some way you could eliminate some 
duplication and use funds for other areas, it would be helpful 
when we're talking to HHS about more money.
    Dr. Kuartei, did you have a comment you'd like to make, 
sir?
    Dr. Kuartei. Thank you very much, Mr. Chairman, for the 
opportunity to be here. Dr. Benjamin actually spoke on behalf 
of the PIHOA. I can only say that as a Pacific Islander, 
sitting over here today, it's probably a benchmark for a moment 
that's probably positive. Thank you very much.
    Mr. Burton. Well, we really appreciate your being here and 
the Governors being here. We will not drop the ball on this. I 
can't guarantee how much money we're going to be able to shake 
loose and how much of the problem will be solved, but I promise 
you that I as the chairman of this subcommittee will push very 
hard, and I'll try to get other Members besides those who are 
here today to likewise push hard to get some of these things 
done.
    With that, thank you very much for being here. It's been 
nice being with all of you.
    We stand adjourned.
    [Whereupon, at 4:42 p.m., the subcommittee was adjourned, 
to reconvene at the call of the Chair.]
    [The prepared statement of Hon. Elijah E. Cummings and 
additional information submitted for the hearing record 
follow:]
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