[House Hearing, 109 Congress]
[From the U.S. Government Publishing Office]



 
      THE LAST FRONTIER: BRINGING THE IT REVOLUTION TO HEALTHCARE

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

                                HEARING

                               before the

                              COMMITTEE ON
                           GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED NINTH CONGRESS

                             FIRST SESSION

                               __________

                           SEPTEMBER 29, 2005

                               __________

                           Serial No. 109-90

                               __________

       Printed for the use of the Committee on Government Reform


  Available via the World Wide Web: http://www.gpoaccess.gov/congress/
                               index.html
                      http://www.house.gov/reform


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                     COMMITTEE ON GOVERNMENT REFORM

                     TOM DAVIS, Virginia, Chairman
CHRISTOPHER SHAYS, Connecticut       HENRY A. WAXMAN, California
DAN BURTON, Indiana                  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
GIL GUTKNECHT, Minnesota             CAROLYN B. MALONEY, New York
MARK E. SOUDER, Indiana              ELIJAH E. CUMMINGS, Maryland
STEVEN C. LaTOURETTE, Ohio           DENNIS J. KUCINICH, Ohio
TODD RUSSELL PLATTS, Pennsylvania    DANNY K. DAVIS, Illinois
CHRIS CANNON, Utah                   WM. LACY CLAY, Missouri
JOHN J. DUNCAN, Jr., Tennessee       DIANE E. WATSON, California
CANDICE S. MILLER, Michigan          STEPHEN F. LYNCH, Massachusetts
MICHAEL R. TURNER, Ohio              CHRIS VAN HOLLEN, Maryland
DARRELL E. ISSA, California          LINDA T. SANCHEZ, California
GINNY BROWN-WAITE, Florida           C.A. DUTCH RUPPERSBERGER, Maryland
JON C. PORTER, Nevada                BRIAN HIGGINS, New York
KENNY MARCHANT, Texas                ELEANOR HOLMES NORTON, District of 
LYNN A. WESTMORELAND, Georgia            Columbia
PATRICK T. McHENRY, North Carolina               ------
CHARLES W. DENT, Pennsylvania        BERNARD SANDERS, Vermont 
VIRGINIA FOXX, North Carolina            (Independent)
JEAN SCHMIDT, Ohio

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


                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on September 29, 2005...............................     1
Statement of:
    Brailer, David J., M.D., PH.D., National Coordinator for 
      Health Information Technology, U.S. Department of Health 
      and Human Services; and Robert M. Kolodner, M.D., Chief 
      Health Informatics Officer, Veterans Health Administration.    22
        Brailer, David J.........................................    22
        Kolodner, Robert M.......................................    38
    Powner, David, Director, Information Technology Management 
      Issues, Government Accountability Office; Carol Diamond, 
      M.D., managing director, Markle Foundation; Janet M. 
      Marchibroda, chief executive officer, Ehealth Initiative 
      and Foundation; Diane M. Carr, associate executive 
      director, healthcare information systems, Queens Health 
      Network; and Larry Blue, vice president and general 
      manager, Symbol Technologies...............................    64
        Blue, Larry..............................................   114
        Carr, Diane M............................................   106
        Diamond, Carol...........................................    80
        Marchibroda, Janet M.....................................    93
        Powner, David............................................    64
Letters, statements, etc., submitted for the record by:
    Blue, Larry, vice president and general manager, Symbol 
      Technologies, prepared statement of........................   117
    Brailer, David J., M.D., PH.D., National Coordinator for 
      Health Information Technology, U.S. Department of Health 
      and Human Services, prepared statement of..................    25
    Carr, Diane M., associate executive director, healthcare 
      information systems, Queens Health Network.................   108
    Clay, Hon. Wm. Lacy, a Representative in Congress from the 
      State of Missouri, prepared statement of...................    19
    Davis, Chairman Tom, a Representative in Congress from the 
      State of Virginia, prepared statement of...................     4
    Diamond, Carol, M.D., managing director, Markle Foundation, 
      prepared statement of......................................    82
    Kolodner, Robert M., M.D., Chief Health Informatics Officer, 
      Veterans Health Administration, prepared statement of......    40
    Kucinich, Hon. Dennis J., a Representative in Congress from 
      the State of Ohio, prepared statement of...................   123
    Marchibroda, Janet M., chief executive officer, Ehealth 
      Initiative and Foundation, prepared statement of...........    96
    McHugh, Hon. John M., a Representative in Congress from the 
      State of New York, prepared statement of...................   125
    Porter, Hon. Jon C., a Representative in Congress from the 
      State of Nevada, prepared statement of.....................    15
    Powner, David, Director, Information Technology Management 
      Issues, Government Accountability Office, prepared 
      statement of...............................................    66
    Waxman, Hon. Henry A., a Representative in Congress from the 
      State of California, prepared statement of.................     8


      THE LAST FRONTIER: BRINGING THE IT REVOLUTION TO HEALTHCARE

                              ----------                              


                      THURSDAY, SEPTEMBER 29, 2005

                          House of Representatives,
                            Committee on Government Reform,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 10:08 a.m., in 
room 2154, Rayburn House Office Building, Hon. Tom Davis 
(chairman of the committee) presiding.
    Present: Representatives Tom Davis, Mica, Gutknecht, 
Porter, Schmidt, Waxman, Maloney, Cummings, Kucinich, Davis of 
Illinois, Clay, Watson, Ruppersberger, and Norton.
    Staff present: Melissa Wojciak, staff director; Chas 
Phillips, policy counsel; Rob White, press secretary; Drew 
Crockett, deputy director of communications; Victoria Proctor, 
senior professional staff member; Susie Schulte, professional 
staff member; Teresa Austin, chief clerk; Sarah D'Orsie, deputy 
clerk; Phil Barnett, minority staff director/chief counsel; 
Kristin Amerling, minority general counsel; Sarah Despres, 
minority counsel; Earley Green, minority chief clerk; Jean 
Gosa; minority assistant clerk; and Cecelia Morton, minority 
office manager.
    Chairman Tom Davis. The meeting will come to order.
    Millions of Americans are nearing retirement and will 
become greater consumers of healthcare over the coming years. 
Innovations are helping people live longer and healthier lives. 
In recent years, information technology has brought great 
advances in quality, efficiency, and cost savings to almost all 
sectors of our economy. It has been the driver of the American 
economy.
    The Government Reform Committee has worked to ensure that 
the Federal Government has access to the latest technology at 
the lowest possible cost to bring the innovations of the 
private sector to the public sector. We have witnessed the 
improvements in Government services that come from harnessing 
the power of information technology. Until now, however, the 
healthcare industry has failed to embrace technology. 
Technology that could dramatically improve the quality of 
healthcare and reduce cost.
    We live in a world of IT systems that handle millions of 
transactions daily in real time. We interface with them 
quickly, and they process our requests efficiently and 
accurately. We do this when we transfer money, buy gas, or shop 
online. It is routine.
    But the routine in healthcare is different. It is primarily 
a paper-based system of disconnected records and files in 
multiple locations. Doctors continue to write billions of 
handwritten prescriptions every year, a significant portion of 
which are illegible, or involve incorrect or incompatible 
drugs.
    According to one survey, only 15 percent of physicians are 
using electronic prescribing systems, and only 3 percent of 
prescriptions are processed electronically. Computerized order 
entry systems coupled with electronic health records offer 
enormous potential.
    A more troubling routine is a healthcare system in which 
the Institute of Medicine reports that around 50,000 to 100,000 
Americans die every year due to medical errors. A modern IT-
based system could cut errors dramatically. One can argue that 
hospitals, doctors, insurance companies, and the Government are 
endangering lives by moving too slowly in adopting electronic 
health records. There is a direct link, in my view, between 
health IT and healthcare quality and safety.
    As we have seen recently with Hurricane Katrina, physicians 
are often our second responders. They should have the support 
of the same sophisticated IT systems as our first responders, 
enabling them to respond to a crisis quickly, to retrieve and 
share the critical records of information that they need to 
save lives.
    I hope we can bring a sense of urgency to this issue. The 
recent events surrounding Hurricane Katrina highlight the need 
for accessible, accurate medical records and medical 
information. I am particularly interested in VHA's experience 
during this period.
    I hope the system that we create will help us share 
information quickly, effectively, and securely, which is 
something we have been pushing the Federal Government to do in 
all aspects of its operations. I believe we can enhance patient 
care by providing every medical professional with instant 
access to life-saving information. With the information 
technology available to us today, we can no longer accept 
injury or death because of preventable errors.
    Efforts to convert to electronic health records have met 
some resistance, however. Many stakeholders have been slow to 
see the long term benefits that upfront investments in new 
technology can bring. Small providers could be asked to bear 
burdens that benefit others initially. Fewer than one in four 
doctors currently enter information into an electronic health 
record.
    There will be other challenges as we move from a paper-
based system. Many hospitals and doctors' offices are still 
lacking in information security, physical security, and privacy 
protection practices that will be needed with electronic health 
records, but we have faced these challenges before.
    In this committee, we work constantly to bring the best 
private sector practices and procedures to the Federal 
Government to encourage information sharing, information 
security, and encourage the efficient use of the latest 
information technology. Each of these priorities is relevant to 
the health IT debate.
    The healthcare industry is a fragmented and complicated 
marketplace. We need to exercise caution when we are asked to 
step in with regulations and mandates. I am interested in 
learning what level of governmental, including congressional, 
action is warranted.
    We have seen a lot of action recently on health IT 
legislation, and we have a unique opportunity. Many issues on 
Capitol Hill can be divisive, but there appears to be broad 
bipartisan support for health technology. Of course, anytime 
you propose dramatic changes that affect such a broad 
community, challenges will arise. I hope we can continue to 
work together to solve them and move toward the ambitious goals 
we have set.
    The purpose of today's hearing is to highlight the 
challenges and opportunities that will come with the widespread 
adoption of health information technology. The principles 
driving health IT are the same principles the committee pushes 
Government-wide, bringing the best information technology, 
policies, and practices to the Government at the lowest 
possible cost. It is a goal we will continue to support.
    [The prepared statement of Chairman Tom Davis follows:]

    [GRAPHIC] [TIFF OMITTED] T4713.001
    
    [GRAPHIC] [TIFF OMITTED] T4713.002
    
    [GRAPHIC] [TIFF OMITTED] T4713.003
    
    Chairman Tom Davis. Now I will recognize our distinguished 
ranking member who has been very active, not just in the IT 
field but the health field as well, Mr. Waxman, for his opening 
statement.
    Mr. Waxman. Thank you very much, Mr. Chairman.
    It is entirely appropriate for this committee to be holding 
an oversight hearing related to the U.S. healthcare system, a 
system in need of major improvement. There are more than 45 
million Americans without health insurance, and that number 
keeps rising each year. Millions of Americans forego needed 
treatment or declare bankruptcy because of the cost of 
healthcare. Unjust disparities in access and outcomes are 
common across a wide range of conditions.
    Today's hearing addresses a small but important part of the 
solution to the healthcare system's problems, the need for 
better information technology. A network of electronic medical 
records may allow treating physicians to share information 
about a patient's condition quickly and efficiently, preventing 
redundant treatment. Computerized warnings could stop medical 
errors. Access to key patient data in an emergency can 
literally be lifesaving.
    While improvements in health information technology may 
bring many benefits, it will also bring new challenges. Privacy 
is a major issue. There must be safeguards in place to ensure 
that patients' health information is secure, and that the 
information will not be misused.
    Then there is the question of who pays. Creating an 
interoperable network of standardized electronic medical 
records is going to be expensive. While many are convinced that 
these costs will be more than offset by the savings these 
systems may offer, others are not so sure.
    Some experts have raised the concern that the projections 
of cost savings are based on rosy assumptions. If the American 
taxpayer is footing the bill, we need to ensure that we have a 
realistic understanding of what health information technology 
can actually deliver.
    I look forward to learning about the promise of health 
information technology today, and I thank the witnesses for 
coming. And I hope the testimony we receive today will form 
part of a broader examination by Congress of problems facing 
our healthcare system.
    Thank you, Mr. Chairman.
    [The prepared statement of Hon. Henry A. Waxman follows:]

    [GRAPHIC] [TIFF OMITTED] T4713.004
    
    [GRAPHIC] [TIFF OMITTED] T4713.005
    
    [GRAPHIC] [TIFF OMITTED] T4713.006
    
    Chairman Tom Davis. Mr. Waxman, thank you.
    Jean Schmidt was appointed to the committee on September 
15, 2005. She is a lifelong resident of Clermont County. She is 
the first woman ever elected to represent southern Ohio in 
Congress. She served for two terms in the Ohio State House. 
According to the Cincinnati Enquirer, she proved effective in 
passing legislation to address her district's concern.
    While serving in the State legislature, she enacted 
legislation to create jobs, protect Ohio's children, and ensure 
access to quality healthcare. And prior to her election to the 
Ohio State House, she served 10 years as a Miami Township 
Trustee.
    She resides in Miami Township with her husband, Peter, and 
her daughter, Emily. She holds a degree in Political Science 
from the University of Cincinnati. And her other interests 
include auto racing and long distance running. Jean, how many 
marathons have you done?
    Mrs. Schmidt. Fifty-six.
    Chairman Tom Davis. Fifty-six, so she will be well-suited 
to our hearings. [Laughter.]
    Fifty-six marathons and still counting, that is 53 more 
than the chairman. I just want to say, welcome to the 
committee. We are very pleased to have you here. And if you 
want to make an opening statement here or not----
    Mr. Waxman. Before you recognize her as a new member, I 
also want to extend my welcome to her on behalf of the 
Democratic side of the aisle to join our committee. You have 
run 56 marathons more than I have run. [Laughter.]
    Mrs. Schmidt. Well, in 2 weeks, it will be my 57th, 
hopefully. Thank you so much, Chairman Davis and fellow members 
of this wonderful Government Reform Committee. It is my honor 
to serve with you.
    I am very excited about the fact that our first topic is 
healthcare because, in the Ohio Legislature, that was one of 
the chief concerns that I had, that we have quality healthcare 
access to all individuals in all walks of life. As an elected 
official, my top priority is to make sure that our precious tax 
dollars are spent correctly and used efficiently.
    My seat on this committee will allow me to work with all of 
you to cut waste, streamline bureaucracy, and to ensure that we 
American citizens get the most from our Government. I am very 
excited to work with you in the coming months. There is a lot 
of work to do, so I am going to be quiet and let us get 
started. Thank you.
    Chairman Tom Davis. Thank you very much. Any other Members 
wish to make opening statements?
    Ms. Norton.
    Ms. Norton. I particularly appreciate this hearing. I am 
going to be in and out because there are two other hearings at 
the same time. I believe that one of the most important 
questions we could answer is why the healthcare industry lags 
behind other industries so substantially in IT.
    It seems to be there is a very deep conundrum here. First 
of all, you can call this an industry if you want to, but 
essentially a bunch of people who deliver healthcare is what we 
are talking about. We are talking about healthcare. We are 
talking about hospitals. We are talking about HMOs. We are 
talking about individual practitioners.
    And to bring IT to such an important sector, scattered 
among the neighborhoods, if you will, scattered in every part 
of our country, would itself be a feat, especially if you want 
the system to be able to talk to wherever patients go.
    I see an up front problem, and that is the cost of 
healthcare itself. Here we have hospitals, and HMOs, and those 
who provide Medicare hardly able to keep up with the most 
inflationary part of the economy.
    So, in essence, if we are talking IT, especially IT beyond 
what my doctor has, and she has it fine. It is in her office, 
but she isn't hooked up to every hospital in the District of 
Columbia. She isn't hooked up to where I might go somewhere in 
the country, if that is what you are talking about.
    If that is not what you are talking about, then I am not 
sure why we are here. If that is what you are talking about, 
there has to be some incentive for an industry that can hardly 
keep up with its basic mission, which is providing healthcare 
for the American people, to in fact come forward with the up 
front costs that IT would involve. What is the incentive for 
them to do that, to hook themselves up, or to put in systems 
that would allow themselves to hook themselves up with 
whomever?
    The beneficiary, it seems to me, in all of this would 
really be the American people; it would be individuals, far 
more than providers. Until we figure out who would benefit and 
who would pay the cost, then the wonderful talk about IT is 
going to be just that. We are not talking about putting in 
computers, I do not believe. We are not talking about being as 
computer savvy as my doctor is. We are talking about having 
your records, so that they would be accessible wherever you go.
    We are talking about the kind of use of IT that would mean 
doctors would be less often the objects of malpractice suits 
because they know everything about a patient because they would 
be able to find that through IT, in a way now it is even more 
difficult to do.
    So we kind of started with the back end of how great it 
would be to hook us all up. Somebody has to tackle the hard 
question, cost in an industry where cost is the primary 
question and cost in a industry where 43 million Americans 
don't have access to a doctor and could care less about IT.
    Who would benefit? Would it really be the HMO? Would it 
really be the hospital? Why should they do it if, in fact, the 
benefit would be to you and me? Then it seems to me the 
Government of the United States has to face that it is the 
American people who would benefit, and somehow or the other the 
incentives have to be there for that cost to be provided for us 
to benefit.
    Thank you very much, Mr. Chairman.
    Chairman Tom Davis. Thank you very much. Any other Members 
wish to make opening statements?
    Mr. Porter.
    Mr. Porter. Thank you, Mr. Chairman. I appreciate the 
opportunity to speak on this important issue today.
    The subject of this hearing touches every single one of us 
in some shape or form. Everyone here has gone to the doctor, 
some more than others, but we understand what it is like to 
have to visit a doctor or visit a hospital. Quality healthcare 
is of great importance to everyone. However, notwithstanding 
the fact that the United States is a world leader in healthcare 
science, its delivery and management of healthcare is often 
outmoded and very inefficient.
    Over 90 percent of the activities that go into the delivery 
of healthcare are centered information and information 
exchange. If this component is flawed in any way, the optimal 
delivery of care will not be achieved. On July 27th the 
Subcommittee on Federal Workforce and Agency Organization, 
which I chair, explored this very issue.
    During this hearing, we explored the potential of deploying 
health information technology, its implications, and its 
potential for success. At this hearing, we heard testimony from 
the Federal Government, medical experts, and others who are 
very interested in deploying HIT for 8 million of our Federal 
employees.
    Hurricane Katrina and Rita shed limelight over this issue. 
With millions of Americans scattering from the Gulf Coast 
Region all over the country, we soon realized that many of the 
hurricane victims would require adequate healthcare from many 
different doctors and many different hospitals. Many medical 
records were not immediately available for patients, 
potentially putting some patients at even greater risk. We must 
make sure that situations like this are avoided in the future. 
By deploying HIT, it would be a step in the right direction.
    One insurer, however, stands out as a stark example of HIT 
excellence. Blue Cross Blue Shield of Texas extracted data on 
its members who lived in the areas that were evacuated before 
Rita hit. To help physicians care for Hurricane Rita evacuees, 
Blue Cross of Texas is making its members' clinical summaries 
electronically available to physicians.
    The summaries contain historical and current data such as 
lab results, pharmacy information, basic medical history. Some 
of those members won't return home for several weeks, maybe 
even months or years, because of the hurricane. Blue Cross took 
its payer-based data for 830,000 members, and converted it into 
electronic health records available to any treating provider 
for hurricane-affected States, and did it for 4 days.
    The benefits of computerizing health records are simply 
substantial. Health information technology will improve the 
quality of care, reduce the redundancy of testing and 
paperwork, and virtually eliminate prescription errors, prevent 
adverse effects from conflicting courses of treatment, and 
significantly reduce medical errors, and reduce administrative 
costs.
    The President, in announcing his 10 year goal, admonished 
the Federal Government has to take the lead. The FEHB Program 
is no exception and should leverage as buying power about 8\1/
2\ million participants to support President Bush's goal and 
lead by example.
    That is why in the next 2 weeks, I will be introducing 
legislation called the Federal Family Health Information 
Technology Act. This bill will provide every Federal employee 
and participant of the Federal Employees Health Benefits 
Program with an electronic healthcare record and will 
effectively serve as the largest HIT demonstration project in 
the country.
    No one can claim that moving information technology into 
the healthcare industry is going to be easy; it is going to be 
difficult. However, as the Blue Cross Blue Shield of Texas case 
demonstrates with payer-based data, there is no reason not to 
get started with the data that currently is available to the 
Federal Government. The HIT bill I will be introducing 
recognizes that there are three components of electronic health 
record, and each component will be phased in accordingly.
    The first component is the payer-based record which will 
use claims data and other information readily available to 
carriers. The other components, a personal health record and 
provider-based record will be phased in accordingly. The bill 
also requires carriers in the program to provide each program 
participant with a wallet-size electronic health record 
identification card within 5 years of passage of this act.
    As chairman of the subcommittee, I am committed to 
supporting the President's goal and this committee, full 
committee's goal. Mr. Chairman, I appreciate this opportunity. 
I look forward as the hearing unfolds. But realize that we are 
so far behind in our technology, that many American lives are 
at stake. I look forward to moving forward with my bill, which 
we will be introducing, and others that have come before us.
    [The prepared statement of Hon. Jon C. Porter follows:]

    [GRAPHIC] [TIFF OMITTED] T4713.007
    
    [GRAPHIC] [TIFF OMITTED] T4713.008
    
    Chairman Tom Davis. Thank you.
    Ms. Watson.
    Ms. Watson. I want to thank you, Mr. Chairman, for having 
this hearing this morning.
    In reading over the analysis of this meeting, it says 
health IT may be especially beneficial for inner city and rural 
populations and other medically under-served areas. We all 
witnessed a month ago how the under-served were those who were 
very, very ill or became very, very ill.
    What I find our problem is, it is two-fold. No. 1, we don't 
have a national health insurance program, and we need to focus 
on that. And No. 2, we don't have the outreach. We all assume 
that communities are on the Internet. And so, as we go through 
these discussions around legislation, I would hope that our 
panels would address how we outreach in communities that are 
under-served. That is our biggest problem.
    I represent a city in California called Los Angeles, and it 
is spread out. We don't access; we don't have IT; and we don't 
have outreach. People suffer from lack of information, and they 
suffer from inaccessibility. So as we discuss IT, I hope we 
will broaden out that discussion, so we can be sure the under-
served is indeed served through this new technology.
    Thank you, Mr. Chairman.
    Chairman Tom Davis. Thank you very much. Members will have 
7 days to submit statements for the record. We are going to now 
recognize our first panel.
    I am sorry, Mr. Clay, do you want to say something?
    Mr. Clay. Thank you, Mr. Chairman.
    Chairman Tom Davis. You are recognized.
    Mr. Clay. Just very quickly, thank you for calling today's 
hearing on ways we can improve the use of information 
technology in our healthcare delivery system. I welcome our 
witnesses today and hope to partner with them in the future on 
transforming our healthcare system into an electronically based 
model for medical efficiency.
    In the coming weeks, like the other gentleman stated, I 
plan to introduce a bill that will strengthen the Federal 
Government's role in developing and strengthening electronic 
health record standards while allowing private sector 
stakeholders to remain innovative in their own EHR 
implementation efforts. My legislation seeks to accomplish two 
major endeavors.
    First, it would codify the office of Dr. Brailer and 
strengthen his role as the leading health information standard 
setting organization in the Federal Government by establishing 
stringent milestones and compliance requirements for all 
Federal health agencies. We will reduce barriers to sharing 
health information between agencies while providing the 
marketplace a model for efficient and secure health information 
exchange.
    Second, the bill will establish a loan program modeled 
after the William D. Ford Direct Loan Program for Students for 
providing financing options among providers and organizations 
in the process of establishing EHR systems. A major barrier to 
developing a nationwide health information network is the 
capital costs involved with the design and implementation of 
the system, particularly among small providers lacking access 
to capital markets or specialized financial instruments.
    I believe the Federal Government ought to foster its 
economic resources in a responsible manner to provide such 
capital where necessary, and our Direct Loan Program provides 
for us a model to do so.
    Mr. Chairman, this concludes my remarks, and I ask that 
they be included in the record.
    [The prepared statement of Hon. Wm. Lacy Clay follows:]

    [GRAPHIC] [TIFF OMITTED] T4713.009
    
    [GRAPHIC] [TIFF OMITTED] T4713.010
    
    [GRAPHIC] [TIFF OMITTED] T4713.011
    
    Chairman Tom Davis. Without objection.
    Do any other Members wish to make opening statements? Then 
we will proceed to our first panel. We have Dr. David Brailer, 
who is an M.D. and a Ph.D. He is the National Coordinator for 
Health Information Technology at the U.S. Department of Health 
and Human Services.
    And Mr. Robert Kolodner, M.D., who is the Chief Health 
Informatics Officer at the Veterans Health Administration. 
First, let me thank you both for your service. It is our policy 
that we swear you in before you testify, so if you would rise 
and please raise your right hands.
    [Witnesses sworn.]
    Chairman Tom Davis. Thank you. We have a light in front of 
you that will turn green when you start; it will turn orange or 
yellow after 4 minutes, red after 5. Your entire statement is 
part of the record, and our questions are based on the entire 
statement.
    So if we can keep within time, it helps. I won't gavel if 
you feel you need an extra minute or so because we want to make 
sure you get your points across. This is important testimony. 
Dr. Brailer, we will start with you and then go to Dr. 
Kolodner. Thank you very much for being with us.

     STATEMENTS OF DAVID J. BRAILER, M.D., PH.D., NATIONAL 
COORDINATOR FOR HEALTH INFORMATION TECHNOLOGY, U.S. DEPARTMENT 
  OF HEALTH AND HUMAN SERVICES; AND ROBERT M. KOLODNER, M.D., 
       CHIEF HEALTH INFORMATICS OFFICER, VETERANS HEALTH 
                         ADMINISTRATION

                 STATEMENT OF DAVID J. BRAILER

    Dr. Brailer. Thank you, Mr. Chairman and members of the 
committee. I appreciate the opportunity to speak with you today 
and to continue our discussions about health information 
technology.
    We are far along in our efforts to begin understanding what 
the Nation's work will be like to bring health information 
tools to our doctors, hospitals, and consumers. There are three 
foundations that have been strongly set. The first and most 
important is a clinical foundation that essentially says that 
the use of health information tools appropriately set up and 
appropriately trained for clinicians save lives.
    The second is a technical foundation that asks: Do we have 
the components, and the pieces, and the know-how to do this? 
And we believe that we have, if not all of it, most of it 
because of the opportunities already underway in many 
healthcare organizations as well as other industries. The 
question of an economic foundation which is, how does this get 
paid for and how does it generate economic value, is something 
that has been explored at length and will continue to be as 
well.
    We view there being two fundamental challenges around 
health information technology, and they work together. The 
first is how to get these important tools into the hands of 
doctors, and not just a few but all, into the hands of other 
clinicians, into the hands of professionals, and consumers, 
institutions, clinics, and other settings. This adoption 
challenge has many pieces that include financing, culture, 
training, legal issues.
    And second is the question of portability of information, 
or its interoperability which involves a separate set of issues 
about how organizations and healthcare relate to each other and 
ultimately how they can come together to deliver seamless care 
for each patient.
    We are now ready to begin full scale implementation of the 
administration's agenda, and I would like to summarize some of 
the key steps that are underway in the next few weeks. The 
first is the American Health Information Community which is a 
group comprised of 17 members, 8 of which are from the Federal 
Government, 8 from the private sector, and 1 from a State 
government.
    This American Health Information Community will be the main 
steering group for the health information technology agenda in 
the administration. It will prioritize breakthroughs, a 
breakthrough being some specific way that health information 
technology can be useful to the American public. It will 
balance the short term goals against long term issues as we 
buildup an infrastructure and a capacity in the United States 
to bring this across to all forms of healthcare and to all the 
different constituents. It will ensure that various voices are 
heard including those of key Federal agencies like Medicare and 
the Office of Personnel Management in terms of how they can 
participate and bring their Federal tools to this agenda.
    Second, from that we will be setting up work groups to 
oversee these breakthroughs. If, for example, a breakthrough is 
a personal health record, or tools for chronic care disease 
management, or e-prescribing, or bioterrorism surveillance just 
to name a few, each of these will have a work group constituted 
of Federal, State, and private leaders to ensure that we can 
move these agendas forward, and address barriers, and work 
against a very specific timetable.
    The American Health Information Community has its first 
meeting on Friday, October 7th. And we expect by the end of the 
year to have the breakthroughs chartered, and charged, and 
working against a timetable. At the same time next week, we 
will be announcing the Federal Government's partner for 
standards harmonization.
    We do have a significant number of different, somewhat 
overlapping, and ambiguous standards in the United States, and 
the standard harmonization partner will help us align those 
into one single fabric, one set of tools that can ensure that 
information can be exchanged and shared seamlessly.
    We will also be identifying our conformance certification 
partner, which is another way of saying the entity that will 
help us determine what are the characteristics of an electronic 
health record that is used by doctors and hospitals. We will be 
establishing a consortium of State leaders together to identify 
security and privacy advances that are needed to protect 
information the coming Information Age and address the question 
of portability in the context of that security.
    And finally, later in October, we will be identifying the 
groups of entities that will develop models, or architectures, 
or plans for what the Nation's capacity to share information 
looks like. There are many technical components of these, and 
we are asking for six different groups to work, so we can 
extract from that and combine the very best ideas of any of 
those groups.
    My office has had the privilege of working with the private 
sector recently in the health information response to 
Hurricanes Katrina and Rita. I am happy to tell you that this 
was a remarkable experience by which many groups came together 
and operated well within the bounds of law to produce for up to 
80 percent of the evacuees a prescription data base in a 
secure, non-centralized data tool that was available to 
physicians and shelters within 7 days. This remarkable 
experience will redefine what urgency is in health information 
and what it means to really break through and to address real 
problems.
    These actions that are underway will be supplemented by 
other policies and other changes over the course of the next 
few months that are needed to continue to drive both 
portability and adoption. We have many things to do, but at 
this point we are underway, and we expect to see significant 
progress over the course of the next several months.
    I welcome your interest in this topic, and I certainly look 
forward to further discussion about it. Thank you.
    [The prepared statement of Dr. Brailer follows:]

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    Chairman Tom Davis. Thank you very much.
    Dr. Kolodner.

                  STATEMENT OF ROBERT KOLODNER

    Dr. Kolodner. Good morning, Mr. Chairman and members of the 
committee. I am Dr. Robert Kolodner, the Chief Health 
Informatics Officer in the Department of Veterans Affairs. 
Thank you for inviting me here today to discuss our work in the 
field of health information technology.
    Seventeen months ago President Bush outlined an ambitious 
plan to ensure that most Americans have electronic health 
records within 10 years. The President made his announcement 
during a visit to the Baltimore VA Medical Center where 
patients have benefited from electronic health records for 
years.
    Four months ago, HHS Secretary Leavitt issued a report 
which concluded that the widespread adoption of IT should be a 
top priority for the American healthcare system and the U.S. 
economy. Collaboration between private sector organizations, 
and public sector health entities such as VA, and activities 
like Connecting for Health, and the eHealth Initiative were 
cited as a key factor in the advancement of health IT.
    One month ago Hurricane Katrina struck, and in minutes the 
IT innovations we have been pursuing for years suddenly went 
from esoteric to essential. My written testimony describes VA's 
health IT activities in greater detail, but I want to highlight 
in my oral testimony the benefits of these activities during 
this recent crisis.
    VA's Electronic Health Record, known as VistA, is 
recognized as one of the most comprehensive and sophisticated 
electronic health records in use today. As a doctor and as a 
patient, I am passionate about the use of this technology and 
the very real effect it can have on patients' lives. It can 
mean the difference between life and death.
    How many of the Katrina evacuees with chronic medical 
conditions would have been spared additional suffering if their 
treatments and medications had continued without disruption 
because their new physicians and access to their previous 
medical records? What would have been the value to the millions 
of Katrina evacuees of we had a National Health Information 
Network in place to support access to their complete health 
information regardless of where the evacuees sought care?
    For our patients, these capabilities are not the stuff of 
fantasy. Our VistA system supports secure nationwide access to 
our patients' health information and gives our providers a 
single place to review test results and drug prescriptions, 
place new orders, and update a patient's medical history. VistA 
is used routinely at all VA medical centers, outpatient 
clinics, and long term care facilities across the country. That 
is over 1,300 sites of care.
    Of course, electronic systems of any sort are not 
impervious to natural disasters. In the aftermath of Hurricane 
Katrina, many of the IT systems VA relies on were interrupted, 
and a great deal of work was needed to restore network 
connectivity, email, BlackBerry service, and other 
telecommunications. While clinicians and emergency personnel 
focused on saving lives, IT staff worked around the clock to 
restore access to critical patient care information.
    Katrina had a significant impact on more than a dozen VA 
healthcare facilities in the Gulf Coast Region. When Katrina 
hit, the Gulfport VAMC was completely destroyed. New Orleans VA 
Medical Center was forced to shut down their VistA system and 
evacuate their patients when that city flooded. Although power 
and communications were lost at the Jackson and Biloxi VA 
Medical Centers, their VistA systems continued to operate 
within those facilities using emergency generator power.
    Although medical records were temporarily unavailable for 
evacuated patients, within 1 day, we were able to provide 
access to pharmacy, laboratory, and radiology results for all 
of these patients using a regional data warehouse. With less 
than 100 hours of effort, we were able to bring the New Orleans 
VistA system back online.
    And by the next week, when commercial telecommunications 
were restored to Biloxi, the complete electronic health records 
for all veterans were again available nationwide to help us 
serve these veteran evacuees. Many patients affected by 
Katrina, such as the 282 veterans from the Gulfport Armed 
Forces Retirement Home who were relocated to their sister 
campus less than 2 miles from the Capital had minimal 
disruption in their continuity of their healthcare.
    The difference between the availability of electronic 
health records and paper medical records is striking. Many or 
most of the paper records in the affected areas may never be 
recovered. The result is that the majority of the 1 million 
people displaced by Hurricane Katrina have incomplete medical 
records or no medical records at all, a consequence that will 
affect families and communities across the Nation.
    This single natural disaster has reinforced the Nation's 
need for a host of technical advances from electronic health 
records and personal health records to secure communications 
networks. The VA quick recovery of crucial health information 
after Hurricane Katrina simply would not have been possible 
without VistA. Our experience confirmed that VA's health IT 
strategy, including our new initiative to provide personal 
health records to veterans, has been a good one as we continue 
to invest in, refine, and improve our information technology 
solutions to support the future models of healthcare.
    One of the most important vehicles for achieving the 
President's vision for health IT is the AHIC which was 
discussed by Dr. Brailer and convened by HHS. We are delighted 
that VA's Under Secretary for Health, Dr. Jonathan Perlin, will 
serve as one of the 17 AHIC Commissioners. I invite each of you 
to visit a VA medical center to see our systems firsthand. We 
look forward to sharing our systems, knowledge, and expertise 
with our partners through the healthcare community.
    Mr. Chairman, this completes my statement. I will be happy 
to answer any questions that you or other members of the 
committee have.
    [The prepared statement of Mr. Kolodner follows:]

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    Chairman Tom Davis. Well, thank you both.
    Dr. Brailer, let me start with you. You mentioned the 
adoption gap in electronic health records between large and 
small hospitals, and you mentioned several areas you are 
focusing on to bridge that gap. Ultimately, isn't this about 
money and resources?
    Dr. Brailer. Money and resources are clearly one of the 
fundamental challenges, but there are also numerous other 
barriers as well. I will just identify a few. First, to the 
financial resources, we know that for many providers, they 
invest in health information technology and can't recover those 
investments. This is because either they are small or because 
of the way they are paid, but this is a challenge for some 
organizations.
    But beyond that, there is a technical capacity and 
technical know-how. Many large organizations do have 
substantial resources of experts about information technology 
and small organizations don't have that. Large organizations 
also have the capacity to operate, if you would, strategically 
to be able to understand how they can get the benefits from 
these tools as they compete in the market, and many small 
organizations cannot.
    So the gap of adoption is multifaceted and can't be crossed 
only with money. And it means raising the know-how of these 
organizations, providing to them resources to help them 
implement these complicated systems, and re-engineer their 
workflows to change the way their business operates, and to 
have the kinds of benefits that other large organizations 
bring.
    Chairman Tom Davis. Transforming the use of IT in 
healthcare delivery is a huge task. What kind of incentives 
does the Federal Government need to create to keep the private 
sector involved?
    Dr. Brailer. Many payers have looked at this question. And 
the Federal Government is able to operate really in two ways 
with respect to this healthcare financing question. First, in 
CMS, and Medicare, and Medicaid, there is activity underway 
through demonstration projects and forthcoming through MMA 
implementation for CMS to provide incentives for health IT 
adoption through pay for performance programs, essentially 
allowing organizations that are paid somewhat of a differential 
for performance to be able to get a bonus for health IT.
    And this is consistent with how the private sector has 
viewed the role of other payers providing ultimate payment for 
the value that health information technology brings. Second, 
through organizations like the Office of Personnel Management, 
many other purchasers of care, other large employers are 
looking at how to direct their health plans and other carriers 
to support health information technology adoption among 
providers. There are many ways, and this is consistent with how 
we view the Federal Government's role of being a catalyst and a 
purchasing promoter of good health IT.
    Chairman Tom Davis. Dr. Kolodner, has VA's VistA project 
been able to demonstrate any improvements in quality of care?
    Dr. Kolodner. Yes, Mr. Chairman. The VA's VistA system is 
part of a suite of activities including performance measure 
that VA has used to improve its quality of care over the last 
10 years, and we currently have quite a number of performance 
measures that are published in the literature that show that 
VA's quality of care meets or exceeds that quality of any other 
healthcare system in the country. There have been reports by 
the Rand Corp. that have been published to that effect, and 
other measures that we have.
    Chairman Tom Davis. Dr. Brailer, recent articles report 
that the State and public health officials, who have a lot to 
gain from the improved use of IT in healthcare, are feeling 
excluded from national strategy efforts. Are you working to 
better include health IT efforts? Do you think these are 
justified? Are we doing things like establishing regional 
health information organizations and national health 
information networks? Can you talk a little about that?
    Dr. Brailer. Sure. I am unaware of those reports, and I am 
frankly surprised by them. I think one of the most interesting 
and useful aspects of health information technology is the 
grassroots nature, both at the State and community level.
    We have seen more than 200 regional areas come together and 
form regional health information organizations where a local 
group is able to begin understanding what they can do to bring 
these tools to their doctors, hospitals and consumers, to be 
able to address privacy concerns and other security issues, to 
support adoption financing and other things. It is a remarkable 
effort, and it is something that didn't happen at the behest of 
the Federal Government or at any other entity; it came together 
because of this broad grassroots interest.
    Also, many States are involved and have activities 
underway. I have personally visited 20 States so far that have 
health information technology efforts underway, and we are 
working very closely with them. This one new collaborative 
relationship we are about to establish around security and 
privacy will be directly with States, working together to 
understand how we can advance security and privacy rules.
    So I think that there is a significant amount of activity 
underway, and we work very closely with them, and I certainly 
look forward to expanding that in the future.
    Chairman Tom Davis. Thank you very much.
    Mr. Clay.
    Mr. Clay. Thank you, Mr. Chairman, and I thank the 
witnesses for being here.
    Dr. Brailer, there is no questioning the leadership you 
have provided the Government in the area of electronic health 
records, but I am concerned that you do not have adequate 
resources or authority to bring all Federal agencies into 
compliance. What barriers do you see having an impact on 
getting the Federal agency community to adopt and implement 
health informatic standards developed through your office? Has 
there been agency resistance to particular initiatives begun by 
your office?
    Dr. Brailer. First, thank you, sir. I appreciate the 
support for what we are doing.
    It is certainly the case that before this office was 
created, many different Federal agencies viewed them having a 
charge to support health information technology, or standards, 
or things related to this.
    And as you might not be surprised to know, they worked 
somewhat independently, agencies in the Veterans Affairs 
Department, DOD, and HHS. I have been very well received by 
these agencies, in fact more than I expected, and beyond that 
we have had very good working relationships with them to 
address these foundational questions on standards.
    Let me give you two examples. We will announce this new 
partner for standards harmonization, and that entity will be an 
entity where all the Federal agencies come together, along with 
the private sector, to agree on a common set of standards. And 
this has been done with and through the agencies.
    Second, in our certification partner, it is the same thing, 
where many agencies are involved in this effort, and we will 
look and take their cues from that as well. We are doing other 
things internally to make sure we have alignment in our goals 
and alignment in our plans, but I would never characterize our 
relationships with the agencies as not cooperative and not 
focused on the same goal. There are certainly more things we 
can and will do, but I am very, very happy with the amount of 
progress that we have made to date.
    Mr. Clay. That is good to hear. Perhaps this is somewhat 
forward thinking, but can you expand on the measures and 
outcomes you will be utilizing to demonstrate progress and 
efficiencies achieved through a nationwide health information 
infrastructure? Are there sufficient tools in place to measure 
the benefits of implementing an interoperable standard 
structure for electronic health records? And also, have you 
thought about how to protect the privacy rights of patients?
    Dr. Brailer. Thank you. It is something that I am happy to 
speak about. We actually very soon will be announcing a 
contract with an independent third party that will perform an 
annual survey that looks at the adoption of electronic health 
records and the electronic transactions that share clinical 
data.
    And that gets to the very base level of: Are these tools 
being put in place? Are they being put in place across both 
urban and rural settings, across large providers and small, in 
different specialties or different other settings? We want to 
understand that, and we want it to be done objectively. So that 
will be underway starting this year.
    There are two levels above that. One, given that these 
tools are adopted, the question becomes: Are they being used? 
And we have been working with a variety of organizations that 
already inspect or observe what clinicians do in their offices 
or what hospitals do. They are onsite, like NCQA and the Joint 
Commission, to understand what they can do to being looking not 
at adoption but are they being used.
    And then the final question, and the one where we all want 
to be, is: What are the outcomes? I have been very encouraged 
by the studies that are done in some of the large pay for 
performance projects, where organizations that do have health 
information technology do substantially better in their 
performance than those that do not. So we want to look for the 
final value that is realized by the American public.
    And to your comment, there are negative outcomes, the 
potential for privacy breaches or new abuses that come from 
this data, and this is exactly what the Security and Privacy 
Consortium will speak to. What do we need to put in place at a 
business policy or a public policy to ensure that as we move 
into the Information Age that we have policies and tools to 
take us there as well? We will be watching for complaints, 
privacy breaches, things that are already being reported but 
asking an additional question about: Is this related to an 
information tool, or is it paper?
    Mr. Clay. That is reassuring to know that you are sensitive 
to the privacy issues and how we protect the patients to the 
utmost. One last question, the Federal Government seems to be 
an appropriate vehicle to coordinate the development of a 
National EHR System but have State and local governments begun 
the widespread use and implementation of these systems?
    Dr. Brailer. We have had, as I commented with the prior 
question, very encouraging relationships and progress with 
States, but it is variable. There are about 20 States that have 
been quite enthusiastic, that have come forward and are working 
with us, that are looking at how they can incorporate support 
for health IT in, for example, their Medicaid program, or in 
looking at their own State privacy laws, or at licensure 
issues, or at encouraging adoption in State funded or county-
funded clinics and other settings.
    And then other States are, I would call, neutral. We have 
none that have really been adverse or opposed to this, but 
there are some that I think see differential priorities, other 
things they have to do first. So we are working more with the 
willing today, but we want to create an imperative where all 
the States see this as something fundamental to what the State 
government does.
    Mr. Clay. Thank you for your response. Thank you, Mr. 
Chairman.
    Chairman Tom Davis. Yes, ma'am, the gentlelady from Ohio, 
any questions?
    Mrs. Schmidt. No, thank you, Mr. Chairman.
    Chairman Tom Davis. Mr. Gutknecht.
    Mr. Gutknecht. Mr. Chairman, I am not sure I have a 
question as much as a comment.
    First of all, thank you for this hearing, and we really do 
appreciate it. I have a keen interest in this whole subject, 
and I think as we go forward, this is going to become more and 
more important. I am delighted that at least there are people 
inside our Government who do take it seriously.
    Let me talk about this from a somewhat different 
perspective. I also chair a committee of the Rural Caucus that 
has been interested in telecommunications policy. Ultimately, 
this issue and telecommunications policy do meet, and they are 
inexorably intertwined.
    One of the things that we learned, and I suspect that you 
have probably already bumped into this, and that is that an 
awful lot of the constituencies for the services we are talking 
about here today live in small towns. Many of those small towns 
do not have the same kind of broadband access that some of us 
in larger communities take for granted.
    We had three separate hearings. What we learned in those 
hearings was that one of the things that is important, if we 
are going to continue to build out broadband services to small 
towns and rural parts of America, is that we have to have a 
Universal Service Fund. I don't know how familiar you are with 
that, but it is important to those small, rural providers. In 
Minnesota, all of the telecommunications people want to serve 
Bloomington, MN; not many want to serve Blooming Prairie, and 
that is a big problem.
    That problem becomes worse because the telecommunications 
business is changing and evolving even as we speak. A year ago 
I didn't know what VOIP was, but it is a fact of life, and it 
is going to become more and more important. Voice Over Internet 
Protocol is going to become more and more important. What we 
have is more of these companies who want to use the network, so 
to speak, but they don't want to help pay for the network.
    I think this is for the benefit of members of the committee 
as well. I understand that the Commerce Committee here in the 
House is working on a telecom bill, and we hope to have it out 
on the floor. And it is going to have some good things in it.
    I don't want to be critical, but one of the most important 
things, I think, is going to be ignored. That is: How are we 
going to deal with this Universal Service Fund in a 
telecommunications industry that is changing so fast? I am 
afraid that all of the good work that you are doing here on 
this area, well, not all, is going to be wasted, but some is 
going to be wasted because we don't have that last mile and we 
don't have an awful lot of our rural communities included.
    If we don't come up with a reasonable solution to the 
Universal Service Fund issue, who pays and who gets to draw 
out, and for what services can it be used for? It strikes me 
that is going to be very, very important to your deliberations 
as you go forward.
    Dr. Brailer. Perhaps just a comment on that, I certainly 
can't comment on the Universal Service Fund, but I think it is 
not coincidence that the President announced the health 
information technology agenda in the same speech where he 
announced the administration's broadband efforts. They are part 
and parcel.
    We need that infrastructure to do the things that we are 
discussing, and the things that are happening here give value 
to why those broadband networks need to exist. I think this is 
particularly true in rural areas as you described because today 
we are talking about the sharing of labs, and prescriptions, 
and other things that are not very heavy in bandwidth.
    But not too far out we are talking about telemedicine, and 
remote video, and monitoring live feed devices that are in 
people's homes or on their bodies for monitoring their 
physiological status, and those are bandwidth dependent. So I 
think this is moving very quickly where it will become 
something where we will say, here is a value that broadband 
will give us.
    This is an issue that I am particularly sensitive to, being 
from a very small town in West Virginia that has an 18-bed 
hospital that I am proud to tell you my mother is on the board 
of. We look at this quite a lot and say: How do we make sure 
that we are raising the playing field for everyone?
    Mr. Gutknecht. You say that you can help us by putting a 
little pressure both on the administration and some of our 
colleagues in Congress, but ultimately we have to resolve this 
issue of the Universal Service Fund because all the other 
efforts we have, I think, dwarf in terms of the relative 
importance to rural communities in building out that broadband 
service.
    Because if we don't get that done, all of these magic 
things, and I have seen a lot of them, and I agree with you. 
The potential of this is enormous. But you can't do that if you 
don't have the wire or the cable to carry the information.
    Dr. Brailer. I will make sure that message is conveyed.
    Mr. Gutknecht. Thank you.
    Dr. Brailer. Thank you.
    Chairman Tom Davis. Ms. Watson.
    Ms. Watson. From the outside looking in, what would you 
suggest we do here? Now we were just discussing the fund, and 
if this is going to work to service the entire Nation, and I 
would hope it would do that.
    What do you see as the obstacles? How could we remove them 
and make it work in the small areas that most of this 
technology never reaches? And how do we get to the under-
served? What would you suggest? I address that to both 
panelists.
    Dr. Brailer. Thank you.
    Ms. Watson. And blue sky, you know. Don't worry about the 
budgetary restraints; let us worry about that. What would you 
suggest to make this an effective, operational system?
    Dr. Brailer. Thank you. I don't get asked to do that very 
often. [Laughter.]
    Again, I think we need to recognize that if we look at, for 
example, an urban population or a population that is under-
served, their healthcare system has numerous challenges around 
delivering basic services in addition to health information 
technology.
    So if you look at, for example, many community clinics or 
county-funded clinics, they have certainly financial challenges 
of being able to support the adoption and use of tools, but 
they also have a significant manpower issue in terms of just 
skill base, people that understand technology, being able to 
negotiate the contracts to procure the services, etc. I think 
it is a combination of support financially plus the kinds of 
know-how.
    One of the things that, in the tool that has come out 
through CMS from VA, the VistA Office EHR, the one area where 
we think there is real opportunity is being able to make that 
tool available into those kinds of settings because it can give 
support, but it also involves not a lot of the legal issues 
around negotiating those contracts and other things.
    How the funding actually comes to be, I certainly couldn't 
comment, except to say that I have been impressed at the 
variability of Medicaid programs and the extent to which they 
either take a forward leaning posture on technology use in 
clinics and other settings, or they don't.
    I am encouraged to see some of the ones have been quite 
supportive, and I have visited a number of clinics that I think 
would by far exceed what many private sector providers have in 
terms of their technical capacity to really care for patients 
in a seamless way. So I think it can be done, but I would not 
say it is money alone. I am really worried about the Nation's 
overall manpower supply of experts in this field, particularly 
how it is distributed into those settings.
    Ms. Watson. What resonated with me in the beginning of your 
statement was the fact of training. I ran a program back in the 
1960's at UCLA and Allied Health. We said, 10 years from now, 
that was 1960, there will be 10,000 new jobs that we don't know 
about today. Well, there must be 300,000 new jobs that 
correspond to the developing technology.
    So maybe there should be a training component. Whatever we 
do, we ought to have a training component so we will have 
personnel out in the field that can indeed utilize this new 
technology to its fullest extent. I appreciate your input, and 
I ask my staff to take notes because maybe we will come up with 
a piece of legislation in addition to what is already on the 
table.
    Dr. Kolodner. I think also the idea is the technology has 
to adapt to the individuals. All of us can use telephones right 
now; they are simple to use. Trying to program your VCR still 
is a challenge for many people.
    I think that as those of us who are in the technology field 
look forward, particularly as we get into the personal health 
records which I think will, in fact, revolutionize the 
relationship between the providers and the patients--raising it 
up so that the provider, in fact, becomes the expert counsel to 
the patient instead of the caretaker for the patient and 
empowers people to take control of their health as they move 
forward. Things like the personal health record, or even the 
electronic health record for the providers, have to be simple 
to use; they have to be understandable; they have to be able to 
be tailored to the particular style, or reading level, or 
others of the person who is using it.
    Ms. Watson. Thank you.
    Chairman Tom Davis. I recognize Mr. Porter.
    Mr. Porter. Thank you, Mr. Chairman.
    Dr. Brailer, are there still a lot of disincentives out 
there for the industry to get into technology, the providers? 
Are there some barriers that we should be breaking? It seems to 
me we do a lot of Government incentives, and there are grants, 
low loan rates, which are all good things. Assuming that there 
are some barriers, which I think there are, is there something 
we can do market-driven, to help jump start this?
    Dr. Kolodner. Let me start just by saying that one of the 
things, if you look at VA, Kaiser Permanente, DOD--where there 
have been advances for large systems in the use of the 
information technologies--they are systems where the systems 
are both the provider and the payer because it is really on the 
payer side that a lot of the benefits occur. Actually, it is at 
the level of beneficiary.
    But in terms of the people who are making the decisions, 
the payer gets the benefit of not having duplicate tests and 
being able to operate more efficiently. Over the last 10 years, 
VA has doubled the number of patients that we have seen with 
only about a 15 percent increase in our budget at a time when 
healthcare has been double digit. Not all of it, but a good 
part of it, had to do with putting in the electronic health 
records, helping us to be more efficient.
    Dr. Brailer. It is a great question. It is one that we 
obviously spend a lot of time with. It is no surprise that 
large physician groups or prepaid group practices are among the 
Nation's leaders in the use of advanced health information 
technology because they live in a world that has both clinical 
care and bottom line risk in the same organization, and they 
have few, if any, barriers to collaboration between doctors and 
institutions.
    Mr. Porter. Plus, they have the resources in many respects.
    Dr. Brailer. Sure, they do. As we think about how do we 
extend that across the industry, I think the question is not 
how do we provide incentives per se, but how do we take away 
the perverse or the contrary incentives to not invest because 
it is against the financial interest of many providers to 
actually put in tools that improve quality or improve 
efficiency. That is because we pay for volume, and efficiency 
and quality by definition reduce volume.
    So that is a real challenge I think that is across the 
industry. Many physicians and hospitals want to do the right 
thing if we could at least make the incentives neutral with 
respect to that.
    Second, there are barriers to doctors and hospitals 
cooperating around the care of their patients in a way that can 
improve quality. Health information technology is just one, one 
very large but just one, of those areas.
    Then third, as we move toward this concept of 
interoperability, most of the technical infrastructure is built 
with the concept of somewhat proprietary data, that the data is 
very difficult to move and that many of our technical companies 
make a lot of money in their revenue cycle from implementation 
of somewhat standardized tools. In a world that is highly 
interoperable, or plug and play, means a fundamentally 
different kind of value stream for them as well. So there are 
barriers up and down the supply chain of health IT, if you 
would, that need to be addressed.
    Mr. Porter. Mr. Chairman, if I may continue. It was 
mentioned earlier there are those pockets in the country that 
are under-served by healthcare and technology. One of my goals 
in the legislation I am proposing is if you take a group the 
size of the Federal Government, 9\1/2\ million people, and by 
having the proper encouragements in place to have the 
providers, doctors, and the patients involved in the system, it 
hopefully will flow into the rest of the free market system 
because the systems will be in place.
    But I know that there are small doctors that are 
piecemealing systems because they can't afford to get into it, 
like the clinics and the combinations. There are small doctors 
across the country that would like to, but then there are those 
that don't want to change. There is the culture of this is the 
way we have always done things.
    It seems to me if we can help provide an incentive, a 
market-driven incentive to make sure that those doctors that 
use the latest, and providers throughout the system use the 
technology, there may be some incentive to reduce their medical 
liability insurance, and have medical liability carriers 
engaged in finding a way to provide assistance because it 
reduces, of course, the loss of life and injury, but on the 
dollar side reducing some costs. So part of the legislation I 
am working on will hopefully provide some incentives to reduce 
medical liability insurance costs because the losses are fewer, 
which in turn could be returned.
    I understand there are lots of barriers. We have to come 
out of the Dark Ages as soon as possible. I appreciate what you 
are doing. You guys, you are on the cutting edge. I am not sure 
about the title of our hearing, the Last Frontier. I think this 
is the frontier; we are there. I appreciate what you are 
providing for us today, and I look forward to working with you.
    Chairman Tom Davis. Thank you.
    Ms. Norton.
    Ms. Norton. Thank you, Mr. Chairman.
    I appreciate that you have talked about some of the 
barriers. They are pretty big barriers. I spoke about one 
barrier. Mr. Porter, who has just spoken, had a hearing in 
another of our subcommittees on which I serve on this issue. It 
is absolutely fascinating because of how hard it is to get a 
handle on it. It would be hard enough if, given the 
decentralized nature of the sector, if costs were the only 
barriers, but when you really get into interoperability and you 
get into other technical matters, you get into personal 
matters, and cultural matters, and professional ethics, and 
age, they are quite awesome.
    I am interested in the VA. When we had our hearing in 
subcommittee, it was a subcommittee that deals with the Federal 
Government and Federal workers. I noticed, Dr. Kolodner, that 
on page 6 of your testimony, you say, you use an example which 
is the best way to make people understand a subject like that.
    You said, suppose a veteran comes in for a check-up and 
tells a physician he is allergic to drugs, etc. So the first 
thing I want to know is once a veteran is in the system in one 
part of the country, does that mean his records are accessible 
in every veterans' hospital throughout the country?
    Dr. Kolodner. Yes, it does, whether that is progress notes, 
whether that is lab results, radiology reports. Actually, 
starting this month, we started rolling out a new capability so 
that all of the images that exist at one hospital are available 
in any another.
    Ms. Norton. I just think this is very important. This isn't 
going to happen unless the Federal Government shows it can 
happen. And here we have closed system here. We are the 
Government. We can make things happen in our organization, the 
largest organization in the country in a way that even the 
largest HMOs would have more difficulty because we can 
appropriate money.
    We can do it through pilot projects, or we can look at what 
the Veterans Administration is already doing, and remove some 
of these barriers simply by showing, in fact, what the benefits 
are. The benefits are to all involved, but that is certainly 
not immediately apparent to all involved in today's healthcare 
world.
    You say, for example, on page 9 of your testimony that 
about 40 percent of veterans that come to one of your 
facilities each year receives care some place out from non-VA 
physicians, and you are now beginning to tackle that notion. I 
see you as a possible pilot here. When you go from your own 
system, which you appear now to have a hold of, you now have to 
deal with the fact, the kind of situation rather, that 
healthcare outside of the Government will face.
    I would like you to discuss how you expect to be able to do 
for that 40 percent what you can do for those within your 
system and what you can do about keeping track within your 
system. It might not matter if, in fact, you get somebody 
seriously ill, for example, who normally does not come to your 
system--and perhaps you both have talked about Katrina and 
Rita--if, in fact, healthcare is normally received outside of 
your system. Will you speak to that, please?
    Dr. Kolodner. Yes. The figure that you cited, the estimated 
40 percent of veterans we treat each year getting care outside 
of VA, is one of the very reasons why VA has been very active 
both in the area of standards development that was mentioned 
earlier as well as the close working relationship we have with 
Dr. Brailer's office and our active participation in public/
private initiatives such as those you will be hearing about on 
one of the subsequent panels with the eHealth Initiative and 
the Connecting for Health.
    That allows us to work with others because we are not going 
to be able to solve this alone. We need electronic health 
records on the outside. We need those National health 
information networks that we can connect into. We can certainly 
contribute our experience, the things that we have learned 
along the way as we have brought up the systems and connected 
our hospitals, and as we have worked with the Department of 
Defense to connect these two large departments, and where we 
are moving information back and forth bi-directionally between 
the two departments in order to help our veterans, some of who 
are getting care at the Department and Defense.
    But it is really in the public/private initiatives and with 
Dr. Brailer's office, where they have the charge for these 
broader community initiatives that we are really able to----
    Ms. Norton. So you are really not able. If this veteran who 
is not in your system comes in, and now you have a lot of 
information that you get from him, are you able to connect with 
his HMO, let us say, if in fact that HMO could speak to you 
through your system? Would some of the barriers that we have 
been discussing be such that you could feel that you could use 
IT to retrieve data about him rather than relying on the old-
fashioned methods?
    Dr. Kolodner. We can't do that today. That is the goal, and 
that is to work with the regional health information 
organizations and with these other organizations in order to 
establish the standards, the protocols, and the rules of the 
road for accomplishing exactly what you are talking about.
    Ms. Norton. Dr. Brailer, I must say, I see what your doing. 
It is very complicated. I really think in the busy world of 
HMOs and physicians, it is so complicated that unless somebody 
can set up a pilot that somebody sees works, this is just not 
going to work. The best, it seems to me, possibility might be 
within the VA and some kind of pilot involving the VA and 
patients who are not regularly in VA or who are sometimes in VA 
and sometimes not in VA, because setting people down to even 
want to do this is a task unto itself.
    The cost task is such that even in your testimony, Dr. 
Brailer, you are cautious, and I think that is being very 
responsible about whether anybody should be promised cost 
savings. Ultimately, as with almost everything in our country, 
if we see a system that works in this way, that has solved the 
considerable problems in your testimony, it seems to me that we 
will have a better chance of connecting our healthcare system 
than I see us having now.
    I just think this is a show-me country and if we can't show 
the country a system that works, then I think we are not going 
to be able, in the context of costly healthcare today, to move 
ahead, particularly when it is normally provided by private 
parties.
    Thank you, Mr. Chairman.
    Mr. Gutknecht [presiding]. Mr. Ruppersberger.
    Mr. Ruppersberger. Sure. Excuse me if I duplicate some of 
these questions, but I had to come late.
    First, there are many issues involving a national health 
information system, but one of my major concerns is making sure 
that the various healthcare systems nationwide can talk to each 
other. It serves no one any good if we have a bunch of networks 
and data bases that can't talk to each other and that are not 
centralized. Now where are we as it relates to where you are 
and where we need to move forward as far as the systems talking 
to each other?
    Dr. Brailer. We have what I would consider to be numerous 
pieces that are now coming together. We have, for example, in 
the regional and local areas these 200 or more projects that 
are trying to build the capacity to do what you described, to 
share information, to talk together, to make it seamless. And 
those organizations go from those that who do have actually 
very good demonstration sites of what has happened to those 
that are still moving forward, including one here in D.C.
    At the same time at the Federal level, we are trying to 
make sure that there are a single set of standards and a 
capacity, this national health information network architecture 
that can tie these together. So we are trying to converge all 
of those pieces together to make sure that the easy thing for a 
doctor or a hospital to do is to be online and sharing their 
information with other doctors and hospitals as the patient 
permits.
    Mr. Ruppersberger. Are there any lessons learned that you 
can pass onto the private sector in your efforts to create an 
electronic health record system? Anyone?
    Dr. Kolodner. There are many lessons that would be 
something. Actually we have a report the GAO did where we 
talked about lessons learned between VA and DOD in terms of the 
information exchange. The ability to meet the needs of the 
provider, and make sure that the systems are fitting the 
workflow, and are not designed from the outside by non-
clinicians but actually are shaped by the needs of clinicians, 
so that it fits into their clinical practice is an important 
way of succeeding with the electronic health record part.
    But the focus really needs to remain on the fact that IT is 
an enabler. It is not an end itself; it is the means for 
delivering better quality of care and safer care.
    Mr. Ruppersberger. Let me talk about the issue of barriers. 
Sometimes we, in Congress, try to fix a problem and when we fix 
it, it sometimes makes the problem worse. Even though we need 
to deal with the issue of confidentiality, I think HIPAA is an 
example.
    It seems to me that people in the medical field, from 
either a hospital perspective or doctors, are involved in so 
much paperwork now, that even HIPAA has gotten to the point of 
maybe giving people excuses, some in the medical field: When 
you have a parent that has dementia, well, I can't talk to you 
because of HIPAA. It has also been said that HIPAA is great for 
the paper business because there is a lot of paper generated.
    How would you look at the issue of HIPAA as it relates to 
what we are talking about here today, and how would you solve 
maybe some of the tremendous administrative wastes of time and 
personnel that are focusing more on HIPAA than actually 
treating patients?
    Dr. Brailer. I think HIPAA is a good example of where the 
information age can be advantageous in many ways. For example, 
providers do have concerns about being burdened with the costs 
of accounting and disclosure. Information-based exchange is 
much less manually intensive. It is cheaper for them to keep 
track of who they gave data to and how to release that data.
    So I think information tools are actually a positive thing 
in a HIPAA world. Second, with respect to consumers that want 
to get their data, electronic data is easier for them to get, 
and get access to, and give to third parties. The information 
age, I think, will let consumers be much more engaged in not 
just getting their information but controlling who has access 
to it.
    I think the one challenge, not really in HIPAA but across 
the States that have often superceded HIPAA with their specific 
State requirements, is the concept of flexibility. Flexibility 
here means that the way a hospital or a doctor implements their 
security and privacy regime varies from very small 
organizations to very large ones.
    That flexibility is often at odds with data portability. It 
is not a security or privacy issue, per se; it is an issue 
about whether or not those create barriers to information 
exchange. That is exactly what this project is going to do, 
where we bring together all the State leaders and regional 
leaders to understand what they can do to have both flexibility 
and data portability at the same time. So I think it is a 
positive step, and we will be looking at that from the 
perspective of what are the protections or guidances needed to 
make sure that we can protect data yet have it be portable as 
the patient chooses.
    Mr. Ruppersberger. OK, thank you.
    Chairman Tom Davis [presiding]. Any other questions? If 
not, that is all I have for this panel. We appreciate it very 
much.
    Just let me ask, in the interest of time, we are going to 
combine panels two and three. We appreciate this very much. We 
will take a 2-minute recess. And I want to thank Mr. Powner for 
his flexibility and assistance in letting us go to two panels, 
so we can try to get to a prospective noon vote.
    On our second panel, we have Mr. David Powner, who is the 
Director of Information Technology Management Issues at the 
GAO; Carol Diamond, M.D., the managing director of the Markle 
Foundation; Janet Marchibroda, who is the CEO of eHealth 
Initiative and Foundation; Diane Carr, who is the associate 
executive director of Healthcare Information Systems, Queens 
Health Network; and Mr. Larry Blue, the vice president and 
general manager of Symbol Technologies.
    [Recess.]
    Chairman Tom Davis. As you know it is our policy that we 
swear everyone in. If you will rise with me and raise your 
right hands.
    [Witnesses sworn.]
    Chairman Tom Davis. Thank you very much. We will start with 
you. I think everyone understands how we try to operate on 
time. With GAO, if you need a couple of extra minutes to do it, 
your whole report is in the record, and we have worked up 
questions based on the entire testimony, but take what you need 
to highlight what you need.
    Thank you all for being with us.

 STATEMENTS OF DAVID POWNER, DIRECTOR, INFORMATION TECHNOLOGY 
  MANAGEMENT ISSUES, GOVERNMENT ACCOUNTABILITY OFFICE; CAROL 
 DIAMOND, M.D., MANAGING DIRECTOR, MARKLE FOUNDATION; JANET M. 
 MARCHIBRODA, CHIEF EXECUTIVE OFFICER, EHEALTH INITIATIVE AND 
   FOUNDATION; DIANE M. CARR, ASSOCIATE EXECUTIVE DIRECTOR, 
  HEALTHCARE INFORMATION SYSTEMS, QUEENS HEALTH NETWORK; AND 
    LARRY BLUE, VICE PRESIDENT AND GENERAL MANAGER, SYMBOL 
                          TECHNOLOGIES

                   STATEMENT OF DAVID POWNER

    Mr. Powner. Chairman Davis, Ranking Member Waxman, and 
members of the committee. We appreciate the opportunity to 
testify on healthcare information technology. As we have 
highlighted in several recent reports completed at your 
request, Mr. Chairman, significant opportunities exist to use 
IT to improve the delivery of care, reduce administrative 
costs, and to improve our Nation's ability to respond to public 
health emergencies.
    This morning I will briefly describe the importance of 
defining and implementing standards to achieve the President's 
goal of nationwide implementation of interoperable healthcare 
systems. I will also summarize key administration efforts to 
further define standards and conclude by highlighting key items 
for consideration.
    IT standards enable the interoperability of data and 
systems and defining such standards can help speed the adoption 
of IT for the healthcare industry. For example, standards are 
essential to provide greater consistency of patient medical 
records. Standards-driven electronic health records have the 
potential to give caregivers with complete and consistent 
medical histories necessary for optimal care. Standards are 
equally important as systems are pursued to detect and respond 
to public health emergencies including acts of bioterrorism.
    This past summer, Mr. Chairman, we issued a report to you 
that highlighted the importance of developing and adopting 
consistent standards to enable interoperability of key 
surveillance systems like CDC's BioSense and Homeland 
Security's BioWatch. Despite this critical need, today's 
standards are uncoordinated and have resulted in conflicting 
and incomplete standards. We recommended several years ago that 
the Secretary of HHS reach consensus across the healthcare 
industry on the definition and use of standards and to create 
mechanisms to monitor the implementation of standards.
    HHS has taken several actions that should help to define 
standards for the healthcare industry. First, the coordinator 
has assumed responsibility for the Federal Health Architecture 
which is expected to include standards for interoperability and 
communication. This architecture effort now also includes the 
Consolidated Health Informatics Initiative, one of the original 
OMB eGov initiatives to facilitate the adoption of Federal 
healthcare standards.
    Second, HHS agencies continue to identify standards 
including those for clinical messaging, drugs, and biological 
products. Third, HHS plans to leverage private sector expertise 
by awarding a contract to develop and evaluate a process to 
further define industry-wide standards. In addition, HHS also 
formed a public/private committee to help transition the Nation 
to electronic health records and to provide input and 
recommendations on standards.
    The importance of a national health information network 
that integrates interoperable data bases was just recently 
highlighted on a smaller scale with the coordinator facilitated 
the development of a web-based portal to access prescription 
information for Katrina evacuees. This online service is to 
allow authorized health professionals to access medication and 
dosage information from anywhere in the country and was made 
possible when commercial pharmacies, health insurance programs, 
and others made accessible the prescription data.
    Although Federal leadership has been established, and plans 
and several actions have positioned HHS to further define and 
implement relevant standards, consensus on the definition and 
use of standards remains a work in progress. Key items to 
consider as the administration moves forward with this vital 
effort are completing detailed plans for defining standards 
that include private sector input, fully leveraging the Federal 
Government as a purchaser and provider of healthcare, enlisting 
consumer support to a point where patients demand electronic 
health records, and providing incentives for the private sector 
to participate and partner.
    In summary, standards are essential to achieving 
interoperable data and systems, and are critical in the pursuit 
of electronic health records and public health systems. 
Clearly, vision and leadership are now present, but detailed 
plans associated with the National framework remain incomplete, 
and we are still quite far from sufficiently defining standards 
necessary to carry out this vision.
    Once this occurs, the healthcare industry will confront the 
more difficult challenge of consistently implementing a 
comprehensive set of standards. Until these standards are 
implemented, the healthcare industry will not be able to 
effectively exchange data and, consequently, will not reap the 
costs, clinical care, and public health benefits associated 
with interoperability.
    This concludes my statement. I would be pleased to respond 
to any questions that you have.
    [The prepared statement of Mr. Powner follows:]

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    Chairman Tom Davis. Thank you very much.
    Dr. Diamond.

                   STATEMENT OF CAROL DIAMOND

    Dr. Diamond. Thank you, Mr. Chairman and other members of 
the committee. Thank you for having me here today.
    In my role at the Markle Foundation, I chair an initiative 
called Connecting for Health which is a unique public/private 
sector initiative consisting of over 100 organizations who 
represent all the stakeholders in healthcare. Over the last few 
years we have participated in shaping the National drive toward 
interoperable health information by building broad consensus 
about a road map of immediate actions and priorities, and most 
recently by developing a working prototype of an electronic 
national health information exchange based on common open 
standards and policies. Our prototype, which includes the 
exchange of information both within and among local 
communities, is deployed in northern California, Indiana, and 
Massachusetts.
    As this hearing demonstrates, the public and private sector 
recognition for the need for health information technology has 
increased dramatically over the last several years, but nothing 
could better highlight how far we still need to go than 
Hurricane Katrina. As was mentioned earlier, in response to the 
storm the Office of the National Coordinator, the Markle 
Foundation, and 150 other public and private organizations 
worked closely an intense crash effort to establish an online 
service for authorized professionals to gain access to 
prescription records for evacuees.
    The medication history information came from a variety of 
public and private sources and covered the majority of the 
evacuees. This was a marvelous collaborative effort, but the 
challenge of creating it had little to do with technology. In 
truth, the technologies to move health information between 
facilities or communities are relatively well understood and 
operate today within many complex enterprises. Instead, 
katrinahealth.org came into being because of good faith 
commitment to overcome established business, legal, and policy 
challenges to information sharing.
    If there is any lesson that can be instructive going 
forward, it is that a narrow focus on technical aspects of 
creating an electronic health information environment will not 
produce a sustainable, effective network. Longstanding policy, 
legal, and business obstacles prevent our personal information 
from being brought together and applied to our health needs.
    To overcome these obstacles, Government leadership is 
needed in three areas: policy, uniformity, and a level of 
public participation that maintains focus on the needs of the 
American people. The policies that govern information access, 
acceptable uses, consent, privacy, and security must be crafted 
in parallel with the deployment of technology if we are to have 
a trusted and effective health information environment, and the 
technology choices themselves must incorporate policy 
objectives.
    The ultimate success of efforts to promote widespread 
adoption of health information technology and electronic 
records will depend on the confidence and willingness of 
consumers to accept and use the technology. However, several 
studies note significant public concerns about the privacy of 
electronic personal health data, even when most people 
acknowledge the benefits.
    The policies that establish who has access to health 
information, what uses of information are acceptable, the 
extent to which patients can give or withhold access to their 
information, and the design of privacy and security safeguards 
must be crafted in parallel with the deployment of technology, 
and the technology choices themselves must consciously 
incorporate policy objectives that protect patients.
    The second area is uniformity through a common framework. 
To the opening remarks on achieving goals for a broad, 
nationwide health information network while making good use of 
the precious, private and public sector dollars that are 
invested, we must be dependent on a uniform set of standards 
and policies that allow all parties who participate to adopt 
and participate in information sharing.
    In our work we call this a common framework, and it is 
based on a network of networks in which existing healthcare 
institutions agree to adhere to a small set of shared rules. 
This includes technical standards and explicit policies for 
information use and governance.
    The key to this approach is the articulation of these 
uniform policies and technical standards, and this approach 
supports a complete diversity of technologies to coexist. Our 
experience teaches us that the Nation will need to have an 
entity to promulgate this common framework, containing both 
policy and technical standards that provide structure to our 
health information environment.
    The AHIC recently defined by the Secretary may be the first 
institutional attempt to provide these functions, and we intend 
to work closely with it. The Markle Foundation is now working 
with over 30 national consumer groups who are aware of the 
importance of health information technology and want to help 
shape this agenda. The Federal Government and Congress should 
establish a meaningful process to address the issues and 
priorities of the public as the AHIC and other health 
information technology activities move forward.
    As the AHIC and various Federal agencies begin to set 
national priorities for the pace and scope of health 
information adoption, they must give attention to the services 
that produce high value for individual Americans, particularly 
technologies that give people more access to their own 
information and more control over their healthcare.
    It is not enough to connect healthcare enterprises to each 
other; we must also connect people to their doctors, to each 
other, and to innovative resources that provide new ways to 
deliver and improve health. Personal health records that can 
connect doctors and other health system networks may provide 
the foundation for Americans to improve the quality and safety 
of the care they receive, to communicate better with their 
doctors, to manage their own health, and take care of loved 
ones.
    Thank you again for inviting me to speak. I look forward to 
responding to questions.
    [The prepared statement of Dr. Diamond follows:]

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    Chairman Tom Davis. Thank you very much.
    Ms. Marchibroda, thank you for being here.

                 STATEMENT OF JANET MARCHIBRODA

    Ms. Marchibroda. Thank you, Chairman Davis, distinguished 
members of the committee. I am honored to be here today to 
testify before you on the state of information technology, and 
health information sharing, and the progress and challenges 
related thereto.
    My name is Janet Marchibroda. I am testifying today on 
behalf of the eHealth Initiative and its foundation. I service 
the CEO of both organizations which are independent, nonprofit, 
national organizations whose missions are the same, to improve 
the quality, safety, and efficiency of healthcare through 
information and information technology. Both convene multiple 
stakeholders, both within the private and public sector, to 
reach agreement on and stimulate the adoption of common 
principles and strategies for accelerating the use of 
information to support health and healthcare.
    In addition, it is important to note that through EHI, the 
eHealth Initiative Foundation, we have built a coalition of 
almost 1,000 stakeholders in nearly 50 States across the 
country who are now mobilizing information to support 
healthcare.
    Despite the recent increase in interest in the use of IT to 
address quality, safety, and efficiency issues, current 
penetration rates continue to be low, particularly in the small 
physician practices where a majority of our healthcare is 
delivered. And it is also important to note while installing 
electronic health records can address some of our healthcare 
challenges, the real value in terms of improving quality and 
safety, saving lives, reducing costs comes from the 
mobilization of data across systems. You really need that 
connectivity to avoid redundant tests, improve safety and 
coordination, and improve consumer compliance with some of the 
prevention and disease management guidelines.
    Currently, the U.S. healthcare system is highly fragmented 
and paper-based, and the clinicians that take care of us don't 
have the information they need to deliver the best care. To 
address the need for health information mobilization, a number 
of collaborative organizations involving all stakeholders in 
healthcare are emerging across our country to develop and 
implement health information exchange capabilities, and the 
policies and processes that will support their ongoing 
operations.
    The eHealth Initiative Foundation recently conducted its 
second annual survey of State, regional and community-based 
health information exchange efforts, and we released our 
results in late August. What the survey results indicated was a 
dramatic increase in the level of interest in and activity 
related to mobilizing information. It showed that there are a 
lot more of them this year, and those that are out there are 
much more mature in terms of organization and governance, 
getting all the stakeholders to the table, and the range of 
functionality provided. Among the 109 health information 
exchange efforts identified by the survey, there is clear 
evidence of rapid maturation and movement with 40 respondents 
in the implementation phase and 25 fully operational, up from 9 
last year.
    In terms of the barriers to getting to an interoperable 
healthcare system, we see two: the first being the misalignment 
of incentives and lack of a sustainable business model for IT; 
and two, the need for standards adoption and interoperability. 
Physicians have a real tough time. They face a significant 
financial hurdle when exploring the purchase of an EHR system. 
What we found in our 2005 survey was, while these health 
information exchange initiatives are growing and maturing, the 
No. 1 key challenge, 84 percent of them actually cited 
developing a sustainable business model as either being a very 
difficult or moderately difficult challenge.
    Achieving sustainability for health information exchange 
efforts stems in part from fundamental problems with our 
Nation's prevailing reimbursement methods which reward the 
volume of services delivered instead of outcomes or processes 
that would result in higher quality care. A lot of progress is 
being made with the value-based purchasing legislation that is 
coming out and the leadership of the Centers for Medicaid and 
Medicare Services, as well as groups such as Bridges to 
Excellence in the private sector. We have developed a set of 
principles and policies bringing together employers, health 
plans, and practicing clinicians, and these community-based 
efforts that will begin to align incentives that we provide in 
healthcare, not only with quality and efficiency goals but also 
with HIT capabilities within the community.
    Great progress is being made around standards and 
operability, interoperability, which we have heard from the 
other parts of our panel, and a number of efforts are underway 
with a number of bills in Congress. Finally, in closing, the 
Office of Personnel Management through its Federal Employees 
Health Benefits Program has an enormous opportunity to affect 
change in our healthcare system given that 8 million Federal 
employees, retirees, and their dependents are reliant on the 
program. By building into those incentive programs, policies 
related to health information exchange, we can make real 
progress.
    So in conclusion, we offer a very brief summary of key 
points. Without the alignment of financial and other 
incentives, not just with quality and efficiency but also 
health information exchange, efforts to accelerate the 
mobilization of information will continue to move at a slow 
pace, and the combined purchasing power of both CMS and OPM can 
make great progress in this area.
    Two, innovative programs designed to facilitate both public 
and private sector seed funding of these emerging community 
health information exchange efforts must be developed and 
implemented, if our goals around widespread interoperability 
are to be achieved. And three, national efforts designed to 
achieve consensus on standards and promote their adoption could 
not be more timely, particularly for our communities across 
America that are on the ground making this happen.
    We are at a unique point in time where we have a lot of 
momentum moving around these issues. If we focus on moving our 
quality and efficiency goals, and at the same time those 
related to health information technology, we will make great 
progress.
    Chairman Davis, distinguished members of the committee, 
thank you again for inviting me to discuss our perspectives. I 
hereby request that the Parallel Pathways Framework for 
Incentives and our survey of State, regional, and community-
based initiatives that are referenced in my testimony be made 
part of the record.
    Chairman Tom Davis. Without objection.
    Ms. Marchibroda. We commend you for your leadership. And, 
again, thank you for the opportunity to join you.
    [The prepared statement of Ms. Marchibroda follows:]

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    Chairman Tom Davis. Well, thank you very much.
    Ms. Carr.

                    STATEMENT OF DIANE CARR

    Ms. Carr. Good morning, Mr. Chairman and members of the 
committee. I would like to thank you for this opportunity to 
share the experience of a public hospital in New York City in 
transforming healthcare with technology.
    Queens Health Network is the largest healthcare provider in 
the borough of Queens, New York City. We serve a population of 
about 2 million people. We include two major teaching 
hospitals, Elmhurst Hospital Center and Queens Hospital Center, 
and have a combined total of 771 inpatient beds and see 43,000 
annual admissions. We are affiliated with the Mount Sinai 
School of Medicine and a member of the New York City Health and 
Hospitals Corp. which is the largest municipal healthcare 
organization in the United States.
    Our service model is unique. I just want to mention that 
for a moment because, in addition to providing acute hospital 
care including tertiary care, we also provide a full range of 
services of primary care and specialty care services. We serve 
as many of our patients family doctors. We do that, in addition 
to our on campus locations in 14 freestanding medical clinics 
and 6 school-based health programs where we provide care to 
children at their school, similar to what many of us 
experienced with school nurses. We have a partnership with 
community-based physician practice groups, and we see over 1 
million ambulatory visits a year. So we are a pretty high 
volume healthcare provider.
    I just want to mention about the community we serve because 
there is some uniqueness to that as well. It is probably the 
most ethnically diverse region in the world. We have immigrants 
from over 100 different countries speaking 167 different 
languages and 87 percent of our patient population is people of 
color and ethnic minorities.
    Our residents are also some of New York City's poorest. 
Sixty-five percent of the households in our service area have 
annual incomes under $15,000. Because of this, our patient 
population is also medically under-served. They are denied care 
in other venues due to inability to pay, and they are generally 
unaware of preventive practices that promote good health. They 
present sicker than the general population.
    In the mid 1990's, Queens Health Network faced a dilemma, 
how to maintain and expand services for an ever increasing 
number of uninsured patients in an ever more demanding 
marketplace. As part of our business and strategic plan, senior 
administration proposed implementation of an electronic health 
record to our medical staff.
    In January 1997, we began with computerized physician order 
entry. Our doctors started ordering all of their lab and 
radiology results and looking them up online. We had no idea at 
the time how early we were undertaking this. Today we have a 
fully integrated, interdisciplinary health record that is used 
by over 4,300 people every day. This is all of our doctors, our 
nurses, our pharmacists, social workers, dieticians, lab and 
radiology techs use the system all day, every day, to enter 
orders, review results, do assessments and plans, histories and 
physical examinations, and medical orders.
    We provide a full range of electronic decision support to 
improve safety and effectiveness of care. So what we have 
discovered in the experience of installing our electronic 
health record is that it is essential to improving patient 
safety, effectiveness of care and also in reducing costs.
    Chronic disease is the leading cause of illness, 
disability, and death in the United States today. Nearly half 
of the population, 100 million Americans, have one or more 
chronic medical conditions. The costs of the treatment is 
enormous in accounting for nearly 70 percent of all personal 
healthcare expenditures in the country. The electronic health 
record can provide a structure for applying evidence to patient 
care to improve care of patients with chronic diseases.
    So we have targeted heart failure, diabetes, and depression 
right now as populations of patients who can benefit from 
analysis and aggregation of data, which helps us to evaluate 
therapies and treatments on patient outcomes. For example, if 
we have cardiologists working in adjoining rooms with patients 
with the same disease, we may not know what is going on with 
them individually, but when we start to aggregate their data we 
can look at patterns and see rooms for improvements.
    The final point that I want to make is that, with all the 
discussion of interoperability, I think you also have to start 
somewhere and that the electronic health record is the place 
that will provide a starting point. If you don't have 
electronic health record that you can share your patient 
information from, interoperability means nothing, that is it.
    Chairman Tom Davis. OK. You have concluded?
    Ms. Carr. Yes.
    [The prepared statement of Ms. Carr follows:]

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    Chairman Tom Davis. Mr. Blue, go ahead. We have a vote, but 
if we can hurry this up, we can get some questions in.
    Mr. Blue. I will try and speak as quickly as I can, Mr. 
Chairman.
    Chairman Tom Davis. Then we can go. Otherwise, we have to 
come back.

                    STATEMENT OF LARRY BLUE

    Mr. Blue. Mr. Chairman Davis and distinguished members of 
the committee, thank you very much for the opportunity to 
testify today and for holding this very important hearing on 
how we can use information technology to improve the quality of 
healthcare in this country. I would like to focus my remarks 
today on two specific areas, reducing medical areas and using 
RFID to fight the rising tide of counterfeit drugs.
    First, let me tell you a little bit about Symbol 
Technologies. Symbol manufactures handheld computers that scan 
bar codes and read RFID tags. We also manufacture wireless 
networks that tie together large scale asset management 
systems, so information is available where it is needed in real 
time. We help our clients capture, move, and manage 
information. Today these tools are being used to dramatically 
improve the delivery of healthcare by making medical 
information where and when it is needed, at a patient's 
bedside, in an operating room, or on a battlefield.
    Medical errors are a serious problem facing the healthcare 
industry today. The Institute of Medicine estimates that 
preventable deaths due to medical errors are between 44,000 and 
98,000 annually, and adverse drug events cause more than 
770,000 injuries per year.
    With aging parents and as a father of three great kids, I 
was pleased to see that reducing medical errors is one of the 
central goals of the national healthcare strategy. In our view, 
the keys to reducing medical errors are: first, converting 
patient records from paper to electronic records as presented 
in Dr. Brailer's earlier testimony and by other testimony 
today; and second, delivering accurate information to the 
patient's bedside in right time.
    Once a medical center adopts electronic patient records, 
the next step is to adopt mobility technology so that 
information is available at a doctor's or nurse's fingertips 
anywhere in the complex. Patients move from hospital rooms to 
radiology centers to operating rooms in the normal course of 
their treatment, and their information has to follow them.
    Some hospitals now assign a barcode to a patient when he or 
she checks in. It is put right on their wristband. When a nurse 
is making rounds and stops in a patient's room, he or she can 
scan the barcode on the patient's wrist with a handheld 
computer similar to the PDA many of you carry today. The 
handheld then wirelessly retrieves the patient's medical 
records and displays the last times medicines were delivered, 
when the next dose is due, and exactly how much of which 
medicines to administer. The nurse can deliver the right 
medicines in the right doses at the right time, and immediately 
update the patient's record electronically.
    One real life example of this system in action can be seen 
at the VA. The Veterans Administration deserves an enormous 
amount of credit for implementing this type of patient 
identification and health information mobility system and 
improving patient care as a result. A hundred percent of VA 
medical centers are currently using barcode technology to 
identify patients and medication, and medication errors have 
been reduced significantly. Unfortunately, the adoption of 
these important solutions in commercial hospitals is estimated 
at less than 20 percent.
    One of the most significant barriers to hospitals 
implementing this type of system has been the lack of a uniform 
barcode on medications. Up until now, healthcare providers have 
had to develop their own barcodes and apply them to drug 
packages which is costly, can be error prone, and is time 
consuming.
    We applaud the FDA's new regulations requiring barcodes on 
all medications by April 2006. This should make these systems 
much easier to implement and will enable more effective 
information exchange within and between facilities during 
patient transport, treatment, and transfer.
    The second topic of my remarks relates to the serious 
problem of counterfeit prescription drugs. This affects not 
only patients here in the United States but around the world. 
The World Health Organization estimates that prescription drug 
counterfeiting is a $32 billion global business.
    New technologies are being employed to combat counterfeit 
drugs, and one of them is RFID. RFID stands for Radio Frequency 
Identification. It is the next generation of barcode. A tiny 
computer chip attached to an antenna is placed on a product. 
When it is activated by a reader, it transmits a serial number 
or unique identifier to an authorized device. That number is 
then used to retrieve information such as an EHR from a secured 
data base.
    The FDA and private industry are aggressively developing 
electronic track and trace systems using RFID to stop 
counterfeiting. The goal of these systems is to create an 
electronic pedigree for legitimate drugs. Symbol is actively 
working with Perdue Pharmaceuticals to develop such a system 
for Oxycontin which is one of the top counterfeited and stolen 
medications in the United States. Early results of our trials 
are encouraging, and we are optimistic that this RFID-based 
system is going to create a real barrier to thieves and black 
marketeers.
    For health IT systems and technologies to be effective, 
they have to be interoperable; and to be interoperable, we need 
industry-wide standards. Without standards, data from one 
company or medical center won't be understood at another, and 
one company's RFID readers won't read another company's tags, 
and so on.
    In my industry, I have personally worked to develop 
standards for RFID and electronic product codes. A group called 
EPC Global has done a great job getting industry together to 
create a common RFID data standard. I believe standardization 
is critical to widespread implementation and unlocking the 
value of a new technology. In this case standards can mean the 
difference between only one hospital having an electronic 
patient record and the ability of that hospital to freely share 
that record with any other healthcare provider needed by that 
patient.
    As the economy has become global, it is now more important 
than ever for these data exchange standards to be global. 
Health care products consumed in the United States are 
manufactured globally, and global standards is one area where 
Congress and the administration can help us. If the Federal 
Government can reinforce the message to industry in foreign 
countries that cooperation on common barcodes, EHRs, and other 
data exchange standards like RFID is a high priority, that 
would be very helpful.
    Thank you again for the opportunity to testify today, and I 
would be happy to answer any questions you have.
    [The prepared statement of Mr. Blue follows:]

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    Chairman Tom Davis. Thank you very much. Let me start. Mr. 
Powner, as you know from our FISMA score card, you know this 
committee likes grades. Can you try to give the administration 
a grade in its efforts to develop a national strategy for 
health IT including its efforts to define and implement 
standards?
    Mr. Powner. From a leadership and vision perspective, 
clearly, Dr. Brailer and the efforts at HHS and the 
administration deserve an A. If you look beyond that in terms 
of putting in place plans and getting down to the 
implementation, we are incomplete. We are far from having plans 
and marching orders in place and a complete game plan to tackle 
this enormous challenge.
    Chairman Tom Davis. Thank you very much.
    Ms. Carr, how long did it take to fully implement 
electronic health records in the Queens Health Network?
    Ms. Carr. Mr. Chairman, in 6 months we went from a twinkle 
in our eye to having our physicians doing order entry online.
    Chairman Tom Davis. How did you get the buy-in from 
physicians?
    Ms. Carr. I guess what we did is we had a really serious 
challenge in terms of the volume of activity that we needed to 
support. And we demonstrated that with this technology, we 
could increase our capacity and take better care of our 
patients.
    Chairman Tom Davis. Thank you.
    Mr. Blue, do you think that health IT systems are more 
vulnerable and more attractive to hackers and cyber attack 
because of the quantity of personal information they hold?
    Mr. Blue. My own personal opinion, Mr. Chairman, is no, I 
do not believe so. I believe that they are vulnerable to attack 
like all data bases, but there is a lot of work that has been 
done both in industry and in Government to assure through 
opportunities like HIPAA, and I believe one of the prior 
testimonies discussed the advantage of information technology 
in protecting that data and also making it more readily 
available to the people that need it. So I don't believe so.
    Chairman Tom Davis. Dr. Diamond, your testimony mentions 
the problem of patients being concerned that a system of 
electronic health records could result in the exposure of 
private health information, which I just asked Mr. Blue a 
question about. How are you working to manage public perception 
that privacy could be compromised?
    Dr. Diamond. Yes. Yes, I think----
    Chairman Tom Davis. Because we see the credit card 
companies and everything else on these things.
    Dr. Diamond. You took the words out of my mouth. I was just 
going to say, Mr. Chairman, that I think we have all seen the 
newspaper stories about credit card data being stolen, and 
other third party data bases being hacked, and consumers' 
identity being stolen. I am of the belief that this is a broad 
IT sector issue that needs to be solved.
    But I think for healthcare, in particular, our approach is 
to build the need to protect privacy and security in on the 
front end of this technology and architecture. And one of the 
models we propose, the model we propose to do that is to 
separate the medical data, the location of the medical data 
from the actual data itself, so that we are not proposing 
putting everyone's information in one large central data base, 
but just having the network and the infrastructure available to 
know where it is when it is needed, and not have to put it in 
one place which is a single point of attack or a hacker's dream 
potentially.
    Chairman Tom Davis. Thank you.
    Ms. Marchibroda, are State and local health IT initiatives 
coordinated with Federal strategy?
    Ms. Marchibroda. Thank you, Chairman. They would like to 
be. I think something that EHI is doing right now is taking the 
national standards and policies that are merging from the 
Federal Government as well as initiatives like Connecting for 
Health, and creating tool kits and guides to help these States 
and regions who very much want to be in sync with national 
principles and standards, provide them with guides to help them 
get there.
    Chairman Tom Davis. OK.
    Ms. Marchibroda. There is still more work to do.
    Chairman Tom Davis. I will ask anybody: What metrics would 
you use to gauge the success of the National Coordinator's 
Office? Anybody want to take a shot at that? Any volunteers? Go 
ahead, Mr. Powner.
    Mr. Powner. Ultimately, I think--Mr. Blue mentioned this--I 
think one of the key metrics we really need to focus on long 
term here is the reduction of medical errors. When you look at 
the staggering figures that come out associated with medical 
errors, the number of people who actually die in a given year, 
that is clearly a metric where the incorporation of health IT 
can clearly move us in the right direction.
    Chairman Tom Davis. Thank you. We have about 3 minutes left 
in our vote. I could hold you over for a couple votes, but I 
think what I will do is just adjourn the hearing at this point.
    We may have some questions for the record from each of you, 
but we appreciate your statements. It is all in the record and 
will all be used as we move ahead. I thank you for your time. 
The meeting is adjourned.
    [Whereupon, at 12:03 p.m., the committee was adjourned.]
    [The prepared statements of Hon. Dennis J. Kucinich and 
Hon. John M. McHugh, and additional information submitted for 
the hearing record follow:]

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