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


 
                  PHYSICIANS FOR UNDERSERVED AREAS ACT

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

                                HEARING

                               BEFORE THE

                      SUBCOMMITTEE ON IMMIGRATION,
                      BORDER SECURITY, AND CLAIMS

                                 OF THE

                       COMMITTEE ON THE JUDICIARY
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED NINTH CONGRESS

                             SECOND SESSION

                                   ON

                               H.R. 4997

                               __________

                              MAY 18, 2006

                               __________

                           Serial No. 109-111

                               __________

         Printed for the use of the Committee on the Judiciary


      Available via the World Wide Web: http://judiciary.house.gov


                                 ______

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                       COMMITTEE ON THE JUDICIARY

            F. JAMES SENSENBRENNER, Jr., Wisconsin, Chairman
HENRY J. HYDE, Illinois              JOHN CONYERS, Jr., Michigan
HOWARD COBLE, North Carolina         HOWARD L. BERMAN, California
LAMAR SMITH, Texas                   RICK BOUCHER, Virginia
ELTON GALLEGLY, California           JERROLD NADLER, New York
BOB GOODLATTE, Virginia              ROBERT C. SCOTT, Virginia
STEVE CHABOT, Ohio                   MELVIN L. WATT, North Carolina
DANIEL E. LUNGREN, California        ZOE LOFGREN, California
WILLIAM L. JENKINS, Tennessee        SHEILA JACKSON LEE, Texas
CHRIS CANNON, Utah                   MAXINE WATERS, California
SPENCER BACHUS, Alabama              MARTIN T. MEEHAN, Massachusetts
BOB INGLIS, South Carolina           WILLIAM D. DELAHUNT, Massachusetts
JOHN N. HOSTETTLER, Indiana          ROBERT WEXLER, Florida
MARK GREEN, Wisconsin                ANTHONY D. WEINER, New York
RIC KELLER, Florida                  ADAM B. SCHIFF, California
DARRELL ISSA, California             LINDA T. SANCHEZ, California
JEFF FLAKE, Arizona                  CHRIS VAN HOLLEN, Maryland
MIKE PENCE, Indiana                  DEBBIE WASSERMAN SCHULTZ, Florida
J. RANDY FORBES, Virginia
STEVE KING, Iowa
TOM FEENEY, Florida
TRENT FRANKS, Arizona
LOUIE GOHMERT, Texas

             Philip G. Kiko, General Counsel-Chief of Staff
               Perry H. Apelbaum, Minority Chief Counsel
                                 ------                                

        Subcommittee on Immigration, Border Security, and Claims

                 JOHN N. HOSTETTLER, Indiana, Chairman

STEVE KING, Iowa                     SHEILA JACKSON LEE, Texas
LOUIE GOHMERT, Texas                 HOWARD L. BERMAN, California
LAMAR SMITH, Texas                   ZOE LOFGREN, California
ELTON GALLEGLY, California           LINDA T. SANCHEZ, California
BOB GOODLATTE, Virginia              MAXINE WATERS, California
DANIEL E. LUNGREN, California        MARTIN T. MEEHAN, Massachusetts
JEFF FLAKE, Arizona
BOB INGLIS, South Carolina
DARRELL ISSA, California

                     George Fishman, Chief Counsel

                          Art Arthur, Counsel

                         Allison Beach, Counsel

                  Cindy Blackston, Professional Staff

                   Nolan Rappaport, Minority Counsel

                            C O N T E N T S

                              ----------                              

                              MAY 18, 2006

                           OPENING STATEMENT

                                                                   Page
The Honorable John N. Hostettler, a Representative in Congress 
  from the State of Indiana, and Chairman, Subcommittee on 
  Immigration, Border Security, and Claims.......................     1
The Honorable Sheila Jackson Lee, a Representative in Congress 
  from the State of Texas, and Ranking Member, Subcommittee on 
  Immigration, Border Security, and Claims.......................     2

                               WITNESSES

The Honorable Jerry Moran, a Representative in Congress from the 
  State of Kansas
  Oral Testimony.................................................     6
  Prepared Statement.............................................     8
Mr. Edward Salsberg, Director, Center for Workforce Studies, 
  Association of American Medical Colleges
  Oral Testimony.................................................     9
  Prepared Statement.............................................    12
Mr. John B. Crosby, J.D., Executive Director, The American 
  Osteopathic Association
  Oral Testimony.................................................    48
  Prepared Statement.............................................    49
Ms. Leslie G. Aronovitz, Director, Health Care, United States 
  Government Accountability Office
  Oral Testimony.................................................    58
  Prepared Statement.............................................    60

                                APPENDIX
               Material Submitted for the Hearing Record

Prepared Statement of the Honorable Sheila Jackson Lee, a 
  Representative in Congress from the State of Texas, and Ranking 
  Member, Subcommittee on Immigration, Border Security, and 
  Claims.........................................................    99
Prepared Statement of the Honorable Kent Conrad, a U.S. Senator 
  from the State of North Dakota.................................   100
Prepared Statement of Gregory Siskind, Chairman, National Health 
  Care Access Coalition..........................................   106
Letter to the Honorable Sheila Jackson Lee from Connie Berry, 
  Manager, Texas Primary Care Office.............................   119


                  PHYSICIANS FOR UNDERSERVED AREAS ACT

                              ----------                              


                         THURSDAY, MAY 18, 2006

                  House of Representatives,
                       Subcommittee on Immigration,
                       Border Security, and Claims,
                                Committee on the Judiciary,
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 2:04 p.m., in 
Room 2141, Rayburn House Office Building, the Honorable John N. 
Hostettler (Chairman of the Subcommittee) presiding.
    Mr. Hostettler. The Subcommittee will come to order.
    Good afternoon. Today's hearing will examine H.R. 4997, the 
``Physicians for Underserved Areas Act.'' This legislation is 
sponsored by Congressman Jerry Moran, who has joined us today 
as a witness.
    H.R. 4997 makes permanent the J-1 visa waiver program for 
physicians who agree to work in underserved areas--sometimes 
referred to as the ``Conrad program'' after the original author 
of the program, Senator Kent Conrad.
    Under current law, foreign doctors may come to the United 
States to complete their residency training. Many do so using 
the J-1 visa, which is for cultural exchange and training 
programs.
    One of the requirements for physicians who use the J visa 
is that the participant return to his or her country for 2 
years upon completion of the training program in the United 
States. The purpose of this foreign residency requirement is to 
encourage American-trained physicians to return to their 
country and improve medical conditions there.
    Since 1994, Congress has waived the 2-year foreign 
residency requirements for physicians who agree to work in an 
underserved area of the United States as designated by the 
Department of Health and Human Services. Each State receives 30 
such waivers per year.
    The waiver program allows States to recruit physicians to 
areas that may be considered unattractive to American 
physicians. Many communities that might otherwise have no 
access to medical services now have physicians nearby as a 
result of this program. It also responds to an overall shortage 
of physicians in the United States, a shortage that seems to be 
growing.
    While today's hearing will address legislation to 
reauthorize a visa program for foreign physicians, I believe 
Congress must also focus on other ways to address the physician 
shortage. First, I am interested to hear from our witnesses 
today what is being done to increase the capacity of medical 
training programs here in the United States. Educating more 
physicians here at home is one obvious way we can alleviate the 
shortage.
    I'm also interested in the expansion of programs, such as 
the National Health Services Corps, which provides incentives 
for U.S. physicians to work in underserved areas.
    In looking at the J-1 visa waiver program, we must keep in 
mind the intent behind the 2-year foreign residency 
requirement. We want to make sure that we aren't facilitating 
``brain drain'' from countries that desperately need well-
trained medical personnel.
    In its 2006 World Health Report, the World Health 
Organization cited the migration of health care workers from 
poorer countries to richer countries as a major problem whose 
``consequences can be measured in lives lost.''
    J visas are designed to allow foreigners to participate in 
exchange and training programs here in the U.S. and then take 
those skills back to their home country. But right now, a 
significant portion of these physicians are staying here in the 
United States.
    Another factor that is complicating the training goal of 
the J-1 visa program is that foreign physicians are now using 
the H-1B visa to come to the U.S. for their residencies. 
Physicians who come to the U.S. on an H-1B visa for the 
residency training are not required to return to their home 
country for 2 years.
    As a result, foreign physicians prefer to use the H-1B and 
fewer are using the J-1 visa. With fewer physicians using the 
J-1 program, there are fewer available physicians to 
participate in the J-1 waiver program to work in underserved 
areas, and there are also fewer physicians returning to needier 
countries.
    I believe we need to closely examine this disparity in 
treatment and consider a uniform policy for foreign physicians 
who receive training in the U.S. The J-1 visa waiver program 
may be helpful in getting physicians to underserved areas, but 
it is, hopefully, a temporary fix to a much larger problem.
    I am hopeful that this Committee and other Committees of 
jurisdiction will work to find ways to educate and train 
greater numbers of American physicians and reduce our reliance 
on foreign physicians.
    At this time, the Chair recognizes the gentlelady from 
Texas, the Ranking Member of the Subcommittee, Ms. Jackson Lee, 
for purposes of an opening statement.
    Ms. Jackson Lee. Thank you very much, Mr. Chairman.
    I appreciate this hearing. I appreciate the witnesses. And 
you have certainly crafted or laid the parameters down that it 
is complex, but it's a good program.
    And the legislation that my friend and colleague Mr. Moran 
has, has great merit because we do know that there are certain 
concerns that you've expressed that I join you in. We don't 
want to have a brain drain of some of our developing nations 
all over the world. In fact, we want to be partners in good 
health care.
    But at the same time, we want to ensure the normal flow of 
talented physicians in underserved areas, and I might say, with 
a State as big as Texas, we're already asking for an increase 
or a need that would cover the vast State--vast areas of our 
State.
    So we know that we have to find a way to answer your 
concerns to discern the purpose of the utilization of other 
visas versus the J-1. We have to address the question of 
overstays, and I might say we have to address the question of 
training more American doctors, helping our Nation's medical 
schools, and providing resources for nurses in America, and 
training and teachers.
    But I do believe that this is a valuable program, and I'm 
delighted that the GAO is present, Mr. Chairman, because I do 
want to acknowledge, as you well know, that Senator Conrad and 
myself asked for a GAO study to assess where we are in this 
program and how we can make it effective. And I look forward to 
your testimony.
    I mentioned, again, the legislation of Congressman Jerry 
Moran that was introduced just recently, H.R. 4997. And 
specifically, it would make the J-1 visa program permanent.
    The J visa is used for one of the educational cultural 
exchange programs that has become a gateway for foreign medical 
graduates to gain admission to the United States as non-
immigrants for the purpose of graduate medical education 
training. The visa that most of these physicians enter under is 
the J-1 non-immigrant visa.
    And let me just say this. I had the opportunity to speak 
before the National Convention of Indo-American Physicians and 
Pakistan Physicians. They are what the oath that they take 
represents. They're healers. They want to do what is right.
    But I tell you, one of the number-one issues was what was 
happening to the J-1 visa because they wanted to use it in a 
positive sense. And I made a commitment in a legislative 
manner, which is to say that this Congress would take the J-1 
visa program seriously and know of their interest and passion.
    One of the doctors in particular was Dr. Kudir, who has 
formerly served--or has served as the leadership of the 
Pakistan-American doctors. But they wanted it to be 
constructive. And they are participants in making the J-1 visa 
work, not to abuse it. And I think we should engage physicians 
and those who participate in this program to make it work.
    The physicians who participate in the J-1 visa programs are 
required to return to their home country for a period of at 
least 2 years before they can apply for another non-immigrant 
visa or legal permanent resident status, unless they're granted 
a waiver of this requirement.
    In 1994, Senator Kent Conrad established a new basis for 
waiver of this requirement with an amendment to the Immigration 
and Nationality Act. It was known as then as the Conrad State 
20 program. It permitted each State to obtain waivers for 20 
physicians by establishing that they were needed in health 
professional shortage areas known as HPSAs.
    On November 2, 2002, the Conrad 20 program was extended to 
2004, and the number of waivers available to the States were 
increased to 30. This program, which is now referred to as the 
``Conrad 30'' or ``State 30'' program, expired on June 1, 2004.
    On December 3, 2004, it was reinstated and extended to June 
1, 2006. That is why we're here today, which is only a few 
weeks from now. Congressman Moran's Physicians for Underserved 
Areas Act would eliminate the need for future extensions by 
making the program permanent.
    And I might say because of the recounting of the yearly or 
every other year extension, it might make sense that we have 
the parameters and the strictures or the structure of the 
program such that we can address the permanent aspect of it.
    When the Conrad 30 Program was established in 1994, most of 
those studying the supply of physicians in the United States 
were concerned about the distribution of physicians, as opposed 
to the total number of doctors being trained. It is now 
generally recognized that we're facing a severe physician 
shortage. The Health Policy Institute eliminates--estimates 
that the shortage could grow to as much as 200,000 by 2020, an 
astounding possibility in view of the fact that the physician 
population in the United States currently is only about 
800,000.
    And might I say that I am not bragging about this 
catastrophe, it is one. Obviously, we have to do something 
outside the jurisdiction of this Committee with our Nation's 
medical schools, the encouragement of physicians or medical 
students, and certainly health care in America.
    But given where we are today, this is a needed program. The 
failure to forecast this severe physician shortage may explain 
why from 1980 until last year no new medical schools opened in 
the United States. According to the Health Policy Institute, 
the United States needs to produce an extra 10,000 physicians 
per year over the next decade and a half in order to meet the 
demands of the country.
    This number assumes that the number of foreign-educated 
physicians will remain constant. We might need to have ``hug a 
physician'' day in America.
    Senator Conrad and I have asked the General Accountability 
Office to do a survey of State views on the Conrad 30 program. 
All 50 States filled out a GAO questionnaire and promptly 
returned it to the GAO. One of the GAO investigators will 
testify about the results of that survey, and so I'll look 
forward to that.
    Approximately 80 percent of the States reported that the 
annual limit of 30 waivers per State is inadequate. Only 13 
percent reported that it is inadequate. Excuse me. I'm sorry. 
Eighty percent of the States reported that the annual limit of 
30 waivers per State is adequate, and only 13 percent said it 
was inadequate.
    Eleven States estimated that they need between 5 and 50 
more waiver physicians, which would total 200 more waiver 
physicians. Forty-four States did not use all of their 
allotted, and the total of the unused waivers for the year was 
664, which is one of my views of being able to move some of the 
waivers from State to State.
    The J-1 visa program has been in effect now for more than a 
decade. In addition to being a good source of additional 
physicians, it ensures that additional physicians will go where 
they are most needed, health professional shortage areas in 
both rural and urban settings.
    I can assure you, Mr. Chairman and to this Committee, that 
it is important for us to have this hearing, but more 
importantly, to take it seriously and to address the concerns 
of our States, but also Americans who need good health care.
    And I look forward to admitting certain letters, but I will 
hold them for the witnesses' testimony, and I believe that, 
together, we can make this program effective and provide the 
good health care for all Americans.
    With that, I yield back.
    Mr. Hostettler. I thank the gentlelady.
    The Chair will now introduce members of our panel of 
witnesses.
    The Honorable Jerry Moran began his career in public 
service in the Kansas State Senate, serving 8 years in that 
body, including 2 years as majority leader. As the 
representative in Congress of Kansas's 1st District, which has 
more hospitals than any congressional district in the country, 
Mr. Moran has been a leading advocate for health care reform, 
rural health care in particular.
    Congressman Moran has been supportive of community health 
care centers and has introduced additional measures, such as 
the Community Pharmacy Preservation Act, which seeks to keep 
small-town pharmacies open and accessible.
    His efforts in Congress have earned Mr. Moran the top 
legislative award from the National Rural Health Association. 
He is the sponsor of the bill H.R. 4997, the legislation that 
this panel is discussing today.
    Edward S. Salsberg began his career in public health in 
1984 at the New York State Department of Public Health, where 
he served as a bureau director. In 1996, Mr. Salsberg left the 
department to found the Center for Health Workforce Studies at 
the School of Public Health of the University at Albany of the 
State University of New York, where he served as its executive 
director.
    Mr. Salsberg has authored and co-authored numerous reports 
on the health care workforce and has spoken throughout the 
country on the topic. He currently serves as director of the 
Center for Workforce Studies at the Association of American 
Medical Colleges.
    John B. Crosby became the executive director of the 
American Osteopathic Association in May 1997. Prior to joining 
the AOA, he spent 6 years at the American Medical Association 
as senior vice president for health policy, where he was 
actively involved with policy development and strategic 
planning.
    He currently serves on the board of directors of the 
Chicago Health Policy Research Council and the Health Care 
Quality Alliance in Washington, D.C. Mr. Crosby has worked on 
health care issues for both the private and public sectors 
since 1977. He has served in positions at think tanks, trade 
associations, and on Capitol Hill.
    Leslie G. Aronovitz began her service to the U.S. 
Government Accountability Office at GAO's Atlanta office in 
1974. Before working on health and income security issues, Ms. 
Aronovitz was an assistant director in GAO's Accounting and 
Financial Management Division. There, she directed much of 
GAO's work on the quality of audits performed by public 
accountants. This work led to important changes in the way the 
accounting profession engaged in self-monitoring.
    Ms. Aronovitz has served as director of GAO's health care 
team for the past 15 years. Among her numerous responsibilities 
as director of the team is research on health professions 
shortages.
    Gentlemen and lady, we appreciate your presence here today, 
and you will notice we have the light system, and we ask--and 
without objection, your entire written testimony will be made a 
part of the record.
    If you can keep within that 5 minutes as much as possible, 
we will give an opportunity for the panel to ask questions.
    Congressman Moran, you are recognized.

  TESTIMONY OF THE HONORABLE JERRY MORAN, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF KANSAS

    Mr. Moran. Mr. Chairman, thank you very much. Thank you for 
the privilege of appearing before your Subcommittee today.
    I appreciate your comments and am pleased to support your 
effort to broaden the inquiry about increasing the availability 
of health care professionals across the country. I appreciate 
Ms. Jackson Lee and her efforts; we were engaged as allies the 
last time this program was reauthorized in 2002.
    I've been a Member of Congress now for a decade. Much of my 
focus in Washington has been about access to health care. I 
represent one of the most rural districts in the country. My 
largest community is a population about 45,000.
    I represent three quarters of the geography of Kansas, and 
you are correct. We have 75 hospitals in the congressional 
district, more than any congressional district in the Nation.
    My constituents drive long distances to access health care. 
They are elderly, generally, and income levels are--would be 
below the national average. I have been engaged in the Rural 
Health Care Coalition and its efforts since coming to Congress 
and have served as its chairman for a number of years.
    My colleague in co-sponsoring this bill, Mr. Pomeroy, the 
gentleman from North Dakota, is the co-chairman of the Rural 
Health Care Coalition today.
    This issue is one that I think matters so much. In fact, I 
believe that health care is the number-one domestic issue we 
face in the country today. And it is about access, but it's 
also about affordability.
    And I have been involved in the J-1 visa program since 
coming to Congress. Many of the physicians who serve, who 
provide health care services to my constituents, are J-1 visa 
doctors.
    And you were right in your recitation of the history. This 
has--came about, this program came about in 1994. We've also 
had a companion Federal J-1 visa program. And surprising to me 
and perhaps to others, Kansas was not a participant in the J-1 
visa program on the State level until 2002. Prior to that, we 
relied upon the United States Department of Agriculture to 
provide J-1 visa access through the Federal program.
    And since 2002, when we started the Conrad--now Conrad 30 
program, we have provided 66 physicians to the people of our 
State. The population of America is 25 percent rural, and yet 
physicians, their practice, only 10 percent of practicing 
physicians have their practice in rural America. So there's a 
tremendous shortage.
    Having outlined the rural nature of my district and my 
focus in Congress, I also would like to point out that the J-1 
visa program is important to urban areas of the country. It is 
not just a rural issue. Many of the core centers of our cities 
face the same dilemma in trying to attract and retain 
physicians.
    It's been my experience that if you are a physician who is 
primarily interested in making money, you will not locate in 
the core of a center of a city. You will not locate in rural 
America because the population base, the patient load is 
generally older. That means that Medicare has a significant 
component of your practice.
    In fact, of the 75 hospitals, many of the hospitals in our 
congressional district--certainly 60, 70, 80, sometimes even 90 
percent of the patients that are admitted to our hospitals are 
on Medicare, which means that Medicare is the sole--is nearly 
the sole provider of the revenue necessary to generate income 
for the hospital or the physician.
    And then on top of that, you add Medicaid, which also is a 
detriment to a physician's income. Underserved areas exist in 
this country, and they exist for a number of reasons, cultural 
as well as economic.
    This has been a successful program in Kansas since its 
arrival in 2002. I know of a number of communities, and I've 
talked to constituents who tell me that but ``absent that J-1 
physician being in my community, I would not be alive today.''
    So it's a matter of economic growth and community 
development, but it is a matter of life and death that people 
can access a physician, and in many cases, it's a J-1 visa 
physician within the confines of their community.
    Rush County Memorial Hospital is located about 25 miles 
from my hometown. Thirty-seven hundred people live in the 
county. They have three J-1 visa physicians. One now, two--a 
husband and wife team, who have now retired. That community has 
been served by J-1 visa physicians for a number of years--
decades, in fact--since the J-1 visa program was--arrived, and 
they now have a physician who has replaced the two who retired.
    Greensburg, Kansas, population 1,500. For the last 10 
years, the only physicians they've had in the county are J-1 
visa physicians. In each of these cases, the community has 
attempted, at least initially, to attract a United States, an 
American physician without success.
    Meade County District Hospital, population of the county is 
about 1,600, 1,700, they made that attempt. Finally were 
successful in obtaining a J-1 visa physician through the waiver 
program. That doctor is now from Romania, has stayed at the 
hospital for 6 years. When he retired and left the community, 
they attracted a J-1 visa physician from the Maldives Islands.
    And finally, the hope--I'm, as you indicated, a supporter 
of community health care clinics. I think they're part of 
access to health care. They're also a part of a way that we can 
reduce health care costs.
    And United Methodist Ministries in Garden City, Kansas, 
which serves a very diverse population, has now been able to 
attract a J-1 visa doctor, originally from Peru, who is 
bilingual and is arriving in August of this year to provide 
services to those with--really, without any insurance, without 
any financial means. And it's only through this J-1 visa 
program that this community health clinic has been successful 
in attracting a physician.
    Mr. Chairman, I am an advocate, a supporter, a--just an 
enthusiastic, and I guess it's not just--it's not based upon 
emotion. It's based upon the reality that absent this program, 
people will not be living, communities will not survive, and 
rural America as well as urban America will have one more nail 
in its coffin.
    So I urge the reauthorization of this program. I'm happy to 
discuss potential amendments in a way that we can meet the 
needs perhaps of Texas, which has perhaps a greater demand than 
the 30 that are allowed, the flexibility to move physicians 
around the country, but also the permanent nature.
    Again, this is an issue that I've lived from the beginning 
of my time in Congress, and it would be nice to have a 
permanent program as compared to us rushing in here always at 
the last minute, trying to get the J-1 visa program 
reauthorized for a short period of time.
    I thank the Chairman and the Ranking Member and the 
gentleman from California for their attention.
    [The prepared statement of Mr. Moran follows:]

 Prepared Statement of the Honorable Jerry Moran, a Representative in 
                   Congress from the State of Kansas

    I am here today to discuss H.R. 4997, the Physicians for 
Underserved Areas Act, which would reauthorize the J-1 Visa Waiver 
program. The J-1 Visa Waiver program provides opportunities for 
graduates of foreign medical schools, who have trained in U.S. medical 
residency programs on the J-1 cultural exchange visa, to stay in the 
United States if they serve for three years in an area that has a 
health professional shortage. These designated health professional 
shortage areas can occur in rural areas as well as urban areas.
    State government agencies may sponsor J-1 physician waiver requests 
under the State 30 program. The State 30 program is designed to provide 
each State up to 30 waivers for physicians each year. Each State has 
been given some flexibility to implement its own guidelines, but there 
are some basic requirements that are common to all State 30 programs. 
The recruitment process takes into consideration the `fit' with the 
practice, the community, and the needs of the physician and family.
    One of my goals is improving access to health care in rural areas. 
It is extremely difficult to recruit health care professionals to 
places where doctors are few and access to major metropolitan hospitals 
requires hours of travel. According to the U.S. Department of Health 
and Human Services, while a quarter of the population lives in rural 
areas, only 10 percent of physicians practice there. This definitely 
highlights the need for the J-1 Visa Waiver program. Today, I would 
like to highlight how this program has benefited my home state of 
Kansas and the predominately rural area which I represent.
    Kansas has been able to recruit 66 physicians to work in 
underserved areas and with underserved populations since 2002. Each 
year, the interest has grown and more and more physicians and hospitals 
are finding that this match is benefiting not only themselves, but the 
communities which they serve.
    The Rush County Memorial Hospital located in La Crosse, Kansas is 
responsible for providing health care to the 3,700 residents of the 
county. With a population that is primarily elderly, having quality 
healthcare is a major concern and requirement.
    After advertising and spending countless dollars and resources 
trying to recruit American born, American trained doctors, Rush County 
Memorial turned to the J-1 Visa program to meet their healthcare needs. 
They have been able to recruit three J-1 Visa physicians into the area 
and would not be able to have top notch healthcare without this 
program. In addition, the physicians have been welcomed into the 
community and warmly received. One physician has stated that this small 
Midwestern town reminds him of his home community in Egypt and has 
started to put down roots by buying a home and getting involved in 
community events. The J-1 Visa Waiver program has been invaluable to 
the Rush County Memorial Hospital.
    Greensburg, Kansas is a small, rural community which has had 
difficulty recruiting physicians in the past. For the last 10 years, 
their physicians have all been J-1 physicians. They have served the 
community well and have been providing excellent health care. The 
current J-1 physician manages 3 mid-level practitioners, provides 
health care to the local assisted living facility and provides care at 
the mental health facility which is located 10 miles from his place of 
residence. However, he still finds time to work a booth at the local 
health fair. For this community, it is imperative that the J-1 Visa 
Waiver program be permanently reauthorized.
    For 15 years, the Meade District Hospital has tried to get an 
American born, American trained physician to move to their rural 
Southwest Kansas hospital and have had no luck. However, through their 
participation in the J-1 Visa Waiver program, they have been able to 
attract foreign born physicians for the last 10 years. The J-1 Visa 
program has helped the hospital provide quality care to their patients. 
They had one doctor, originally from Romania, who stayed in the 
hospital for six years and a current doctor from the Maldaise Islands 
who they anticipate having a long term relationship with as well. The 
J-1 Visa program has been a lifesaver to this hospital and the citizens 
of Meade County.
    Finally, the last success story I will highlight is the story of 
the United Methodist Mexican-American Ministries which is located in 
Garden City, Kansas. They are scheduled to receive their first J-1 Visa 
doctor in August of this upcoming year. This community health clinic 
provides care for many migrant and immigrant families who speak a 
variety of languages including Spanish, German, and French. The new J-1 
Visa doctor is originally from Peru and is highly educated, bi-lingual 
and has tremendous references. The private medical community has been 
supportive of the clinic's efforts to recruit a doctor as the need for 
medical care is great in this area of Kansas. Without the J-1 Visa 
program, this clinic would not be able to get a physician to treat 
their patients.
    People deserve quality health care regardless of their location. 
The J-1 Visa Waiver program is helping many hospitals in my district 
find qualified physicians for their communities and this increases the 
quality of healthcare overall in Kansas. This is a well regarded, well 
run program that is worthy of permanent reauthorization. The Physicians 
for Underserved Areas Act is the way to make this happen.

    Mr. Hostettler. Thank you, Congressman Moran.
    Even though that I must admit that it is a blessing from 
time to time to see your beaming face in front of this 
Committee, that being said----
    Mr. Moran. Mr. Chairman, I might remind you that I was on 
the steering Committee that allowed you to come to the 
Judiciary Committee. [Laughter.]
    And I appreciate that very much because you were senior to 
me in the House Agriculture Committee, and you allowed me to 
become a Subcommittee Chairman when you departed. And I'm very 
grateful for your--for your move.
    Mr. Hostettler. And now we know ``the rest of the story.''
    Mr. Salsberg?

 TESTIMONY OF EDWARD SALSBERG, DIRECTOR, CENTER FOR WORKFORCE 
       STUDIES, ASSOCIATION OF AMERICAN MEDICAL COLLEGES

    Mr. Salsberg. Good afternoon, Chairman Hostettler and 
Ranking Member Jackson Lee and other Members of the 
Subcommittee.
    My name is Ed Salsberg. I'm the director of the Center for 
Workforce Studies at the Association of American Medical 
Colleges.
    AAMC represents all 125 accredited U.S. allopathic medical 
schools, nearly 400 teaching hospitals and health systems, and 
94 academic societies.
    I've been asked to address today the likely future supply 
and demand for physician services and what our medical schools 
and teaching hospitals are doing to assure an adequate supply 
of physicians to meet America's needs.
    Let me state at the outset that the AAMC and our members 
are fully committed to assuring an adequate supply of well-
trained physicians to serve the Nation. Historically, U.S. 
medical schools have responded to the needs of the public and 
policymakers, especially when those needs have been clearly 
articulated and supported by Government programs and policies.
    In the 1960's and 1970's, the U.S. medical school 
enrollment doubled in response to a national need and Federal 
support. In the 1980's and 1990's, allopathic medical schools 
responded to a series of Government reports that clearly 
expressed concern about a pending surplus. And the schools are 
now responding to growing evidence about a future shortage, 
including the recent report by the National Council on Graduate 
Medical Education.
    While we believe our members will respond, we believe more 
can be done, including in terms of Federal support for our 
efforts. Forecasting future physician supply and demand is 
extremely difficult. We're trying to look 10, 20 years out into 
the future, and there are just many, many unknowns.
    But based on our current analysis, we believe that the 
Nation is likely to face a significant shortage in the future. 
That's really reflecting both factors of supply and demand.
    On the supply side, we know there are 250,000 active 
physicians over the age of 55 that will be approaching age of 
retirement. We know that there are reports of younger 
physicians not interested in working the long hours that 
physicians did in the past.
    On the demand side, the Nation is growing rapidly, adding 
25 million additional Americans every decade. We know that the 
elderly will double between 2000 and 2030. That's critical 
because the elderly use far more services than a younger 
population.
    And I think also the increasing wealth of the Nation and 
the expectations of the baby boom generation lead us to 
conclude the demand for health services, particularly physician 
services, will be rising in the future and that the supply will 
not be keeping up.
    A comment about international medical school graduates who 
are really a critical source of--component of the physician 
workforce. International medical school graduates represent 25 
percent of our active physicians in America and 25 percent of 
the physicians in training.
    As you mentioned, we are hearing of growing concerns 
internationally about the impact of the migration of physicians 
from less developed to more developed countries, and this is an 
issue of concern.
    The AAMC has recommended a number of actions to better 
assure an adequate supply of physicians in the coming years. 
First, last February, the association adopted a position of 
recommending that U.S. medical schools increase their 
enrollment by 15 percent.
    We're now considering a recommendation to our members that 
they increase enrollment by 30 percent. That would be equal to 
about 5,000 additional graduates each year. We've seen some 
response already, and I'll come back to that.
    A second important step would be to raise the caps on 
Medicare-funded GME positions. Our medical schools are 
beginning to respond, but they're clearly concerned that in the 
absence of an increase in the cap on residency positions, that 
their efforts to increase the physician supply will not lead to 
that end.
    Third, we reiterated our commitment to the importance of 
having a diverse, culturally diverse physician workforce that 
reflects the Nation.
    Fourth, we've recommended and feel it's critical that we 
expand the National Health Service Corps. That really is 
probably the most effective national strategy to assure 
redistribution of physicians to underserved areas.
    And fifth, we support efforts to expand data collection and 
analysis on an ongoing basis to assure that the medical 
community and the public are aware of what the future physician 
workforce needs are.
    In that regard, we are concerned with the elimination last 
year of about 50 percent of title 7 funding, one of the only 
sources of funding for medical education, including medical 
education in rural communities. And also eliminated was the 
support for the national center and the regional centers for 
health workforce data collection.
    Let me just note that the U.S. medical schools are 
responding. More than half of the U.S. allopathic schools have 
indicated their plans or serious consideration for expanding 
over the next several years. We also expect to see five new 
allopathic schools in the coming years.
    Overall, we see about a 10 percent increase in U.S. medical 
school enrollment in the pipeline now, and we hope to see more.
    I think--in closing, I think U.S. medical schools have 
begun to respond to the calls for an expansion. We could use 
your support. A positive signal from the Federal Government, 
such as the restoration of title 7 funding, lifting of the 
Medicare GME caps, and expansion of the National Health Service 
Corps would go a long way to inform and support the efforts of 
U.S. medical schools to expand their capacity.
    I thank you for the opportunity to speak to you today and 
would welcome any questions.
    [The prepared statement of Mr. Salsberg follows:]

                 Prepared Statement of Edward Salsberg




                              ATTACHMENT 1



                              ATTACHMENT 2



    Mr. Hostettler. Thank you, Mr. Salsberg.
    Mr. Crosby?

  TESTIMONY OF JOHN B. CROSBY, J.D., EXECUTIVE DIRECTOR, THE 
                AMERICAN OSTEOPATHIC ASSOCIATION

    Mr. Crosby. Thank you very much, Mr. Chairman and Members 
of the Committee.
    The AOA is honored to be here, representing 56,000 
osteopathic physicians in the United States, and we're honored 
to be working with Congressman Pomeroy and Congressman Moran on 
addressing these critical issues of access to health care in 
rural America and other underserved areas.
    Let me make clear at the outset, the AOA is not opposed to 
H.R. 4997. We acknowledge the positive results from the J-1 
visa and Conrad programs, and they've helped many rural 
communities over the years.
    What we are concerned about, however, is that policy 
objectives today are not addressing U.S. osteopathic and 
allopathic medical schools and their needs to better meet these 
critical issues. Let me reiterate, the AOA is concerned that 
U.S. graduate medical education programs are not prepared to 
meet the physician workforce demands of 2020.
    Right now, I'm not going to go over the statistics, but 
there are about 96,000 residency positions in the United 
States. By the year 2015, assuming there are still 24,000 PGY-1 
programs around, M.D.s will need another 20,000 positions than 
they have today, and D.O.s will need another 5,000 positions.
    Mr. Chairman, you mentioned in your remarks that you were 
interested in what the U.S. medical schools and physician 
community were doing to address these needs. We have--in the 
osteopathic community, since 1991, we have opened up 8 new 
medical schools, and we have 6 additional medical schools on 
the drawing board as we speak.
    Since 1990, osteopathic physicians have grown in number by 
67 percent. We represent 6 percent of all physicians in the 
United States now, 8 percent of the military, and 22 percent of 
all physicians practicing in rural and underserved parts of the 
United States.
    We have 23 colleges of osteopathic medicine right now. And 
speaking of rural America and underserved areas, some of our 
newest schools have gone into Appalachia, into the rural West. 
We're working with Indian health centers, Eskimo populations, 
and others.
    And our newest school is probably going to be in Harlem, 
New York, to meet the underserved needs of the inner city. So 
we're very proud of what we have done in terms of making a 
commitment to rural care.
    There are several things you can do to address U.S. health 
care needs in this regard. First of all, you can assist us in 
helping to expand the class sizes and increase the number of 
new medical schools, as Dr. Salsberg and others have advocated.
    You can focus more attention on training primary care 
physicians and general surgeons, largely through the Medicare 
physician payment system, which right now has a bias against 
those two areas of training and practice.
    You can increase the training capacity in the United 
States. As Dr. Salsberg said, we support the AAMC in 
eliminating the cap from the Balanced Budget Act of 1997, which 
limits the number of residency training programs for U.S. 
trained physicians as we speak today.
    You can provide financial assistance to rural hospitals who 
would like to start up teaching programs. Right now, it takes 
about 18 months before you get your first dollar from Medicare 
if you want to start a teaching program. Provide them a loan. 
Tie it to primary care. Target it to rural communities, and you 
can do a lot to establish new training programs here in the 
United States.
    And again, as I said, tie it to primary care. You can 
improve graduate medical education training programs that 
foster training in rural settings, particularly nonhospital 
settings. Congressmen Hulshof and Talent have introduced H.R. 
4403, the ``Community and Rural Medical Residency Preservation 
Act of 2005.'' Your support of that legislation would go a long 
way.
    And expanding scholarship and loan repayment programs to 
provide incentives for physicians practicing in rural 
communities would go a long way. Provide an annual tax credit 
equal to the amount of interest that they pay on their student 
loans, and also expand the current scholarship and loan 
repayment program to allow physicians to fulfill their 
commitment to rural communities on a part-time basis as well as 
the full-time basis currently provided by law.
    We are deeply appreciative of your leadership on this 
critical issue. We welcome this opportunity to address these 
concerns. And again, we do not oppose H.R. 4997, but we think 
you can do a great deal to expand training for U.S. educated 
osteopathic and allopathic physicians.
    Thank you very much.
    [The prepared statement of Mr. Crosby follows:]

                  Prepared Statement of John B. Crosby

    Chairman Hostettler, Ranking Member Jackson Lee, and distinguished 
members of the Committee. My name is John Crosby. I am the executive 
director of the American Osteopathic Association (AOA). The AOA, which 
represents the nation's 56,000 osteopathic physicians and 12,000 
osteopathic medical students, is honored to be here today to discuss a 
very important issue-access to physicians in rural and other 
underserved communities. We believe that by increasing training and 
workforce opportunities through recruitment and placement of U.S. 
trained osteopathic physicians you can improve access to physician 
services in rural communities and better address the global health 
needs by encouraging U.S. trained foreign medical graduates to return 
home to provide care to underserved populations.
    We recognize that many communities face limited access to 
physicians and physician services. This is especially true in rural 
communities. We applaud the efforts made by state governments, the 
federal government, Members of Congress, and rural communities to 
increase physician access for their citizens.
    For more than 130 years the AOA and the osteopathic profession have 
been dedicated to educating and training the future physician 
workforce. Consistent with our mission, we remain committed to 
producing primary care physicians who will practice in rural and other 
underserved communities. This mission has been a tenet of the 
profession since it's founding in the late 1800's. Today, more than 
sixty-five percent of all osteopathic physicians practice in a primary 
care specialty (family medicine, internal medicine, pediatrics, and 
obstetrics/gynecology). Each year, more than 65 million patient office 
visits are made to osteopathic physicians.
    Over the past fifteen years we have enjoyed tremendous growth. 
Since 1990 the number of osteopathic physicians has increased sixty-
seven percent. Currently, osteopathic physicians represent six percent 
of the total U.S. physician workforce and over eight percent of all 
military physicians. However, twenty-two percent of osteopathic 
physicians practice in a designated medically underserved area (MUA) 
(Map 1). Throughout our history the osteopathic profession has placed 
an emphasis on primary care and rural service. Our colleges of 
osteopathic medicine have embraced this mission. Through the years, new 
colleges of osteopathic medicine have been established in some of the 
nation's most medically underserved regions (Map 2).
    The issues facing our nation's rural health care system are 
complex. We do not suggest that there are easy answers, but we do 
believe that there are policies that would increase our ability to meet 
these needs. The following pages outline several recommendations. These 
recommendations promote the ability of the AOA and our allopathic 
colleagues to meet the needs of rural communities without placing a 
greater dependence upon international medical graduates. Additionally, 
we believe that the implementation of these recommendations will allow 
the U.S. medical education system to meet its responsibilities of 
training international physicians who will return home and provide 
quality of care to their citizens. As a result of these two missions, 
we fulfill our joint goal of improving health care for all Americans 
and sharing our expertise with other countries as a means of improving 
global health.

                    INTERNATIONAL MEDICAL GRADUATES

    The U.S. health care system is widely recognized as the most 
advanced in the world. The rapid development of new diagnoses and 
treatments outpaces those in other countries. We are the world's leader 
in medicine and medical technology. In this role, we should share our 
expertise with the world. For this reason, the AOA supports the 
continued acceptance of international medical graduates (IMGs) into the 
U.S. graduate medical education system. By training international 
physicians, we can improve the health care delivery systems around the 
world by improving the quality of the physicians. However, this 
transfer of knowledge and skills cannot take place if international 
physicians do not return to their home countries.
    The United States should not be an importer of physicians. 
Physicians should come to the U.S. to train and then return home. The 
``brain drain'' in many countries is well documented. Many countries 
lose their best and brightest young physicians to the United States and 
other English-speaking countries. The AOA believes that policies should 
facilitate the opposite result. International physicians should come 
here to train and should not be encouraged to stay upon completion of 
their training. In fact, we should require that they return to their 
home countries and practice medicine for an extended period of time 
before they are eligible to petition for a visa, J-1 or otherwise.
    In 2006, almost 9,000 IMGs participated in the National Residency 
Matching Program (NRMP). Of these applicants, approximately 6,500 were 
not U.S. citizens and 2,500 were U.S. citizens who attended a foreign 
medical school. Almost fifty percent of all IMGs match to first year 
residency positions. In 2006, the total number of IMGs who matched to 
first year positions increased to 4,382.
    Of the 6,500 IMG participants who were not U.S. citizens, 3,151 
(48.9%) obtained first year positions. 2006 was the fifth consecutive 
year that the number of non-U.S. citizen IMGs matching to first year 
positions increased. Of the 2,500 U.S. citizen IMG participants, 1,231 
(50.6%) were matched to first year positions. 2006 was the third 
consecutive year that the number of U.S. citizen IMGs matching to first 
year positions increased. The total number of IMGs filling first year 
residency positions will be much higher than the approximate 4,400 who 
secured positions through the NRMP. Many IMGs are able to secure 
residency training positions outside the match. All of these IMGs are 
allopathic physicians (MDs) and none are osteopathic physicians (DOs).

                          PHYSICIAN WORKFORCE

    Many experts now believe that the United States will face a 
shortfall in its physician supply over the next twenty years. While 
academic and policy experts debate the needs and expectations of the 
future physician workforce, the AOA recognizes that we must begin to 
educate and train a larger cadre of physicians, now. The time it takes 
to educate and train a physician is, at minimum, seven years. This 
means that a student accepted in the matriculating class of 2006 will 
not enter the physician workforce until at least 2013. Due to the time 
required to educate and train future physicians, we believe a 
concentrated effort must be focused on increasing capacity over the 
next five years. If handled appropriately, the country could increase 
the physician workforce dramatically by 2020.
    Reliance upon the J-1 Visa program is neither the most effective 
nor the most desirable way to increase physician supply in rural 
communities, although we recognize that the program can provide short-
term relief. The J-1 program is not capable of meeting the physician 
workforce needs of our nation and should not be promoted for this 
purpose. Yes, a few states and communities have physician services as a 
result of the J-1 program. However, thousands of rural communities 
remain without physician services. The AOA supports increasing our 
capacity by adopting policies that encourage larger numbers of U.S. 
educated and trained physicians to practice in rural and underserved 
areas. An increase in U.S. educated and trained physicians, if properly 
selected and trained, will lead to a more predictable and reliable 
physician workforce and is more likely to produce larger numbers of 
physicians who will practice in rural communities.
    Currently, there are 23 colleges of osteopathic medicine. Twenty of 
those are operating on 23 campuses. Three of those are in formation 
having recently received pre-accreditation. In 2006, these colleges 
will graduate approximately 2,925 new osteopathic physicians. In 2008, 
the number of graduates will increase to 3,463. By 2013 the number of 
osteopathic physicians graduating from colleges of osteopathic medicine 
is projected to reach 4,706.
    The AOA, like the Association of American Medical Colleges, 
requires maintaining of quality educational standards while class sizes 
are increasing. Additionally, we anticipate the establishment of at 
least three additional colleges of osteopathic medicine over the next 
four years. These new colleges, once established and accredited will 
begin educating approximately 500 to 600 new students each. Once fully 
enrolled, our current colleges, along with the new colleges of 
osteopathic medicine, should produce an additional 1,000 physicians per 
year. Assuming a predictable growth pattern, the osteopathic profession 
should produce approximately 5,000 new physicians per year beginning in 
2015.

                       RECRUITMENT AND PLACEMENT

    Medical schools and colleges of osteopathic medicine traditionally 
place significant emphasis on an applicant's academic achievement-grade 
point average, undergraduate degree program, and scores on the Medical 
College Admission Test (MCAT). While I would never suggest that the 
academic standards required for admittance be lowered, I do recommend 
that the nation's medical education institutions begin evaluating 
``other'' factors. An evaluation of the student's life, including an 
evaluation of where the student was raised, attended high school, and 
location of family members, provides an indication of where a future 
physician may practice. For example, an applicant from Princeton, New 
Jersey is less likely to practice in a rural community than an 
applicant from Princeton, Indiana. If the two applicants are equally 
qualified, we should encourage our schools to matriculate the student 
from Princeton, Indiana, an individual more likely to return to rural 
southwest Indiana once education and training is completed.
    Our medical education system must increase its efforts to promote 
both primary care specialties and experience in rural practice 
locations. Over the years, the role of the rural family physician 
became less glamorous than that of the urban subspecialist. Far too 
many medical school students want to be an ``ologist'' instead of a 
general surgeon, family physician, general internist, or pediatrician. 
Our nation's health care system needs specialists and subspecialists, 
but we need far more primary care physicians. Our medical education 
system must place greater emphasis on educating and training primary 
care physicians and general surgeons. These physicians are more likely 
to practice in a rural or small community hospital and are far more 
likely to practice in rural America.

                       INCREASE TRAINING CAPACITY

    Currently, there are approximately 96,000 funded residency 
positions in the United States. Of these positions, international 
medical graduates fill approximately ten percent. The number of 
international medical graduates training in the United States has grown 
steadily over the past decade. The number of funded residency positions 
has been static since the late 1990's when Congress, as part of the 
Balanced Budget Act of 1997, placed a limit or ``cap'' on the number of 
residency slots any existing teaching program may have. With the 
exception of a provision allowing for the establishment of a rural 
training tract, these caps have been unaltered since their 
establishment.
    The residency cap was established at a time when the general 
consensus was that the country had an adequate supply of physicians. We 
now recognize this is not correct. The residency caps established by 
the BBA limit the ability of teaching hospitals to increase training 
programs, thus preventing responsible growth capable of meeting our 
future physician workforce needs. The AOA encourages Congress to either 
remove or increase the cap on the number of funded graduate medical 
education training ``slots'' as established by the Balanced Budget Act 
of 1997.

                    IMPROVE RURAL TRAINING PROGRAMS

    There is an old saying in medical education circles that physicians 
will practice within 100 miles of where they train. While the validity 
of this saying either in a world that is flat or alternatively in an 
era of globalization is unproven, its message rings true. Physicians 
are more likely to practice in settings where they have the most 
experience. While a majority of physician training takes place in the 
hospital setting, it should not be limited to this setting. We need to 
do more to expose medical students and resident physicians to different 
practice settings during their training years.
    A valuable component of graduate medical education is the 
experience of training at non-hospital ambulatory sites. These sites 
include physician offices, nursing homes, and community health centers. 
Ambulatory training sites provide an important educational experience 
because of the broad range of patients and conditions treated and by 
ensuring that residents are exposed to practice settings similar to 
those in which they ultimately may practice. This type of training is 
particularly important for primary care residency programs since a 
majority of these physicians will practice in non-hospital ambulatory 
clinics upon completion of their training. This training also is 
essential to improving access to care in rural communities.
    Congress has long recognized that a greater focus should be placed 
on training physicians in rural and other underserved communities. In 
the 1990s, Congress began to fear that the current graduate medical 
education payment formula discouraged the training of resident 
physicians in ambulatory settings. This opinion was based upon the fact 
that the payment formula only accounted for the resident training time 
in a hospital setting. Through the Balanced Budget Act of 1997, 
Congress altered the payment formula, removing the disincentives that 
existed for training in non-hospital settings. We accomplished this 
goal by allowing hospitals to count the training time of residents in 
non-hospital settings for the purpose of including such time in their 
Medicare cost reports for both indirect medical education (IME) and 
direct graduate medical education (DGME) payments.
    This change in the payment formula was designed to increase the 
amount of training a resident physician received in non-hospital 
settings, enhance access to care for patients in rural and other 
underserved communities, provide an additional education experience for 
residents who are considering practicing in rural communities, and 
provide a recruitment mechanism for rural and underserved communities 
in need of physicians.
    The program appeared to be working as intended. However, in 2002 
the Centers for Medicare and Medicaid Services (CMS) began 
administratively altering the rules and regulations in respect to this 
issue. As a result, CMS intermediaries began denying the time residents 
spent in non-hospital settings. In many cases, hospitals were forced to 
repay thousands of dollars as a result of this administrative change in 
regulations. Many Members of Congress urged CMS to work with interested 
parties to resolve this issue by developing new regulations that 
clarify the appropriate use of non-hospital settings. Unfortunately, 
these conversations have not produced policies that meet the original 
intent of Congress as established in 1997. As a result, hospitals are 
being forced to train all residents in the hospital setting, 
eliminating the valuable educational experiences offered in non-
hospital training sites. Additionally, some teaching hospitals may be 
forced to eliminate residency programs entirely as a result of current 
CMS policies.
    Allowing hospitals to receive payments for the time resident 
physicians train in a non-hospital setting is sound educational policy 
and a worthwhile public policy goal that Congress clearly mandated in 
1997. Additionally, it is good for rural communities. For this reason, 
the AOA encourages Congress to enact the provisions included in the 
``Community and Rural Medical Residency Preservation Act of 2005'' 
(H.R. 4403).
    H.R. 4403 would establish, in statute, clear and concise guidance 
on the use of ambulatory sites in teaching programs. If enacted, it 
will preserve the quality education of resident physicians originally 
envisioned by Congress in 1997. The Medicare program should promote 
quality graduate medical education, rather than impose unnecessary 
barriers.
    The AOA also encourages Congress to establish a new grant program, 
operated by the Health Resource Service Administration (HRSA) that 
would provide ``start-up'' funding for rural hospitals that seek to 
establish new primary care residency programs. For many rural hospitals 
the costs associated with starting a new residency program are 
prohibitive. Due to CMS requirements, hospitals starting new residency 
programs are not eligible for funding for at least 12 months. This lag 
between the actual start-up date and the date of eligibility for 
funding is cited as one of the main reasons more hospitals, especially 
smaller hospitals, do not start teaching programs. The AOA believes 
that numerous primary care residency programs at rural hospitals could 
be established if financial assistance was available to offset the 
associated costs.

       EXPAND PROGRAMS THAT PROVIDE INCENTIVES FOR RURAL PRACTICE

    There are numerous existing programs that provide scholarships and 
loan repayment for physicians who choose to practice in rural 
communities. These programs include the National Health Service Corps, 
Public Health Service, Indian Health Service, and many programs 
operated by state governments. The AOA supports these programs and 
encourages Congress to continue funding them at levels that facilitate 
greater numbers of physicians practicing in rural and other underserved 
communities.
    Additionally, we believe that some consideration should be given to 
allow physicians to participate in the programs on a part-time basis. 
There are numerous communities that need physician services, but they 
may not need them full time. We believe that modifications should be 
made to federal loan repayment and scholarship programs that allow 
participants to repay on a part-time basis in exchange for a longer 
term of service. For example, if a physician participates in the 
National Health Service Corps and agrees to a three-year commitment in 
a rural community--why not allow the physician the option of committing 
to 4 or 5 year's service on a part-time basis. We believe this would 
encourage more physicians to participate in these valuable programs 
without jeopardizing the underlying mission.
    The AOA also proposes a change in the tax code that would provide 
physicians practicing in designated rural communities with a tax credit 
equal to the amount of interest paid on their student loans for any 
given year that they practice in such a community, or until their loans 
are paid in full. Under current law, individuals may deduct up to 
$2,500 in interest paid on student loans from their federal income 
taxes. However, the income thresholds associated with this provision 
often prevent physicians from qualifying. Our proposal would provide a 
direct link between practice location and the tax credit. A physician 
practicing in a rural Indiana who pays $8,000 in interest on her 
student loans in year one would get an $8,000 tax credit for that year. 
The program would continue until the physicians had retired her student 
loan debt or when she departed the rural community. We believe that 
this proposal provides a direct incentive to young physicians and would 
assist in the recruitment and retention of physicians in rural 
communities.

                     IMPROVE ECONOMICS OF MEDICINE

    The current practice environment physicians face is challenging. 
Over the past decade escalating professional liability insurance 
premiums, decreasing reimbursements, and expanded regulations have made 
the practice of medicine more frustrating for all physicians. These 
issues are compounded in rural communities where physicians are often 
in solo practice or small group practices, unable to benefit from 
economies of scale that larger group practices in urban areas enjoy.
    According to a 2004 Health Affairs study, more than half of all 
practicing physicians are in practices of three or fewer physicians. 
Three-quarters are in practices of eight or fewer. They face the same 
economic barriers as every other small business in America. Costs 
associated with staff salaries; health and other benefits, basic 
medical supplies, and technology, all essential components of any 
business, continue to rise at a rate that far outpaces reimbursements. 
When facing deep reductions in reimbursements at the same time that 
their operational costs are increasing, it is safe to project that most 
businesses will not be able to continue operation. While most 
businesses increase, or have the ability to increase, their prices to 
make up the differential between costs and reimbursements, physicians 
participating in Medicare cannot.

          Physician Payment--Unless Congress acts, Medicare physician 
        payment rates will be cut by 4.6 percent on January 1, 2007. If 
        this cut is imposed, Medicare rates will fall 20 percent below 
        the governments measure of inflation in medical practice costs 
        from 2001-2007. If the projected cuts are implemented, the 
        average physician payment rate will be less in 2007 than it was 
        in 2001. Additionally, two provisions included in the Medicare 
        Modernization Act (MMA), which provide increased reimbursements 
        for physicians in rural communities, will expire over the next 
        two years.
          In 2002, physician payments were cut by 5.4 percent. Congress 
        acted to avert payment cuts in 2003, 2004, 2005, and 2006 
        replacing projected cuts of approximately 5 percent per year 
        with increases of 1.6 percent in 2003, 1.5 percent in 2004 and 
        2005, and 0 percent in 2006. Even with these increases, 
        physician payments fell further behind medical practice costs. 
        Practice costs from 2002 through 2005 were about two times the 
        amount of payment increases. Since many health care programs, 
        such as TRICARE, Medicaid, and private insurers link their 
        payments to Medicare rates, cuts in other systems will compound 
        the impact of the projected Medicare cuts. Medicare cuts 
        actually trigger cuts in other programs.
          Additional cuts in Medicare physician payments decrease 
        Medicare beneficiaries' ability to access to physician 
        services. A MedPAC survey conducted earlier this year found 
        that 25 percent of Medicare beneficiaries reported having 
        difficulties obtaining an appointment with a primary care 
        physician. These problems will only increase if additional cuts 
        are implemented. Additionally, reduced payments may prevent the 
        implementation and adoption of new health information 
        technologies.
          Furthermore, reduced payments hamper the ability of 
        physicians to purchase and implement new technologies in their 
        practices. According to a 2005 study published in Health 
        Affairs, the average costs of implementing electronic health 
        records was $44,000 per full-time equivalent provider, with 
        ongoing costs of $8,500 per provider per year for maintenance 
        of the system. This is not an insignificant investment. When 
        facing deep reductions in reimbursements, it is safe to project 
        that physicians will be prohibited financially from adopting 
        and implementing new technologies.
          Physician payments should reflect increases in practice 
        costs. In its 2006 March Report to Congress, the Medicare 
        Payment Advisory Commission (MedPAC) stated that payments for 
        physicians in 2007 should be increased 2.8 percent. Since 2001, 
        MedPAC has recommended that the flawed SGR formula be replaced 
        by a formula based upon increases in physician practice costs 
        minus a productivity adjustment, which would produce annual 
        updates equal to the Medicare Medical Economic Index (MEI).
          Since its inception in 1965, a central tenet of the Medicare 
        program is the physician-patient relationship. Medicare 
        beneficiaries rely upon physicians for access to all other 
        aspects of the Medicare program. This relationship has become 
        compromised by dramatic reductions in reimbursements, increased 
        regulatory burdens, and escalating practice costs. Given that 
        the number of Medicare beneficiaries is expected to double to 
        72 million by 2030, now is the time to establish a stable, 
        predictable, and accurate physician payment formula that 
        reflects the cost of providing care.
          Congress must act to reform the Medicare physician payment 
        formula. Continued use of the flawed SGR formula will have a 
        negative impact upon patient access to care. Additionally, the 
        AOA urges Congress to approve the ``Medicare Rural Health 
        Providers Payment Extension Act'' (H.R. 5118). This legislation 
        includes provisions that extend two important rural physician 
        payment provisions originally enacted through the MMA. H.R. 
        5118 extends, through 2011, a provision that provides equity in 
        how the Medicare program views and evaluates the work of 
        physicians regardless of geographic location. By establishing a 
        1.0 floor for the work geographic practice cost indices (GPCI) 
        under the Medicare physician fee schedule, the MMA reversed 
        years of inequities in payments between rural physicians and 
        those in larger urban communities. The AOA was equally pleased 
        that the MMA included a 5 percent add-on payment for physicians 
        practicing in recognized Medicare physician scarcity areas. We 
        believe that these are essential and positive Medicare payment 
        policies that should be extended, if not made permanent. Both 
        provisions will enhance beneficiary access and improve the 
        quality of care available.
          Medical Liability Reform--As you know, the nation's medical 
        liability system is broken. In recent years physicians across 
        the nation have faced escalating professional liability 
        insurance premiums. According to the National Association of 
        Insurance Commissioners (NAIC), between 1975 and 2002 medical 
        liability premiums for physicians increased, on average, 750 
        percent. These premium increases are related directly to an 
        explosion in medical liability lawsuits filed against 
        physicians and hospitals and the rapid increase in awards. The 
        Government Accountability Office (GAO) confirms this. In a 2003 
        report, the GAO stated that losses on medical liability claims 
        are the primary driver of increases in medical liability 
        insurance premiums.
          As a result of a broken medical liability system patients 
        face reduced access to health care, the overall costs of health 
        care increases, and the future supply of physicians is 
        threatened. Many physicians no longer provide services that are 
        deemed high-risk, such as delivering babies, covering emergency 
        departments, or performing certain surgical procedures. This 
        crisis also impacts primary care physicians, especially those 
        in rural areas who are often the only physician practicing in a 
        community. As a result, patients have seen a decrease in the 
        availability of physician services. Additionally, the medical 
        liability crisis has a significant impact upon the career 
        choices of future physicians. In a recent poll conducted by the 
        AOA, eighty-two percent of osteopathic medical students stated 
        that the cost and availability of medical liability insurance 
        would influence their future specialty choices, while 86 
        percent stated that it would influence their decision on where 
        to establish a practice once their training was complete. This 
        trend in career choices is disturbing and will have a long-term 
        impact upon the health care delivery system in the years ahead.
          We applaud the leadership of this Committee and the House of 
        Representatives in approving the ``Help, Efficient, Accessible, 
        Low-Cost, Timely, Health Care Act'' (HEALTH Act) (H.R. 5). The 
        AOA believes that provisions included in H.R. 5 will prove 
        beneficial in stabilizing the nation's broken medical liability 
        system, thus improving access to physician services.

                                SUMMARY

    Again, the AOA appreciates the opportunity share our views on this 
important issue. We remain committed to working with Congress to enact 
legislation that will ensure access to quality physician services for 
all Americans, regardless of where they reside. In closing we would 
like to highlight five recommendations made in our testimony that we 
believe will lead to improved global health, increase the availability 
of U.S. trained physicians, improve the quality of training for future 
physicians, and improve the recruitment and retention of physicians in 
rural communities.

        1.  International Medical Graduates should be encouraged to 
        return to their home countries to establish practices and, 
        ultimately, improve the quality of care in those health care 
        systems. The United States should not be an importer of 
        physicians, thus contributing to the ``brain drain'' of other 
        countries. By maintaining existing policy that requires IMGs to 
        return home for two years before petitioning for a visa, we are 
        fulfilling a noble mission of improving the health care needs 
        of many countries.

        2.  Congress should consider eliminating the cap on available 
        and funded residency positions in the U.S. This cap hinders the 
        ability of osteopathic and allopathic medical schools to 
        educate and train larger numbers of physicians. To meet the 
        health care needs of our growing population we must have the 
        capacity and financing to train a larger number of physicians.

        3.  Congress should enact the ``Community and Rural Medical 
        Residency Preservation Act of 2005'' (H.R. 4403). This 
        legislation would establish, in statute, clear and concise 
        guidance on the use of ambulatory sites in graduate medical 
        education programs. If enacted, it will preserve the quality 
        education of resident physicians originally envisioned by 
        Congress in 1997.

        4.  Congress should amend the tax code to allow physicians 
        practicing in rural communities an annual tax credit equal to 
        the amount of interest paid on their student loans. We believe 
        that this proposal provides a direct incentive to young 
        physicians and would assist in the recruitment and retention of 
        physicians in rural communities. Additionally, Congress should 
        revise current scholarship and loan repayment programs to allow 
        physicians to fulfill their commitment on a part-time basis.

        5.  Congress should reform the Medicare physician payment 
        formula by eliminating the sustainable growth rate and 
        replacing it with a more equitable and predictable payment 
        structure. Additionally, Congress should enact the ``Medicare 
        Rural Health Providers Payment Extension Act'' (H.R. 5118), 
        extending much need payment incentives for physicians 
        practicing in rural communities.

        
        
        
        
    Mr. Hostettler. Thank you, Mr. Crosby.
    Ms. Aronovitz?

TESTIMONY OF LESLIE G. ARONOVITZ, DIRECTOR, HEALTH CARE, UNITED 
            STATES GOVERNMENT ACCOUNTABILITY OFFICE

    Ms. Aronovitz. Good afternoon, Mr. Chairman and Mr. 
Lungren.
    I am pleased to be here today as you discuss the States' 
authority to request J-1 visa waivers for foreign physicians to 
practice in the Nation's underserved areas.
    My remarks today are based on preliminary findings from our 
ongoing work, which reviews the number of J-1 visa waivers 
requested by States and physicians practice locations and 
specialties, States' activities to monitor compliance with 
waiver agreements, and the States' views on the adequacy of the 
30 waiver per State limit.
    As Ms. Lee mentioned, our work is based on a survey of 50 
States, the District of Columbia, Puerto Rico, Guam, and the 
Virgin Islands. I should mention that we also surveyed the 
three Federal agencies that requested J-1 visa waivers on 
behalf of States in the last few years.
    In summary, we found that J-1 visa waivers remain a major 
means of placing physicians in underserved areas, with more 
than 1,000 waivers requested in each of the past 3 years for 
physicians to practice in nearly every State. We also found 
that in fiscal year 2005, States made more than 90 percent of 
the J-1 visa waiver requests, with the 3 Federal agencies 
making up the rest.
    Every State, except Puerto Rico and the Virgin Islands, 
made requests last year, though the number varied considerably 
among the States. For example, about a quarter of the States 
requested the maximum of 30 waivers, while another quarter or a 
little bit over--about 29 percent of them--requested 10 or 
fewer waivers.
    Collectively, the States requested 956 waivers, or about 60 
percent of the total that were available to all the States 
collectively.
    In terms of demographics, about 44 percent of the States' 
waiver requests were for physicians to practice only primary 
care, and about 41 percent were for physicians to practice only 
specialties, such as cardiology. More than three quarters of 
the requests were for physicians to work in hospitals or 
private practices.
    Regarding monitoring, while States do not have an explicit 
responsibility for monitoring and overseeing the physicians 
compliance with waiver agreements, most reported conducting at 
least some monitoring activities. For instance, requiring 
periodic reports on whether the intended population in these 
facilities were actually being served or conducting site 
visits.
    Regarding States' views on the 30 waiver limit, about 80 
percent of the States, including many that requested close or 
all of the waivers--the 30 waiver limit--felt that the 30 
waiver limit was adequate for their needs. However, 7 States 
reported that this limit was less or very much lower than what 
they needed.
    When asked--when we asked the States if they needed more 
waivers, interestingly, 7--excuse me, 11 States said that they 
needed a total of 200 more waiver physicians. And this included 
4 States that said the limit was adequate, but they still 
reported needing more physicians.
    Regarding distribution of unused waivers, of the 44 States 
that did not request their 30 waiver limit--10 States did, 44 
did not--25 of those 44 States said that they would be willing 
to have their unused waiver allotments redistributed at least 
either willing or willing under certain circumstances.
    And for example, some of these circumstances involve their 
willingness if they were--if it were--it depended on the timing 
of the distribution. They would not want it done in the first 
half of the year, when there was a chance that they still might 
be able to attract some physicians toward the end of the year.
    Others said they wanted to be sure that their needs were 
met before they would give up their waivers. Others advocated 
for a regional distribution approach, while still others 
mentioned possible compensation, perhaps an exchange of unused 
waiver allotments for more flexibility for the waivers that 
they did use.
    Finally, several States mentioned that they would not want 
redistribution in 1 year to affect the number of waivers that 
they received to be able to ask for in another year.
    In contrast to these 25 States, 14 States reported that 
they would not be willing to have their unused waiver 
allotments redistributed, and they were very concerned about 
the reduction in the number of physicians seeking to practice 
in their States. They felt that if, in fact, physicians knew 
that there was a redistribution program, they might wait until 
a more preferred location in another State cropped up before 
they applied for the position in a less desirable State.
    What remains unclear and what we could not determine is 
whether any redistribution approach would simply move waiver 
physicians from one State to another or instead increase the 
overall pool of physicians seeking waivers to work in 
underserved areas.
    I'm happy to elaborate on my findings or answer any other 
questions that you may have.
    [The prepared statement of Ms. Aronovitz follows:]

               Prepared Statement of Leslie G. Aronovitz



    Mr. Hostettler. Thank you very much, Ms. Aronovitz.
    At this time, we will turn to questions from the panel. 
First of all, Ms. Aronovitz, you state that there has been a 40 
percent decline in the past 10 years of physicians using the J-
1 visa to come to the U.S. for medical training. Can this be 
attributed to increased usage of the H-1B visa?
    Ms. Aronovitz. We don't really know. There are no data that 
really break out the physicians using H-1Bs and J-1s 
specifically for that comparison.
    But a lot of the States who have answered our survey and 
other work we've done have contemplated different reasons. And 
one of the reasons that some States believe there is a 
reduction is the fact that H-1B visas are being used. So that 
is a valid thought on the part of very many people.
    Mr. Hostettler. Thank you.
    Congressman Moran, as you testified, the J-1 visa has been 
instrumental in providing physicians to underserved areas all 
across your district. The National Health Services Corps, as 
you know, through HHS provides loan repayment for U.S. citizen 
health care providers who agree to work in rural areas as well 
as scholarships to individuals who will dedicate time of 
service in rural areas.
    Is your experience with that program such that you believe 
that that could be expanded ``in lieu of'' the J-1 visa 
program? Do they complement one another? How would you----
    Mr. Moran. Mr. Chairman, I was about to answer your 
question ``yes'' until you said ``in lieu of.'' I do think that 
both programs are very important. They attract, they focus on 
additional resources to provide health care providers, but 
they're two different populations. They serve the same 
population, but you're dealing with different applicants, 
different types of physicians, folks who come to the health 
care profession in different ways.
    And so, both are very important to us. I would not at all 
diminish the role that the National Health Service plays in 
helping provide physicians, encouraging physicians to locate in 
underserved areas. But I don't envision, based upon even the 
testimony we've heard today, the number of physicians that are 
available from U.S. medical schools remains so tight that I 
think it takes both programs and even more to meet the needs of 
underserved areas.
    So clearly not in lieu of and any way that we can expand 
and create a greater incentive. One of the things--we have our 
own State program as far as loan repayment for physicians 
through a State law. And many physicians have discovered that 
they can have their loans paid off through recruitment process 
if they'll locate to a more urban or suburban setting.
    And so, with the loan program opportunities that are there, 
I think that just because more money can be made elsewhere, 
we're inducing a number of our physicians to--even though they 
have the loan program--to have their loan paid off by a 
community that's recruiting them to a different setting.
    Mr. Hostettler. Thank you.
    Mr. Crosby, as you note in your testimony, one of the goals 
of the osteopathic profession is training primary care 
physicians for rural areas. How do you recruit and attract 
students to your colleges and specifically to serve rural 
areas?
    And a second question would be do you believe that the J-1 
visa waiver program for physicians should be expanded, as some 
have suggested, if not here, then elsewhere?
    Mr. Crosby. I really couldn't comment on the second 
question in terms of expansion of the J-1 program itself. But 
again, if there's a more specific question in terms of 
supporting that, I'd be happy to address it.
    With respect to your first question, I'll just give you the 
example, Mr. Chairman, one of our newest schools is in 
Pikeville, Kentucky, the heart of Appalachia. And what they do 
is through the application process, try to recruit entering 
osteopathic medical students from the region who want to go 
into primary care and pledge to stay in that part of the 
country to practice medicine.
    And about 80 percent of the students coming in want to go 
into primary care, and they've graduated two classes now, and 
80 percent are staying in Kentucky, northern Tennessee, West 
Virginia, to do just that. So if you tie the application 
process and you screen the applicants with the right mind set, 
I think you can achieve those goals.
    Mr. Hostettler. Thank you.
    Mr. Salsberg, is it fair to say that a number of qualified 
potential medical students are turned down each year because 
there is a shortage of medical school slots?
    Mr. Salsberg. Yes, we think there are many Americans who 
would be qualified to go to allopathic medical schools if we 
expand our capacity. That's one of the reasons we've 
recommended the expansion among our members.
    Mr. Hostettler. Thank you.
    The Chair recognizes the gentlelady from Texas, Ms. Jackson 
Lee, for 5 minutes.
    Ms. Jackson Lee. I thank the Chair very much.
    I think I want to be clear on the record that I do not 
believe the J-1 visa is a replacement for the growing need of 
physicians here in the United States. And I do think it's 
important that even beyond the jurisdiction of this Committee, 
that we focus the Congress on what is obviously a rising need 
that will reach, I think, a crisis level sometime over the next 
decade. And that is, of course, the need for doctors across 
America.
    At the same time, I think that we have solutions that we 
can address and utilize as we speak, and so I think it's 
important to look at the immediacy of the problem and address 
it accordingly.
    Congressman Moran, you've heard me make several points 
which I am interested in, and I will have a document to submit 
from the--and I ask unanimous consent to submit the statement 
of the National Health Care Access Coalition into the record, 
Mr. Chairman.
    Mr. Hostettler. Without objection.
    Ms. Jackson Lee. And I'll also take some quotes from this. 
But would you support a redistribution of the unused visa 
waiver shots--slots, rather?
    Mr. Moran. Well, I was interested in the testimony of the 
GAO. I do think, and I wouldn't want to admit that my State is 
one of those that would consider itself a less desirable 
location. But I do know that there is a fear among some States 
that if redistribution is allowed, that physicians are less 
likely to locate in what at least a physician considers to be a 
less desirable location for practice.
    I think this is--on the other hand, I think that it's 
important that those States who desperately need additional 
physicians and--have access to those physicians. So I think 
there is a way----
    Ms. Jackson Lee. We have to fix it, so that we don't--we 
don't----
    Mr. Moran. We don't want to discourage the least--``the 
least desirable'' locations from being----
    Ms. Jackson Lee. Allegedly. Allegedly.
    Mr. Moran. Allegedly. But we also need to recognize there 
is a demand in States. Texas has to be an example. It's just 
such a large State, that 30 in Kansas is much more beneficial 
than 30 in Texas.
    Ms. Jackson Lee. Absolutely. And I will cite some evidence 
of that. But let me also get your thoughts because this is what 
this Committee will have to address. The Chairman mentioned it. 
The movement away from J-1 visas to the H-1B visas, and do you 
have some thoughts on how we can legislatively address that 
question because it is a real concern?
    Mr. Moran. Well, I've not given a lot of thought to the H-
1B visa issue. It is a competitor to this program, and the 
distinction is that it doesn't meet the needs of underserved 
areas. And so, from my perspective, we--for reasons of access 
to health care and reasons of health care costs--we need more 
physicians serving patients in the United States.
    And so, I wouldn't want to take away from the physicians 
that come here under the H-1B. But clearly, we've got to focus 
the efforts at those areas of the country, urban cities and 
rural America, that desperately need physicians.
    I think that, generally, we're going to find that the more 
prosperous areas of the country will be able to obtain 
physicians, and so the competition between the two programs I 
think has to be--the balance of that has to be in favor of 
those places that are underserved. It's a life and death issue.
    Ms. Jackson Lee. Having the Texas Medical Center near and 
around my congressional district and parts of it in my 
congressional district, the distinction is important. The J-1 
visa is temporary, and I think whatever reform we do--whether 
it's an extension and other aspects that we need to reform, we 
should focus on that--that they go to underserved areas and 
they are immediate.
    H-1B visas are individuals in on research, post docs, 
specialties that allow them to go to the choice areas. In fact, 
the medical centers and prime hospitals and others use H-1B 
visas to get the talented of the talented.
    Not in any way to deflect on the J-1, but they are in a 
different category, and I think we should note that. So that we 
don't undermine the value that J-1 visas have, and there is 
that distinction that should be made.
    Mr. Moran. We can't blur that distinction because we will 
lose the effectiveness of the J-1 visa program.
    Ms. Jackson Lee. I agree with you. Let me ask Ms. 
Aronovitz. You didn't get a sense, and you're in the midst of a 
study, or have you----
    Ms. Aronovitz. Yes. We have--we do have our results. We 
haven't analyzed them fully yet. But we do have some 
preliminary results.
    Ms. Jackson Lee. Then the basic--you get a sense that those 
who are participating or States that are participating view the 
J-1 visa as a positive asset to improving or assisting them in 
health care in their States, respective States?
    Ms. Aronovitz. Most definitely. And as I said, most every 
State last year used at least one of their visa waiver slots.
    Ms. Jackson Lee. So you did not come away, though you're 
still analyzing, with a massive call for elimination?
    Ms. Aronovitz. That's correct.
    Ms. Jackson Lee. Mr. Chairman, may I ask unanimous consent 
to put the statement--I asked that. But also--and I will quote 
from them, the Texas Department of State Health Services. I ask 
unanimous consent to put that letter in the record as well.
    Mr. Hostettler. Without objection.
    The Chair recognizes the gentleman from California for 5 
minutes. Mr. Lungren?
    Mr. Daniel Lungren of California. Thank you very much, Mr. 
Chairman.
    Mr. Moran, I was not in Congress when this program was 
first established, but it obviously was established on a 
temporary basis. Was that because it was to be a pilot project?
    Was that because there was a thought that this need for 
underserved areas would be a stopgap in that somehow we were 
going to, through other mechanisms, provide for these 
underserved areas? What was the nature of the short term or 
sunset of it?
    Mr. Moran. Mr. Lungren, I have the same excuse that you do. 
I was not in Congress when the program was started, and there 
may be others that have the expertise at the table to answer 
your question.
    The Conrad 20 program in 1994, I think, was an effort to 
give States an opportunity that they did not have, and the 
Federal Government's process was so slow and cumbersome for the 
J-1 visa program administered by Federal agencies that my guess 
is that Congress said let's try this. Let's see how it works. 
And I think the results today, 10 years later, is it is 
important and vital.
    I also know that in the timeframe which I was here, part of 
the issue was related to the extension followed post 9/11, 
followed 9/11. And there was interest in making the program 
temporary so that we could determine that the necessary 
security risks were being evaluated by now our Department of 
Homeland Security to make certain that those visas that were 
being approved in no way were causing any threat to the 
national security.
    So I think we've been through a series of times in which 
Congress wants to see how the program is working. And then, 
most recently, it's been let's make certain that there are no 
security risks involved in the program.
    Mr. Daniel Lungren of California. In my first tenure as a 
Member of Congress, I recall we were dealing with the question 
of underserved areas at that time. And there was some question 
as to why these were underserved areas. I mean, we don't want 
to use the word ``choice'' areas versus ``nonchoice'' areas.
    And one of the things that I recall being discussed at that 
time was that physicians like to be kept up to date in their 
profession. That they are assisted in doing that by being 
surrounded by other physicians, by quality medical staffs, by 
having some access to teaching hospitals, if at all possible.
    And so, in some ways, people were suggesting at that time 
or a number of voices suggested at that time we needed stopgap 
measures to have doctors go for short periods of time to 
underserved areas, knowing they wouldn't stay there for a long 
time.
    But there was the hope expressed that with technology in 
the future, that physicians might look at some of these areas 
as the choice areas for living purposes and that technology 
would allow them to fill that gap of information and reflection 
and exposure to colleagues and to outstanding teaching 
hospitals and teaching centers.
    I guess my question would be to all of you on the panel, if 
you would give me some idea as to whether that last thought has 
proven to be unsuccessful or that it has, in fact, proved that 
we can attract more physicians to these areas that were 
previously underserved. And I'm talking about rural areas, as 
opposed to inner city right now.
    And that would help me in looking at the legislation as to 
whether or not when we make it permanent, we're making it 
permanent because we think this is going to continue to be a 
problem forever. Or is this--have we not seen any change in 
terms of attracting doctors to the more rural areas in spite of 
the fact that they now have these technological fixes in a 
sense to be able to keep up with the practice, be exposed to 
new possibilities in medicine and so forth?
    Mr. Moran. Mr. Lungren, I can only speak from my 
experience, and I've worked with communities to recruit 
physicians. It does not seem to me that circumstances are 
getting any better, that the challenge is just as great as it 
has been in the past, and it's related to not only the issue 
that you suggest about the desire of collaboration with other 
physicians.
    It's issues related to lifestyle and the sense of 
physicians today do not want to be on-call 7 days a week, 24 
hours a day. And that's often the necessary practice in a small 
community. It's much easier----
    Mr. Daniel Lungren of California. They're not going to 
Tuesday to Thursday schedules, are they?
    Mr. Moran. We have not gone to Tuesday to Thursday 
schedules. But with the arrival of advanced nurse 
practitioners, physician assistants, I think that's the one 
bright spot that I see as far as attracting and retaining 
physicians in rural America. We have additional assistant help.
    We do have telemedicine that's available in my State. It's 
more now used for some consultation with experts, specialists 
at the University of Kansas School of Medicine. But more likely 
than not and perhaps unfortunately, it's used for continuing 
medical education for not only physicians, but nurses. It has 
not become a replacement for hands-on physician practice.
    Mr. Hostettler. The gentleman's time has expired. Without 
objection, the gentleman will be yielded an additional 2 
minutes for the rest of the panel to respond.
    Mr. Crosby. Congressman, I think you raise a very good 
point. Technology offers a lot of promise in rural areas. Our 
own organization now provides 9 hours of credit for continuing 
medical education programs that doctors can get over the 
Internet. And their access to the latest information from the 
New England Journal of Medicine to a news-breaking development 
with pharmaceuticals or whatever is immediate access.
    However, there are also I think a changing environment in 
terms of just lifestyle. I met--I was in Des Moines last week. 
I met a young doctor who had started out in Phoenix, got fed up 
with managed care, and has relocated to rural Iowa just because 
he wanted a different style of practice, which was very 
attractive to him.
    The one thing that I don't think you can answer in terms of 
rural areas with technology or not is the whole sense of 
camaraderie, which you mentioned in your opening remarks.
    Another young physician that the National Health Service 
Corps sent out to an island off of Alaska would see 90 patients 
a day, but he couldn't last more than 2 weeks without having to 
fly to the mainland just to see other physicians, talk to them 
about things that had come up in his practice, and basically 
cope with that emotional stress of being out there alone 
without anybody else to fall back on if you need it.
    But technology will answer a lot of questions over time. It 
already is.
    Ms. Aronovitz. One thing I can add is in our survey, we 
actually asked States whether they've seen an increase or a 
decline in interest in J-1 visa waiver physicians applying to 
the different States, and it was an open-ended question, and 
only 21 States chose to answer the question.
    But of the 21, 15 States said that they've seen a definite 
decline in interest or in the number of applications by J-1 
visa physicians or visa holders. Six States, on the other hand, 
said they've actually seen an increase specifically in 
nonprimary care areas, like specialists.
    But two-thirds of the ones that answered really did see a 
decline, and some actually attribute it to the possibility that 
physicians were coming for graduate medical education on H-1Bs.
    Mr. Salsberg. You know, the problems of physician 
distribution have been with us for a long time and are likely 
to be with us for a long time. And as I mentioned earlier, I 
think looking at the comprehensive situation, looking at the 
National Health Service Corps is really the best strategy.
    Relying on J-1 visa physicians, who are making an important 
contribution but are a shrinking number, has to be of concern 
as the number of underserved areas, about 20 percent of 
Americans live in federally designated underserved areas. So 
the J-1 stream is clearly not going to be a sufficient stream 
in looking at the whole question of how can we help address 
maldistribution is really what we would recommend.
    Mr. Hostettler. I thank the gentlemen.
    The Chair will now entertain a second round of questions, 
and I will ask just one question in that second round. And that 
is of you, Ms. Aronovitz.
    You note in your testimony that, in 1995, the number of 
waivers for foreign physicians exceeded the number of 
physicians participating in the National Health Service Corps 
that I mentioned earlier, the primary means for providing 
physicians to underserved areas.
    Was there a decline in the usage of the NHSC, the National 
Health Services Corps, as a result of the increased usage of 
the waiver program, or does your data--can your data tell you 
that?
    Ms. Aronovitz. We have--we don't have enough detailed data 
to really understand some of the implications. But clearly, we 
haven't seen that strong a relationship or that correlation. 
And in fact, now we see that J-1 visa waiver physicians 
represent about one and a half times the number of National 
Health Service Corps doctors that are in the field.
    Mr. Hostettler. Thank you. That's helpful.
    The Chair recognizes the gentlelady from Texas for purposes 
of second round of questions.
    Ms. Jackson Lee. Thank you, Mr. Chairman, and I should be 
narrow in my comments.
    I think the answer to your last question really has to do 
with what has been noted by the National Health Care Access 
Coalition, which is the numbers suggest that we need to expand 
to 200,000 doctors, and that there are currently only fewer 
than 800,000 doctors and that there will be a growing shortage 
over the next, as I indicated, couple of decades. So we're 
facing a shortage, and I think there have been many suggestions 
here that we could utilize.
    Mr. Crosby, I just--what is the training of your physicians 
in your specialty?
    Mr. Crosby. Osteopathic physicians have the exact same 
training as allopathic physicians. Go to 4 years of medical 
school. Perhaps an internship, and then 3 or 4 or 5 years of 
residency training.
    We deliver babies. We do neurosurgery. We provide 
osteopathic manipulative treatment. The whole scope of care is 
available through osteopathic physicians, and we're proud to 
have one of our medical schools in the Forth Worth/Dallas area. 
Sorry it's not in Houston.
    Ms. Jackson Lee. And the name of it?
    Mr. Crosby. The Texas College of Osteopathic Medicine, 
affiliated with the University of North Texas.
    Ms. Jackson Lee. And I think, as I listen to you, I think 
you even with the expanded ideas that you've offered, and I 
happen to support a lot of them----
    Mr. Crosby. Thank you.
    Ms. Jackson Lee [continuing]. That you still fall in a 
category that what you're wanting, we've got to produce more?
    Mr. Crosby. Yes.
    Ms. Jackson Lee. And you have my wholehearted support on 
that issue, and I'm going to be studying your testimony quite 
extensively because I think there can be some cross-
pollenization between, though one might not think, Judiciary 
and the Energy and Commerce.
    I think that does not speak to or speak against the 
immediacy of the J-1 visa, which I want to keep in a temporary 
framework.
    And I will offer then simply, Mr. Chairman, the suggestions 
made by the coalition for health care access coalition--the 
National Health Care Access Coalition, which is recommending 
permanently authorize the Conrad program, increase the size of 
the Conrad program to 40 slots per State, and allow unused 
slots to be used by States that need them. And again, I think 
we can do so by making sure that we have the right kind of 
structure that it is not abused.
    I then want to make note that there are six pages here of 
States and actual facilities that are asking for J-1 visas, and 
they do include the great State of Indiana and the great State 
of Texas.
    I also want to make note of a comment from--that was 
written in the Denver Post, reported on a Dr. Amanpour, and the 
quote is that the doctor's importance is described. ``He's 
keeping us alive. The doctor's fantastic. Without a physician, 
our nursing home is in jeopardy.''
    And one of the victims of small numbers of doctors are 
nursing homes. Very few and I would say competent, qualified, 
or either people right on the edge might not want to go in that 
direction, and our senior citizens need health care. And so, my 
question is to Dr. Salsberg.
    Do you see the need of the parallel of these temporary 
visas for use as well as the growth that we need to do in our 
medical profession here in the States?
    Mr. Salsberg. Definitely. I mean, we definitely need to 
encourage expansion of U.S. medical schools to meet current and 
future medical needs. The concern on the J-1 program, as you 
know, was that that was a program designed to assist, as the 
Chairman said, less educated--assist physicians obtain 
education in America, training in America that could be of use 
to less developed parts of the world.
    And so, I think we need an awareness of those concerns. And 
AAMC is looking at what can we do to assist other parts of the 
world in terms of improving their medical education and 
training. So it really should be a two-way street of what can 
we do to help them.
    Ms. Jackson Lee. Absolutely. And we hope that it is a two-
way street as they come and utilize and that they take their 
training back to the nations, particularly developing nations.
    My last point is to cite from the Texas Department of State 
Health Services, and just to show you the starkness of the 
need. Looking at specialties in 2004, there are approximately 
228 physicians per 100,000 population for the United States. 
While in Texas, the ratio was 155 physicians per 100,000, or 30 
percent below the national average.
    Although we, as I said, want to reinforce the value of our 
home-trained physicians, we also know that the immediate need 
is to try to solve some of these problems and, of course, Texas 
has asked for 50 even above the 40 that's been recommended.
    But I close by simply saying to Congressman Moran, do you 
feel comfortable that we can so structure the J-1 program that 
we answer a lot of the concerns that have been expressed here 
today?
    Mr. Moran. I have little doubt that if we work together as 
Members of Congress and with the profession, our States, that 
we can find a satisfactory solution. That doesn't solve the 
demands for physicians, but moves us in the right direction so 
that more people can receive adequate health care.
    Ms. Jackson Lee. I thank you, and I thank the Chairman. I 
think this was an important hearing. I thank the GAO for the 
work that they're still doing and the witnesses that were here 
today.
    I yield back, Mr. Chairman.
    Mr. Hostettler. I thank the gentlelady.
    I want to thank the panel of witnesses for your input and 
contribution to the record. It's been most helpful, and to 
advise Members that they have 5 legislative days to make 
additions to the record.
    The business before the Subcommittee being completed, we 
are, without objection, adjourned.
    [Whereupon, at 3:10 p.m., the Subcommittee was adjourned.]

                            A P P E N D I X

                              ----------                              


               Material Submitted for the Hearing Record

       Prepared Statement of the Honorable Sheila Jackson Lee, a 
Representative in Congress from the State of Texas, and Ranking Member, 
        Subcommittee on Immigration, Border Security, and Claims

    This is a legislative hearing on the Physicians for Underserved 
Areas Act, H.R. 4997, which was introduced by Congressman Jerry Moran 
on March 16, 2006. It would make the J-1 Visa Waiver Program permanent.
    The J visa is used for one of the educational and cultural exchange 
programs. It has become a gateway for foreign medical graduates to gain 
admission to the United States as nonimmigrants for the purpose of 
graduate medical education and training. The visa most of these 
physicians enter under is the J-1 nonimmigrant visa.
    The physicians who participate in the J-1 visa program are required 
to return to their home country for a period of at least two years 
before they can apply for another nonimmigrant visa or legal permanent 
resident status, unless they are granted a waiver of this requirement.
    In 1994, Senator Kent Conrad established a new basis for a waiver 
of this requirement with an amendment to the Immigration and 
Nationality Act. It was known then as, ``The Conrad State 20 Program.'' 
It permitted each state to obtain waivers for 20 physicians by 
establishing that they were needed in health professional shortage 
areas, known as ``HPSAs.''
    On November 2, 2002, the Conrad 20 program was extended to 2004, 
and the number of waivers available to the states was increased to 30. 
This program, which is now referred to as the ``Conrad 30''or ``State 
30'' program, expired on June 1, 2004. On December 3, 2004, it was 
reinstated and extended to June 1, 2006, which is only a few weeks from 
now. Congressman Moran's Physicians for Underserved Areas Act would 
eliminate the need for future extensions by making the program 
permanent.
    When the Conrad 30 program was established in 1994, most of those 
studying the supply of physicians in the United States were concerned 
about the distribution of physicians, as opposed to the total number of 
doctors being trained. It is now generally recognized that we are 
facing a severe physician shortage. The Health Policy Institute 
estimates that the shortage could grow to as much as 200,000 by 2020, 
an astounding possibility in view of the fact that the physician 
population in the United States currently is only about 800,000.
    The failure to forecast this severe physician shortage may explain 
why from 1980 until last year no new medical schools opened in the 
United States. According to the Health Policy Institute, the United 
States needs to produce an extra 10,000 physicians per year over the 
next decade and a half in order to meet the demands of the country. 
This number assumes that the number of foreign educated physicians will 
remain constant.
    Senator Conrad and I asked the General Accountability Office (GAO) 
to do a survey of state views on the Conrad 30 program. All 50 states 
filled out a GAO questionnaire and promptly returned it to GAO. One of 
the GAO investigators will testify about the results of the survey, so 
I will just point out a few key findings.
    Approximately 80% of the states reported that the annual limit of 
30 waivers per state is adequate. Only 13% reported that it is 
inadequate. Eleven states estimated that they need between 5 and 50 
more waiver physicians, which would total 200 more waiver physicians. 
In FY2005, 44 states did not use all of their allotted waivers. The 
total of the unused waivers for that year was 664. Of these 44 states, 
25 reported they were willing, or willing under certain circumstances, 
to have their unused waiver allotments redistributed. These states had 
a total of 398 unused waiver allotments in FY2005.
    The J-1 visa waiver program has been in effect now for more than a 
decade. In addition to being a good source of additional physicians, it 
ensures that the additional physicians will go where they are most 
needed, health professional shortage areas in both rural and urban 
settings. I urge you therefore to support Congressman Moran's 
Physicians for Underserved Areas Act to make the program permanent. 
Thank you.

                               __________

 Prepared Statement of the Honorable Kent Conrad, a U.S. Senator from 
                       the State of North Dakota

    Mr. Chairman, thank you for this opportunity to testify on the 
``Conrad State 30'' program as you discuss its reauthorization. I 
appreciate your interest in addressing the physician shortage in the 
United States with programs such as this.
    When the Conrad 20 program was enacted, approximately 85 percent of 
North Dakota's counties were designated, either in part or in total, as 
health professional shortage areas (HPSAs). The purpose of this program 
was to increase the supply of physicians to rural America. This very 
successful program has since been expanded to the Conrad State 30. It 
is heavily relied upon by a majority of the states, especially rural 
states like North Dakota.
    Before the Conrad 20 program was created, North Dakota's hospitals 
and clinics had to use the federal J-1 visa waiver, which required a 
federal agency to certify the need for a physician. On one occasion, a 
facility in North Dakota was forced to use the Coast Guard as the 
interested federal agency. I was grateful that the Coast Guard, which 
has a small station in LaMoure, was willing to assist the local 
community in obtaining a needed medical professional. But relying on 
the Coast Guard to decide if a town in North Dakota needed a physician 
made no sense.
    That is why I authored the Conrad State 20 program. It allows an 
interested State agency to make the determination that previously could 
only be made by a Federal agency. Not only are States more qualified to 
confirm health shortage areas, the program also uses HHS designated 
shortage areas as a baseline requirement, with the exception of five 
waivers that can go to physicians who will be placed in a facility that 
largely treats patients from HPSAs. Since 1994, this program has cut in 
half the number of family practice physician vacancies in North Dakota. 
It is critically important to rural hospitals and clinics in my state 
and across the country that this program be reauthorized.
    However, a serious drop in Conrad State 30 applications has North 
Dakota hospitals deeply concerned. For instance, St. Luke's Hospital in 
Crosby, ND, reports that it used to have as many as 150 J-1 physician 
applications for an opening. Now, it has had a five-month vacancy, and 
only a handful of candidates have applied. Many users of the program 
believe the shrinking pool of J-1 visa waiver doctors is due to foreign 
physicians turning to H-1B visas in lieu of J-1 visas for their 
graduate medical education.
    Like Chairman Hostettler, my constituents have noticed the 
disparity in how J-1 physicians in residency are treated compared to 
those on H-1B visas. Residents on J-1 visas must go home and contribute 
to their country's underserved for two years, or stay here and 
contribute to ours for three. But those on H-1B visas are excepted from 
either requirement; they are free to practice anywhere in the United 
States when they complete their residency programs. I believe we need 
to explore options to level the playing field, such as requiring 
residents on H1-B visas to serve three years in underserved areas.
    I would also like to take this opportunity to express my strong 
concerns about proposals to re-distribute unused waivers from states 
like North Dakota to states that use all 30 of their Conrad 30 slots. 
With a shrinking overall pool of J-1 visa waiver doctors, any proposal 
to redistribute unused slots risks further reducing the number of these 
doctors who will apply to serve in North Dakota. In the words of Tioga 
Medical's President, ``By allowing physicians to wait for the 
redistribution of slots to occur, a physician can opt to wait for 
states that may be more lucrative in weather conditions, culture, or 
other amenities.'' He is right. According to the Government 
Accountability Office, redistribution would likely benefit a handful of 
more populous states to the detriment of very rural states with 
facilities that have the most difficulty with recruitment.
    The Conrad 30 program has made a very real contribution to 
augmenting the physician supply in rural areas that need qualified 
primary care physicians and specialists in critical areas of medicine 
such as diabetes, cardiology and orthopedic medicine, just to name a 
few. However, eighty-one percent of North Dakota's counties remain 
HPSA-designated some twelve years later. With the physician shortage in 
this country projected to reach 200,000 by 2020, the Conrad 30 program 
is needed now more than ever.
    Since its inception, we have had to reauthorize this program many 
times--every two years since 2000. Such uncertainty is unnecessary. Our 
rural areas need to know they can count on this program for years to 
come. I urge the Committee to support the Physicians for Underserved 
Areas Act to permanently authorize this critical program for rural 
America and ask that the articles that I've included with my testimony 
be submitted for the record.

                               ATTACHMENT



 Prepared Statement of Gregory Siskind, Chairman, National Health Care 
                            Access Coalition



Letter to the Honorable Sheila Jackson Lee from Connie Berry, Manager, 
                       Texas Primary Care Office




                                 
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