[Senate Hearing 109-]
[From the U.S. Government Publishing Office]
DEPARTMENTS OF LABOR, HEALTH AND HUMAN SERVICES, EDUCATION, AND RELATED
AGENCIES APPROPRIATIONS FOR FISCAL YEAR 2006
----------
WEDNESDAY, MARCH 16, 2005
U.S. Senate,
Subcommittee of the Committee on Appropriations,
Washington, DC.
The subcommittee met at 10:42 a.m., in room SD-138, Dirksen
Senate Office Building, Hon. Arlen Specter (chairman)
presiding.
Present: Senators Specter, Craig, DeWine, Harkin, Kohl,
Murray, and Durbin.
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Office of the Secretary
STATEMENT OF HON. MICHAEL O. LEAVITT, SECRETARY
ACCOMPANIED BY:
KERRY WEEMS, ACTING ASSISTANT SECRETARY FOR BUDGET, TECHNOLOGY,
AND FINANCE
JENNIFER YOUNG, ASSISTANT SECRETARY FOR LEGISLATION
OPENING STATEMENT OF SENATOR ARLEN SPECTER
Senator Specter. Good morning. The Subcommittee on Labor,
Health and Human Services, Education, and Related Agencies will
now proceed. We have established a record for starting these
hearings on time so that we do not keep busy people waiting or
people who are not busy waiting. But as I had said a moment or
two ago, the floor manager had scheduled my amendment for
increasing the budget of the subcommittee by $2 billion, $1.5
billion for the National Institutes of Health, and $500 million
for Education. We just concluded the argument and came right
over here and have had a very brief discussion with the
distinguished Secretary.
We do welcome you here, Mr. Secretary. You come to this
office with a very, very distinguished record with the
governorship of Utah and Administrator of the Environmental
Protection Agency, and a very distinguished record before
public service. We look forward to working with you.
My full statement will be made a part of the record and in
view of our late arrival I will make only a very few
introductory remarks. As I had commented to the Secretary when
we moved the hearing from 9:30 to 10:30, that has compressed my
schedule, and I've asked Senator DeWine to be here to take over
the chairmanship here at 11.
But the only introductory comments that I will make are the
daunting tasks which we all have. We have a budget for the
subcommittee which is several billion dollars under what it was
last year. We have a 3.5 percent cut for the Department of
Labor. We have a $500 million cut for Education. There is a
proposed budget for your Department, Mr. Secretary, for $62.4
billion, which is a reduction of almost $1.3 billion, and
that's not calculating the inflation rate. So that means it's
another $2 billion on top of a billion, probably $3.5 billion.
PREPARED STATEMENT
But you come to this job with a great reputation for being
a wonder worker, so we will watch your work and we will work
with you. Now I yield to my distinguished colleague, the
seamless Senator Harkin.
[The statement follows:]
Prepared Statement of Senator Arlen Specter
This morning, the subcommittee on Labor, Health and Human Services,
Education, and Related Agencies will discuss the President'S $62.4
billion 2006 budget request for the Department of Health and Human
Services, which is $1.3 billion below the fiscal year 2005 level. We
are Delighted to have before us the distinguished Secretary of Health
and Human Services, the honorable Michael O. Leavitt.
This subcommittee is pleased to see several shared priorities
funded in the fiscal year 2006 budget, including $303 million over the
fiscal year 2005 level for Community Health Centers and $203 million
over the fiscal year 2005 level for the Strategic National Stockpile to
protect our Nation against bioterrorism.
However, this subcommittee is concerned by the small 0.5 percent
increase in Biomedical Research Funding at the National Institutes of
Health--which is a cut in real terms. Also of concern are the large
cuts in funding of many HHS programs, including the complete
elimination of 35 programs.
Mr. Secretary, I know that you can appreciate the difficult
tradeoffs that this subcommittee will need to negotiate in the coming
months as we balance the competing pressures of biomedical research,
worker protection programs and continued investment in our Nation's
youth. Mr. Secretary, I look forward to working with you as we craft an
appropriations bill that maintains our commitment to fiscal restraint
while preserving funding for high priority programs.
OPENING STATEMENT OF SENATOR TOM HARKIN
Senator Harkin. Thank you very much, Mr. Chairman. I will
follow your lead and not make a full opening statement. Again,
thank you, Mr. Chairman, for your leadership on the floor, on
NIH, to get that funding back up. It just--at a time when we're
making so many great breakthroughs, when we've finished mapping
the human gene, when we've gotten a lot of young people now
more interested in basic research because of the doubling of
NIH, now it seems like, well, we did that and now we don't have
to do anything more.
But that was just catch-up ball. We were just playing
catch-up ball. Now we've caught up, now all of a sudden we're
moving back again. So I just want to compliment my friend and
my chairman for taking the lead on the floor on this.
Just a couple--three things, Mr. Secretary. Again, welcome
you to your first appearance before our subcommittee.
Congratulations on your new position. Like the chairman, we
have met personally and I've just heard a lot of good things
about you, and your reputation is sterling, I can say that.
I just--a couple of comments on the budget, eliminating
services for some 25,000 kids on Head Start. That's very
bothersome. The community services block grant program. Now,
you might say, well, we're continuing some of the things like
LIHEAP and Head Start, things like that, but if you don't have
the people that do it, how does it get done? Community services
block grants being zeroed out is just--I don't know what we--
what could be behind that.
There's one other thing, the systems change grant. Your
predecessor was very strong and the President was, the
President spoke about this in the past, better check the record
on the system change grants. This has to do with the court
case--what am I thinking about--Olmstead case. The Supreme
Court decision said that people with disabilities must live in
the least restricted environment.
Well, we've built up a system of nursing homes in this
country that are still needed for some obviously. But for a lot
of people with disabilities who can get to the community, they
need these system change grants. Your predecessor and the
President has spoken strongly about this and something called
money follows the person, but there's nothing in this budget
for it.
So, again, just a few of those things I wanted to point to,
but lest you think I think everything's bad in this budget, I
compliment you for the increase in the community health
centers. This is one thing that serves--the $300 million
proposed increase is welcome, it's needed. They do a great job
I'm sure in your State, mine, all over the country. So that is
one right spot in this budget that will have our full support,
you can be assured.
Thank you, Mr. Secretary. Thank you, Mr. Chairman.
Senator Specter. Thank you, Senator Harkin. We welcome you
again, Mr. Secretary, and the floor is yours. We look forward
to your testimony. Your full statement will be made a part of
the record and our practice is to ask you to summarize to the
extent you can, leaving the maximum amount of time for
questions and answers. We have a very good attendance for the
subcommittee today.
SUMMARY STATEMENT OF HON. MICHAEL O. LEAVITT
Secretary Leavitt. Thank you, Mr. Chairman, and Senator
Harkin. I will in the spirit of efficiency summarize quickly.
As you indicated, the budget--the overall budget is $642
billion. That's a 10 percent increase over last year. Much of
that will be in the Medicare Modernization Act and its
implementation.
MEDICAID
This subcommittee, as you pointed out, is $62.4 billion,
and it's a lot of money, and we're here to do our best to
defend how in fact we will do it efficiently. I hope we have a
chance today to talk about Medicaid. Forty six million
Americans are served by it. It's rigidly inflexible. The
Governors are desperate to have some change so they can
maintain coverage for people who have it and hopefully provide
coverage for some who don't.
I hope we have a chance to talk some about the
implementation of the Medicare Modernization Act. That's the
main event for 2005 in my opinion for HHS, and we're working
hard to make certain that it's done well. We all have a
substantial stake in its implementation.
Community health centers is a favorite of mine to talk
about too, Senator Harkin, and I'm hopeful that we'll get a
chance to talk more about that.
Homeland defense has been very much on my mind, as I
suspect it is everyone else's, $4.3 billion to continue our
work there, $600 million of it into strategic stockpiles. Our
goal is to have needed medications within 12 hours of every
man, woman, and child in the United States.
NIH, a subject I know that's very important to you,
Senator, and to others, $28.8 billion, $1.8 billion of that
again in biodefense. The flu has become an area of major
concern to me, particularly the--as we begin to see the avian
flu become more prominent in Asia. I hope we have a chance to
talk about our preparation there.
The President has emphasized faith-based initiatives also,
his hope that reauthorization of the Welfare Act of 1996 could
be accomplished this year. This budget will support the
administration's belief in both faith-based and also in
abstinence education. The budget does support Head Start with
$6.9 billion.
PREPARED STATEMENT
A subject I hope we get a chance to talk about is Health
IT. That's an issue that I intend to take on personally.
It's what I believe to be a lean but strong and fiscally
responsible budget, and I'm looking forward to more
conversation.
[The statement follows:]
Prepared Statement of Hon. Michael O. Leavitt
Good morning Mr. Chairman, Ranking Member Harkin, and members of
the Subcommittee. I am honored to be here today to present to you the
President's fiscal year 2006 Budget for the Department of Health and
Human Services (HHS). The President and I share an aggressive agenda
for the upcoming fiscal year, in which HHS advances a healthier,
stronger America while upholding fiscal responsibility and good
stewardship of the People's money.
In his February 2nd State of the Union Address, the President
underscored the need to restrain spending in order to sustain our
economic prosperity. As part of this restraint, it is important that
total discretionary and non-security spending be held to levels
proposed in the President's fiscal year 2006 Budget. The budget savings
and reforms in the President's Budget are important components of
achieving the President's goal of cutting the budget deficit in half by
2009 and we urge the Congress to support these reforms. The President's
fiscal year 2006 Budget includes more than 150 reductions, reforms, and
terminations in non-defense discretionary programs, 19 of which affect
HHS programs. The Department wants to work with the Congress to achieve
these savings.
The President's health agenda leads us towards a Nation of
healthier Americans, where health insurance is within the reach of
every American, where American workers have a comparative advantage in
the global economy because they are healthy and productive, and where
health technology allows for a better health care system that produces
fewer mistakes and better outcomes at lower costs. The fiscal year 2006
HHS budget advances this agenda.
The fiscal year 2006 HHS budget funds the transition towards a
health care system where informed consumers will own their personal
health records, health savings accounts, and health insurance. It
enables seniors and people with disabilities to choose where they
receive long-term care and from whom they receive it. Equally
important, it builds on the Department's Strategic Plan and enables HHS
to foster strong, sustained advances in the sciences underlying
medicine, in public health, and in social services.
To support our goals, President Bush proposes outlays of $642
billion for HHS, a 10 percent increase over fiscal year 2005 spending,
and more than a 50 percent increase over fiscal year 2001 spending. The
proposed fiscal year 2006 HHS budget increase accounts for almost two-
thirds of the entire proposed federal budget increase in fiscal year
2006. The overall discretionary portion of the President's HHS budget
totals $67 billion in budget authority and $71 billion in program level
funding. The discretionary portion of programs covered by this
subcommittee totals $62.4 billion in budget authority and $65.3 billion
in program level funding.
The Department will direct its resources and efforts in fiscal year
2006 towards:
--Providing access to quality health care;
--Enhancing public health and protecting America;
--Supporting a compassionate society; and
--Improving HHS management.
The President and the Department considered a number of factors in
constructing the fiscal year 2006 budget, including the need for
spending discipline and program effectiveness to help cut the deficit
in half over four years. Specifically, the budget decreases funding for
lower-priority programs and one-time projects, consolidates or
eliminates programs with duplicative missions, reduces administrative
costs, and makes government more efficient. For example, the budget
requests no funding for the Community Services Block Grant that was
unable to demonstrate results in Program Assessment Rating Tool
evaluation. Instead, the Administration proposes to focus economic and
community development activities through a more targeted and unified
program to be administered by the Department of Commerce. It is due to
this scrutiny that I am certain the proposed increases in spending will
enable the Department to continue to provide for the health, safety,
and well-being of our People.
Americans enjoy the finest health care in the world. This year's
budget provides opportunities to make quality health care more
affordable and accessible to millions more Americans. Our challenge is
to ensure that everyone has access to health insurance.
PROVIDING ACCESS TO QUALITY HEALTH CARE
MMA Implementation
The next important step toward meeting this challenge is the
implementation of the Medicare Modernization Act (MMA), including the
Medicare Prescription Drug Benefit and the new Medicare Advantage
regional health plans. The Centers for Medicare and Medicaid Services
(CMS) administrative budget request of $3.2 billion includes $560
million for implementing the new voluntary drug benefit that begins
January 1, 2006, enhanced health plan choices in Medicare Advantage, as
well as numerous other MMA provisions. The new prescription drug
benefit will cost $58.9 billion in 2006 and will be financed through
beneficiary premiums and general revenue. The President's Budget also
proposes $75 million for program integrity efforts to combat fraud and
abuse in the new Part D and Medicare Advantage programs.
February 15, 2004 was the final date for plans to submit Medicare
Advantage 2005 applications to provide coordinated care plans,
including local preferred provider organizations (PPOs). The deadline
for stand-alone prescription drug plans, new Medicare Advantage
contractors, and regional PPOs to submit their ``Notice of Intent to
Apply'' was February 18, 2005. CMS has received significant initial
interest from potential prescription drug plan sponsors to offer the
Medicare drug benefit throughout the Nation. In addition, insurance
plans have expressed interest in significantly expanding Medicare
Advantage service areas providing more options to Medicare
beneficiaries.
Medicaid
The President and I are also committed to improving Medicaid.
Medicaid provides health insurance for more than 46 million Americans,
but as you are all aware, States still complain about overly burdensome
rules and regulations, and the state-federal financing system remains
prone to abuse.
This year, for the first time ever, States spent more on Medicaid
than they spent on education. Over the next ten years, American
taxpayers will spend nearly $5 trillion on Medicaid in combined state
and federal spending. The Department plans to make sure tax dollars are
used more efficiently by building on the success of the State
Children's Health Insurance Program (SCHIP) and waiver programs that
allow states the flexibility to construct targeted benefit packages,
coordinate with private insurance, and extend coverage to higher income
and non-traditional Medicaid populations. Additionally, we estimate
that proposals included in the President's Budget to strengthen program
integrity and ensure that Medicaid doesn't overpay for drugs will
create $60 billion in new savings over a ten-year period.
The President plans to expand coverage for the key populations
served in Medicaid and SCHIP by spending $15.5 billion on targeted
activities over ten years. The President's Budget includes several
proposals to provide coverage, including the Cover the Kids campaign to
enroll more eligible uninsured children in Medicaid and SCHIP. In
addition, the extension of the Qualified Individual and transitional
medical assistance programs will ensure coverage is available to
continue full payment (subject to a spending limit) of Medicare Part B
premiums for qualified individuals, and provide coverage for families
that lose eligibility for Medicaid due to earnings from employment. The
Department projects that over 50 million individuals will be covered by
Medicaid and SCHIP in fiscal year 2006, at a federal cost of $198
billion.
Community Health Centers
In addition to expanding access through Medicaid and SCHIP, the
President's Budget builds on the Department's aggressive efforts to
help those who are uninsured or underinsured by expanding the good work
of community health centers. These centers provide quality,
compassionate care to the patients who need our help the most,
regardless of their ability to pay.
The President's Budget requests $2 billion, a $304 million increase
from fiscal year 2005, to fund community health centers. This request
completes the President's commitment to create 1,200 new or expanded
sites to serve an additional 6.1 million people by 2006. By the end of
fiscal year 2006, the Health Centers program will deliver high quality,
affordable health care to over 16 million patients at more than 4,000
sites across the country. Health centers are effectively targeted to
eliminate health disparities and provide a range of essential services.
In 2006, health centers will serve an estimated 16 percent of the
Nation's population who are at or below 200 percent of the federal
poverty level. Almost forty percent of Health Center patients have no
health insurance and 64 percent are racial or ethnic minorities. In
addition, the President has set a new goal to help every poor county in
America that lacks a community health center by establishing a
community health center in counties that can support one, or a rural
health center. The President's Budget includes $26 million to fund 40
new health centers in high poverty counties.
Ryan White/HIV
Our request also includes approximately $18 billion for domestic
AIDS care, treatment, research, and prevention. We are committed to the
reauthorization of the Ryan White CARE Act treatment programs,
consistent with the President's reauthorization principles of
prioritizing lifesaving services including HIV/AIDS medications and
care; providing more flexibility to target resources; and ensuring
accountability by measuring progress. The President's Budget requests a
total of $2.1 billion for Ryan White activities, including $798 million
for lifesaving medications through the AIDS Drug Assistance Program.
Providing Access to Quality Health Care: The Administration's
Comprehensive Plan
These projects and reforms, as well as those at other Departments,
cooperate to extend health care and insurance to millions of people.
For instance, the President proposes to spend more than $125.7 billion
over ten years to expand insurance coverage to millions of Americans
through tax credits, purchasing pools, and Health Savings Accounts. The
proposed Traditional Health Insurance Tax Credit would pay for 90
percent of the cost of the premium of standard coverage, up to a
maximum of $1,000 for an individual, and $3,000 for a family of four.
The proposed Health Insurance Tax Credit for those with Health Savings
Accounts (HSAs) would allow individuals to use a portion of the credit
to purchase a high-deductible health plan while putting the remaining
portion of the credit in an HSA. The Administration also proposes
legislation that would that would allow small employers, civic groups,
and community organizations to band together and leverage purchasing
power to negotiate lower-priced coverage for their employees, members,
and their families through Association Health Plans (AHPs). As opposed
to previous proposals that limited AHPs to small businesses, this
proposal also applies to private, non-profit, and multi-state entities
outside the workplace.
Thanks to the comprehensive nature of this vision, workers are
already investing money tax-free for medical expenses through Health
Savings Accounts, Americans have increasing flexibility to accumulate
savings and to change jobs when they wish, and more Americans are
accessing high-quality health care. We estimate that 12 to 14 million
additional people will gain health insurance over the next ten years.
ENHANCING PUBLIC HEALTH AND PROTECTING AMERICA
Bioterrorism Preparedness
Since 2001, your support for HHS's bioterrorism efforts has been
unwavering. As a result we have made tremendous strides in protecting
our Nation from various threats. The HHS fiscal year 2006 budget builds
upon these achievements to strengthen our ability to minimize the
number of casualties that would occur as a result of a bioterrorist
attack, or other attack with weapons of mass destruction. From 2001 to
2005, HHS invested nearly $15 billion to prepare our Nation's health
systems. The fiscal year 2006 budget requests $4.3 billion to continue
this work, a 1,500 percent increase from the 2001, pre-9/11 level.
The fiscal year 2006 request places the highest priority on those
programs that address readiness issues for which there is a unique
federal role. These include the new mass casualty initiative, the
Strategic National Stockpile (SNS), and National Institutes of Health
(NIH) research on next-generation countermeasures.
HHS has a responsibility to lead public health and medical services
during major disasters and emergencies. Toward this end, the
President's Budget would invest $70 million in a new effort to develop
federal mass casualty treatment capacity that can be rapidly deployed
and staffed to supplement the surge capacity being developed at the
state and local level. Of this amount, $50 million, financed through
the SNS, will be used to procure and manage the mass casualty treatment
units. The Medical Reserve Corps will be expanded by $12.5 million to
support the enrollment, training, and credentialing of volunteers that
could be deployed in the event of a national emergency. A new $7.5
million effort will fund the development of a secure database that can
consolidate healthcare provider credentialing information from federal,
state, and non-government sources for quick retrieval in a major
emergency. This activity will be fully coordinated with the state-based
Emergency System for Advance Registration of Volunteer Healthcare
Personnel that the Health Services and Resources Administration (HRSA)
sponsors.
The Strategic National Stockpile's goal is to provide state and
local governments the pharmaceuticals and supplies they would need to
minimize casualties from a bioterrorist attack or other major public
health emergency within 12 hours. The budget requests a total of $600
million for the SNS, an increase of $203 million above the fiscal year
2005 enacted level (including the $50 million for mass casualty
treatment units discussed earlier). The Administration has continued to
reassess the stocks that are needed to best protect the American
population. As a result, by the end of fiscal year 2006, the SNS will
have sufficient antibiotics to provide prophylaxis to up to 60 million
Americans exposed to the anthrax organism. The SNS will set up the
highly specialized cold storage capacity needed for the IND vaccines
procured through BioShield. Substantial funds will also be used to
replace medications that are losing potency, and to maintain the
capacity needed to deploy assets to any part of the Nation within hours
of the detection of an event.
Our Nation's ability to detect and counter bioterrorism ultimately
depends on the state of biomedical science, and NIH will continue to
ensure full coordination of research activities with other federal
agencies in this battle. The President's Budget includes $1.8 billion
for NIH biodefense research efforts, a net increase of $56 million.
When this is adjusted for non-recurring extramural construction in
fiscal year 2005, NIH biodefense research activities grow by $175
million, or 11 percent, over fiscal year 2005. Included in this total
is a $50 million initiative budgeted in the Public Health and Social
Services Emergency Fund to develop new medical countermeasures against
chemicals that could be used as weapons of mass destruction.
HHS continues to have a strong commitment to preparing States and
local public health departments and hospitals to prepare against public
health emergencies and acts of bioterrorism. From fiscal year 2002 to
fiscal year 2005, $5.4 billion has been invested in this work through
the Centers for Disease Control (CDC) and HRSA's ongoing state and
local preparedness programs. The fiscal year 2006 budget includes $1.3
billion more for this work, increasing the cumulative total to $6.7
billion.
Influenza
Since the H5N1 strain of avian influenza first appeared in 1997,
public health officials have grown increasingly concerned about the
possibility that a pandemic strain will emerge that could cause an
additional 90,000 to 300,000+ deaths in the United States. Avian
influenza has reappeared in Southeast Asia again this year, indicating
that the virus has become endemic. The fiscal year 2006 budget
continues to expand HHS's efforts to be prepared in the event this or
another deadly influenza strain changes in a way that makes it easily
communicable from person to person.
Since fiscal year 2001, HHS has increased its direct expenditures
related to influenza vaccine from $42 million to $439 million in fiscal
year 2006, in addition to insurance reimbursement payments through
Medicare. The fiscal year 2006 budget includes targeted efforts to
ensure a stable supply of annual influenza vaccine, to improve access
to influenza vaccine for children and Medicare beneficiaries, to
develop the surge capacity that would be needed in a pandemic, and to
improve the response to emerging infectious diseases before they reach
the United States.
Increasing the use of annual influenza vaccinations will both
reduce annual morbidity/mortality, and make the Nation better prepared
in the event of a pandemic. CDC estimates that 185 million people
should receive annual immunizations but fewer than half of that number
have ever been immunized in a given year. The President's Budget seeks
to increase annual immunization rates by both making sure an ample
supply is manufactured each year and working to ensure it is used. The
President's Budget includes several initiatives within CDC's two
immunization programs to expand the production of bulk monovalent and
finished influenza vaccine for the 2006/7 influenza season. CDC will
invest $70 million in new resources to build vaccine stockpiles. First,
CDC will set aside $40 million in new mandatory Vaccines for Children
(VFC) budget authority for a stockpile of finished pediatric influenza
vaccine that can be used in the event of a late-season surge in demand;
the first ever stockpile was purchased for the winter of 2004/5.
Second, CDC's discretionary Section 317 program will invest $30 million
in contracts to get manufacturers to make additional bulk monovalent
vaccine over and above the amounts the companies expect to use for the
2006/7 season. This added bulk vaccine will be available to be turned
into finished vaccine if other producers experience problems, or if an
unusually high demand for vaccine is anticipated. Bulk vaccine not used
for the 2006/7 season will be kept for potential use the following
year. Commonly, one or two of the strains in the trivalent influenza
vaccine remain the same from one year to the next.
HHS is also continuing its efforts to expand annual influenza
immunizations. The Section 317 program will also use increased funding
of $20 million over fiscal year 2005 to purchase an estimated two
million doses of influenza vaccine for the 2006/7 influenza season to
help states expand vaccination for children. Centers for Medicare and
Medicaid Services has taken steps to ensure that physicians have
appropriate incentives to improve vaccination rates. Since 2002, the
Medicare reimbursement rate for the administration of influenza vaccine
has increased more than four times, from an average of $3.98 in 2002 to
$18.57 in 2005. The reimbursement rate for the vaccine product also
increased, from $8.02 to $10.10.
To ensure sufficient vaccine can be made quickly in a pandemic, the
Nation needs to develop the ability to surge domestic vaccine
production as soon as scientists determine that a pandemic strain has
emerged. The President's Budget increases the Department's investment
in pandemic preparedness efforts by $21 million, for a total of $120
million in fiscal year 2006. This increase will be used to develop the
year-round domestic surge vaccine production capacity that would be
needed in a pandemic; this added surge capacity could also be used to
respond to unexpected problems in the production of annual vaccines. It
will finance contracts with vaccine manufacturers to develop and
license influenza vaccines using new production techniques and
establishing a domestic manufacturing capability. HHS will continue to
ensure a year-round supply of specialized eggs needed for domestic
production of currently licensed vaccines. Manufacturers will be
encouraged to license and implement new processing and other
technologies to improve vaccine yields from both new cell culture
vaccines and existing egg-based vaccines. In addition, HHS will sponsor
the development and licensing of antigen-sparing strategies that would
increase the number of individuals who could be vaccinated from a given
amount of bulk vaccine product. Finally, the President's Budget
maintains the flexibility to redirect these funds to initiate pandemic
vaccine production at any time a pandemic appears imminent.
To improve our Nation's long-term preparedness and enhance the
annual vaccine supply, NIH will invest approximately $120 million in
influenza-related research nearly six times the fiscal year 2001 level.
Research areas include new cell culture techniques for flu vaccine
production, which complements the advanced development; vaccines for
potential pandemic strains, including H5N1; next-generation antiviral
drugs; rapid, ultra-sensitive diagnostic devices to detect influenza
virus infection; and ways to make flu vaccine more effective among the
elderly.
These research and advanced development efforts will be
complemented by expanding funding for CDC's Global Disease Detection
initiatives by $12 million, from $22 million to $34 million in fiscal
year 2006, to improve our ability to prevent and control outbreaks
before they reach the United States.
Childhood Immunization
The President's Budget includes proposed legislation in the
mandatory VFC program to improve low-income children's access to
routine immunizations that I believe members of this committee should
strongly support. This proposed legislation would ensure that all
children have access to all routinely recommended vaccines regardless
of cost such as the newly-approved meningococcal conjugate vaccine.
This legislation would enable any child who is currently entitled to
receive VFC vaccines to receive them at state and local public health
clinics. There are hundreds of thousands of underinsured children who
are entitled to VFC vaccines, but can receive them only at HRSA-funded
health centers and other Federally Qualified Health Centers. When these
children go to a state or local public health clinic, they are unable
to receive vaccines through the VFC program and the State may decide
not to use scarce discretionary dollars to provide newer, more
expensive vaccines. This legislation will expand access to routine
immunizations by eliminating this barrier to coverage and will help
States meet the rising costs of new and better vaccines. As modern
technology and research has generated new and better vaccines, that
cost has risen dramatically. For example, when the pneumococcal
conjugate vaccine became available, it increased the cost of vaccines
to fully-immunize a child by approximately 80 percent. A new
meningococcal vaccine has recently been approved that will further
raise the cost to fully immunize a child making this legislation even
more important.
Focus on the Future--Health Information Technology and NIH
Our fiscal year 2006 budget was also constructed with the knowledge
that health information technology will improve the practice of
medicine and make it more efficient. For example, the rapid
implementation of secure and interoperable electronic health records
will significantly improve the safety, quality, and cost-effectiveness
of health care. To implement this vision, we are requesting an
investment of $125 million. The Office of the National Coordinator for
Health Information Technology would spend $75 million to provide
strategic direction for development of a national interoperable health
care system, and to address barriers to the widespread adoption of
electronic health records. The Agency for Health Care Quality and
Research continues to direct $50 million to accelerate the development,
adoption, and diffusion of interoperable information technology in a
range of health care settings.
Equally important, major advances in knowledge about life sciences,
especially the sequencing of the human genome, are opening dramatic new
opportunities for biomedical research. Heretofore un-imagined prospects
for more precisely predicting individual susceptibility to disease and
responses to medication are now close at hand, as are new approaches to
diagnosing, preventing, and treating disease and disability. These
advances have been driven by the investments in research made by the
National Institutes of Health (NIH), the world's largest and most
distinguished organization dedicated to medical science.
The fiscal year 2006 budget request for NIH of $28.8 billion seeks
to capitalize on the opportunities these investments have created to
further improve the health of the Nation. The NIH budget is built upon
and reflects the tremendous growth in biomedical research spending in
recent years. In fiscal year 2006, over $24 billion of the $28.8
billion requested for NIH will flow out to the extramural community,
which supports work by more than 200,000 research personnel affiliated
with approximately 3,000 university, hospital, and other research
facilities across our great Nation. These funds will support nearly
39,000 investigator-initiated research project grants in fiscal year
2006, including an estimated 9,463 new and competing awards. NIH will
also fund close to 1,400 research centers, over 17,400 research
trainees, and much more.
In fiscal year 2006, NIH will also continue to implement the
Roadmap for Medical Research by spending a total of $333 million, an
increase of $98 million over fiscal year 2005, on initiatives to target
research gaps and opportunities that no single NIH institute could
solve alone. The budget request also emphasizes efforts to enhance
collaborations for multidisciplinary neuroscience research and
accelerate efforts to develop and evaluate vaccines against HIV/AIDS.
Within this total, NIH will also increase funding to address critical
requirements in biodefense, including a targeted $50 million research
effort to develop new medical countermeasures for chemicals that can be
used as weapons of mass destruction.
SUPPORTING A COMPASSIONATE SOCIETY
Faith-Based and Community Organizations
As part of the Administration's Faith-Based and Community
Initiative, the HHS fiscal year 2006 budget maintains a commitment to
strengthen the capacity of faith-based and community organizations,
including the Access to Recovery program, the Compassion Capital Fund,
the Mentoring Children of Prisoners program, and Maternity Group Homes.
The toll of drug abuse on the individual, family, and community is
both significant and cumulative. Abuse may lead to lost productivity
and educational opportunity, lost lives, and to costly social and
public health problems, including HIV/AIDS, domestic violence, child
abuse, and crime. Through the Access to Recovery program, HHS will
assist States in expanding access to clinical treatment and recovery
support services and allow individuals to exercise choice among
qualified community provider organizations, including those that are
faith-based. This program recognizes that there are many pathways of
recovery from addiction. Through Access to Recovery individuals are
assessed, given a voucher for appropriate services, and provided with a
list of providers from which they can choose. Fourteen States and one
tribal organization were awarded Access to Recovery funding in fiscal
year 2004, the first year of funding for the initiative. The funded
entities have identified target populations that include youth,
individuals involved with the criminal justice system, women,
individuals with co-occurring disorders, and homeless individuals. The
President's Budget increases support for the Access to Recovery
initiative by 50 percent, for a total of $150 million, and will support
a total of 22 States participating.
The Compassion Capital Fund advances the efforts of community and
charitable organizations, including faith-based organizations, to
increase their effectiveness and enhance their ability to provide
social services where they are needed. The President's Budget includes
$100 million, an increase of $45 million in support of the Compassion
Capital Fund.
Within this program, the President has proposed a new focus on
young Americans that will include support for programs that help youth
overcome the specific risk of gang influence and involvement. This
three-year, $150-million initiative will provide grants to faith-based
and community organizations targeting youth ages 8-17, and will help
some of America's communities that are most in need. These
organizations will provide a positive model for youth one that respects
women and rejects violence.
Abstinence
Expanding abstinence education programs are also part of a
comprehensive and continuing effort of the Administration, because they
help adolescents avoid behaviors that could jeopardize their futures.
Last year, HHS integrated abstinence education activities with positive
youth development efforts at the Administration for Children and
Families (ACF), by transferring the Community-Based Abstinence
Education program and the Abstinence Education Grants to States to ACF.
The HHS fiscal year 2006 budget expands activities to educate
adolescents and parents about the health risks associated with early
sexual activity and provide them with the tools needed to help
adolescents make healthy choices. The programs focus on educating
adolescents ages 12 through 18, and create a positive environment
within communities to support adolescents' decisions to postpone sexual
activity. Where appropriate, the programs also offer mentoring,
counseling, and adult supervision to promote abstinence with a focus on
those groups which are most likely to bear children out of wedlock. A
total of $206 million, an increase of $39 million, is requested for
these activities.
Head Start
The Head Start program helps ensure that children, primarily in
low-income families, are ready to succeed in school by supporting their
social and cognitive development. Head Start programs also engage
parents in their child's preschool experience by helping them achieve
their own educational, literacy, and employment goals. The HHS fiscal
year 2006 budget of $6.9 billion will provide comprehensive child
development services to 919,000 children. This level includes an
increase of $45 million to support the President's initiative to
improve Head Start by funding nine state pilot projects to coordinate
state preschool, child care, and Head Start in a comprehensive system
of early childhood programs for low-income children.
Temporary Assistance for Needy Families
It has been three years since President Bush first proposed his
strategy for reauthorizing TANF and the other critical programs
included in welfare reform. During this time, the issues have been
debated thoroughly but the work has not been completed and States have
been left to wonder how they should proceed. We believe it is important
to finish this work as soon as possible and set a strong, positive
course for helping America's families. The proposal is guided by four
critical goals that will transform the lives of low-income families:
strengthen work, promote healthy families, give States greater
flexibility, and demonstrate compassion to those in need.
Administration on Aging
The President's Budget requests a total of $1.4 billion in the
Administration on Aging for programs that serve the most vulnerable
elderly Americans, who otherwise lack access to healthy meals,
preventive care, and other supports that enable them to remain in their
home communities and out of nursing facilities. It also continues
investments in program innovations to test new models of home and
community-based care.
IMPROVING HHS MANAGEMENT
The President's Management Agenda (PMA) provides a framework to
improve the management and performance of HHS. HHS has taken
significant steps to institutionalize its focus on results and achieve
improved program performance that is important to the HHS mission and
the American taxpayer.
Budget and Performance Integration (BPI) aims to improve program
performance and results by ensuring that performance information is
used to inform funding and management decisions. For fiscal year 2006,
HHS operating divisions produced their first ``performance budgets''
which combine budget and performance information in a single document.
With this new format the Department moved from the traditional approach
of presenting separate budget justifications and performance plans to
the use of one integrated document to present both budget and
performance information. This move also enhanced the availability and
use of program and performance information to inform the budget
process.
HHS has made significant steps in its implementation of the
President's five government-wide management initiatives. The Program
Assessment Rating Tool (PART) is an important component of the Budget
and Performance Integration initiative and is used to assess program
performance and improve the quality of performance information. Sixty-
five HHS programs were reviewed in the PART process between fiscal year
2004 and fiscal year 2006. HHS consolidated 40 personnel offices into
four Human Resources Centers, which became operational in January 2004,
and is planning several upcoming projects to support Human Capital
strategic management. Since the start of the competitive sourcing
initiative, HHS has competed almost 25 percent of its commercial
activities, resulting in increased efficiencies and savings for the
American taxpayer. For example, HHS anticipates gross savings of $55
million from studies completed in fiscal year 2004, which will be
redirected to mission critical activities at HHS. This year, HHS will
focus on structuring competitions to maximize efficiencies and savings,
as well as implement a savings validation plan. HHS also implemented
several processes to improve the financial performance of the
Department, such as streamlining and accelerating the annual financial
reporting process and combining annual audited financial statements
with program performance information in the Department's Performance
and Accountability Report. HHS is also continues to implement the
Unified Financial Management System throughout the Department. More
than 95 percent of HHS' information systems have certified and
accredited security plans. Finally, HHS has been working to achieve a
more mature Enterprise Architecture that links performance to
strategic, capital planning, and budget processes.
Over the past four years, the Administration has worked diligently
with the Department to make America and the world healthier. I am proud
to build on the HHS record of achievements. For the upcoming fiscal
year, the President and I share an aggressive agenda for HHS that
advances a healthier, stronger America while upholding fiscal
responsibility and good stewardship of the People's money. I look
forward to working with Congress as we move forward in this direction.
I am happy to answer any questions you may have.
MEDICAID PROTECTION
Senator Specter. Well, thank you very much, Mr. Secretary,
for many things, most recently brevity.
Mr. Secretary, I begin with a question on the Medicaid. It
has been a topic among Senators. It serves people who are
desperately in need of medical attention. There is a projected
reduction which is represented at 1 percent, but in the out-
years it grows exponentially. You come with three terms as
Governor of Utah, so you've been in the Governor's role. The
Governors are very concerned about Medicaid.
Senator Smith of Oregon has offered an alternative proposal
to take a closer look at it on a commission, not satisfied with
the review which has been made so far, which has--could have
more depth. We can always study more. Of course it involves
some delay. But how will the recipients of Medicaid at the
present time be protected with the proposal which you have
backed?
Secretary Leavitt. Senator, that's the right question in my
mind. How do we protect the coverage of people who are
currently being served, and how in fact can we expand the reach
of Medicaid? It's currently serving some 46 million Americans.
But some of them are in jeopardy because the program has such
rigid inflexibility that States are by the nature of that
inflexibility being forced to look at diminishing the coverage
substantially or eliminating the coverage of many optional
groups.
A couple of points. One is, if there is any perception that
Medicaid is being cut, I would like to suggest that is not
correct. The Medicaid budget will grow by in excess of 7
percent over the next 10 years. We'll see almost $5 trillion
spent at the end of that 10 years. We'll see $900 billion more
from the Federal side be put into Medicaid. It is a rapidly
growing program.
What the budget does reflect is a desire to see it increase
at a slightly slower rate. The Governors I believe are, as I've
spoken with them, some--I think I've had conversations now with
38 of them about this subject in direct and personal ways.
There are a series of reforms that they're anxious to see that
provide flexibilities that will allow them to continue the
coverage of many who they believe are imperiled.
The reforms are quite common sense in my mind. One is to
reduce the amount that's paid for prescription drugs, not to
reduce the number of people served by them or to reduce the
number of drugs they can receive, but to change the way in
which they are paid for. Medicaid would be widely known as the
best payer in the business. They pay higher costs for
prescription drugs than Medicare or for that matter most
private plans. This would propose a statute change that would
allow them to essentially pay the same rate as Medicare Part B
will pay.
The second reform is caring for what's known as an asset
spend-down where people have learned to give their assets to
their children so that the State can pay for their Medicaid,
and Governors would like to see that changed.
The third is in being able to provide a series of co-pays
among those who are in higher income brackets served by
Medicaid. Governors are interested to see Medicaid recipients
become cost-conscious consumers in the same way that others are
required.
The fourth would be really a celebration of SCHIP, to use
SCHIP more broadly to provide more flexibility in constructing
benefit plans of again mostly mothers and children in higher
income brackets that would provide the ability to serve more.
The last is an important reform, and that is as the number
of elderly served by Medicaid increases and will clearly
increase in the future, there's a desire to in essence liberate
Medicaid from exclusive use of nursing homes. We'd like to be
able to have people served in their homes and in communities.
It's more efficient, and frankly that's where they want to be
served.
So, Senator, those are the reforms that are on the table.
They are reflected in the budget as a budget reduction, but
only because they provide flexibility that in my judgement
almost all the States will be using in health care in different
ways to preserve the coverage of those who might lose it
otherwise.
Senator Specter. Mr. Secretary, let me compliment you on
finishing your answer within 2 seconds of the allotted time
which I have. That plus your opening statement on brevity gets
you off to a very, very good start with this subcommittee.
Secretary Leavitt. Thank you.
Senator Specter. I'm now going to turn the gavel over to my
distinguished colleague, Senator DeWine, to relieve me on the
chairmanship. Thank you very much.
Secretary Leavitt. Thank you, Senator.
Senator DeWine [presiding]. Senator Harkin.
IOWA ARMY AMMUNITION PLANT
Senator Harkin. Thank you very much, Mr. Chairman. Mr.
Secretary, we visited earlier. We talked about briefly, a month
or so ago, I forget when it was, about the situation at the
Iowa Army ammunition plant that had to do with workers who had
worked there for years in a nuclear weapons facility there.
A little background. Several years ago a worker had
contacted me there because of all the cancers that had been
happening to people, asked me to look into this. I contacted
the Department of the Army who informed me that they had never
assembled nuclear weapons there, and so I went out on a limb
and told this guy that he must be mistaken, and he never gave
up, Mr. Anderson never gave up. He came back and we finally
found out that in fact they had been assembling nuclear weapons
there for many, many years, and many of the workers there were
exposed to high levels of radiation, had no knowledge of this.
They were sworn to secrecy. Many of them never talked to
doctors, never talked to anyone, because of this oath of
secrecy they had taken.
Well, this has all gone through a lot of hearings and
processes and stuff. Senator Bond and I have managed to win
four votes on this. But basically the NIOSH Advisory Board on
Radiation and Worker Health voted seven-zip, seven to nothing,
to provide automatic compensation for former nuclear weapons
workers at the Iowa Army ammunition plant.
Now, under the law they are then to notify you by letter of
their decision. Under the law you then have 30 days whether to
approve or disapprove of this, and then of course Congress then
can step in depending upon what the decision is. Have you
received any--that notification yet?
Secretary Leavitt. No.
Senator Harkin. Well, this may be an unfair question, but
I'll ask it. Do you have any explanation as to why you have not
received an official notification?
Secretary Leavitt. I don't. I've read accounts that the
vote took place as you have indicated. I'm aware that--but I
can't reconcile why they haven't. When I do receive it, we'll
obviously act in a way that's timely.
Senator Harkin. Well, Mr. Secretary, I--well, I wrote them
a letter yesterday along with others to Mr. Howard, director of
NIOSH, and Mr. Paul Ziemer, chairman of the Advisory Board on
Radiation and Worker Health, because I didn't know, I really
didn't know if they had transmitted or not. So I wrote them a
letter saying, if you haven't, please do it. So I hope that we
can find out why it is that they have not forwarded this,
because these workers have been waiting a long time. It was a--
wasn't even a--as I said, wasn't even a close vote, seven to
nothing. So I'm hopeful we can move ahead on that.
The other thing I wanted to talk about just for the record,
Mr. Secretary, it was reported yesterday that the White House
disagrees with the GAO opinion that prepackaged video news
releases prepared and distributed by Federal agencies or their
public relations firms that do not disclose, that this would
not constitute illegal covert propaganda.
One of the videos reviewed by GAO was funded by one of your
agencies, CMS. Now, again, I don't expect you to have these
numbers at your fingertips, but if your staff could take note
of this, as the appropriations subcommittee here, could you
provide this subcommittee with your anticipated budget for
fiscal year 2006 for public relations activities, including any
contracts with public relations firms, media buys, et cetera,
if you could provide that for the committee.
Secretary Leavitt. Indeed we will.
[The information follows:]
Senator Harkin. I appreciate that.
MEDICARE MODERNIZATION--PART D
Secretary Leavitt. Senator, I might just comment----
Senator Harkin. Sure.
Secretary Leavitt [continuing]. Make one statement that we
will obviously follow the guidance of our legal counsel on this
matter and make certain that we are acting within the scope of
the rules. We have a very demanding challenge in front of us
collectively as a government during the next 15 months, and
it's the rollout of Medicare Modernization, the Part D for
prescription drugs.
One of the--at the base of this conflict was the question
of what tools we should deploy and use to provide people with
information about their options under Part D. I mention that
simply to put some perspective on the dilemma we're facing,
reaching people, educating them. We enlist the help of the
Senate, and at the risk of eliminating the good reputation I
formed with Senator Specter on stopping when that red light
goes on, I'll quit there.
Senator Harkin. Well, Mr. Secretary, just summing up, we
send out letters and information to our constituents all the
time, but we sign our names to it, you know, and I'm certain
those who in my State who disagree with me dismiss it because
I've said it, and you know how that goes. But at least they
know where it comes from.
Secretary Leavitt. Right.
Senator Harkin. Do you think that any information provided
by HHS should be attributed to HHS? I mean, I realize you're
going to get information out, but at least it ought to say
where it comes from.
Secretary Leavitt. That seems like a logical statement to
me. I don't know the nature of this dispute. I know that there
has been discussion between GAO and differences of opinion
about it. At this point, our role is to first of all do the
best job we can in being able to educate people on the
opportunity that's there and at the same time make certain
we're within the rules. I can assure you we'll do our best to
stay within them.
Senator Harkin. I thank you. We will, as I said, when you
send those anticipated figures up, any contracts you have with
media firms and stuff like that, we would like to analyze that
closely.
Secretary Leavitt. Thank you.
Senator Harkin. Thank you, Mr. Secretary. Thank you, Mr.
Chairman.
Senator DeWine. Senator Craig.
STATEMENT OF SENATOR LARRY CRAIG
PANDEMIC FLU VACCINE
Senator Craig. Thank you very much, Mr. Chairman. I would
hope that any activity or publicity that has been garnered as a
result of certain advertising and information flows does not
put a chilling effect on what I believe is a fundamental
responsibility of the agency to communicate with the public,
and to do so in a forthright and direct way. Clearly as we
struggled to bring folks on line with the prescription drug
card and to get them into the system so that as we roll out the
plan as you're talking about, there clearly needed to be an
informational flow. There was a partnership at AARP at that
time that was a cooperative effort, Mr. Secretary, that I think
worked extremely well.
So while I do believe there ought to be full disclosure, I
don't think you or I would dispute that, I would hope that
anyone who might charge that you're doing something beyond
without good grounds, this Senate spends a lot of time and
money getting out our point of view, and more importantly, once
a policy is developed and ready for the public, I think it's
important that we communicate it effectively.
FLU VACCINE
One question of you: Last year I wore a different hat than
I wear today, and that was chairman of the Select Committee on
Aging--Special Committee on Aging. We spent a lot of time prior
to and after the announcement by Chiron that they had been
forced to close their Liverpool plant and could not supply to
the marketplace and to Americans the necessary flu vaccine that
we had anticipated. We worked very closely with your
predecessor in making sure that somehow we made it through, and
we are making it through this year it appears. At least thank
goodness we have not had a major outbreak, but the flu is out
there and it's taking lives as it does.
But I think you are right to be concerned of a pandemic,
and therefore, clearly the need in this country to build a
reliable supply of flu vaccine. We, by a--for a variety of
reasons including liability, while our class action efforts of
the past month may help some, we've run a lot of folks offshore
or out of business. The business of making vaccines is not 100
percent perfect in all instances. There is liability without
question.
Senator Bayh and I have introduced legislation, you're
right. There are others who have looked at shaping the market
or assisting the market. When we deal with the flu virus, and
it is constantly in mutation, you cannot inventory this on the
shelf and keep it there. It must be new with the season. You
have to have the capability to produce it. I do believe there
will come a day when you are right to be concerned about what's
going on elsewhere in the world as it relates to flu vaccines.
It is a killer of our elderly, there is no question about it.
Could you for a moment spend some time on that issue with
us as to what you anticipate you'll be doing? I see the
Liverpool plant is back up in operation. It looks like Chiron
is back in the market. That's wonderful. But we're still--we
still have a very fragile system. We're looking at new
techniques beyond the egg to cell for production purposes.
Enlighten us if you would as to where you see it at this
moment, and what we might do to assist you in ensuring a
constant and reliable supply.
Secretary Leavitt. Judgements on how much and when and what
to buy are complex and often times required to be made with
incomplete information, or at least imperfect information.
Senator Craig. That's right.
Secretary Leavitt. It's in some respects like many other
commodity-type business or business decisions where there are
peaks of use and the question as to whether you buy to the peak
always or whether you buy what you think will be normal. The
truth is they will not be manufactured unless there's a market,
and often times government has to be that market. We've
proposed in this budget for back-up guarantees some $20 million
in 2005 and $30 million in 2006, and also $120 million for
pandemic work for alternative production.
I would like to just update you some, Senator, on efforts
we are making to follow the avian flu in Asia. We have people
on the ground who are now working with various governments in
their clinics, in their--working with their governments, with
their practitioners. We're trying to deploy more and more
resources at the source. Pandemics have occurred on three
different occasions during this century. There's no reason for
us to believe they won't happen again. They strike quickly. We
don't know when they will strike, we don't know where they will
strike, and as you've suggested, we don't always know the
strain of the flu, and we have to be in a position to respond
quickly.
It is a matter of grave concern to me. I am following this
literally on a daily basis. I receive a daily briefing now from
CDC and others involved. Currently I believe that we are
following the right path, but we'll keep you and other members
of the committee informed as things develop.
Senator Craig. Well, I thank you very much. There are many
of us following this. We're glad to see you fully engaged.
You've made, in my opinion, the right statement. To ask
companies to supply to an indeterminate market means that we
have to stabilize the market, and the only way to do that is
for government to be the stability. Therefore to, at the end of
the cycle, to be able to buy out, if you will, excess, as long
as the companies have met the level of projection, is something
I think we ought to build a level of expectation for in the
marketplace. It's in part why we don't have companies operating
today. We bankrupt them by basically suggesting they supply to
a market it didn't develop and then we weren't there to sustain
them in the end.
So I thank you for that. I'm glad to see there's increased
money in the budget for those purposes and that we're moving as
well as we can in relation to pandemic knowledge. Thank you.
STATEMENT OF SENATOR MIKE DE WINE
Senator DeWine. Mr. Secretary, welcome.
Secretary Leavitt. Thank you, Senator.
COMMUNITY ALTERNATIVE FUNDING SYSTEMS
Senator DeWine. Ohio's Community Alternative Funding
Systems, the CAFS program, serves individuals with mental
retardation and developmental disability. However, the CAFS
program apparently does not comply with Federal mandates, and
as a result, Ohio will not be providing Medicaid services to
this fragile population. You and I have talked about this, our
staffs have talked about this, and I just want to again mention
it to you that as we, Ohio, works its way through this problem,
I hope that you will continue to work with Ohio to try to work
this out. We understand Ohio has to comply with Federal law,
but we need to make this transition as smooth as we can as we
find other ways to serve this population. These are kids, these
are kids in school, these are kids who really are a most
fragile population. So I just look forward to working with you
on that.
Secretary Leavitt. Thank you. May I say that there is no
disagreement on the nobility of the purpose and a commitment to
find a solution.
MEDICAID FUNDING
Senator DeWine. Good. We appreciate it. We'll work with
you. We appreciate you working with us. Thank you very much.
Last year, one of our Ohio children's hospitals in
Cincinnati was pursuing a Federal grant trying to find money to
continue a major project in improving the quality, the safety,
and the efficiency of its care using technology, best
practices, and sound management. But they looked around and
they found that really there was no way to pursue Federal
funding in regard to kids. It's rather ironic, I think, that
that is true, because if they had been doing it, if it was an
adult hospital, they had been doing it, there's Medicare money
available. There's not Medicaid money available.
So again we have a situation really where kids are
discriminated against. I wonder what you can do to change that
in your Department and what you see is the future to try to
deal with this.
FLEXIBILITY IN MEDICAID
Secretary Leavitt. I spoke briefly earlier about what I
believe is a wide and broadly held view that Medicaid is
rigidly inflexible and that it creates the kind of
circumstances--we've talked a couple of times already today
about where there are noble causes, noble pursuits that ought
to be done, and there's no disagreement on the cause, but
people are left without the capacity to respond to it.
That's one of the reasons that we hope very much that the
Congress will act to provide more flexibility in Medicaid. I
believe one of those areas would be the ability to construct
benefit packages that would be tailored particularly in the
instances of mothers and children. We believe more flexibility
will not result in anything other than more people being
covered as opposed to fewer.
Senator DeWine. Well, this is the type of thing that, you
know, our children's hospitals really need the ability to deal
with, and I would hope you would take a look at that as we may
possibly design something to deal with that.
TREATMENT OF CHILDREN WITH HIV/AIDS
Senator DeWine. Let me move to another area. Currently few
programs specifically target the treatment of children with
HIV/AIDS in developing countries. A primary reason is the lack
of appropriate pharmaceuticals for use in children. We all of
course know that children are not small adults and treating
them that way jeopardizes their lives. With 2.5 million
children infected with HIV around the world, it's essential
that we have appropriate medications to treat them.
How does your budget plan and your Department--how do you
plan to ensure that HIV/AIDS drugs, both generic and brand name
approved by the FDA expedited process, also include pediatric
formulations as well as important dosing information needed for
treating different age groups?
Secretary Leavitt. Senator, NIH has provided $25 million in
2004 and 2005, and they're proposing another $25 million in the
2006 for pediatric drug research. I believe that information on
the effects of those drugs in children is critically important
as well, and I'm looking forward to working with you to ensure
that we have success in this effort.
[The information follows:]
HIV/AIDS Drugs
On May 17, 2004 FDA published guidance for the pharmaceutical
industry encouraging manufacturers to submit marketing applications for
fixed dose combination (FDC) and co-packaged versions of previously
approved single entity anti-retroviral therapies. The guidance
encourages the development of pediatric formulations for these
products. Also, subsequent to the publication of the draft guidance,
FDA expanded the expedited review program to include single product
generic applications. Most of the first line antiretroviral agents are
currently available in pediatric dosage forms, so these pediatric
formulations can be made available through the generic drug approval
process.
Regarding fixed dose and co-packaged combination products, only one
company thus far has expressed interest to FDA in developing a
pediatric combination product. This could be explained in part by the
challenges associated with establishing appropriate doses for pediatric
patients for a fixed dose combination product. Such combination
products generally do not provide the dosing flexibility needed for
pediatric HIV therapy. Also, many of the pediatric formulations are in
the form of oral solutions that are not amenable to combination product
development. Combination therapy in younger pediatric patients might
best be accomplished through the use of individually formulated
antiretroviral products that can be made available through the generic
approval process. The adult combination products can be used in the
older pediatric population.
Regarding the application of the Pediatric Research Equity Act
(PREA) to PEPFAR (President's Emergency Plan for Aids Relief)
applications, the Agency is enforcing PREA for these applications as it
would with any other application. However, PREA does not apply to most
generic products or co-packaged products. When PREA does apply to a
drug (including HIV drugs) we do not hold up approval but grant
deferrals as appropriate for these life-saving treatments.
In addition, the pediatric exclusivity provision of the 1997 FDA
Modernization Act and the subsequent 2002 Best Pharmaceuticals for
Children Act have generated many clinical studies and useful
prescribing information for many products, including several for the
treatment of HIV infection. FDA has an HIV Written Request Template to
facilitate the development of products. Following are a few examples of
products that have been approved for treatment of HIV infection in
children. These approvals resulted from studies submitted in response
to a Written Request from FDA.
Ziagen (abacavir), Zerit (stavidine), Videx (didanosine), and
Viracept (nelfinavir mesylate), in combination with other
antiretroviral agents, are indicated for the treatment of HIV-1
infection in children. Use of Ziagen in pediatric patients aged 3
months to 13 years is supported by pharmacokinetic studies and evidence
from adequate and well-controlled studies of Ziagen in adults and
pediatric patients. Use of Zerit in pediatric patients from birth
though adolescence is supported by evidence from adequate and well-
controlled studies of Zerit in adults with additional pharmacokinetic
and safety data in pediatric patients. Use of Videx in pediatric
patients two weeks of age through adolescence is supported by evidence
from adequate and well-controlled studies of Videx in adults and
pediatric patients. Use of Viracept in pediatric patients from age 2 to
age 13 is supported by evidence from adequate and well-controlled
studies of Viracept in adults with additional pharmacokinetic and
safety data in pediatric patients.
In addition, in March 2003, the Pediatric Subcommittee of the
AntiInfective Drugs Advisory Committee of the Food and Drug
Administration, Center for Drug Evaluation and Research discussed the
development of antiretroviral drugs in HIV-infected and HIV-exposed
neonates younger than four weeks of age. The Advisory Committee
supported the continued need for development of products for neonates.
These are just a few examples that demonstrate FDA's commitment to
the principle that product development should include pediatric studies
when pediatric use of the product is intended. In addition, through
efforts to make safe and effective antiretrovirals available for
treatment of HIV across much of the developing world, we expect to
reduce the number of children born with HIV infection and thus
significantly impact global health.
Senator DeWine. Good. Well, my time is up, but we hope to
continue to work with you on this. Thank you very much. Senator
Kohl is gone. Senator Murray.
STATEMENT OF SENATOR PATTY MURRAY
Senator Murray. Thank you very much, Mr. Chairman. Mr.
Secretary, thank you for being here today. I can't think of an
agency that doesn't have more direct impact on lives of every
single one of the constituents we represent here, and it's a
tremendous job and we appreciate you taking it on.
HEAD START
I do want to make one comment on Head Start. We had a
conversation about this before and in a written response you
sent to me you said that you are committed to ensuring the
implementation of the President's proposals on Head Start that
provide an opportunity for more children to be served by local
Head Start programs at the highest level of quality.
I liked the statement, but unfortunately the President's
proposal does not provide for more kids to be in Head Start,
and I just really urge you to go slow on this proposal. If we
break the compact that these local communities have in
providing Head Start, I think we're going to take away the
basic tenet that Head Start was put together on. It's not just
an education program. It's making sure that kids are ready to
learn when they get to school.
So I just--I ask you again, I will tell you I'm going to be
working hard to make sure that we do this right and you'll be
hearing more from me on that, because I'm very concerned the
President's proposal will eliminate an important compact and
just essentially put in another bureaucratic layer of
government that won't help any child get to school ready to
learn.
MIGRANT HEALTH CENTERS
What I did want to ask you about today, however, is the
budget request which we are here to discuss today, and I am
very concerned about the mixed messages that we're sending
communities. I really appreciate the President's leadership on
funding for the community in migrant health centers. I couldn't
agree more with the administration's support for these centers,
because they do provide prevention-based affordable health
care. They're not just a safety net. They really do a good job
in providing health care for low income, often uninsured
patients that often fall through the cracks in our health care
system. So I applaud the administration's request for another
$304 million. I think that's great.
But what I am concerned about is a number of the other
budget policies that are coming at us will make it impossible
for these community health centers to meet their mission and to
provide the health care that we're asking them to. The other
proposals on New Starts and Medicaid and the elimination of
coordination services like the Healthy Community Access Program
are going to have a huge impact.
We know that our community health centers are already
seeing double digit increases in the number of patients that
need care, and as the number of patients uninsured continue to
increase, their load is going to continue to increase. We need
to make sure that we're not just funding new health centers,
but we're making sure that the existing ones get the support
they need.
Medicaid on average accounts for more than 30 percent of
the revenue for these community health centers, so any policy
cuts in Medicaid is going to have a direct impact on that. I'm
already hearing from all of my community health centers that
they are deeply concerned about the proposed cuts in Medicaid.
We're already dealing with a mental health crisis under
Medicaid. I think you know CMS just notified Washington State
that they can no longer depend on the $82 million annually to
provide community-based mental health care for low income
patients.
Another policy I'm very concerned about is you talked about
providing flexibility, but you're taking away, but that's a
point for another day. The community health centers are the
ones who are going to absorb the impact of that on them.
Then the elimination of the Healthy Community Access
Program that works out in our communities. I know the
administration in the past has said it's not effective. I
really invite you out to Washington State or to talk to some of
our HCAP grantees, because they really are making a difference.
Elimination of that is going to be very hard for our community
health centers to be able to succeed.
So my question to you is, thank you for providing
additional funds, but budget policies that impact these
community health centers in very negative ways are going to
make it impossible. How do you reconcile increasing the money
but passing the policies that make it very difficult for them
to be successful?
Secretary Leavitt. Senator, let me respond on Head Start.
I'll go through all of the three areas you talked about. The
President's proposal would actually allow for 9,729 additional
students to be served by Head Start. The President and the
Secretary of HHS are enthusiastic about Head Start and want to
make sure it continues not just to serve those, but to expand.
I've had a number of meetings now with Secretary Spelling to
talk about how we could coordinate activities between the
Department of Education and HHS. We think that that will
leverage those funds even further.
With respect to health center funds and the whole subject
of community health centers, that's another area where we share
enthusiasm. We think that the President's proposal puts us
again on a path to complete his objective of 1,200 new and
expanding centers. This one will add 40 in the areas with the
lowest incomes.
We have made a policy decision to emphasize actual service
delivery, and there are places in this budget, with health
center funds being one of them, where the actual--where by
statute only 15 percent of those funds could go for service
delivery and went for other matters ancillary to it. So there
was a priority put on our part for the actual delivery of
funds.
With respect to Medicaid, clearly community health centers
are dependent upon continued participation by Medicaid. I
think, as you pointed out and others have, that it's nearly 35
percent of their overall budget. We want them to succeed. A cut
in the number of dollars in Medicaid would in fact be alarming.
However, this budget will reflect more than 7 percent more
dollars going into Medicaid than did before. This is not a
matter of cutting. We want Medicaid to increase. We want it to
increase .2 of 1 percent than what had been proposed before,
but there are very few large numbers in the President's budget
that will reflect a 7 percent-plus increase, and Medicaid is
one of them.
HEAD START
Senator Murray. Well, I appreciate your response. I know
I'm out of time. I just would ask you again to go cautiously
with Head Start, because it is more than just an education
program, and it is a success story, and I want to make sure we
don't undo that.
I just am concerned that if we just focus on new community
health centers we are going to leave the ones that are out
there not doing a good job and then we'll be back here saying,
well, they don't do a good job, let's not fund any of them, and
I don't want to go there. I think it's really important to
understand the health care impact, the crisis, the budget
numbers that are hitting these, the number of uninsured that
are increasing, and we need to be able to do our part here. I
will continue to work on that. I know you care as well, so
thank you very much.
Secretary Leavitt. Thank you.
Senator DeWine. Senator Durbin.
STATEMENT OF SENATOR RICHARD J. DURBIN
Senator Durbin. Thank you very much, Mr. Chairman. George
Carlin is a great observer of life and has a routine relative
to riding on airplanes, most of which cannot be repeated at
this hearing.
But there is one thing he observes: When starting to land
in an airplane, the flight attendant says, let me be the first
to welcome you to Washington DC. Carlin asked, if you're on the
same plane I'm on, how can you be welcoming me anywhere? I
would like to welcome you to this committee, but since this is
the first time I've ever been on this committee, I can't. I'm
just happy to be here with you today.
Secretary Leavitt. Thank you.
MEDICAID AND MEDICARE
Senator Durbin. I can't officially welcome you, but I've
wanted to be on this subcommittee for a long time and I'm glad
that it finally happened. It's very critical and important.
SOCIAL SECURITY
The President is on a 60-day tour around America to cities
to talk about the crisis or challenge or problem, or whatever
is the word du jour of Social Security. There are many of us
who believe that Social Security does present a challenge that
we should address and address now with sensible, common sense
approaches that over the long term will help us meet our needs.
I'd like to show you a chart though that compares the
challenge of Social Security to other challenges. I'll make
sure the Secretary can see it there. You'll note on this chart
that over the period of time of our debate about the costs of
Federal programs, we anticipate by 2075 a 48 percent increase
in the cost of Social Security as a percentage of our gross
domestic product. Look at the numbers for Medicare and
Medicaid, dramatically larger, 318 percent for Medicare, 342
percent for Medicaid.
So if the President is looking down the track and seeing 40
or 50 years from now this light of a train coming toward us and
warning us about this, certainly we should be sensitive to the
fact that looming directly behind us is a locomotive that says
health care in America that is about to run us over.
You are addressing through this budget some of the cost of
programs like Medicaid and Medicare. Neither this
administration nor this Congress apparently has the political
will to address the much larger issue we face in this country.
If there were another line in this chart, the cost of health
insurance by the year 2075, it might even be larger in terms of
increase. So how can we address these things so tentatively in
such a piecemeal fashion and expect to really resolve the
difficulty?
AFFORDABLE HEALTH INSURANCE
I just left a meeting with the President of one of the
largest unions in America. He says we're about to lose
manufacturing through his union because of the cost of health
care. I hear that from small and large businesses alike. Yet
we're not talking about it. If the President were making a 60-
day, 60-city tour about what to do to make sure that every
American had affordable health insurance that provided basic
protection for their family, he would have turnouts,
unimaginable turnouts of people interested in this issue.
MEDICAID
So I ask you this. What is--what do you think we should do
in this next year? Is the answer to cut coverage on Medicaid?
Every time someone in Washington says flexibility, I grab my
wallet, because flexibility means less money, I know that, I've
been around here long enough. I understand we need to change
some rules, but I'm afraid flexibility is just a cover for a
reduction in cost.
Shouldn't we be asking for some advantage for consumers and
taxpayers in this process? We're still in a position where
Medicare cannot bargain under the new prescription drug plan to
bring pharmaceutical costs down. Medicaid in most States is
really limited as to how it can bargain with drug companies to
bring the cost of drugs down for recipients in those States.
Yet we know over the border in Canada drugs are a fraction of
the cost.
How can we be honest and sincere about dealing with health
care if all we're going to do is cut benefits for poor people
and not address cost issues such as the ones that I just
mentioned?
Secretary Leavitt. Senator, I've become fond of observing
that there is a point in the life of every problem when it's
big enough you can see it but small enough you can still solve
it. Your chart reflects three of them. The President has
clearly taken two of them on this year. That's--two out of
three is a very significant undertaking.
But the matter that you've reflected on, health care costs,
clearly is one that we will all have to deal with. Now I,
recognizing the limit of time, may I just say--point out four
things that I believe can and should be done in this budget
year to get us started?
MEDICAID REFORM
One is in fact Medicaid reform. These are reforms that will
not result in anyone losing health insurance, but in fact will
allow us to preserve health insurance for many who have it and
who are at risk of losing it, and I believe would have the
capacity of expanding health care to others for reasons that
I've already enumerated and won't repeat.
HEALTH IT
The second is health IT. I believe health IT is the new
frontier in health care productivity. Many things in this
budget would point us toward being able to harness the powers
of technology.
But it leads us to, I think, a third, and that is we're
measuring the wrong thing. We measure quantity of care, not the
quality of care. We are not measuring outcomes. And I believe
until we begin to measure performance outcomes and compensate
providers and others on the basis of those outcomes, we will
continue to see an unsatisfying result.
ACCESS TO HEALTH INSURANCE
The fourth would be expanding health care to--or access to
health insurance. The President's proposal would allocate $125
billion over the next 10 years and would result in 12 to 14
million people who currently do not have coverage to receive
it. So Medicaid reforms, IT, pay for performance, and expanding
access to health insurance through health savings accounts and
other mechanisms I believe would be at least steps in the
direction that you've pointed.
Senator Durbin. I think they are steps in that direction.
There may be some different--I don't know if association health
plans is part of what you're suggesting here. They raise a lot
of questions about standards and actual coverage and the like
and the financial stability of the company's offering.
HEALTH SAVINGS ACCOUNTS
Health savings accounts again have been a wildly popular
theory here since Golden Rule Insurance Company became the
favorite of then-Speaker Gingrich. We keep hearing about it
every year. I'd like to see some demonstrated proof that it
really does offer the kind of health insurance coverage that we
want to see in the long term.
I don't know, Mr. Chairman, if my time is expired here.
Senator DeWine. Why don't you just continue.
Senator Durbin. Thank you.
Senator DeWine. Because I'm going to have some questions
too, so why don't you just go ahead.
Senator Durbin. Well, thank you very much.
Senator DeWine. As long as the Secretary has a couple more
minutes.
TITLE X
Senator Durbin. I will just try to make it as direct as I
can and as brief as I can. Let me talk to you about Title X.
Title X, of course, is the family planning program,
particularly for low-income people. If there's one thing that
divides this Congress and this Nation, it is the question of
abortion, and we have spent more time and anguish over this
issue, what is the right thing to do. Most people would
conclude that the right thing to do is to give to that
prospective mother and father the option of planning their
family so that they don't find themselves in a position where
there are unintended or unplanned pregnancies forcing decisions
which may lead to abortion.
I take a look at where we are today. Your fiscal budget for
2006 flat funds Title X family planning programs at $286
million. This level of funding does not keep up with inflation
and meets the needs of fewer than half of the low-income women
who qualify. If we are truly trying to reduce the number of
unintended pregnancies and abortions, how can we do it with a
budget that does not meet the obvious need for family planning
information, counseling, medications for the lowest income
people in America?
Secretary Leavitt. Senator, you're correct in that the
budget between 2005 and 2006 is the same. That follows,
however, a year where we did increase our proposal by $10
million. I'd also point out the fact that the Federal share of
Medicaid during that period of time who served that same group
went up $65 million, and the Indian Health Service went up $19
million.
So while that one category may have been level, the broader
view was up $84 million on----
Senator Durbin. On Medicaid as opposed to Title X.
Secretary Leavitt. On Medicaid and Indian Health Services,
and they serve basically the same population.
Senator Durbin. I would not disagree, but certainly that
money is being spent on many, many other things, not focused as
Title X is on family planning.
Let me ask you in the same vein, most parents that I know,
certainly my family, raising children preached abstinence,
saying to these children, my children and many other children,
wait, don't make a mistake, make the right decision and have
enough respect for yourself to make that right decision. That
has become such a major part of our effort now in trying to
reduce teen pregnancy and unintended pregnancy.
ABSTINENCE
The proposed budget includes a $38 million increase for
abstinence only until marriage programs. The groups that have
taken a look at this, like the National Academy of Sciences'
Institute of Medicine, have criticized this investment in these
abstinence-only programs. Some investigations by the House
Committee on Government Reform have found that the abstinence-
only programs contain errors and distortions in the messages
that they are giving to people and young people. One federally
funded curriculum, for example, was found to be teaching
students that sweat and tears are risk factors for HIV
transmission, which I don't believe any reputable medical
doctor would agree with.
So I ask you, when it comes to these abstinence-only
programs and the amount of money that we're putting into them,
do you believe that this is our best investment in terms of
good public health policy to reach the goal of educating young
people so that they make the right decisions about their own
bodies?
Secretary Leavitt. Senator, we serve many populations in
many different ways. This is a commitment on the part of the
administration to teach one principle that we know is true, and
that is abstinence is 100 percent effective. I also recognize
that there are times when one program or another will have the
validity of one fact or another or approach on all sides of the
ideologic spectrum, and we ought not to be defending things
that aren't true in any of those.
We need to have a commitment to the truth, and the
President's commitment to include abstinence-only programs is
real, because he believes, as do I, that it is in fact what we
ought to be teaching our children.
Senator Durbin. I don't quarrel with that premise, and as I
said, most parents start there. Some parents and teachers and
counselors and ministers come to the conclusion that more has
to be said beyond ``say no.'' So I won't go any further than to
say I hope that we will test each of these programs to make
sure that the information given is accurate and then be honest
about the outcomes.
DIETARY SUPPLEMENTS
My last question if I might ask relates to dietary
supplements. I've had a passion over this industry and the laws
regulating it. I got up this morning and I took my vitamins,
for the record, so I am not opposed to taking vitamins. I think
it's good, it's healthy. I don't think it's going to hurt me.
Maybe it'll help.
But some of these dietary supplement companies are selling
products that have never been tested. They are making claims
about their products' efficacy which they cannot substantiate.
They are marketing their dietary supplements to children. The
ephedra scandal of just a year or so ago is an indication of
that element of the dietary supplement industry that was
clearly doing all the things that I just mentioned to the
detriment of the health of America.
Senator Hatch and I have debated this back and forth. We
don't see it all the time eye to eye, but we have come to a
conclusion, and I hope that you will consider supporting it,
and that is that the dietary supplement industry should at a
minimum make adverse event reports to the Food and Drug
Administration. If some company is making a dietary supplement
that results in a bad health outcome, a seriously bad health
outcome or death, that should be reported to the Food and Drug
Administration. That is not the law today.
What is your opinion? Do you believe that those who are
marketing dietary supplements should be required to report
adverse events to the Food and Drug Administration as those
making over-the-counter drugs and pharmaceuticals are required?
[The information follows:]
Dietary Supplements
With enactment of the DSHEA, Congress made the decision to create a
new regulatory regime for dietary supplements modeled more on the
Agency's regulation of food safety and less on the drug regulatory
model. With the exception for new dietary ingredients, FDA's regulation
of dietary supplements is essentially post-market program similar to
food regulation.
Under the Dietary Supplement Health and Education Act (DSHEA), FDA
relies on voluntary adverse event reports as a major component of our
post-market regulatory surveillance efforts. Voluntary reporting
systems are estimated to capture only a small percentage of adverse
events, but they provide valuable signals of potential problems. When
such a signal identifies a possible safety hazard, the burden is on FDA
has the ability to gather and evaluate any scientific literature or
information regarding whether the substance produces a safety hazard
FDA has used this information to open investigations that led to
removal of ephedra from the market and is currently investigating the
marketing of steroids as dietary supplements. FDA's enforcement actions
are enhanced by a close working relationship with DEA, the FTC and
other State and Federal agencies.
Another important aspect of FDA's regulatory and surveillance
programs are current good manufacturing practice (cGMP) requirements
for dietary supplements authorized in the Act. These regulations will
establish industry-wide standards to ensure that dietary supplements
are not adulterated. This final rule is in the last stage of review and
is expected to be published in the near future.
In addition, FDA has a post-market surveillance program to support
enforcement of labeling requirements for dietary supplements. This
compliance program, Dietary Supplements--Import and Domestic, contains
guidance to FDA field offices regarding field exams and sample
collections to determine compliance with the labeling requirements for
dietary supplements. Significant violations of the labeling
requirements for dietary supplements may lead to an advisory action,
such as a Warning Letter, or to a court action for seizure or
injunction. Imported products that do not comply with FDA labeling
requirements are subject to detention and refusal when offered for
entry into the United States.
FDA will continue in its efforts to take action against dietary
supplement products that threaten the public health and will continue
to provide guidance to the industry and outreach to consumers in this
regard. We further believe that the promulgation of the GMP rule with
provide another measure of safety for dietary supplements, and we look
forward to working with the Committee to further examine these issues
and ensure that appropriate steps are being taken.
Secretary Leavitt. Senator, I have not had the benefit of
being able to hear you and Senator Hatch debate these issues.
It sounds like a colorful and rather interesting thing to hear.
I'll look forward to hearing more--to find that the two of you
have agreed on this. Sounds like something I ought to learn
about.
Senator Durbin. Let me share it with you. I won't put you
on the spot any more on this, but I hope you'll take a look at
it. It could be a reasonable way to bring some regulation to an
industry which by and large is doing a wonderful job, but there
are some players in this industry who are not.
Mr. Chairman, thank you for your forbearance and patience,
and Mr. Secretary, thank you for being here.
OLMSTEAD ACT
Senator DeWine. Mr. Secretary, just a few more questions.
President Bush signed an executive order in response to the
1999 Supreme Court decision in regard to the Olmstead Act. This
Court said that the disabled have a right to live in a group
home or other supportive system rather than being pushed into
an institution, and the Court directed the government to
develop opportunities for the disabled to better live in their
communities. The Court also said forcing them into institutions
is discriminatory.
The executive order told the agencies to put together plans
to make this happen. How are you proceeding in reaching this
goal?
Secretary Leavitt. Senator, it would be better if I could
provide you with specifics. The actual plan and the execution
of that plan inside either our agencies our broader would be
unknown to me. But I would like to point out that the
President's money follows the person it is designed
specifically to----
Senator DeWine. That was my next question anyway.
Secretary Leavitt. Good. Well----
Senator DeWine. We can--you can proceed.
Secretary Leavitt. One of the----
Senator DeWine. But you will give us, Mr. Secretary, you
can follow up then in regard to this question about----
Secretary Leavitt. Yes.
Senator DeWine [continuing]. What the plan is and what the
timing would be on that.
Secretary Leavitt. We will be responsive on that query, and
I'll also point out as one of the specific Medicaid, for
example, proposals that we would like to see adopted this year
would be a capacity, a flexibility, again stepping away from
the rigid inflexibility that is currently there to serve those
who are disabled and particularly those who are elderly.
Medicaid is a good example of a policy that just needs to
be changed, needs to be modernized. Medicaid was established in
the 1960s. The state of practice at that point was to
institutionalize basically those who were either disabled or
elderly and disabled, and consequently Medicaid, without some
waiver or without a change in the law, simply doesn't allow us
to pay for any circumstances outside an institution, and that
just needs to change. It's making the point that you have and
we hope very much that Congress will act with some dispatch to
give States that capacity.
DISABLED
Senator DeWine. Your President's proposal and your budget,
the money following the person, I wonder if you could elaborate
on that in regard to how that will affect the disabled, and
specifically how that will work in the 50 States. Are we
talking about 50 State programs, or how will that blend with
national uniformity and how these programs will be
administered?
Secretary Leavitt. Well, specifically it would create----
Senator DeWine. This is--my understanding of this--excuse
me--this is a--these are pile-up programs.
Secretary Leavitt. That's right. It would create a 5-year
demonstration that finances services for individuals who are in
transition from institutions to the community. The Federal
Government would fund 100 percent of the community-based
services for the first year and then funding would revert back
to the States at the current Federal match, which means the
Federal Government on average would pay about 65 percent.
The demonstration would test whether the increased use of
home and community-based services would reduce spending on
institutional care as the advocates and as this Secretary
believes that it will.
Senator DeWine. How will that work in regard to the
disabled community? I mean, this is designed in my
understanding for the disabled community but also for older
Americans. Is that correct?
Secretary Leavitt. Well, the rationale of the program is
that the proposal would encourage States to move from
institutionalizing long-term care patients who are served by
Medicaid into home and community services, which in turn may
reduce the spending on institutional care. The proposal is an
attempt to rebalance the system, as I've indicated, where long-
term care has been essentially institutionalized under the
Olmstead decision by increasing the care-setting choices and
assisting individuals with disabilities. They will be able to
live in the home and community-based settings.
This is where they want to be served. Frankly, it's where
their families want to serve them. It leverages the great
American asset of people loving their families and choosing to
care for them and it helps in the right spot. Disability groups
have been very supportive of this and we'll continue to work
closely with them and with you on various proposals as we learn
more.
Senator DeWine. Mr. Secretary, I'd like to commend FDA's
actions in quickly enacting Best Pharmaceuticals for Children
Act, as well as a pediatric rule. How those two programs
interact can sometimes though be very tricky, but they interact
nevertheless, and that's what they were designed to do.
[The information follows:]
Best Pharmaceuticals for Children Act
The BPCA is a critical tool in NIH's effort to ensure that adequate
information is available concerning the effects and efficacy of
pharmaceuticals in children. The NICHD is working with the FNIH and the
Secretary to implement the provisions of the law, and to facilitate the
testing of drugs.
BACKGROUND
The Best Pharmaceuticals for Children Act (BPCA) established
procedures to identify health risks and effectiveness of drugs in
children. The Secretary delegated the functions of developing the
priority listing of drugs to be tested to NIH and FDA, and the program
for testing those drugs to NIH. Dr. Zerhouni delegated the NIH duties
to NICHD. Over the last few years we have had several communications
with Sen. DeWine's staff about implementation issues. Most recently,
they have raised questions about the testing of a particular on patent
drug, Baclofen, which is proposed for treatment of spasticity in
children with cerebral palsy.
BPCA
Under the BPCA program, different procedures are followed for
testing on- and off-patent drugs for pediatric use and labeling.
Following the BPCA's enumerated procedure for on patent drugs, NICHD
tests a drug only after the manufacturer and current patent holder
decline a request from the FDA to conduct the testing and after private
donor decline to provide support through the Foundation for the
National Institutes of Health (FNIH). (NICHD and FNIH have a Memorandum
of Understanding in place to conduct the testing.) If the FNIH is
unable to raise sufficient private funds to support the requested
testing, and so-certifies to the Secretary, the Secretary refers the
drug to NICHD for inclusion on the BPCA program priority list of drugs
for testing in children.
ON-PATENT DRUGS
Senator DeWine. I'd like to bring an issue to your
attention. My staff has already raised this with NIH. And that
is the on-patent drugs that are currently awaiting study in the
NIH Foundation. The pediatric rule provides for the rule to be
invoked when a Secretary makes a certification regarding
insufficient funds. Preliminary discussions have suggested this
would be an appropriate action for HHS, FDA, and NIH to take.
I'd ask that you have your staff take a look at this issue,
you take a look at it, and get in touch with the appropriate
staff at NIH and FDA and begin the process of invoking the
pediatric rule so clinical trials can begin. I would ask you do
this and get back in touch with me in regard to this so we can
get some resolution and move forward.
Secretary Leavitt. I will do so, Senator. Thank you.
GLOBAL AIDS FIGHT
Senator DeWine. I appreciate it. Let me turn if I could to
the CDC's work in the global AIDS fight, and you and I have
talked about this before. Specifically in the countries, the
non-focus countries, countries such as India and China, let me
ask you, does the CDC's global AIDS program do you believe have
the infrastructure necessary to expand its programs in these
non-focus countries? If not, what's needed to expand their
response?
Second, let me ask you, will you support providing
increased program support and resources to the global AIDS
program and other HHS programs that are part of the emergency
plan?
Secretary Leavitt. The President has made a commitment to
expand appropriations to $15 billion to undertake that
challenge. Obviously that will need to include the deployment
of proper infrastructure in those countries as well as others.
We're working hard now to target our efforts to provide for the
greatest possible need. We've laid out a series of principles
and we're working to follow those principles.
Senator DeWine. I look forward to having further discussion
with you in regard to this. It is a very difficult question, as
I think your answer would indicate. Taking the finite resources
that we have, even though this administration has made a major
commitment, which I commend the administration for, and the
Congress has done the same, when you look at the need, it's
still finite resources, and trying to make a determination of
how aggressively we move into countries like India and China is
a very, very tough call.
But, you know, if we don't--if the world does not stem the
emerging AIDS problem in India or China or Russia, the
ramifications are going to be absolutely unbelievable. When it
moves, AIDS moves in India, for example, into the general
population, the results are going to be absolutely devastating,
and it's getting very close to that.
So it's, you know, these are just tough questions, they're
tough calls. I just look forward to working with you and
sharing ideas.
Secretary Leavitt. Thank you. I look forward to the same
interaction.
Senator DeWine. I appreciate it. Well, Mr. Secretary, we
thank you very much for your time and attention and look
forward to working with you on many issues.
Secretary Leavitt. Thank you.
SUBCOMMITTEE RECESS
Senator DeWine. Thank you very much Mr. Secretary.
The subcommittee will stand in recess to reconvene at 9:30
a.m., Wednesday, April 6, in room SD-124. At that time we will
hear testimony from the Honorable Elias Zerhouni, Director,
National Institutes of Health.
[Whereupon, at 11:45 a.m., Wednesday, March 16, the
subcommittee was recessed, to reconvene at 9:30 a.m.,
Wednesday, April 6.]