[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]
REVIEW OF THE DEPARTMENT OF HEALTH AND HUMAN SERVICES' FISCAL YEAR 2008
BUDGET
=======================================================================
HEARING
BEFORE THE
COMMITTEE ON ENERGY AND COMMERCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED TENTH CONGRESS
FIRST SESSION
__________
FEBRUARY 6, 2007
__________
Serial No. 110-2
Printed for the use of the Committee on Energy and Commerce
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COMMITTEE ON ENERGY AND COMMERCE
JOHN D. DINGELL, Michigan, Chairman
HENRY A. WAXMAN, California JOE BARTON, Texas
EDWARD J. MARKEY, Massachusetts Ranking Minority Member
RICK BOUCHER, Virginia RALPH M. HALL, Texas
EDOLPHUS TOWNS, New York J. DENNIS HASTERT, Illinois
FRANK PALLONE, Jr., New Jersey FRED UPTON, Michigan
BART GORDON, Tennessee CLIFF STEARNS, Florida
BOBBY L. RUSH, Illinois NATHAN DEAL, Georgia
ANNA G. ESHOO, California ED WHITFIELD, Kentucky
BART STUPAK, Michigan BARBARA CUBIN, Wyoming
ELIOT L. ENGEL, New York JOHN SHIMKUS, Illinois
ALBERT R. WYNN, Maryland HEATHER WILSON, New Mexico
GENE GREEN, Texas JOHN SHADEGG, Arizona
DIANA DeGETTE, Colorado CHARLES W. ``CHIP'' PICKERING,
Vice Chairman Mississippi
LOIS CAPPS, California VITO FOSSELLA, New York
MIKE DOYLE, Pennsylvania STEVE BUYER, Indiana
JANE HARMAN, California GEORGE RADANOVICH, California
TOM ALLEN, Maine JOSEPH R. PITTS, Pennsylvania
JAN SCHAKOWSKY, Illinois MARY BONO, California
HILDA L. SOLIS, California GREG WALDEN, Oregon
CHARLES A. GONZALEZ, Texas LEE TERRY, Nebraska
JAY INSLEE, Washington MIKE FERGUSON, New Jersey
TAMMY BALDWIN, Wisconsin MIKE ROGERS, Michigan
MIKE ROSS, Arkansas SUE MYRICK, North Carolina
DARLENE HOOLEY, Oregon JOHN SULLIVAN, Oklahoma
ANTHONY D. WEINER, New York TIM MURPHY, Pennsylvania
JIM MATHESON, Utah MICHAEL C. BURGESS, Texas
G.K. BUTTERFIELD, North Carolina MARSHA BLACKBURN, Tennessee
CHARLIE MELANCON, Louisiana
JOHN BARROW, Georgia
BARON P. HILL, Indiana
______
Professional Staff
Dennis B. Fitzgibbons, Chief of Staff
Gregg A. Rothschild, Chief Counsel
Sharon E. Davis, Chief Clerk
Bud Albright, Minority Staff Director
(ii)
C O N T E N T S
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Page
Baldwin, Hon. Tammy, a Representative in Congress from the State
of Wisconsin, opening statement................................ 12
Barrow, Hon. John, a Representative in Congress from the State of
Georgia, opening statement..................................... 16
Barton, Hon. Joe, a Representative in Congress from the State of
Texas, opening statement....................................... 3
Burgess, Hon. Michael C., a Representative in Congress from the
State of Texas, opening statement.............................. 9
Butterfield, Hon. G.K., a Representative in Congress from the
State of North Carolina, opening statement..................... 13
Dingell, Hon. John D., a Representative in Congress from the
State of Michigan, opening statement........................... 1
Doyle, Hon. Michael F., a Representative in Congress from the
Commonwealth of Pennsylvania, opening statement................ 8
Engel, Hon. Eliot L., a Representative in Congress from the State
of New York, opening statement................................. 15
Harman, Hon. Jane, a Representative in Congress from the State of
California, opening statement.................................. 9
Hill, Hon. Baron P., a Representative in Congress from the State
of Indiana, opening statement.................................. 12
Inslee, Hon. Jay, a Representative in Congress from the State of
Washington, opening statement.................................. 11
Murphy, Hon. Tim, a Representative in Congress from the
Commonwealth of Pennsylvania, opening statement................ 8
Pallone, Hon. Frank, a Representative in Congress from the State
of New Jersey, opening statement............................... 5
Schakowsky, Hon. Janice D., a Representative in Congress from the
State of Illinois, opening statement........................... 16
Solis, Hon. Hilda L., a Representative in Congress from the State
of California, opening statement............................... 10
Stearns, Hon. Cliff, a Representative in Congress from the State
of Florida, opening statement.................................. 11
Stupak, Hon. Bart, a Representative in Congress from the State of
Michigan, opening statement.................................... 6
Towns, Hon. Edolphus, a Representative in Congress from the State
of New York, opening statement................................. 14
Walden, Hon. Greg, a Representative in Congress from the State of
Oregon, opening statement...................................... 7
Weiner, Hon. Anthony D., a Representative in Congress from the
State of New York, opening statement........................... 17
Wynn, Hon. Albert Russell, a Representative in Congress from the
State of Maryland, opening statement........................... 14
Witnesses
Leavitt, Hon. Michael O., Secretary, U.S. Department of Health
and Human Services............................................. 17
Prepared statement........................................... 58
REVIEW OF THE DEPARTMENT OF HEALTH AND HUMAN SERVICES' FISCAL YEAR 2008
BUDGET
----------
TUESDAY, FEBRUARY 6, 2007
House of Representatives,
Committee on Energy and Commerce,
Washington, DC.
The committee met, pursuant to call, at 10:05 a.m., in room
2123, Rayburn House Office Building, Hon. John D. Dingell
(chairman of the committee) presiding.
Present: Representatives Markey, Boucher, Towns, Pallone,
Rush, Eshoo, Stupak, Engel, Wynn, Green, DeGette, Capps, Doyle,
Harman, Allen, Schakowsky, Solis, Gonzalez, Inslee, Baldwin,
Hooley, Weiner, Matheson, Butterfield, Melancon, Barrow, Hill,
Barton, Upton, Stearns, Deal, Whitfield, Shimkus, Pickering,
Fossella, Pitts, Walden, Terry, Ferguson, Rogers, Myrick,
Sullivan, Murphy, and Burgess.
Staff present: Sharon Davis, Elizabeth Ertel, Bridgett
Taylor, Amy Hall, John Ford, William Garner, Jessica McNiece,
Christie Houlihan, Ryan Long, Melissa Bartlett, Brandon Clark,
Katherine Martin, and Chad Grant.
OPENING STATEMENT OF HON. JOHN D. DINGELL, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF MICHIGAN
The Chairman. The committee will come to order. The purpose
of today's hearing is to receive before the full committee,
testimony from the distinguished Secretary of Health and Human
Services regarding the President's fiscal year 2008 budget
request. Mr. Secretary, we welcome you.
On occasions when a hearing is conducted at the full
committee level, the Chair, after consultation with my dear
friend Mr. Barton, will be following somewhat different
procedures with regard to opening statements and questions.
Consistent with the rules and past practices of the
committee, the chairman and ranking member of the full
committee then will be recognized for 5-minute opening
statements. The chairman and the ranking member of the relevant
subcommittees will be recognized for 3-minute opening
statements.
All other Members will be recognized for a 1-minute opening
statement, but they may waive their statements for an
additional 1-minute of questioning during the first round.
The Chair wishes we could do this a little differently, but
the situation is we have a very large committee and to do the
business and show courtesy to all, this is probably the best
solution. We used it during the past Congress where Mr. Barton
and I worked it out, and it was generally satisfactory to the
Members.
Now I will recognize Members who are here when I call this
hearing by order of their seniority on the full committee. Once
all these Members have had an opportunity to deliver or waive a
statement, I will recognize all members of the committee in the
order that they arrived at the hearing.
Sharon Davis, the chief clerk of the committee, will keep a
careful accounting of the attendance for purposes of ensuring
that this is fairly and properly carried out.
The Chair will recognize Members for the purposes of
questioning Secretary Leavitt under the same procedures that I
have outlined.
Before we proceed with the hearing, the Chair reminds our
good friends and colleagues that the committee will be
conducting two additional full committee proceedings this week.
As previously noted, one, the full committee will reconvene on
Thursday, February 8 at 10 a.m. to receive testimony of the
Secretary of Energy regarding the President's fiscal year 2008
budget request. And Members and their staff are invited to a
briefing by the Intergovernmental Panel on Climate Change
regarding its recently announced fourth assessment report on
February 9 at 10:00 a.m.
The Chair suggests very strongly that my colleagues should
be there.
The Chair now recognizes himself for the purposes of an
opening statement.
Today we will hear about the President's fiscal year budget
from the Secretary of Health and Human Services, our friend
Secretary Leavitt.
Forty-six million Americans today lack health insurance.
This problem warrants immediate attention. The administration,
however, continues to shred the health safety insurance net.
First the President has missed, and regrettably, an
historic opportunity to reduce the number of uninsured
children. Seven out of 10 uninsured children qualify either for
Medicaid or the State children's health insurance program,
SCHIP, but are not yet enrolled. The President, however, makes
cuts in the program ensuring that we will not reach those
children and that more children and their parents will become
uninsured.
Second, rather than working with the States to bolster
health care coverage, the administration cuts key benefits; $50
billion in overall calls to Medicaid coming on top of last
year's $28 billion in cuts. It also induces the States to
provide bare-bones packages and high-deductible plans that make
little sense for the working poor.
Third, the President proposes billions in tax breaks to
encourage people to move from employer-sponsored coverage into
high-deductible or bare-bones health plans in the unregulated
insurance market. Studies have documented that this will cause
employers to drop insurance coverage that they provide their
workers today.
Fourth, the President directly attacks the institutions
that serve the uninsured and the underinsured, cutting upward
of $50.4 billion from hospitals, public providers and medical
education.
On Medicare, the budget is as noteworthy for what is absent
as what is included. The budget fails to address the documented
problems in part D drug benefit or include one dime to address
pending Medicare physician payment cuts, a very serious
problem.
According to the American Medical Association, physicians
will see a 10 percent payment cut next year and cumulative cuts
of more than 40 percent over the next 10 years. Moreover, the
President would increase part D premiums for more Medicare
beneficiaries, as well as the part D premium. Likewise, the
budget does not propose any of the MedPAC-recommended cuts to
HMO and private health plan payments, which alone would save
tens of billions of dollars over that time.
Instead, it proposes $252 billion over the next 10 years in
cuts to Medicare fee for service, the program that enrolls the
vast majority of our seniors today. In the public health
service budget, there are several other proposals causing
concern. Instead of existing programs being invested in what
would affect children's health and adolescent health, the
President's budget creates a new adolescent health promotion
initiative with a budget of 17 million for a country of 300
million people. The public health safety net takes another
beating in this budget.
Programs for training health professionals, substance abuse
prevention, and chronic diseases are but a few examples. The
budget for National Institutes of Health does not keep up for
inflation, much less providing for needed increases where they
could be spent for the public good.
I am alarmed that the budget does not provide adequate
resources for public health threats for bioterrorism. The Trust
for Americans' Health says that reduction in the bioterrorism
in public health preparedness programs is particularly
troubling.
We are cutting core boots-on-the-ground support for
emergency disaster response, leaving the country at unnecessary
levels of risk. While this budget provides increases for the
Food and Drug Administration, I remain concerned that these
increases will not be adequate to allow Food and Drug to
properly ensure safety of drugs, food, cosmetics and medical
devices. This is a disturbing message that we find in the
President's budget.
The Chair notes that I have completed my statement with 32
seconds remaining, and I now recognize my dear friend Mr.
Barton for 5 minutes.
OPENING STATEMENT OF HON. JOE BARTON, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF TEXAS
Mr. Barton. Thank you, Mr. Chairman. And if you feel a
little rusty, I can just show you what I good fellow I am; I
will be happy to take over at any time, until you feel unrusty.
It is time to have our full first committee hearing on the
on part of the President's budget in health items and we do
have our very eminent Cabinet Secretary, Governor Leavitt here.
We welcome you, sir.
This committee has a proud history of legislating and doing
oversight in health care. In the last Congress we reauthorized
for the first time in a generation the National Institutes of
Health. We reauthorized the Ryan White AIDS Act and we also
passed legislation to spur development of bioterrorism
countermeasures. That is just a few of the examples of things
that actually became law that originated in this committee in
the last Congress. In the 110th Congress we have a new chairman
who is going to do an outstanding job, I am sure, and I am sure
that he wants to be active on health care.
I will not be surprised if the emphasis changes. We have
already seen a lot of the Presidential want-to-be candidates on
the Democratic side talking about health care, and if they
follow through, we are going to see lots of proposals that
would require tax increases, government mandates and many, many
more government bureaucrats involved in health care for the
average American and the average American family.
I personally think we ought to have more choices in health
care and I think those choices ought to be based on market
forces and openness and transparency as opposed to mandates and
bureaucracy.
We will have some spirited hearings and some spirited
debates about that in this committee.
Mr. Dingell has told me that he plans to reauthorize the
State Children's Health Insurance Program which we commonly
call the SCHIP program. That program expires this year. It is
under the jurisdiction of this committee. And we certainly want
to be involved in that.
The new congressional majority has already passed a piece
of legislation on the House floor requiring the Secretary of
HHS to go out and negotiate Medicare part D prescription drug
benefits for the senior citizens. Mr. Dingell taught me, when I
was a junior member of this committee in the minority, that you
held hearings and you held markups and you actually had a
regular-order process to do major things like that. We have not
done that so far. Some on the majority decided to legislate
before they knew what they were talking about.
But maybe we are coming back to the old way of doing things
if this is the start of today's hearing. I certainly hope so.
I do think that we need to look at the Medicare program and
we need to look at the Medicare part D prescription drug
benefit program. The numbers that I have been given show that
the premiums are 42 percent lower than expected, the cost is 30
percent lower than anticipated, and that the seniors that have
chosen to participate in the program have somewhere between a
70 and 80 percent satisfaction.
So that seems to me that it is a program that is working.
Costs are coming down, options are going up, and people are
satisfied.
We also need to look at the larger Medicare program. We
need some long-term reforms in Medicare. And I am sure this
committee is going to look at that. We have a funding problem
in Medicare over time. The program is going bankrupt and I am
hopeful that Chairman Dingell will take a systematic view of
the overall program.
The President in his State of the Union address announced
two new innovative solutions for affordable health insurance. I
am sure that the Secretary is going to talk about that in his
statement. We do have millions of uninsured Americans. We do
need to find a way to find health care and health insurance for
those Americans that don't have it today. The President has
announced two programs to do that.
He has a tax deduction for basic insurance called the
President's Affordable Choices Initiative. This would provide
States with incentives to make basic affordable private health
insurance available to their citizens and the Secretary of HHS
would be able to redirect Federal payments away from
institutions to individuals in eligible States.
I think this is an idea that makes some sense. I certainly
hope that we will take a serious look at it in this committee.
And I also know that will have to be done in the Ways and Means
Committee.
I see that my time has expired, Mr. Chairman, so let me say
that we on the minority side look forward to working with you
and those in the majority in the health areas to find better
health care at affordable costs for all citizens in America.
The Chairman. I thank the gentleman.
The gentleman from New Jersey Mr. Pallone for 3 minutes.
OPENNIG STATEMENT OF HON. FRANK PALLONE, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF NEW JERSEY
Mr. Pallone. Thank you, Mr. Chairman. Mr. Chairman, what a
difference 2 weeks makes at the White House. Yesterday
President Bush sent his budget proposal to Congress that
completely contradicts statements he made on health care 2
weeks ago during his State of the Union address. He
specifically stated then that when it comes to health care,
government has an obligation to care for the elderly, the
disabled, and poor children. Yet yesterday the President
proposed a budget that includes serious cuts to the very
programs that serve these vulnerable populations; that is,
Medicare, Medicaid, and the State children's health insurance
program, SCHIP. So once again it appears as though the
President's previous statements are nothing but empty rhetoric.
And I am most alarmed about the President's proposal to
reauthorize the SCHIP program. Under the President's plan, the
Federal Government would reduce payments to States who cover
children above 200 percent of the Federal poverty line. This
would mean a drastic reduction in aid from my home State of New
Jersey which covers kids up to 350 percent of the Federal
poverty line. If enacted, I have no doubt that it would spell
disaster for low-income children in New Jersey and across the
country.
As Congress works to reauthorize SCHIP, I urge the
President to scrap his plan and work with Democrats to put
forward a realistic proposal that maintains current eligibility
standards and improves outreach and enrollment efforts.
I also have serious concerns about the mix of Medicare and
Medicaid proposals included in the President's budget. Once
again, the President has put Medicare and Medicaid on the
chopping block. Instead of trimming the fat currently going to
managed care companies, the President would slash
reimbursements to providers and burden beneficiaries with
higher premiums.
Noticeably absent from the President's budget once again is
any mention of the physician payment fix. Apparently, ensuring
physicians receive adequate payments is not a priority for this
administration.
And finally, Mr. Chairman, let me reiterate my firm
opposition to the President's new health insurance tax
proposal, and I stress tax proposal because that is what it is.
This will be disastrous for consumers because it forces them
into the unstable and uncertain individual insurance market. As
with health savings accounts and associated health plans, the
President's new proposal could potentially increase the number
of Americans without insurance, especially among our most
vulnerable citizens who need it most.
And I am also firmly opposed to his plan to divert DSH
payments away from our safety net hospitals. I whole-heartedly
agree with the President that we need to do more to reduce the
ranks of the uninsured; however, I disagree with the means he
is proposing to get us there.
As Congress considers possible solutions to this growing
problem, we should be guided by the principle of first do no
harm. Unfortunately the President's latest budget proposal
fails to meet this basic test.
And I have a lot of concerns in addition to the President's
budget proposal, too many to mention now, but I look forward to
asking the Secretary some questions later today and thank him
for being with us.
Thank you, Mr. Chairman.
The Chairman. The Chair thanks the gentleman.
The Chair recognizes now the distinguished gentleman from
Georgia, Mr. Deal, for 3 minutes.
Mr. Deal. Mr. Chairman, I will reserve my time for
questions.
The Chairman. The gentleman reserves his time.
We will now recognize Members in the order announced
earlier.
The Chair recognizes next the gentleman from Michigan, Mr.
Stupak, for 1 minute.
OPENING STATEMENT OF HON. BART STUPAK, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF MICHIGAN
Mr. Stupak. Thank you Mr. Chairman.
Welcome to the committee, Mr. Secretary. As chairman of the
Oversight Subcommittee, I can tell you that we have quite a
backlog of business with HHS. This morning I offer my
commitment to work with you to expose the truth of how a
sizeable bureaucracy has been functioning. The subcommittee
will not be requesting documents or interviews that we don't
need, but we will expect your cooperation in assuring that the
committee has the information necessary to fulfill our
constitutional responsibility to see that law is sufficient and
is being administered properly.
We have particular concerns about the compromises to both
food and drug safety at FDA. We are concerned about the
Department's ability to protect this country from bioterrorism
and natural threats such as pandemic flu. We intend to examine
issues of ethics and conflicts of interest that seem to plague
your agencies. We want to work with you to examine problems and
to call attention to your successes.
On a personal note, a good start would be if you can answer
questions I put to your predecessor back in July 2004 regarding
the 1 800 adverse side effects numbers for prescription drugs.
It has been almost 5 years and nothing has been done.
Also by February 15, 2006, questions to you concerning
Accutane specifically, with over 300 suicides reported by
Accutane users, what is the FDA doing to protect users other
than posting warnings on the FDA Web site?
Thank you for coming. And I look forward to asking a few
more specific questions later.
The Chairman. The Chair recognizes now the distinguished
gentleman from Michigan, Mr. Upton, for 1 minute.
Mr. Upton. Thank you, Mr. Chairman I am going to reclaim my
time under questions so I will waive my opening statement.
The Chairman. Gentleman chooses to reserve his time. We now
recognize the distinguished gentleman Mr. Walden for 1 minute.
OPENING STATEMENT OF HON. GREG WALDEN, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF OREGON
Mr. Walden. Thank you Mr. Chairman.
Mr. Secretary welcome. We are delighted to have you here
today. I realize in the budget of any size for a family of four
or a family of 300 million you have to make some tough choices.
And I want to commend the President for the additional 224
million for community health centers. I think this is something
that I hope Congress will certainly enact. I have seen
firsthand the importance of these community health centers
across my district.
I am also pleased to see the President recommend a modest
increase in funding for State offices of rural health. Ours in
Oregon does a fantastic job. I am disappointed, however, that
the President recommended eliminating funding for other rural
health programs, such as rural hospital flexibility grants
which fund quality improvement efforts at critical access
hospitals and small rural hospitals. Representing a district
that is more than 70,000 square miles in size, with many, many
very small, isolated, rural communities, this program is
essential for them. I will submit the rest of my comments for
the record and I will look forward to hearing your comments.
The Chairman. Without objection, the balance of the
statement is inserted in the record.
The Chair recognizes now the distinguished gentlewoman from
Colorado, the vice chairman of the committee, Ms. DeGette.
Ms. DeGette. Mr. Chairman, I will reserve my time for
questioning.
The Chairman. Gentlewoman reserves her time.
The Chair now recognizes the distinguished gentlewoman from
California, Ms. Capps.
Mrs. Capps. Thank you, Mr. Chairman. I would reserve my
time as well.
The Chairman. Gentlewoman reserves her time.
The Chair now recognizes the distinguished gentleman from
Pennsylvania, Mr. Doyle.
OPENING STATEMENT OF HON. MICHAEL F. DOYLE, A REPRESENTATIVE IN
CONGRESS FROM THE COMMONWEALTH OF PENNSYLVANIA
Mr. Doyle. Thank you, Mr. Chairman. It is a pleasure to get
to call you that this morning. And thank you, Mr. Secretary,
for coming down to help explain the President's priorities.
It has been said that our budget is a statement of the
Nation's priorities, and I for one am disappointed that it
continues to be a bigger priority for our President to cut
taxes for those who have plenty and to cut aid for those who
have little.
This President's Iraq policy costs us over $100 billion a
year. And the burden for paying for that is placed squarely on
the backs of seniors, children, and the working poor and not
those who have plenty to give.
Medicare cuts, Medicaid cuts, hardly enough funding for
SCHIP to cover the children already in the program today. At a
time when the President is pushing to take people from
uninsured to underinsured, he proposes cutting support funds
for the hospitals that serve as the last refuge for those folks
and as a public health safety net.
And finally, while the President claims his budget is
fiscally responsible, it will hamstring our economy over the
long run, adding another $3 trillion to the national debt over
the next 5 years alone.
Mr. Secretary I look forward to hearing how this budget
will do more good than harm.
The Chairman. The Chair now recognizes the distinguished
gentleman, Mr. Murphy, for 1 minute.
OPENING STATEMENT OF HON. TIM MURPHY, A REPRESENTATIVE IN
CONGRESS FROM THE COMMONWEALTH OF PENNSYLVANIA
Mr. Murphy. Thank you, Mr. Chairman. And thank you, Mr.
Secretary, for being here. Although I am pleased that there is
a number of things that continue to be funded in the
President's budget, I would like to ask that part of the thing
that may come up is--maybe not necessarily in this hearing but
maybe in the future--when you look at some examples of where we
can be saving money and not just looking at the way that
Congress usually deals with making cuts. These include such
things as saving $50 billion and 90,000 lives by providing
incentive payments or working with hospitals to reduce
infections; to expand the number of volunteer doctors at
community health centers and making sure that every family has
a neighborhood doctor; to eliminate higher discriminatory
copayments under Medicare for our Nation's seniors seeking
mental health services; and also to work to establish regional
collaborations to work on health information technology. All
issues that I know are near and dear to you and the President.
And I look forward to hearing your comments and working
together with you to make sure we bring health care into the
21st century and also make sure we really work to reduce health
care costs and not just deal with the costs of health
insurance. Thank you, Mr. Chairman I yield back.
The Chairman. The Chair thanks the gentleman.
The Chair recognizes now the distinguished gentlewoman
from California, Ms. Harman.
OPENING STATEMENT OF HON. JANE HARMAN, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF CALIFORNIA
Ms. Harman. Thank you, Mr. Chairman. I apologize to you and
our witness that I must leave soon for a memorial service for a
dear friend, and I want to take my 58 seconds and flag an issue
that I know is on everyone's mind, and that is pandemic flu
preparedness.
This budget includes another $1.2 billion on top of the
$6.1 billion that we have already appropriated. But just in
recent weeks we have seen a mutated avian flu virus kill two
people in Egypt, and the scary part was that this virus was
resistant to Tamiflu which at the moment is our primary post
facto countermeasure.
This is a dynamic evolving threat. We need a dynamic
evolving response. I don't think anyone on this committee--and
I am sure Secretary Leavitt is encouraged by how we responded
to Katrina, and this is Katrina times 100. So I would urge you,
Mr. Secretary, to make clear in this testimony and in your
future statements how your Department will be ready, how your
strategy will guarantee that this enormous potential threat
will be handled.
I think it is up there, Mr. Chairman, among the top horrors
that could confront America if we don't act effectively. Thank
you.
The Chairman. The Chair recognizes now our good friend and
colleague, Mr. Burgess.
OPENING STATEMENT OF HON. MICHAEL C. BURGESS, A REPRESENTATIVE
IN CONGRESS FROM THE STATE OF TEXAS
Mr. Burgess. Thank you, Mr. Chairman.
Thank you, Mr. Secretary, for being here. I too am pleased
that the budget makes a continued commitment to expanding
health centers. Fully funding this initiative represents just
one side of the coin, however. There are many entities that are
willing and able to establish a community health clinic in many
more areas of the country, none more so than the portion of
north Texas that I represent. However, many archaic programs
hinder the development of a medical home for millions of more
Americans.
I believe that while additional funding is essential, the
committee must turn a critical eye toward the rules that govern
the community health center as well as the Federal agency
itself. When we again take up the important work of
reauthorizing this program, I hope to work with you, Mr.
Secretary, and you, Mr. Chairman, to address this important
issue.
STR remains a critical issue before our Nation, but I, just
like the Secretary, I believe, feels that is an issue that
requires a legislative fix and not a Federal agency fix.
Another issue I would like to discuss is the state of the
health care system in New Orleans. Having visited that area
several times after Hurricane Katrina and discussing the
situation on the ground with health professionals, I have great
concerns that the money appropriated for rebuilding and relief
in that area could be used in a more efficient manner.
I am also concerned with the Federal agencies that assist
hospitals, and other health care providers that are actually
more of a hindrance than a help, but certainly look forward to
hearing your comments on that. I yield back.
The Chairman. The Chairman thanks the distinguished
gentleman.
And now the Chair recognizes the distinguished
gentlewoman, Ms. Solis, for 1 minute.
OPENING STATEMENT OF HON. HILDA L. SOLIS, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF CALIFORNIA
Ms. Solis. Thank you and good morning, Mr. Chairman, and
Members.
And, Secretary Leavitt, thank you for coming here. As you
know, health care access is one of our big priorities here in
the Congress. Forty-six million Americans are uninsured, and
that includes 1 in 3 residents in my district who don't have a
form of coverage and 14 million Latinos nationally who don't
have any health care coverage.
Eighty-three percent of the uninsured, as you know, are
working families. And yet the proposed budget appears to leave
our seniors and children with fewer choices and higher costs.
Nine million children, including 1 in 5 Latino children, are
uninsured and yet the President wants to reduce SCHIP
eligibility for many of our children.
Our safety-net providers and hospitals are also struggling,
and they make that very well known to us when we go home to our
districts. Communities of color bear the impact of the lack of
health care, struggling disproportionately from chronic
diseases such as diabetes and obesity, and yet the budget fails
to place a priority on culturally and linguistically competent
care.
We must do better for all Americans. And I urge the
administration and Secretary Leavitt to work with us and place
a priority on ensuring access to quality, affordable,
culturally and linguistically competent care in all of our
communities.
And I thank you, Mr. Secretary, and look forward to working
with you.
The Chairman. The Chair thanks the gentlewoman.
The Chair recognizes now the gentleman from New Jersey, Mr.
Ferguson, for 1 minute.
Mr. Ferguson. Mr. Chairman, I will waive my opening
statement for additional questions.
The Chairman. Gentleman waives 1 minute; he will have that
added to his time.
The Chair recognizes now my good friend and colleague, Mr.
Pitts, for 1 minute.
Mr. Pitts. I will waive, Mr. Chairman.
The Chairman. Gentleman has waived his 1 minute.
The Chair recognizes now my good friend, Mr. Whitfield.
Mr. Whitfield. Mr. Chairman, I waive my opening statement
as well.
The Chairman. Gentleman has waived his opening statement.
The Chair recognizes now our good friend, Mr. Terry.
Mr. Terry. Waived as well.
The Chairman. Gentleman has waived his time.
The Chair recognizes now the distinguished gentleman, our
good friend and colleague, Mr. Stearns from Florida.
OPENING STATEMENT OF HON. CLIFF STEARNS, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF FLORIDA
Mr. Stearns. Thank you, Mr. Chairman. I appreciate the
Secretary being here. I praise the implementation and oversight
of Medicare part D. In my congressional district I have heard
nothing but overwhelmingly good news. And I have The Villages,
which is the largest adult community in the Nation, and I have
heard nothing but positive news.
In fact recently in the Gainesville Sun, they printed a
letter by one of my constituents, Mrs. Rannel James. She and
her husband are both in their seventies. They have been married
almost 50 years and they wrote, quote, Medicare part D has been
a great experience for our family. We saved nearly $250 a month
because of Medicare part D on our medications, and we look
forward to continuing this savings next year.
This benefit has given them coverage, and, it appears from
their letter, peace of mind, which is most important.
And also recently I think all of you saw the Washington
Post editorial that appeared on November 2, 2006 talking about
this prescription drug--how it is working and we don't need to
change it.
And so, Mr. Chairman, I am just very pleased that the
Secretary is here and I want to compliment him and his staff
for what a great job they are doing with the implementation of
the Medicare part D program.
The Chairman. The Chair recognizes now the gentleman from
Washington, Mr. Inslee.
OPENING STATEMENT OF HON. JAY INSLEE, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF WASHINGTON
Mr. Inslee. Thank you, Mr. Chairman. I was just looking at
a newspaper. Someone described this budget as a dead on arrival
document that gets everyone in a tizzy. So perhaps we should
keep that in mind. But I think this budget is important to
discuss--even though it will not pass--in illustrating how a
priority is helping--a misprioritization is hurting Americans'
health.
When Americans go to get health care and it is not there--
if this budget were to pass, because of the cuts to the
disproportionate share program for hospitals that help serve
our 47 million Americans who do not have insurance, and they
wonder where their health care went, it went into the sands of
Iraq. And this policy document, this budget, makes very clear
that the President has made a priority on the escalation to
pour our taxpayer dollars into the sands of Iraq rather than to
our Nation's uninsured and to our seniors, both of whom will
have reduced access to health care.
And the principal message I would take from this budget is
we would rather escalate in Iraq than escalate our efforts to
provide health care in America. And we will be talking about
that this afternoon. Thank you.
The Chairman. The Chair recognizes now our good friend from
Michigan, Mr. Rogers, for 1 minute.
Mr. Rogers. Mr Chairman, I waive my opening.
Mr. Stupak. Gentleman has waived.
The Chair then will recognize our friend and colleague, Mr.
Hill, for 1 minute.
OPENING STATEMENT OF HON. BARON P. HILL, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF INDIANA
Mr. Hill. Thank you, Mr. Chairman.
Mr. Secretary, thank you for appearing before us today. I
first want to say that I am happy to see that the President has
made health care an issue and it has become a priority for him.
I believe it is very important to ensure access to affordable
health care to all of our citizens. An ailing workforce is
terrible, not only because people are suffering, but because it
costs the government millions of dollars for illnesses that
could have been prevented. However, I do not believe by
penalizing those who already have employer-sponsored health
insurance by raising their taxes is the way to do so.
That aside, it seems that the President and some of my
colleagues on the Hill are attempting to develop some system of
universal health care. While some may see ensuring affordable
health care for all citizens as a government responsibility,
others may view it as the responsibility of the private sector
or individuals.
I believe that these individuals have essentially skipped
over one of the most important debates that Congress should
have: Is affordable health care a right or a privilege? If
Congress decides that affordable health care should be a
constitutional right, it may then include all relevant players,
insurance companies, pharmaceutical companies, hospitals,
doctors, et cetera, in devising a program.
Mr. Secretary, I look forward to your testimony today and
specifically to finding out if you and the President have ever
discussed whether or not affordable health care should be a
citizen's constitutional right.
The Chairman. The Chair recognizes now the distinguished
gentleman from Illinois, Mr. Shimkus, for 1 minute.
Mr. Shimkus. I will waive, Mr. Chairman. Thank you.
The Chairman. Gentleman has waived.
The Chair recognizes now our dear friend and colleague from
Wisconsin, Ms. Baldwin.
OPENING STATEMENT OF HON. TAMMY BALDWIN, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF WISCONSIN
Ms. Baldwin. Thank you, Mr. Chairman.
And thank you, Secretary Leavitt, for joining us this
morning. Our Nation is in the midst of a health care crisis.
Nearly 47 million Americans are uninsured, and an additional 16
million are underinsured. So an aggregate 63 million Americans
either have no health insurance or only sporadic coverage, or
have insurance coverage that leaves them exposed to high health
care costs.
And we all know this is unacceptable. But what is even more
unacceptable is that the President's budget proposes harsh cuts
to both Medicare and Medicaid, programs that actually do
provide affordable comprehensive health care, and it offers a
reform proposal that I fear will make many Americans worse off.
In addition, this budget includes substantial cuts to
health care providers, those who are actually providing the
needed care to the 47 million uninsured Americans.
Lastly, this budget proposes to fund the State child health
insurance program at a level which we all know will fall far
short of the amount needed to continue to provide health care
to the children currently covered; this, at a time when we
ought to broaden SCHIP to cover all uninsured children in
America.
This budget misses opportunity after opportunity and is a
disappointment to the nearly 47 million Americans who have no
health insurance at all. Thank you, Mr. Chairman.
The Chairman. The Chair thanks the gentlewoman.
The distinguished gentleman from Utah, Mr. Matheson.
Mr. Matheson. Mr. Chairman, I will waive.
The Chairman. Gentleman waives.
The Chair recognizes now the distinguished gentleman from
Texas, Mr. Gonzalez.
Mr. Gonzalez. Waive the opening.
The Chairman. Gentleman has waived.
The Chair now recognizes our dear friend from California,
Ms. Eshoo.
Ms. Eshoo. Mr. Chairman, I will defer.
The Chairman. Gentlewoman has deferred.
The Chair recognizes now the distinguished gentleman from
North Carolina, Mr. Butterfield.
OPENING STATEMENT OF HON. G. K. BUTTERFIELD, A REPRESENTATIVE
IN CONGRESS FROM THE STATE OF NORTH CAROLINA
Mr. Butterfield. Thank you, very much, Mr. Chairman.
Mr. Secretary, let me join my colleagues in thanking you
very much for your testimony today and your willingness to come
down and engage in this process.
The reason I am sitting on the third tier is because I am
one of the newer members of this committee. In fact, this is my
very first hearing. So thank you very much for being a part of
it after.
I represent the 15th poorest district in the Nation,
eastern North Carolina, and we have a health care crisis in my
congressional district. And I know you are sensitive to that.
But I want you to encourage your Department and the
administration to become more attuned to rural health issues.
My health centers are doing the best that they can do. My
hospitals are engaged in good quality health care, but they are
not paying the bills. And many of our hospitals are challenged,
and some are even threatened with going out of business.
And so thank you for what you do, and I look forward to
being an advocate on health care issues. And I look forward to
working with you.
I yield back.
The Chairman. Gentleman's time has expired.
Chair recognizes now the distinguished gentleman from
Maryland, Mr. Wynn.
OPENING STATEMENT OF HON. ALBERT RUSSELL WYNN, A
REPRESENTATIVE IN CONGRESS FROM THE STATE OF MARYLAND
Mr. Wynn. Thank you, Mr. Chairman. And I welcome you, Mr.
Secretary. I appreciate your presence here.
Today I want to reiterate a point that was made by several
of my colleagues, and that is my concern about the cuts to
Medicaid and Medicare. This will affect in Maryland, my State,
627,000 Medicare patients and 485,000 Medicaid patients.
And the way we are affecting them is that we are reducing
reimbursements to the physicians. And that is something that
this Congress only a few months ago said was unacceptable. We
understood there was a crisis that occurred when we did not
reimburse physicians adequately.
Moreover, we are going to hurt hospitals, disproportionate
share hospitals and other hospitals that take in our uninsured
population that you have heard about from many of my
colleagues. So I think this is a very unwise policy.
And then to increase premiums on this population of
patients and customers I think is equally unwise, because we
are in a health care crisis, as has been mentioned.
I share the concern of my colleagues regarding the SCHIP
program. We have 137,000 uninsured youth in my State alone.
Many people now--in fact, there is a broad consensus that what
we ought to do is start by universally covering our young
people, those under 18. This policy moves in the opposite
direction.
Third, I want to mention LIHEAP. It is ironic that on one
of the coldest days this region has experienced, we are looking
at a budget that underfunds the LIHEAP program for low-income
home energy assistance by $3.3 billion. We authorized $5
billion for LIHEAP, and this administration comes in woefully
short of that.
And the problem becomes when we have programs from places
like Venezuela who try to help, people say, oh, that is awful,
we should not accept their assistance. But we in this country
do not provide the necessary assistance for the poor when they
confront these drastic weather conditions. So perhaps if we
could do better, we would not have to accept charity from
places like Venezuela.
Finally, in closing I want to say my district is home to
FDA. I am very proud and appreciative of that fact. But it was
woefully underfunded by about $150 million----
The Chairman. Time of the gentleman has expired.
Mr. Wynn. Thank you Mr. Chairman. I relinquish my time.
The Chairman. The Chair recognizes now the distinguished
gentleman from New York, Mr. Towns.
OPENING STATEMENT OF HON. EDOLPHUS TOWNS, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF NEW YORK
Mr. Towns. Thank you very much, Mr. Chairman, for holding
this hearing today. And thank you, Mr. Secretary, for coming.
I am concerned that much of what the administration
proposes is an escalating war on our public health system.
The proposed reductions may virtually eliminate the health
safety net for millions of our poor citizens. And that is
wrong. These proposals will shift the weight of paying for that
care onto already overburdened cities, counties, and States.
The proposed cuts to Medicare and Medicaid for chronic
disease programs, the lack of physician payment reform and the
administration's inability to adequately fund health
information technology is hurting this Nation's ability to
provide effective quality care and to reduce health disparities
among communities of color.
I am deeply concerned that this administration is going in
the wrong direction, and we should seize this moment to change
the direction that we are going in.
On that note, Mr. Chairman I yield back.
The Chairman. Time of the distinguished gentleman has
expired.
The Chair recognizes now the distinguished gentleman from
Illinois, the Reverend Rush.
Mr. Rush. Thank you, Mr. Chairman. Mr. Chairman, I yield.
The Chairman. Gentleman defers.
And now the Chair recognizes the distinguished gentleman
from New York, Mr. Engel.
OPENING STATEMENT OF HON. ELLIOT L. ENGEL, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF NEW YORK
Mr. Engel. Thank you, Mr. Chairman, and welcome, Mr.
Secretary. I must say that I am very much appalled at the
budget released yesterday. Budgets are a reflection of
priorities. And this one, in my opinion, sends a message that
the health care needs of children, seniors, hospitals and
communities are sacrificed for the administration's other
priorities.
The proposals within the budget strike the foundation of
patient care, assaulting it from every possible angle. The
children's health insurance program will see its funding cut
from last year. And, worse, the amount allocated for its
reauthorization is less than half the amount required to
maintain coverage for current beneficiaries.
While this alone will undoubtedly compound the number of
uninsured, the hospitals and other safety-net providers have
their funding slashed as well.
The fiscal year 2008 budget calls for billions of dollars
in draconian Medicare and Medicaid cuts, including $2.7 billion
for New York hospitals and health centers just 2 weeks after
CMS issued a regulation that limits States' abilities to draw
down needed Medicaid dollars from lawful intergovernmental
transfers. One of the most ill-thought-out proposals is the
President's call for diverting up to $30 billion in essential
payments to safety-net hospitals to States that promote private
health insurance, like my State of New York, regardless of the
scope of coverage. We can increase coverage effectively by
expanding existing comprehensive----
The Chairman. Time of the gentleman has expired.
The Chair recognizes now the distinguished gentlewoman
from Illinois, Ms. Schakowsky.
OPENING STATEMENT OF HON. JANICE D. SCHAKOWSKY, A
REPRESENTATIVE IN CONGRESS FROM THE STATE OF ILLINOIS
Ms. Schakowsky. Thank you, Mr. Chairman. And thank you, Mr.
Secretary. I feel like I am watching the old movie, Groundhog
Day. We are living the same budget over and over again. Once
again, the President has placed a higher priority on more tax
cuts and a misguided war in Iraq than on meeting the Nation's
health care needs.
Despite a record number uninsured and medical bankruptcies,
his budget either cuts critical health care initiatives or
fails to provide adequate resources to meet the challenge
before us.
I have many of the same concerns that I did last year:
proposed cuts in Medicare, Medicaid; nurse and health
professionals training; the National Cancer Institute;
preventive and mental health and provider payments that will
jeopardize access to quality and timely care.
I am also disappointed in the low funding levels for SCHIP.
This year, like last year, I believe the President's diagnosis
of the problem is the reverse of the actual problem.
Americans are not paying too little for health care or
getting too much. They are paying too much and getting too
little. Shifting more costs onto the already overburdened backs
of Medicaid and Medicare beneficiaries is the wrong answer. So
too is the proposal to have U.S. taxpayers subsidize highly
inefficient individual health policies instead of more cost-
effective public coverage.
The movie Groundhog Day ends happily when Bill Murray comes
to his senses, changes his behavior, and moves forward.
Although the President's budget proposals show no sign of
changing, I am confident under your leadership, Mr. Chairman,
the Congress will move in a different direction to meet our
health care priorities.
And I would just like to add my support to what Dr. Burgess
said about Katrina victims. We need to do more.
The Chairman. The time of the distinguished gentlewoman has
expired.
Chair recognizes now the gentleman from Georgia, Mr.
Barrow, for 1 minute.
OPENING STATEMENT OF HON. JOHN BARROW, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF GEORGIA
Mr. Barrow. Thank you, Mr. Chairman, and good morning, Mr.
Secretary. In addition to all of the concerns which have been
raised, which I share, I have three areas of emphasis that I
want us to focus on at some point today. That is SCHIP, SCHIP
and SCHIP.
I got a State that has the fifth highest number of folks
enrolled in that very successful and very effective program. As
a result of that, we are most adversely affected by a funding
formula that rewards folks for getting on board but doesn't
maintain them once they get on board. I want to know what the
administration is going to do to help meet the funding
shortfall in States like Georgia that have a lot of folks
getting on board.
I also want to know what the administration is going to do
about refunding the formula, the funding formula, how to reform
it so we don't have this shortfall on a year-to-year basis.
Thank you.
The Chairman. The Chair thanks the distinguished gentleman.
The gentleman from New York, Mr. Weiner.
Mr. Weiner. Thank you, Mr. Chairman.
OPENING STATEMENT OF HON. ANTHONY D. WEINER, A REPRESENTATIVE
IN CONGRESS FROM THE STATE OF NEW YORK
Recently the President did a victory lap in New York and
announced that $25 million would be put towards those that had
responded on September 11, stood on that pile digging for their
friends and loved ones and are now dying. I can't find it in me
to say thanks, though. Twenty-five million dollars is a
fraction of the $1 billion or so that is probably going to be
necessary; $25 million should not cleanse the Federal
Government of its responsibility when it was the Federal
Government that said it was safe for these heroic men and women
to be there with paper masks over their face. And $25 million
is really not a great gift when the rest of the budget cuts New
York $2.7 billion.
So I think it is commendable that to some degree your
administration has said it is the responsibility of the Federal
Government for these folks that are dying little by little, day
by day, but I also think that it is shameful to do the victory
lap about the $25 million and then hide from the $2.6 billion
responsibility.
Well, today you are not going to be able to do that. But I
welcome you.
The Chairman. The Chair thanks the gentleman.
Chair notes that I think we have heard from all the
Members who desire to make an opening statement.
Is there any Member who desires to be heard at this time
for an opening statement?
Very well, then, Mr. Secretary, we express to you our
affection and our welcome. If you would like to have somebody
there at the witness table with you, it would be perfectly
proper, and the Chair would say you may do so or even encourage
you if you so desire.
STATEMENT OF HON. MICHAEL O. LEAVITT, SECRETARY, U.S.
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Secretary Leavitt. Thank you, Mr. Chairman. And may I
express what a privilege it is to appear before you and this
committee on your first committee hearing.
I will accept your invitation at appropriate times. If
there are those who can give better answers than I am equipped
to, I would like to be able to provide the best information we
have available.
This is a complex and a large budget. It required hundreds
of people the better part of the year to develop, and there
were tens of thousands of individual decisions. Rather than
attempt today to select individual items from my opening
remarks, I think it would be most helpful if I could just
provide some context and move as rapidly as possible to the
individual topics that the various members have indicated.
Most of you are aware how this budget is arrived at. The
President does, in conjunction with the Office of Management
and Budget, lay out a context and does, in fact, provide
instructions and themes and priorities.
It is then sent to the various Cabinet members who have the
responsibility then to provide instructions to those who lead
the Department.
I think it would be important for me to establish that
context. It is very clear to me, and I hope to you and the
American people, that the President shares the view that every
American ought to have access to an affordable basic insurance
policy. He shares the view that our homeland should be safe. He
shares the view that we should do all we can to provide
assistance to those who are in need.
There is also a need to balance our budget. And this budget
focuses a priority on balancing the budget by the year 2012.
It is important in the President's mind, in addition to
meeting those obligations, that we keep our economy strong. It
is important to him that we keep our taxes affordable, that we
spend taxpayer money wisely.
Having those priorities given to me as a Cabinet Secretary,
I called together my colleagues and gave them a set of
guidelines. And I would like to review those with you if I
could, because I think it will give you a context to understand
the nature of these decisions.
I first of all indicated to them that there were--there
would obviously be a need to alter the glide path of the budget
if we were going to balance by 2012, and that would, of course
require choosing between programs, all of which had noble
purposes.
It is clear to me, and I am sure to all of you, if we are
to balance the budget by 2012 it does require the selection of
priorities between noble projects. And I don't have any
question about the fact that there will be differences of view
between Members and between the Congress and the administration
on what those priorities should be.
My purpose today isn't to reconcile all these
disagreements, but simply to make certain you understand, the
best I can, the judgments that were made.
Recognizing that the hard choices need to be made, we also
recognized there would be new programs, new initiatives, things
that were important for us to respond to. And I gave my
colleagues essentially four principles to follow in selecting
those. And let me enumerate them.
The first was if there were high demand, highly effective
programs that are serving people well, we do need to make
certain that they are made a priority.
I will give you some examples. Head Start. We protected
Head Start in this process. I would also recognize the Indian
Health Service. The issue has been raised many times on SCHIP.
We believe SCHIP is a priority that needs to be reauthorized.
And I am anxious to have a discussion on the basis of which
that should be done.
There were a number of Presidential initiatives that the
President wanted to assure were met. And my job is to make
certain that they are. I will give you an example. Community
health centers. The President made a commitment when he became
President to have 1,200 new ones, and, in addition to that, to
seek out the counties that had the highest need and make them a
priority. This budget will address that.
The third principle was if there are pressing new problems
that we need to address, then we need to find room in this
budget to do so.
Many of you have mentioned the FDA and the need for greater
focus on drug safety. You will see in this budget a response to
that, because we see that as a high new priority.
The fourth was to continue to seek funding and to advocate
for funding in some areas that we have advocated in the past
that have not been funded to the degree we believe they should
be. I will give you examples. Health information technology,
very important centerpiece on how we can make health care work
better. Fraud and abuse. I have been Secretary now for 2 years.
It has become evident to me that we need to do more in that
area. And this budget requires response to that from a
Congress.
The Commissioned Corps, part of our United States Public
Health Service. Many of you talked about Katrina. That is a
priority.
Those are the four principles that I asked my colleagues to
look for in terms of adding new items to the budget.
Now with respect to the more difficult task of how we would
balance out the glide pattern so that we could land a balanced
budget by 2012, I provided them with six principles, and if you
don't mind I will just enumerate them because I think it will
give us the basis of some conversation.
You will see some places in this budget where one-time
funds were not repeated. Many of you will be advocates, as I
am, for the Centers for Disease Control, for example. You will
note that there are some one-time funds that we did not repeat
in this budget because this construction was done.
Second, we chose to favor programs where there was a direct
providing of a service as opposed to the bolstering of
infrastructure.
Now again, I would like to be able to bolster
infrastructure and provide basic service. But when we are
trying to make these judgments, I offered the guidance to my
Department that I would like to see them emphasize the actual
providing of services.
I will give you a very good example of this. You will see
places here where, in advanced nursing for example, we did not
increase the funding, and in fact have reduced funding in a
couple of places. But we have increased basic nursing by the
use of loan forgiveness and so forth.
And we have also funded community health centers. There is
an example of where I said if I can't do both, I would rather
provide services than infrastructure. So, again, I recognize
that those are both noble purposes, but so you will understand
why that happened, they made the decision based on that
guidance.
The third principle was to look for places where grants had
been concluded or where activities had actually been concluded.
A good example of this is in the National Cancer Institute. You
will see a minor reduction in the overall budget of the
National Cancer Institute, but I would like to point out that
there it would be an increase in the number of new competitive
grants that are provided. Why? Because we chose, rather than to
provide an ongoing funding for a grant that had been concluded,
to emphasize new grants. And so there will be more competitive
grants. We think that is an important strategy.
Now, the fourth would be to eliminate programs whose
purposes might be undertaken by a number of different agencies.
Now, HHS is a big Department. This is a big government. And it
won't surprise any of you to find that on occasion when a noble
purpose is being pursued, that there are more people pursuing
it than just one department, with one program. And so I have
sought out places where I could find budgets that were
attacking similar problems and tried to coordinate those. I
have looked for programs that we were involved in where there
was, in fact, a redundancy.
I think I have probably taken enough time to give you a
sense of principles. I am anxious now, Mr. Chairman, to get to
the actual specifics of the Members' questions.
[The prepared statement of Secretary Leavitt appears at the
conclusion of the hearing]
The Chairman. Mr. Secretary you are most courteous.
Chair will recognize the present occupant of the chair for
5 minutes.
Mr. Secretary, how much new funding does the
administration's budget add to the SCHIP program? I believe the
number is $4.8 billion over a period of 5 years. Is that
correct?
Secretatry Leavitt. Mr. Chairman, we view the continuation
of SCHIP as a priority and we see it being about $15.4 billion
in the future and we----
The Chairman. New money, Mr. Secretary.
Secretatry Leavitt. We would add $5 billion of new money
plus the $4.4 billion that is currently left over from previous
allocations, and then the $5 billion that is in the base that
is a----
The Chairman. Our numbers are $4.8 billion. Are we
incorrect? If so, sir, where please?
Secretatry Leavitt. My understanding is it is a billion a
year. I am informed that I rounded up.
The Chairman. $4.8 billion.
Secretatry Leavitt. Correct.
The Chairman. Thank you, Mr. Secretary.
Now, Mr. Secretary, last year's SCHIP covered 4.4 million
children. The numbers I get as we review the budget and we
consult with the actuaries at CMS is fiscal year 2008, 4.7
million; fiscal year 2009, 4.7 million; fiscal year 2010, 4.4
million; 2011, 4.4 million; 2012, 4.3 million. Are those
numbers correct?
Secretatry Leavitt. Mr. Chairman, I am not able to follow
the individual points. Let me give you the principle which we
operate----
The Chairman. Mr. Secretary, I would love to get that but I
have to get down to numbers because we are talking about them.
I don't mean any disrespect----
Secretatry Leavitt. Do you want me to read them off again
and ask my able counsel to help us.
The Chairman. If counsel can help us. Are those numbers
correct, sir?
Secretatry Leavitt. I am informed they are correct.
The Chairman. Thank you, Mr. Secretary.
Now, Mr. Secretary, outside sources, including the
Congressional Research Service, estimates it takes three to
four times $4.8 billion in the President's budget to keep the
children from losing coverage; is that true?
Secretary Leavitt. We believe that the budget we have
provided or that we have proposed is adequate for us to
continue SCHIP. We do believe that SCHIP in the future ought
not to be covering more adults than it currently covers, and we
believe that it should be focused on children who are in the
most need. And we look forward to working with Congress to
achieve that.
The Chairman. I hear you, Mr. Secretary, but with great
respect, this is not responsive to the question.
Congressional Research Service and others estimate that it
takes three to four times the $4.8 billion in the President's
budget to keep children from losing coverage; is that correct
or not?
Secretary Leavitt. That would not be consistent with the
belief of the administration.
The Chairman. Well, I am going to ask you to document that.
The numbers that we have gotten everywhere tell us that is the
case.
Now, Mr. Secretary, your budget provides no new money to
help States with the cost of covering children. In fact, it
does just the opposite. It cuts other domestic programs by $117
billion over 5 years as compared to the current spending level,
and it cuts Medicaid by close to $50 billion over 10 years; is
that statement correct?
Secretary Leavitt. The budget is as you point out.
I would like to make clear that we believe the budget does
make responsible changes in the growth rate of Medicaid and, I
will add, Medicare, that we can provide the underlying health
care that is required for the groups that those programs were
intended to serve with the budget that we have put forward.
The Chairman. Now, Mr. Secretary, here, let us take a
family of three whose income is not more than $36,000, and we
reduce the funding to the States to take them off the SCHIP
program. Is that a fair statement that your package would
remove families of three which have income of not more than
$36,000 and reduce payments to the States so that they would be
removed from the SCHIP program?
Secretary Leavitt. That would be dependent upon the State,
and it would be dependent upon the rules adopted by the State.
The Chairman. Well, then in the 19 seconds I have
remaining, will you assure me that will not happen?
Secretary Leavitt. I can assure you that it is dependent
completely on the State rules, and if you would like to help
reconcile that particular example in the State of Michigan, I
would be pleased to do that after the hearing.
The Chairman. In other words, Mr. Secretary, you are
advising us to pray, and I do.
Secretary Leavitt. It is always a good thing, Mr. Chairman.
The Chairman. Well, with that record, I now recognize my
dear friend Mr. Barton for 5 minutes.
Mr. Barton. Thank you, Mr. Chairman, and I will stipulate
the minority also supports prayer. We are pro prayer on our
side, and we know we are going to need a lot of it on this
committee of this Congress, so we are for that.
What does ``SCHIP'' stand for, Mr. Secretary?
Secretary Leavitt. It is the State Children's Health
Insurance Program.
Mr. Barton. State. It means the States are partially
responsible and the ``C'' is for children.
What is your definition of a ``child''?
Secretary Leavitt. Well, that definition, obviously, is
established by the States themselves, and the States have the
ability to define what they will----
Mr. Barton. My definition of a ``child'' would be a
youngster, a toddler, or somebody living at home with a legal
guardian or his or her parents, somebody normally under the age
of, say, 18, but there are some States that is not a child;
isn't that correct?
Secretary Leavitt. I will accept your definition, yes.
Mr. Barton. And we have now, I think, in the vocabulary an
interesting term, ``adult children.''
Do you think the original SCHIP program was established to
cover adult children?
Secretary Leavitt. No, Mr. Barton, it was not. I was
Governor at the time and serving as part of the Governors
Association team that dealt with Congress, and I am quite
familiar with the historical background on this. SCHIP was
intended to serve children, and has done a very good job at
that, and we believe it should be reauthorized and that we
should be focusing on providing health coverage----
Mr. Barton. So, as to those States that choose under law--
now it is legal--to cover adult children, maybe we should ask
those States to pay for the cost of that coverage.
Would that be an unreasonable request to these States?
Secretary Leavitt. We believe that those adults who are
covered--we do not propose to remove them, but we do not
propose to allow additional adults to be covered, and think we
should focus SCHIP on children.
Mr. Barton. On children--and, again, your definition and my
definition and probably 100 percent of the dais up here on both
sides says a ``child'' is somebody under age, living with a
guardian or at home, sometimes in an institutional setting, but
definitely somebody who is not yet ready to go out in the world
and take care of themselves in most cases. We are in agreement.
Secretary Leavitt. [Nods in the affirmative.]
Mr. Barton. What should we do about those--let me ask for
some information.
What is the minimum requirement in the law to be covered
under the SCHIP program? Is it 100 percent of the Federal
poverty limit; 150 percent; 200 percent? What is kind of the
minimum?
Secretary Leavitt. Well, in States where--first of all,
those in the lowest income would be covered under Medicaid.
Children who had greater income than Medicaid, but under a
limit established by the States, were permitted to be covered
by SCHIP. The State was then provided substantial flexibility
and the means by which they would be covered.
Mr. Barton. But what is kind of the basic bar? In Mr.
Pallone's State of New Jersey, they cover up to, if I heard him
correctly, 350 percent of the Federal poverty limit; 350
percent, is that the normal standard?
Secretary Leavitt. That is not. It is 200 percent of the
poverty level.
Mr. Barton. The average is 200.
Secretary Leavitt. Yes. Certain States' approach to the
Federal Government received waivers to----
Mr. Barton. In my home State of Texas, what is it, 200
percent?
Secretary Leavitt. I think it is 180 in Texas.
Mr. Barton. So I am at 180. My good friend from New Jersey
is at 350. Should the Federal Government pay that delta between
180 and 350 or should the Garden State of New Jersey's
taxpayers? If they choose to cover it at 350 percent, maybe
they should pay that difference.
Secretary Leavitt. We do believe that it is reasonable to
have State differences in the States, but we also believe that
States have an obligation to meet their share of it and that
there needs to be some equity in the way----
Mr. Barton. I mean, that is one reason Mr. Pallone's State
is going to spend its SCHIP money in the first 2 months of this
year, and the State of Texas last year had a slight surplus
which Mr. Pallone's State wanted to take in the negotiations
right at the end of the last Congress.
Secretary Leavitt. SCHIP was designed as a system of
allotments, and many States, most States, chose to manage those
allotments to where, if they were getting to the point of their
budget running out, they slowed enrollment. Other States did
not, and those that did not tended to be----
Mr. Barton. My time has just expired. If the chairman would
let me ask one final question.
The Chairman. Without objection, so ordered.
Mr. Barton. Thank you, Mr. Chairman.
If a bill that passed the House a couple weeks ago becomes
law, you are going to have the authority to negotiate Medicare
prescription part D drug prices for all the senior citizens of
America. How do you feel about that?
Secretary Leavitt. I do not believe that any one person is
as able a negotiator as an efficient market. The efficient
market that has been created is working in a way that has
driven prices down and kept customers happy, and we think the
system is working well.
Mr. Barton. Thank you, Mr. Chairman.
The Chairman. Thanks to the gentleman.
The Chair recognizes now the distinguished gentleman from
New Jersey, Mr. Pallone, for 5 minutes.
Mr. Pallone. Thank you, Mr. Chairman.
I am not going to get into this State-by-State thing
because I think it is irrelevant.
The fact of the matter is we know--and the President says
when he is of good conscience, that he cares about covering
kids and the uninsured, and whether there is some woman whose
kid is on the street and cannot, get health care in Texas
versus New Jersey, it does not make any difference to me. I
think they should all be covered, and if you listen to the
President's rhetoric, he suggests that they should be.
The problem is that even though, Mr. Secretary, you are
saying that SCHIP is a priority and works, the reality is that
what you are proposing or what the President is proposing is
going to cut down on the number of kids that have health
insurance. And I think that is a national disgrace, and it goes
against the rhetoric that the President is using in his State
of the Union address and when he is out on the road. If he
wants to cover more kids, he is going to have to put more money
up front for the SCHIP program; and effectively, he is not.
A number of children's health experts estimate that it
would cost approximately $12 billion to $14 billion over 5
years to keep up with medical inflation to prevent currently
enrolled children from losing their coverage. So, if you are
giving 5 million in additional dollars--billion--that means
less kids are going to be insured and more kids are not going
to have health insurance, whether they are in Texas or whether
they are in New Jersey or wherever they happen to be, and at
least another $35 billion to $45 billion over 5 years is needed
to reach eligible but uninsured children. And what you are
effectively doing here is cutting back on the eligibility down
to 200 percent, but we are not even covering the kids that are
currently enrolled with the amount of money that the President
is proposing in his budget.
I just have trouble understanding how the President's
proposal to reauthorize SCHIP will improve coverage for
children because common sense tells me that when you underfund
a program and limit eligibility, a number of children are going
to end up losing coverage. And I just have a couple of
questions.
Do you have a sense of how many uninsured children
currently eligible--I say ``currently eligible''--for SCHIP
will be enrolled because of the President's proposal? Do we
have any numbers in that regard?
Secretary Leavitt. Congressman, could I just respond
generally and then to your specific?
It is the belief of the President, and my own belief as
well, that every person in America needs to have access to an
affordable basic policy. There are two divergent views that are
presented on how we should arrive at that point.
One view is that the Federal Government essentially should
ensure or provide coverage to everyone. The other view is that
there is a basic Federal responsibility to care for those who
are the most needy, and then that we have through our State
governments a responsibility to assure that there is a market
where people can buy a basic, affordable policy.
This week I met with Governor Corzine from the State of New
Jersey, who shares that aspiration and desires to see every
person have an affordable basic plan. Recognizing that there
may be a difference on which children should be covered by
SCHIP, we have agreement on the fact that SCHIP is an important
component part and that if you are poor or elderly or disabled,
or if you are a pregnant mother in a low-income situation, or
if you are a child needing protection, you will get coverage.
SCHIP is a very important part of it.
Mr. Pallone. Mr. Secretary, I just do not want my whole
time to run out.
The problem is this is a budget hearing, and we are talking
about dollars, and I have no reason to believe--and if you have
some reason to believe otherwise, tell me. I have no reason to
believe that the level of funding that is being proposed by the
administration is enough to even pay for the kids that are
enrolled now, let alone expand it. In most States, there are
more kids eligible and not enrolled in the SCHIP program than
there are actually enrolled. So if you cannot even keep up with
your budget numbers with those who are currently enrolled
because of inflation, we are never going to get to the kids
that are eligible even under your 200 percent and are children,
not adults. We are never going to get to them. And the
President goes out and suggests that he wants to do something
about it, and for him to say ``well, OK, that is up to the
States'' is not solving the problem because we know that a lot
of the States do not have the money.
Secretary Leavitt. Well, Congressman, let me make clear
that we view the proposal we have made as being adequate to
cover those children who are currently covered under SCHIP and
to cover the program as it is currently constituted. We do not
view that SCHIP is the vehicle to cover all children.
Mr. Pallone. OK. I appreciate that.
Let me just say, because I have only 15 seconds left, at
the same time, you have significant cuts in the Medicaid
program. Now, SCHIP is simply supplemental to Medicaid and does
not cover as many people as Medicaid. If you cut Medicaid, how
are you going to make up for the loss of the uninsured there?
Secretary Leavitt. We are not proposing cuts in Medicaid.
We are proposing savers to reduce the growth rate, and at some
point as we go through, if you would like to go through
individually, I would be very pleased to reconcile the
reasoning that we used in how we made those decisions.
The management of a program as big as Medicaid demands that
you continue to look for ways to reduce the cost so we can
serve more people. It makes no sense for us to allow a business
to go forward without refinement.
The Chairman. The time of the gentleman has expired.
The Chair recognizes now the gentleman from Georgia, Mr.
Deal, for 8 minutes.
Mr. Deal. Thank you, Mr. Chairman.
Mr. Secretary, thank you for being here, recognizing the
difficulty of anyone trying to explain budgets as large as the
one that you preside over, but I thank you for being here and
being willing to entertain our questions.
I, for one, welcome the suggested changes that you are
proposing to the SCHIP program, and let me tell you why.
First of all, it is a block grant program, as you
indicated, and if my figures are correct, the current poverty
level in this country is $20,650. If I take that and compare it
with the 200 percent of poverty that you are talking about
proposing for SCHIP eligibility, that is $41,300 for a family
of four, and I am speaking of a family of four.
Now, if you go from that level to what we find in some
States at 350 percent of poverty for a family of four, it takes
it up to $72,275, which is the current eligibility level that
some States have for their SCHIP program.
Now, quite frankly, in poor States like the State of
Georgia and many other States that are considered poor, if we
were to extend eligibility for SCHIP and extend it to the
family itself, which is being done in some States, at the level
of $72,275, my State would be in great shape. But the reality
is that is not practical, and I think what is happening with
the SCHIP program is an idea that certainly was welcomed at the
time but has gotten out of hand. The waivers that have been
granted for expansion to the program are at a level that we
just cannot simply afford it, and I welcome the changes that
you suggest.
Would you give us a brief overview of why you are
suggesting the changes to the SCHIP program?
Secretary Leavitt. I would like to put that, Congressman,
in the context of our vision that everyone ought to have an
affordable basic plan. We think that SCHIP is an important
component of how we insure specific populations, but if we use
SCHIP as essentially the engine to pull us toward a point where
everyone is covered by the Federal Government, we do not see
that as in the interest of the American people or of taxpayers.
We have a vision of SCHIP covering children, meeting the
mission that it has been given. We support its reauthorization.
Mr. Deal. Now, when we look at Medicaid and the reforms
that are proposed there, as I understand the proposal, the FMAP
formula for all States would be at 50 percent; is that correct?
Secretary Leavitt. We propose, on administrative expenses
only, that it would be at 50 percent. We see a continuation of
FMAP as it currently is with respect to the reimbursement of
health care costs.
Mr. Deal. I see. So it is not 50 percent across the board
then?
Secretary Leavitt. No.
Mr. Deal. OK. Well, obviously, that would cause some
concern for the poorer States that are at a higher FMAP level
for the reimbursement of services. I appreciate the
clarification on that.
Let me also compliment you for the proposals that you have
put in place with regard to building on the reforms that we
have worked hard to put in place in Medicaid reform during the
last Congress. And I know this committee heard from the
National Governors Association, who were basically leading the
charge for reforming Medicaid, because every State was facing
crises with funding their own portion of the Medicaid formula.
Would you briefly highlight some of the proposals that you
are making for further amplification of Medicaid reforms?
Secretary Leavitt. Yes. Thank you, Congressman.
For example, we believe that Medicaid ought to be used for
the purpose of paying for health care for those who are less
fortunate. We do not believe that it ought to be the means by
which we finance schools. There is a proposal for us to
eliminate payment for some administrative functions that
schools are billing us for. We want to pay for services, not
for administration.
Another example is that we believe that we need to have
graduate medical education in our States. We think Medicaid is
not the way to do that. We think there ought to be a more
rational way of apportioning the burden of medical education.
We also believe that we are overpaying for pharmacy.
Medicaid is, by far, the highest-priced pharmacy reimbursement,
not just in the Federal system but in the private system as
well. And therefore we propose various savers. All of these are
savers. None of these are cuts in Medicaid. All of this goes
toward reducing the pressure so that we can make this a
sustainable program.
Mr. Deal. Well, obviously, one of the largest components of
the Medicaid program is long-term care, and the last time, we
tried to make significant changes, and I think we did move in
the right direction for the reforms that this past Congress
adopted. One of those was how much of an asset can you have in
your home and still be eligible for the taxpayer to pay for
your nursing home expenses? And we had--because of compromises
that were put in place, we originally were at a half a million
dollars, and we allowed under the change up to $750,000 if the
State elected to go--and you are recommending that $750,000 be
removed and that there be a cap at a half a million dollars?
Secretary Leavitt. No. We believe that a person being able
to protect a half a million dollar home is adequate. In some
cases, that is even higher than under the bankruptcy statute.
It leads, obviously, to a situation where a person has an
incentive to acquire a larger home in order to preserve assets.
A person with a three-quarter to a quarter of a million dollar
equity in their home probably does not need to have public
assistance through Medicaid.
Mr. Deal. Well, I commend you for that position. It was one
that we tried to advocate. We did not quite succeed in keeping
it at that level, but I commend you for recommending it again.
With regard to Medicare part D, are you generally pleased
with the enrollments that have occurred and the projected cost
of participating in Medicare part D, and can you give us some
updated information as to where that stands?
Secretary Leavitt. It continues to be very good news.
We added over a million people after the recent
reenrollment. We went through the reenrollment with very few of
the problems that occurred during the initial implementation
during the first 3 weeks. We now have well over 38 million
people, 90 percent of those who are eligible. Of those who have
enrolled, some were between 70 and 80 percent, depending on the
survey that you look at.
People are happy with this, and they are saving money,
about $1,200 a year on average. The original estimate was $37 a
month. This year the average will be $22. Why? It is because of
competition. And do not take my word for it. That is what the
actuaries tell us. They tell us that when people are given an
opportunity to have good information about cost and quality,
they choose high quality and low cost, and the efficient hand
of the marketplace is clearly playing out here.
Mr. Deal. In one of the debates that is ongoing in light of
the language that the House adopted recently, allowing or
instructing you to negotiate the drug prices, I think one of
the assumptions was that if you had the ability to negotiate on
behalf of all Medicare beneficiaries that you would be the
largest negotiating bloc in the entire health care industry.
My understanding is that there are some private insurance
companies who, because they insure people beyond the Medicare
population, actually have a larger bloc of population on whose
behalf they negotiate prices; am I correct?
Secretary Leavitt. You are correct. That negotiation, a
rigorous negotiation, takes place now, and that is part of the
competition that we have seen. Plans, very clearly, have to
perform with the highest quality, at the lowest cost, in order
to keep a customer. And it is happening now, and there are
large-scale, rigorous negotiations taking place, and that is
why we are seeing the drop in prices.
Mr. Deal. Thank you, Mr. Chairman.
Ms. DeGette. [presiding]. The Chair recognizes Mr. Stupak
for 5 minutes.
Mr. Stupak. I thank the Chair.
Mr. Secretary, in 2002, I successfully included language in
the Best Pharmaceuticals for Children Act that would ensure
consumers know that they have the right to report to the FDA,
side effects they are experiencing with a drug. This provision
was intended to empower consumers and give the FDA more
information to help identify adverse events and to take the
necessary action. It took the FDA more than 2 years to issue a
proposal, despite language in the law that required a final
rule within 1 year of enactment. I sent comments in to support
a proposal over 2 years ago. Yet no action has been taken by
the FDA to finalize a rule.
Mr. Secretary, it has now been 5 years, and the FDA has
completely failed to implement this provision. It is estimated
that 10 percent of all adverse events are ever reported to the
FDA.
Why, Mr. Secretary, has the FDA not taken action on this
rule? Can we be assured that the FDA will take action to issue
this rule within the next few months?
Secretary Leavitt. Mr. Stupak, I am not able to give you a
response now. I will give you one directly, following our
hearing, by letter.
I would like to tell you that I share the concern that you
have on drug safety, and that ultimately the best way for us to
begin to gather information on adverse effective drugs will be
having an effective system of electronic medical records where
we will see those kinds of reports on an ongoing and regular
basis.
Mr. Stupak. But with all due respect, Mr. Secretary, we do
not need electronic medical records. All this is is a label on
your prescription bottle saying, ``If you have an adverse
effect of this drug, report it to the FDA: 1 (800) FDA-1088.''
it should not take 5 years when the law says 1 year.
Secretary Leavitt. I will be responsive to your inquiry. I
am not able to at this hearing.
Mr. Stupak. OK. Well, let me ask you this one.
Short of pulling a drug off the market, the FDA has no real
enforcement authority when it comes to pulse market regulation.
According to a recent Institute of Medicine report on the
future of drug safety, the FDA's regulatory and enforcement
options after a drug has been approved generally lie at the
ends of the spectrum of regulatory actions: either do nothing,
or precipitate the voluntary withdrawal of prescription drugs.
Doing nothing implies not taking action on potential health
threats to the public, and precipitating withdrawal implies
caving in to the drug companies' financial interests.
Therefore, the Institute of Medicine recommends that Congress
ensure that the FDA has the ability to require post marketing
assessments such as labeled boxes, box warnings and the
fulfillment of post market study commitments by pharmaceutical
companies. Again, it is something we put in the Best
Pharmaceutical Act for children. These conditions may be
imposed before both and after approval of a new drug, a new
indication or a new dosage, as well as after the identification
of new patterns of adverse events. But again, we do not know
about adverse events because we do not tell people to report
them, because we have been waiting 5 years to do that.
Do you agree with the IOM on this recommendation? Would you
suggest to Congress additional enforcement authority for the
FDA?
Secretary Leavitt. We view the IOM report to be an
important road map to improvement, and there is a general
belief--and I hold this belief--that we can improve in this
area. And we look forward to working with you and other Members
of Congress to implement in the appropriate way the IOM
recommendations.
Mr. Stupak. Well, the reason why I am asking about drug
safety is because that is a concern of ours. It has been 5
years since we have done--and none of this has been
implemented. We are not going to allow legislation to go
through, saying you have to do things within a year and it is 5
years.
While you may agree with the recommendations, please tell
us if you think there are other things the FDA should be doing,
and hopefully we have some reassurance the FDA will actually do
it.
Let me ask you one more that we have done on O&I while I
still have a minute left. In December 2006, Dr. Trey
Sutherland, chief of the Geriatric/Psychiatry branch at the
National Institute of Mental Health pled guilty to conflict of
interest charges brought by the U.S. Attorney's Office. These
charges are based on investigative work performed by the
Oversight Investigation Subcommittee and supplied to the NIH
beginning 3 years ago. It is my understanding that both NIH and
the Commission's Corps have failed to discipline Dr. Sutherland
even after criminal charges have been sought.
Is there any reason why two of the agencies that you
oversee have yet to discipline Dr. Sutherland?
Secretary Leavitt. Congressman, I am not familiar with that
specific case. I would be pleased to find out about it and give
you a response in writing.
Mr. Stupak. OK. I have many other questions on more
specifics, but we will be having hearings on drug safety, and
in fact, we have one next week starting. So these are issues of
concern to the subcommittee, and we will look forward to
working with you.
Secretary Leavitt. Thank you.
Ms. DeGette. The Chair recognizes Mr. Upton from Michigan
for 6 minutes.
Mr. Upton. Thank you, Madam Chair.
I appreciate your willingness to come up again. It is a
daunting task. I wanted to follow up on Mr. Barton's question
on the SCHIP just for a moment.
I know that Michigan is one of those States that does, in
fact, have beneficiaries who are over 18 participating. I am
just curious to know how many other States are in that same
category, and is there a ceiling or a cap in terms of the age
of eligible folks who are able to benefit from SCHIP?
Secretary Leavitt. I do not know the number of States, but
I can tell you----
Mr. Upton. Is it a big number?
Secretary Leavitt. Well, I know there are three States that
have more adults than they do children.
Mr. Upton. Really? So over 18?
Secretary Leavitt. That is right.
Mr. Upton. Wow.
The next question I have involves NIH. I have been one of
the leaders, and I thought it was a great victory for this
Congress to the degree that we were able to pass a renewal of
the NIH reauthorization bill last year under Chairman Barton,
and it was with great bipartisan support that it was promoted
and passed. And I was part of the team that Speaker Gingrich
actually put together back in the mid- to late 1990's, along
with Mr. Barton and Mr. McCain and others in the Senate
bipartisan group, to double the level of funding for the NIH.
And it is my understanding that the CR that we passed this last
week was carefully negotiated with not only the administration
but on both sides of the Hill, and the funding level for the
NIH and the CR that was passed in the House and is now pending
in the Senate included $28.9 billion for the NIH for fiscal
year 2007. I think that is the right number.
My question is: In the President's budget that we received
yesterday, the 2008 budget request is actually less than the CR
provided for that we passed in the House last week. And I am
just curious to know what your comment might be since you did,
I guess, part of the negotiating for that level.
Secretary Leavitt. Well, much of this is a function of
timing. As you know, it is rather complicated what you are
comparing to because of the introduction of the continuing
resolution, and I think the important thing is here we want to
support NIH. The budget that you are saying was prepared would
have been prepared in advance of that agreement.
Mr. Upton. Right. But you could accept a larger increase in
the NIH budget knowing that it would otherwise be a reduction
from what we passed last week?
Secretary Leavitt. Well, would I accept it? Obviously, but
what the actual----
Mr. Upton. I do not see your support in the back, so--I
know he is listening.
Secretary Leavitt. That does not change our budget. Let me
explain to you, if I can, what we are focused on at NIH.
We have seen substantial new investment over the course of
the years. We are focused now on making certain that the
research we do continues to focus on new investigators and
continues to operate in a way that we are getting new grants.
And we are beginning to use more competitive grants, and we are
looking also to get more projects that go across the various
silos that naturally exist within NIH. You will see that being
our focus.
Mr. Barton. If the chairman will just yield for 30 seconds.
We do support funding NIH at the authorized levels. We had
one ``no'' vote on this entire committee on the reauthorization
bill; we had two on the floor, and we had none in the Senate.
And we did commit on a bipartisan basis that if we could get
that reauthorization through, we would support significant
funding increases for NIH, so we are going to continue to press
for that.
Mr. Upton. I am pleased to hear that.
There has been some criticism level in this budget with
regard to across-the-board cuts on providers, such as
hospitals, under the Medicare market basket update cuts. And my
question in this regard is that--we have a number of hospitals,
I know, in my district that have done a very good job with
health IT, with a whole number of different efficiencies that
they have proposed, and my question is: Aren't we at some point
penalizing these hospitals that have improved their
efficiencies to such a degree that when we just take a slice,
an across-the-board cut, that we are actually penalizing these
hospitals in contrast to those that have not undertaken the
same type of efficiencies? Is there not a better way to do
this?
Secretary Leavitt. In years past, even prior to this
administration, there have been a number of occasions where
they have not funded the entire market basket. In fact, it
would be the rule, not the exception. The rationale we used in
developing our proposal, which is 0.65--the market basket is
minus 0.65--is we just took half the productivity increase that
MedPac suggested that they would see, which is 1.3 percent. We
figured let us have taxpayers benefit half, and the hospitals
can receive half. Other than that, we concluded to fund the
market basket for most hospitals.
Mr. Upton. You were in Michigan last week and, I know, met
with some of my State legislators. In the budget that was sent
out yesterday, the preventative health and health services
block grant was proposed to be eliminated. One of the
provisions that one of my State senators, Tom George, proposed
was a greater emphasis on smoking cessation programs; diet; a
whole number of different things.
It would seem like this would be a natural way where we
could save money, and I am not quite sure how that fits with
the elimination of this program.
Secretary Leavitt. That was actually a continuation from
last year.
Mr. Upton. Simply because you proposed it last year, you
did it again this year?
Secretary Leavitt. You are exactly right. You have got it.
Mr. Upton. OK. All right. My time has expired. Thank you.
Ms. DeGette. The gentleman from Massachusetts, Mr. Markey,
is recognized for 5 minutes.
Mr. Markey. I thank the gentle lady very much.
So just as coincidence would have it, I am the ``no'' vote
out of all Members of Congress on the NIH reauthorization last
year, and the principal reason that I was opposed is that in
the last Congress, once again, there was not an increase in the
NIH budget that would cover inflation; and as everyone in this
room knows, over the last 4 years, there has been actually a
12-percent cut in the NIH budget if you factor in inflation,
and the consequence for research is dramatic.
And we know that the President continues to adhere to the
position that his tax cuts are sacrosanct, but we realize that
a price has to be paid. In my opinion, this is the area that
pays the single greatest price, because research is medicine's
field of dreams from which we harvest the findings that give
hope to the tens of millions of families that are afraid that
that disease which has already affected someone else in their
family could affect others in their family, whether it be
Alzheimer's, Parkinson's, cystic fibrosis, diabetes, you name
the disease.
And the Bush administration--Mr. Secretary, I know that you
are handed these numbers by President Bush. I just think
President Bush makes a terrible mistake. When he is told that
he has to make the choice between his tax cuts and research for
all diseases in America, I just think he makes the wrong
decision. And while it is true that the Republicans did vote
for an increase in authorization for NIH, that was before they
voted against an increase in appropriations, and the reality is
that at $28.9 billion for fiscal year 2007, heading into fiscal
year 2008 where there is not going to be an increase, there are
tough choices that have to be made in terms of who is going to
get funded for the research which is going to hopefully solve,
find the clues at least, that can lead to the solving of these
incredible diseases which affect American families.
So I know that you are put in an impossible situation here,
but I will say this: that it is a moral choice which President
Bush is making. It is the wrong choice. Far greater than any
threat from any terrorists to the average American is the
threat that a disease which they already know exists in their
family is going to afflict another person in their family. That
is the greatest threat to every family in our country. And if
there is an arsenal that could be used in order to give
protection to a family, it is this NIH budget. And from my
perspective, there is no more important issue that we are going
to work on in this Congress. It will be to rectify this
disaster area which President Bush, the White House, OMB, have
created. And I know that at HHS you would welcome the money,
and you would use it well, but I would--again, I appreciate how
you are going to try to spread it around in ways that might be
more effective, but it is much less money.
So I will give you, Mr. Secretary, a chance to defend the
President's tax policies and the consequences that it has for
the NIH budget.
Secretary Leavitt. Congressman, I support the President's
budget. I recognize there is a difference in how you might have
selected those priorities.
An area where I believe there would be agreement would be
how we are choosing to use the number we have, and I would like
to articulate that to you because I think that would--I think
you would be heartened by it.
Mr. Markey. No. What I am saying is--what I would like you
to justify is--President Bush's budget makes health cuts,
health research cuts, in order to protect tax cuts. And that I
would like you to defend, Mr. Secretary.
Secretary Leavitt. The President obviously feels it is
important for us to have a strong economy, and he views the tax
cuts as integral to keeping a strong economy. He believes that
$28.9 billion that the American people invest in research every
year is a function of a strong, robust economy, and that if we
want to see the kind of research investment that we all aspire
to have, that it is critical to invest in the strength of the
economy.
Mr. Markey. Well, again, respectfully, Mr. Secretary, I
disagree with President Bush. I think it is a misallocation of
resources. Only the NIH can fully fund the cutting-edge
research that the private sector will not invest in. And I just
hope that he reexamines his decision on this issue. Otherwise,
he is going to leave a legacy in the most important research
area in all of the world, in a way that really will harm the
hope that families need. And I thank you.
Ms. DeGette. The Chair now recognizes Mr. Murphy from
Pennsylvania for 6 minutes.
Mr. Murphy. Thank you, Madam Chairman. Again, welcome, Mr.
Secretary.
In following up on conversations you and I have had before
and in my opening comments here, I wanted to raise again some
questions and see if these are things you continue to support.
These are issues of how we can save money. Again, so much of
the discussion here and on the Hill is about the cost of health
insurance, and I know you are an advocate of work on the cost
of health care through such issues as transparency and quality
improvement, et cetera.
There are a couple of issues I would like to find out
specifically from you, and one that I raised earlier has to do
with such things as the healthcare-associated infection rates.
While we are all concerned about any illnesses or problems that
occur or tragedies that occur, natural disasters, et cetera, in
our Nation, it still is amazing to me--perhaps appalling is the
word--that the Center for Disease Control reports that they
have identified that there are about 2 million infections and
90,000 deaths annually from healthcare-borne infections--subtle
resistant staph infection to pneumonia, et cetera--and about
$50 billion a year is from that.
Now, I am submitting legislation to work on disclosure of
that, because Pennsylvania is the only State that requires
disclosure and makes that public. I believe about six States
require it, but it is not out there.
I am just wondering what some of your thoughts are in
working with this Congress or with this committee on trying to
directly address the massive expenses that go to such things
that are so preventable. So many hospitals have been able to
bring these numbers down to near zero, but as a Nation, we
continue to pay the bills of those that are not working this.
But there is plenty of evidence that it can be done. I just
wondered what your thoughts are on how we can work to drive
those costs down.
Secretary Leavitt. I believe Pennsylvania is to be
congratulated for their efforts to not only collect but to
report information on hospital infections. It is unnecessary
and it is preventable, and we need to move aggressively to make
the information available and to reduce the infections.
The best thing we can do is to have electronic health
information systems that will gather the information, not only
for the purpose of reporting, but also to be able to compare
actual performance to standards that have been established by
the industry themselves.
Mr. Murphy. I appreciate that and I look forward to working
with you on that.
There is a second issue that you and I have spoken about in
the past. While the President continues to maintain his
emphasis on work in the community health centers, again I hope
we can work on dealing with the issue that even--we do not even
have enough physicians and nurses to staff the current
community health centers. As you know, there is between a 10
and 20 percent vacancy rate for OB/GYNs, for family practice
doctors, for psychiatrists. And I have tried to deal with this
before by trying to find some way of having doctors even
volunteer, and hope we can continue to work on that through
such things as allowing them to be covered under the Federal
Torts Claims Act. It still is deeply concerning to me, and I
hope we continue to work on that.
Finally, I wonder if you can give us some update on the
transparency issues. I know that the President signed an
executive order last summer on this. Again, in so much of the
time we are discussing the budget, we talk about the spending,
and I think coupled with that should be how the administration
is working towards reform and savings.
Can you give us some information on how that is working and
what kind of savings you see coming out of that?
Secretary Leavitt. Congressman, we often refer to the
``health care system.'' There likely is not, I think, a system
you can say is health care. There is no economic system. We
have a large, robust, rapidly growing sector, but there is no
system. There is nothing that connects them together. We view
the future to be a system of competition based on value, and to
get to that system, we have to have four things. The first is
electronic medical records. The second would be standards of
quality that can be independently assessed and compared. The
third would be cost assessments that people can compare, and
the last would be incentives.
The President created an executive order, putting the
purchasing power of the Federal Government to implement those
four cornerstones in Federal purchasing. We are now approaching
the private sector and other large payors. We now have 10 of
the largest 15 payors in the country who are committed to that.
We have 51 of the largest 200. We believe that by April we will
have nearly 60 percent of the entire health care marketplace
beginning to work towards those four cornerstones. We believe,
within 2 years, we will begin to see health care based on value
in limited areas on limited procedures. Within 5 years, we will
see the word ``value'' or that combination of cost and quality,
as being a regular part of the medical lexicon. In 10 years, it
will be ubiquitous.
We are clearly moving on a pathway that will lead us to a
transparent system of health care. Costs will be reduced
because people will begin to pursue high quality and low cost,
and we know that when consumers have that information they make
those choices. Health care improves and the costs go down.
Mr. Murphy. Well, I appreciate your continued commitment to
this because patient safety, patient quality, and patient
choice are three components that are really making sure we work
to drive this forward. And I know the RAND Corporation said
they estimate electronic medical records could save $162
billion annually in reducing redundant tests and unnecessary
hospitalizations. I know people in the health care system--
physicians, nurses, everybody in the health care--is dedicated
to trying to work towards this quality, but we have to have
that information in electronic medical records.
I know you are making progress on this. I would like to see
us move farther and Congress move faster on some of these
things for standards, but please continue to push those. As
part of the budget, it is too often ignored of how we can
really drive costs down and not just find new ways of paying
for it. So I thank the Secretary for coming here, and I look
forward to continuing to work with you.
Secretary Leavitt. Thank you.
Ms. DeGette. The Chair now recognizes herself for 6
minutes.
Welcome, Mr. Secretary.
Mr. Secretary, I assume that it is the administration's
position that all eligible children for SCHIP or Medicaid
should be covered; is that correct?
Secretary Leavitt. We believe that the program should be
focused on children and we do support its reauthorization.
Ms. DeGette. Well, you talked to Mr. Barton about this
whole concept of adult children, which you are in this budget
proposing not to cover any longer; is that correct?
Secretary Leavitt. We are proposing that those who are
covered continue. We believe that we should focus our efforts
on children; that is to say, those under 18.
Ms. DeGette. Right. Now, all of those adult children who
are covered right now are covered under waivers that this
administration has given to the States, correct?
Secretary Leavitt. That is correct, or a previous
administration, and we would choose not to continue that
practice.
Ms. DeGette. OK. So, right now--so, according to CMS, we
have 667,000 adults currently covered under the SCHIP program
out of 7.3 million people who are covered in SCHIP.
Do those numbers sound right to you?
Secretary Leavitt. Those numbers sound in the ballpark,
yes.
Ms. DeGette. OK. So my question to you is, if you eliminate
those adults--and by the way, those are not just childless
adults who are in extreme poverty who are covered, they are
also pregnant women and parents. If you unenroll those people,
is it the administration's position that you will now be able
to--and in addition to reducing the eligibility to 200 percent
of poverty, is it your position you will now be able to cover
all of the 2 million, roughly, kids who are eligible but
unenrolled in SCHIP at this time?
Secretary Leavitt. Let me be clear that we do not intend to
unenroll adults who are currently in the program. We do
intend--we would pursue a policy that would discontinue the
enrollment of children----
Ms. DeGette. OK, but to answer my question then, if you did
not enroll any more adults then, is it your view that you would
be able under this budget to enroll all of the rest of the kids
who are eligible but unenrolled?
Secretary Leavitt. It would be our position that SCHIP
continue to operate as it does with State allotments, and
States should be using those----
Ms. DeGette. OK, but it is your goal--if it is the
administration's goal to have all of these kids enrolled in
health insurance, do you think this budget will be able to
achieve that by reducing the eligibility to 200 percent of
poverty and not enrolling any more adults? It is a simple
question and it goes to the heart of the administration's
policy here.
Secretary Leavitt. The administration's policy is that
every American should have access to an affordable, basic plan
and that SCHIP is an important tool in being able to provide a
portion of those that access, that it is important that we work
with Governors like yours to develop plans similar to the ones
that he has proposed where we are able to assure that there is
some kind of access available to every child.
Ms. DeGette. And do you believe this budget will be
sufficient to enroll all of those kids, ``yes'' or ``no''?
Secretary Leavitt. We believe that the budget is
sufficient.
Ms. DeGette. OK. Now, for a family of four, 200 percent of
poverty is equal to $41,300. Under this budget, a family of
four making $44,000 would become ineligible for SCHIP coverage.
So if this family does not have access to employer-based health
insurance, they are going to have to get coverage in the
individual insurance market.
How are they going to be able to find affordable insurance
for their kids?
Secretary Leavitt. The individual market does not perform
in the way we aspire for it to, and therefore the President has
made two very important proposals.
One is to work with States, like the State of California,
in developing proposals where there is an affordable, basic
plan where the Federal Government is prepared to help with
those who cannot afford it, like the one that you spoke of. But
there is one problem that no State can solve, and that is the
inequity that comes when a person who is a teacher's aide or a
construction worker or a student, and does not have access to
employer-based insurance, it is the inability for them to buy
that in after-tax dollars. And therefore the President has
proposed to level the playing field. There is no defendable
reason that we provide a tax deduction to one employee who gets
their insurance through an employer and not another. So those
are two important reforms that we believe will strengthen the
individual market.
Now, may I say----
Ms. DeGette. If you do not mind, Mr. Secretary, let us talk
about that for a minute because I have a chart right here for
Ennis, TX. It is in Mr. Barton's district, and if a family of
250-percent eligibility--so still not a very high income
family--is eligible for SCHIP right now, if they have to buy a
private insurance policy in Ennis, TX, one of the policies,
BCBS, would cost 61.4 percent of their income; one would cost
23.9 percent; and one would cost 24.3 percent of their income.
It is hard for any of us, on this side at least, to see how
insurance policies this costly, even with the President's tax
proposal, would be able to afford those policies even with the
tax relief.
Secretary Leavitt. Let us assume that that couple that you
have spoken of in Ennis, TX--let us say one is a teacher's aide
and the husband works in construction, and they earn $60,000 a
year between them, and that is about--what?--275 percent, I am
guessing now, of the poverty level.
Clearly, they would be hard-pressed to have insurance for
the reasons that you have spoken of. But under the two
proposals that I have mentioned, first of all, there would be
an affordable, basic plan available to them.
Ms. DeGette. We are hoping the States develop those. They
do not have that now, correct?
Secretary Leavitt. Many States do. Texas, as a matter of
fact, does. But let us just say for the purpose of this
discussion that the President's proposals were enacted. The way
it would be--that couple would receive a $4,500 tax benefit,
and therefore the policy that they would purchase would be
$4,500 a year cheaper. And let us assume that it was not enough
and that the State of Texas decided that they wanted to
subsidize the purchase of that insurance policy. We propose
that the States would receive from the Federal Government
assistance in being able to make certain that not only was a
basic policy available but that a basic policy would be
affordable.
Now, it is possible that there would be people in Texas who
do not qualify for SCHIP that would be helped in this way. We
aspire for every American to have access to an affordable basic
policy, but SCHIP should not be the vehicle by which we insure
every adult and every child in America. There are different
ways----
Ms. DeGette. And I do not think anybody thinks that.
Thank you, Mr. Secretary, and my time has really expired
now.
I would now like to recognize the gentleman from Texas, Mr.
Burgess, for 5 minutes.
Mr. Burgess. Mr. Secretary, thank you for your service to
the country. We are indeed fortunate to have a man of your
caliber serving in your position at this time.
I think one of the things that perplexes me most of all is
the SGR formula, and all of my discussions with Dr. McClellan
over the last several years have led me to the conclusion that
this is something that requires a legislative fix rather than
an administrative fix.
Am I correct in that assumption?
Secretary Leavitt. The formula is a complex formula. Very
few people understand it.
Mr. Burgess. Yes or no?
Secretary Leavitt. I personally believe there has got to be
a better way.
Mr. Burgess. I do as well, and that is why I wanted to
bring it up, because we talk about the market basket formula.
The SGR formula is a finite, fixed amount of dollars, and we
slice the pie ever thinner if there are more people who make
demands on that pie or submit invoices. The volume and
intensity increases, and the reimbursement rates go down. But
hospitals, drug companies, HMOs, Medicare, Advantage plans all
enjoy market basket updates which the administration has now
said perhaps we should look at those market basket updates as a
place to arrive at some savings.
So does the administration have a road map by which we may
get to a more equitable system of provider funding? Whether it
be a hospital or a doctor or an HMO or a drug manufacturer,
does the administration have a road map as to how we get there?
Secretary Leavitt. We believe that at least some portion of
physician reimbursement ought to be based on the quality of the
services that they render and the outcomes that they produce.
We are not at the point at this moment that we can base large
percentages of it, but some portion should. The road map
includes electronic medical records which allows the
information to be gathered on both quality and on performance.
It involves having quality measures that can be independently
assessed. We are in the process of working with the medical
community if you want to----
Mr. Burgess. So if we do all of those things--Medicare,
which is an integrated program--perhaps then the funding silos
would not be quite so rigid between the parts A, B, C, and D?
Secretary Leavitt. That would be our aspiration.
Mr. Burgess. Let me ask you a question on a completely
different front, Hurricane Katrina.
I have been down--in fact, our committee had a hearing a
little over a year ago down in Louisiana. Charity Hospital for
the first quarter of fiscal year 2006 received, as I understand
it, or was due to receive, about $250 million in a
disproportionate share of funds, so-called DSH funds.
Is that a correct assumption?
Secretary Leavitt. Actually it is over $1 billion a year.
Mr. Burgess. The DSH money that was earmarked for Charity
Hospital, where has that gone?
Secretary Leavitt. Well, let me reconcile this.
Louisiana receives just under $1 billion a year in a
disproportionate share of hospital money. Under the Deficit
Reduction Act, another $2 billion was allocated for recovery of
the gulf region. We have allocated that money to the various
States that were impacted, including Texas, to reimburse them
for claims that they paid that were not otherwise compensated
by Medicaid. We have allocated most of that money.
Mr. Burgess. Allocated or paid?
Secretary Leavitt. Actually paid. Paid, yes.
Mr. Burgess. But the health care infrastructure in New
Orleans, as I understand it--and I have not been down there for
several months--but the health care infrastructure still is
just literally hanging on by its finger nails.
Secretary Leavitt. And other moneys were made available
through other means in dealing with medical infrastructure, and
that is an ongoing discussion.
Louisiana properly wrestles right now with what they want
the future of their health care system to be. Do they continue
to use their charity system where they have two tiers--one for
those who are insured and employed and one for those who are
not? It is a very important decision, and they have an
opportunity to upgrade on a perpetual basis their health care
system if they choose that.
Mr. Burgess. Perhaps that is a great idea for them, but
should we not be giving them more encouragement to move ahead
and move forward with this since there is a large component of
Federal dollars that are involved?
My discussions with doctors on the ground is that they are
rapidly leaving the area as they are having to spend their own
savings to keep their clinics open to see patients that cannot
reimburse them because they have no health care coverage.
Wouldn't we be better served by keeping those people on the
ground and functioning and working in the gulf coast area,
rather than allowing them to disperse throughout the country,
and then trying to rebuild it whenever the State gets around to
it?
Secretary Leavitt. Two weeks ago, I sent $71 million to the
hospitals and $15 million to the doctors and clinics for the
purpose of whatever their need was, but most of them will be
spending it on wage upgrades.
Mr. Burgess. Did that have to go through a State agency for
those hospitals and clinics to receive those dollars?
Secretary Leavitt. It did, but the grant was made in a way
that will assure that those dollars are received by the
hospitals and clinics that need it.
Mr. Burgess. I will look forward to following up with that.
Let me just ask you a broad question. My time is about up.
President Bush and I actually disagree on the fundamental
question of how to deal with immigration reform in this
country, and my side lost last November, so I have got to
assume the President is likely to get his wish in the coming
months. In all of the budgets that we are assessing today, how
does the administration propose that we deal with the health
care needs of 10 to 20 million people who may be in this
country illegally as they then get in line for citizenship?
Secretary Leavitt. Well, the larger question you ask is how
do we pursue uncompensated care? And in my judgment, that is
something that ought to be the subject of far more conversation
than we have the time to have today.
Ms. DeGette. Thank you very much.
The Chair now recognizes Mrs. Capps from California for 6
minutes.
Mrs. Capps. Thank you, Madam Chair.
Welcome, Secretary Leavitt, for being here today.
I still am having a lot of trouble understanding how the
priorities were determined in this HHS budget, especially after
seeing the devastating cut. You have referred to it already. It
is from $150 million to $105.3 million imposed on nurse
workforce development. This includes the elimination of
programs to strengthen advance practice nursing, and it comes
after 3 years of flat funding.
Keep in mind that back in 1974, Congress appropriated the
equivalent of over 600 million in today's dollars for nurse
education programs. I am sure you are aware that projections
are that by 2020 our Nation will see a 29 percent shortage of
nurses. HRSA itself reported in April 6, 2006 that nursing
schools would need to increase the number of graduates by 90
percent in order to address the overall shortage of nurses. You
reference this in your opening remarks about training new
nurses. But I would rejoin that you can't train new nurses
without nurse faculty and these are the people who need these
advanced degrees. And loan forgiveness for nursing students
doesn't help if there is nobody to teach them.
And so I want to get on record a very basic question to
you. You do believe, don't you, that nurses are an essential
part of our ability to deliver quality health care?
Secretary Leavitt. I do.
Mrs. Capps. And I am sure you also agree with assessments
by HHS agencies that our nursing shortage is going to continue
to grow if current trends continue?
Secretary Leavitt. And if we continue to use current
practices in the way we train them. There are many ways I
believe we could expand that with----
Mrs. Capps. Right. And as you just said, that is a subject
for another discussion. You probably know that enrollment in
nursing schools rose only 5 percent from 2005 to 2006, but over
32,000 qualified applicants were denied admission because of
the nursing faculty shortage and a lack of clinical placement.
So it is pretty clear that decreasing funding for nurse
education programs by $44 million is only going to harm our
efforts to build a properly staffed nursing workforce.
And I am also considering the emphasis our President places
on bioterrorism and the pandemic flu preparedness. I believe it
is blatantly counterproductive to divest from the front line of
public health workers who could respond in the face of a
national health emergency. Preparedness efforts are incomplete
in the absence of a properly staffed public health workforce.
And I do want to ask a follow-up question. I do have half
my time left. And this is a big topic, but I would with like to
know what the rationale is for these cuts in this budget. Just
the highlights.
Secretary Leavitt. Well, let me indicate as I did before
that we were following, for example, the GAO assessment which
indicated they believe they were an underperforming program. We
also believe----
Mrs. Capps. They were underperforming programs?
Secretary Leavitt. That is right.
Mrs. Capps. Current nursing schools?
Secretary Leavitt. The grants that were being offered that
we are proposing to be reduced was--GAO believed and we believe
wasn't the best way to expend those dollars. I do believe that
investing in the development of basic nurse infrastructure is
an important one.
Mrs. Capps. But you do understand we do have to have some
kind of faculty prepared.
Secretary Leavitt. We obviously do. But I am not certain
personally, but you say this is probably a conversation for a
different day, but I am not sure that we ought to be dependent
completely on the large medical nursing school method. We have
to find ways that will produce more nurses----
Mrs. Capps. That could well be, but we have to have some
kind of faculty, some kind of specialized personnel to impart
the body of nursing knowledge to the second, to the incoming
population. Let me go on because maybe we can come back and
visit that topic.
I am to understand also, I believe, in this budget that
nursing education funding needs to be cut by one-third from
last year, yet there is enough money to increase unproven
abstinence only education, which the GAO itself concludes uses
Federal funds for unproven scientifically inaccurate programs
that lack oversight. I want to underscore this budget in actual
dollars has 200 million and more in funding for abstinence only
education but $105 million for nursing education.
I am going to go on and talk about one other topic. You can
come back to that if you want. I just want to make sure that I
get another very big concern of mine out on the table, and that
is these budget cuts and funding for the National Cancer
Institute. It has been brought up before.
In 2004, cancer deaths dropped for the second consecutive
year. It is likely no small coincidence that the declining rate
of cancer deaths coincided with an increase in NIH funding for
many years, and that tells you something about the way the
deaths--the way that it required for many years.
But this year NCI funding is being cut. Even now the
National Cancer Institute can only approve funding for 11 to 12
percent of applications compared to 25 to 30 percent in past
years. I don't think it was ever high enough.
How can you justify impeding progress when this country is
so committed to the 2015 goal of eliminating deaths from
cancer? You were recently quoted in a National Journal article
saying that we all want to invest more, but it is a function of
capacity.
And I refer back to my earlier question about the decision
to fund unproven risky programs over life saving proven
research. I want to ask you what is the justification for
cutting cancer research? I know from personal experience--as
many of us do--that it is not until stage 3--you talk about new
cancer research--but it is not until stage 3 trials that this
research comes to bear the kind of fruit that will actually--
and literally has--saved thousands of lives.
Cutting cancer research funding I believe will directly
impede our ability to reach the goal that was so poignantly
expressed by Dr. Von Eschenbach to end deaths from cancer by
2015.
And I would like to have you now respond in the time that I
have for how this is going to happen.
Secretary Leavitt. Congresswoman, let me reiterate the fact
that I don't think any of us have not been touched in some way
by cancer and there is none of us who don't want to see it end
and celebrate our progress. I want to point out we are not
eliminating cancer funding. It is still the largest allocation
of funding to NIH, in excess of $4\1/2\ billion a year. What we
have chosen to do this year, however, is begin to award more
competitive grants that we believe put us on the cutting edge
of science. We continue that commitment----
Mrs. Capps. But you would do this in the face of funding
abstinence only----
Mr. Stupak. I am sorry. The gentle lady's time has expired.
I now recognize the gentleman from New Jersey, Mr. Ferguson,
for 6 minutes.
Mr. Ferguson. I thank the Chair. Welcome back, Secretary
Leavitt. I am sure this is one of the most fun parts of your
job. But we very much appreciate you joining us again as a
committee and we are certainly very fortunate to have somebody
of your caliber and your integrity serving in this very, very
difficult capacity. We thank you for your service.
Mr. Secretary, I want to talk a little bit about pandemic
flu. You and I have discussed this on a number of occasions
before.
We have discussed preparedness. We continue to see reports
from Asia and Africa, particularly in Egypt and Nigeria, and
now we are even seeing reports in Europe about the spread of
avian flu. The last stories I have seen point to 63 deaths from
bird flu in Indonesia and, very alarmingly, 11 deaths in Egypt.
For the record since it has been some time since we have
had a chance to discuss this, I am sure you would continue to
agree that it remains just a matter of time before this or some
other pandemic strain mutates and is spread from person to
person. If you disagree with that, please feel free to say so.
But I continue to be very, very alarmed by that.
To date, my understanding is that you have requested, and
the Congress has appropriated, about $6.1 billion for the
implementation of the $7.1 billion National Strategy on
Pandemic Flu.
I understand you are requesting $875 million, nearly the
final billion, that would complete or fully fund the national
strategy.
Can you very briefly and generally talk for a second about
what has been set aside for both antivirals and vaccines? And
what has been spent of what has been set aside for antivirals
and vaccines?
Secretary Leavitt. Our pandemic plan can well be divided
into five parts. The first would be the development of
vaccines. Much of our $7.1 billion is involved in the
development of new research as well as acquiring stockpiles. We
continue to make heartening progress. We have released
contracts now both on anti--on vaccines but also new
antivirals, we have also made progress in the area of adjuvant
technologies.
I can tell you by that we are making progress toward our 81
million courses of Tamiflu, for example, where we have--in 2008
we will complete the 20 million course antiviral stockpile
purchase to maintain the function of our health care system and
to provide antivirals for our first responders and to stockpile
an additional 24 million treatment courses for the treatment of
influenza.
We currently have--we are working with the States to
complete that, all the States have taken advantage, almost all
of them, there are four who haven't. So we are making very good
progress, and I would say we are on schedule in every one of
the five-point plan.
Mr. Ferguson. I appreciate that. I know that of the final
billion that would fund the remainder of the national strategy.
I understand that the budget request this year is for $875
million. Again we don't know when budgets are finished around
here. We certainly don't know when they are appropriated.
I would ask you to consider that if the administration is
going to be submitting a supplemental this year, any kind of an
emergency supplemental, whether it is for the war or anything
else, that the administration would consider including the
final billion dollars that would fund the National Strategy on
Pandemic Flu, that that might be included as has been looked at
and done in the past.
I see this as a very urgent matter. I think it is a ticking
time bomb. It is waiting to explode. And I just think the
sooner the better that we fully fund and finalize this
strategy. I think it will certainly be in the interest of the
health care of our Nation.
In the minute and a half I have left I just want to turn to
one other topic.
The budget that we are talking about today embraces the
goal of personalized medicine instead of this ``one size fits
all'' approach. I think that is something all of us would
support, particularly with new technologies we have today and
diagnostics and in other areas. Mr. Secretary, I just wanted to
call to your attention legislation that I have supported in the
past and will continue to support which would allow this
tremendous gift of molecular diagnostics to help identify the
types of treatments that are appropriate for each different
individual.
It is certainly the way of the future. It is a better way
to treat diseases. It is a more humane way. It is a more cost
effective way of treating diseases. For example, there is a
test which would indicate if someone would respond in a
particularly positive way to a breakthrough of breast cancer
drug, for instance. As you know, this could make a tremendous
difference in finding the most effective and efficient way to
treat deadly diseases. And I would ask if you might be willing
to work with us to move that type of legislation forward during
this Congress.
Secretary Leavitt. We view that as a land of great promise,
and may I also say one of the things that Congress could do
that would aid us in accelerating would be passing genetic
discrimination protection. There is great worry that as we
gather the information that is necessary to do the research and
to organize it in a way that will help us make the
breakthroughs here that people will be discriminated against
and we need to give them the comfort of knowing they cannot be,
and that bill I think will probably approach the House of
Representatives very soon.
Mr. Ferguson. Thank you, Mr. Secretary. Thank you, Madam
Chair.
Ms. DeGette [presiding]. I now recognize Mr. Doyle from
Pennsylvania.
Ms. Eshoo. Madam Chairwoman, could I just inquire about the
time that the Secretary has? It would be instructive to know.
Ms. DeGette. Mr. Secretary.
Secretary Leavitt. I believe I was scheduled until 12:30.
Ms. Eshoo. May I ask Madam Chair that if we don't have the
opportunity to ask questions that we submit them directly to
the Secretary and that we receive a timely response?
Ms. DeGette. Mr. Secretary.
Secretary Leavitt. I would be pleased to respond.
Ms. DeGette. Without objection, so ordered. Mr. Doyle is
now recognized for 5 minutes.
Mr. Doyle. Thank you, Madam Chair. Mr. Secretary, welcome.
In our dealings in the past when you were over at EPA, I
had the pleasure of working with you on some issues and I want
you to know I think you have done a good job there and I think
you are a good person. I think you also have an impossible task
trying to defend this budget given the constraints put upon you
by the President.
I want to talk a little bit about the affordable choices
and suggest that maybe you need to think about going back to
the drawing board on this one.
I have been in the insurance business since 1975. I am
licensed in all lines of insurance. I used to sell a lot of
health insurance policies.
It seems to me that the end result of the President's
proposal of affordable choices is to put many more Americans
into the individual insurance market, the most costly of the
markets, group insurance obviously being less expensive than
individual insurance.
The problem that I find with most working poor that don't
have insurance isn't that they can't get insurance. They can't
afford insurance.
When you look at the President's proposal, and he cites
that a couple making $60,000 a year would save $4,500 in taxes,
now that is assuming they are self-employed and are paying the
15.3 percent in Social Security and Medicare tax. But if you
have someone who is working poor, working for someone else,
their actual saving is more than like $3,400. Now this is a
couple making $60,000. Now I don't know about the rest of the
country, but in Pittsburgh, PA, the people that I represent,
most of the working poor in my congressional district aren't
making $60,000. They are making between $20,000 and $30,000 and
their employers aren't offering them insurance. And the
deduction that the President proposes would put far less
dollars back in their pockets than the $3,400 cited by a couple
making $60,000. I don't believe a couple making 60,000 could
find individual insurance for $300 a month. And I certainly
know a couple making 20 to 30,000, they would be placed out of
the market.
The second point I want to make, though, and get your
response to is the impact this has on those same families. This
is like a double whammy. What we are basically asking the
working poor in this country to do is to trade reduced
retirement benefits in the future for some assistance in trying
to buy health care today.
And the reason I say this is that the formula that
determines what you get in Social Security payments is based on
how much you pay into the system and how much your employer
pays into the system.
And for those people that are making $100,000 a year, the
people that are at the max and above, under this formula they
would get about a 15 percent reduction in their benefits of
Social Security. But when you apply the same formula to the
working poor, people making between $20,000 and $30,000 a year
and they are getting this $15,000 exemption to Social Security,
their benefits--I saw a study that was done by, I will get the
name of the organization, the Tax Policy Center in Washington,
estimated that their benefits could be cut up to 50 percent.
So it is sort of a double whammy. On the front end we are
not giving the working poor enough dollars to go out and
purchase insurance in the private market, in the individual
market. And on the back end we are cutting their Social
Security benefits because of this $15,000 exemption that they
have taken advantage of.
So my question is, how does the administration propose to
make up this huge loss of retirement income and this plan for
the very people who rely on their Social Security payments the
most? I mean, I don't believe the administration has something
against working poor, but it just seems to me that they get it
on both ends of this deal. They don't get enough money to buy
insurance in the private market and they get their Social
Security benefits reduced on the back end. And I think that is
a terrible dilemma to put our people in and I just wonder how
the administration proposes to make up for the loss of
retirement income.
Secretary Leavitt. Congressman, there are two parts of the
proposal that the President has put forward. The first is that
every State should have an affordable basic insurance plan that
is accessible to every citizen.
That means they first of all need to make certain that it
is available for sale, and then second of all they need to make
certain it is affordable.
That is an important distinction because the tax benefit
has not been intended to be the sole means by which a person
who could not afford health insurance----
Mr. Doyle. How is this done, Mr. Secretary? How do you
force or compel States to offer this affordable insurance?
Since we are a free market people here and we are not going out
to the insurance industry and be heavy handed with them and
tell them they are going to have to cut their premiums and lose
money. How does that happen?
Secretary Leavitt. The President has asked I meet with all
the Governors in the next 100 days. I will see almost all of
them. Pennsylvania, your Governor is working on such a plan.
The Governors of California, Texas, Washington, Wisconsin,
Michigan--I can go all the way across here and I am currently
receiving proposals from your Governors to do exactly what I
have suggested and that is creating an affordable basic plan.
But they are going to need help in two ways to make their
plans work. They can't solve the problem of the discrimination
that they receive on taxes. And there is no way to justify
that. We have to fix that one way or the other.
The second thing they need help is they could use some
Federal money to help subsidize those who can't even afford a
basic plan. And that is all we are proposing.
Mr. Doyle. What are you going to do for the working poor
and the back, though, with their retirement benefits?
Ms. DeGette. Gentleman's time has expired.
Mr. Doyle. That is a big concern, too.
Mr. Stupak. Mr. Secretary, I would like to take this moment
to ask you, we really do appreciate you being here with us this
morning and a lot of good questions on both sides of the aisle.
I count seven Members here who have not had time to question.
And I am just wondering, I know you are scheduled to be here
until 12:30. Is there any way you could extend that to 1
o'clock so we can give the Members who are remaining the
ability to ask their questions?
Secretary Leavitt. How about 1:10?
Ms. DeGette. That would be great. Thank you very much, Mr.
Secretary.
Mr. Shimkus. Could the chairman yield? Maybe we close the
list, how Members come back and forth. So if those Members
present----
Ms. DeGette. I would add Mrs. Eshoo to that list.
Secretary Leavitt. I want to make sure Mr. Matheson from
Utah gets his question.
Ms. DeGette. Absolutely, Mr. Secretary. Now we know where
the power lies. Now we recognize Mr. Whitfield for 6 minutes.
Mr. Whitfield. Thank you, Madam Chairman, and Mr.
Secretary, we are delighted you are with us today and I want to
congratulate you on the tremendous job you do at HHS.
In August 2005, the Congress passed and the President
signed a law establishing a national prescription drug
monitoring program.
Former Secretary Thompson supported the legislation. You
supported the legislation. And last year we worked out--and the
legislation housed that program at HHS. And we passed that
legislation because prior to that without authorization from
anyone, some members of the Appropriations Committee
established an earmark that provided funding at the Department
of Justice, and they--it was a mechanism that really didn't
provide incentives and has not been successful in establishing
a program at every State.
And last year, we worked out an agreement so that the new
program at HHS would receive $5 million and the old program at
Justice would receive $5 million until we could get them meshed
together at HHS.
And in this budget that you have just submitted, there is
no money requested for the NASPAR program and I would like to
know why and was that a decision that HHS made or was it a
decision that OMB made?
Secretary Leavitt. Congressman, I know what an irritation
this is to you. And I am sorry. It is a program we support. It
is a program we would gladly administer. However, it is a
decision that was made at OMB to view it more of a law
enforcement program. I say that not as a matter of complaint
other than just explanation that we are in a place where we
don't control that decision. And I am happy to sponsor more
conversation between you and those who do.
Mr. Whitfield. Well, thank you, Mr. Secretary. Madam
Chairman, I would like to say I think it would be appropriate
for our committee to get a letter over to OMB on this issue and
also to work with the appropriators to see to it that the
authorized program at HHS, where it should be, receives proper
funding. And I would yield my time to anyone that wants it. But
that is--yes, I would yield to Mr. Pallone.
Mr. Pallone. I just wanted to support your efforts myself
and Ed and a number of us on this committee worked very hard to
get the NASPAR program authorized and we do think it is very
important. And I don't hear you saying you disagree. So I think
we should initiate that letter. I would be glad to cosponsor it
with my colleague from Kentucky and try to get some of this
funding in during the appropriations process. And I appreciate
your bringing it forward because I do think it is crucial.
Mr. Whitfield. I yield the time to Dr. Burgess. Did you
want time, Dr. Burgess?
I yield back the balance of my time.
Ms. DeGette. Thank you. I now yield to Ms. Solis for 5
minutes.
Ms. Solis. Thank you, Madam Chair, and thank you, Mr.
Secretary, for staying to hear our questions. I have several.
And the first one I would like to start out with is December
15, 2006, a Congressional Hispanic Caucus Task Force on Health
sent you a letter. And we have yet to get a response back. And
it is regarding your interpretation of documentations that are
now going to be required for newborns.
And I wanted to ask you if we could get a response or if we
can expect one and how soon? And also if you could please
explain how that policy is somehow going to help us achieve
eliminating health care disparities with respect to
underrepresented communities.
Secretary Leavitt. Congresswoman, I will confess to you
that we worked awfully hard so I wouldn't have to answer the
question, why haven't you answered my letter? Most of our
letters are current and I will follow up to find out why yours
isn't.
Ms. Solis. And I would like to submit the letter we sent
for the record if I could request unanimous consent, Madam
Chair.
Secretary Leavitt. When was this letter?
Mr. Stupak. It was December 15.
Secretary Leavitt. It may be that we count that as a
current letter and we are working on it.
Ms. Solis. And so when can I expect a response? Soon. OK.
Can you explain to me a little bit about that regulation and
how you see that fostering identifying these underrepresented
groups?
Secretary Leavitt. You will get a better response in the
letter because I am not certain I am in a position to enlighten
you very much on it.
Ms. Solis. OK. One of the questions I had--and you didn't
go from your text that you submitted--but I wanted to ask you
about your Adolescent Health Promotion Initiative, $17 million.
Does that include extending the Abstinence Only Program?
Secretary Leavitt. That is a separate proposition.
Ms. Solis. One of the concerns I have and something that
the Hispanic community and the caucus is very concerned about
is the increase, actually the upsurge or upping of teenage
pregnancies amongst the Latino population. It is well above, I
would say, in some cases 20 percent. In fact the statistics
prove that 51 percent of Latino teens get pregnant at least
once before the age of 20 and for African American it is 57
percent become pregnant at the age of 20. So obviously the
abstinence program is not working well. And one of the concerns
we have is that information be provided in a culturally
competent, linguistically competent manner. And I have yet to
see any evidence that is happening in all the years of funding
for these programs.
Can you respond to that?
Secretary Leavitt. We provide information to people in lots
of different ways and the abstinence program is one of those
that we pursue. And there are those who believe that it ought
to represent--and I am among them--at least part of what we
teach and part of the way we teach. And it is part of the
ideology of the administration, and you can expect that we will
continue to offer those proposals.
Ms. Solis. OK, ideology I guess is one of the words that
would concern me there. Because in many instances it is hard to
reach these youngsters as it is and having nontraditional modes
of outreach would be very, I think, very important and a much
improved effort to get to these youngsters. But also employing
some new methodology, maybe looking at what works for us in our
communities along the area of--I don't want to say social work
but people who are out there promoting health care prevention.
And you probably are well aware of these programs, one of which
I am familiar with, and I am hoping that we can get support
through the SCHIP program, is promotoras program, and it
currently exists in and along the border, becoming the
fronteras, and they also exist in the State of California and
other parts of the country actually, and some of the counties
and local municipalities have taken it upon themselves to
create these programs to extend campaigns of information to the
local immigrant community--not just Latino--but other hard
pressed groups. So I would hope that that might be something
that we could discuss with you about extending services by way
of outreach campaigns to these at-risk communities.
Secretary Leavitt. I think you would find that many of
those campaigns have at least some Federal money in them. And
my point is that we do feel strongly that abstinence is an
important message and that it is effective and it can be
demonstrated.
Ms. Solis. But it is not effective when the percentages
keep going up in these very----
Secretary Leavitt. You can make the same charge of the
other programs that you advocate then. If the fact that we
continue to see an increase is a function of the fact that the
programs aren't working, then you would have to make the same
indictment of both.
We are all working at this. We all want to see those rates
come down. There are some good signs that they begin to. But we
believe that it is important to have abstinence as part of what
is taught.
Ms. Solis. One of the other concerns I have is with respect
to the ability to train future physicians, not only in the
nursing area but in the medical field and, as you know,
Hispanic serving institutions don't receive as much monetary
support in terms of adequately outreaching and recruiting to
the Latino community to prepare for that potential growth and
service that is going to be needed in coming decades.
And I would hope that you would reconsider your formulas
for funding to help promote for more recruitment, especially
given the fact that in States like California, where you have a
number of medical institutions, we are not seeing that kind of
support coming through the Federal Government.
Secretary Leavitt. Could I briefly comment?
Ms. DeGette. Yes.
Secretary Leavitt. Actually, we believe as you have
suggested that our funding ought to be oriented toward areas
and specific communities of need and not allocating money on a
general basis. And many of the programs you see reduced in the
area of nursing and other professional development you will see
were reduced because they did a uniform across the board, and
we would either rather target our money into areas where there
are specific needs.
Ms. DeGette. The Chair now recognizes Mr. Shimkus of
Illinois for 6 minutes.
Mr. Shimkus. Thank you, Madam Chairman. Secretary, welcome.
I always appreciate your calm and thoughtful approach in, as we
all know, a difficult large Federal bureaucracy that has many
tentacles and it reaches throughout our society. So I
appreciate it. And I appreciate you staying past 12:30 because
I get to visit with you for a few minutes.
I am going to have three primary areas. One is kind of a
macro issue and then I will go down to a few specifics. The
first one is on the overall debate on Medicaid funding. One of
my frustrations is--I think we talked about this before--is F-
MAP funding, the differential between States--you know that as
your former position--and then the games that those of us who
are of not at the high levels of F-MAP ratios, the things we
have to do to try to make up for what we feel is a loss. And
that is the IGT, that is the hospital assessment.
In 2 years left in this administration I would really ask
that we try to make a bold move. It would be tough for Members
across the country to defend inequities in a Federal system.
And there will be some States who to rectify the differences
would have to make some tougher choices. And I understand that.
But I just feel that until we, if we keep doing this
gamesmanship and find these other ways, it just distorts the
system and makes it very difficult for people to understand,
and we develop new programs to compensate for the loss of
revenue, and if you could respond just briefly I will go to the
other two.
Secretary Leavitt. Congressman, that is essentially our
view. We would like to see us have a straight-up formula where
people put up real dollars and the games that are played and
have historically distort the system and----
Mr. Shimkus. But you could help lead with that by a debate
on the ratios.
Secretary Leavitt. There is no question that funding
formulas are tough and they are the toughest debates in
Congress, and that is where they start and that is where they
get set. We administer them as best we can. But funding
formulas happen in Congress.
Mr. Shimkus. Let me, maybe we should have hearings on the
funding formula for F-MAP and address the differential between
States. And I think that is what you are highlighting. I would
be receptive to that.
The President's Health Centers Expansion Initiative has
successfully increased the total number of health centers to
over 3,800. When I first became a Member of Congress, now my
district has changed a little bit, I did not have a single
community health center. Now in my enlarged district of parts
of 30 counties in Illinois, I have 13. And it has been a very,
very successful program.
The President's High Poverty Counties Initiative has been
outlined as a next step. Can you explain that a little bit more
fully for me?
Secretary Leavitt. The President made clear he would like
to have 1,200 new ones during the period of his service. We are
going to achieve that, Congress being willing. He also then
later said, and I want 180 of those to be targeted at the
highest need areas, that is to say the areas with the highest
levels of poverty, so some portion of the allocation each year
is given priority for those counties.
Mr. Shimkus. And the great thing about the community health
centers that they do bring in the community involved and there
is a partnership. And again it has been very, very helpful.
The last thing I want to ask about is this recent GAO
report on the AMP. We in the Deficit Reduction Act, which was
hotly contested and debated and passed, tried to get a handle
on this process. This recent GAO--and to the great excitement
of some of our constituents and the local pharmacists and those
people.
The GAO report makes a premise that the AMP, as stated,
would be less than the cost of the retail pharmacist for the
purchase of the drug.
Obviously that wasn't our intent. We want to get it to
where it is competitive, where we can control costs, but we
don't--the local pharmacists play a critical role in the health
delivery process. And if they are not going to be compensated
for just a break even, then they are not going to provide that
service. So can you address that and what steps you might be
doing to relook at the AMP and how we can get to some
accommodation?
Secretary Leavitt. Congressman, I spent a lot of time
behind pharmacy counters in the last year talking to
pharmacists, and it has become clear to me that most of them
could run for mayor in their town and win.
They are very popular people because they meet needs and
they obviously need to be supported. I just need to tell you we
fundamentally disagree with the conclusions of the GAO report
on this. We just disagree with their conclusions, and we will
offer more information about that later. We know that they need
to be supported. We just can't come to the same conclusion they
did.
Mr. Shimkus. I have 20 seconds left, and the other issue
that we debated before was dispensing, nature of a dispensing
fee. What are your thoughts on that?
Secretary Leavitt. That remains a State option.
Mr. Shimkus. My time has expired. Thank you, Madam
Chairman.
Ms. DeGette. Mr. Secretary, I am pleased to tell you that
by working collectively in a bipartisan manner, all of the
other Members have agreed to limit their time who are here. So
we hope you can stay for all of these.
Secretary Leavitt. As long as Congressman Matheson gets to
answer his question.
Ms. DeGette. Well, we are going to put him last so you will
stay. I am now pleased to recognize Ms. Baldwin for 5 minutes.
Ms. Baldwin. Thank you, Madam Chairwoman, and thank you,
Mr. Secretary. We heard in the State of the Union Address as
the President was discussing health care matters a brief
reference to State innovations, and that is going to be the
subject of my second question, to sort of find out some more
particulars surrounding that proposal.
But I wanted to start with a different State innovation,
and that is in Wisconsin its very successful prescription drug
program called Senior Care. Senior Care in Wisconsin provides
affordable drug coverage to over 100,000 Wisconsin residents at
prices that are significantly below the part D prices, and I
believe it is a shining example of what every government
program should be.
Senior Care is easy for seniors to enroll in. It involves a
one-page form that they have to fill out. It is cost effective.
And studies in our State have shown that for every dollar spent
on Senior Care, it leverages an additional $4.35 from other
non-Federal sources.
It is comprehensive because it has no doughnut hole like
part D, and for all of those reasons and others it is an
extremely popular program. I am a big fan of the program and I
receive an unbelievable amount of feedback from constituents
praising the program, but also begging me to do everything
within my power to make sure that that program is allowed to
continue.
As you may recall, Senior Care operates under a pharmacy
plus waiver. That waiver is set to expire in June of this year.
And Wisconsin has submitted its waiver renewal application in
June of last year. The entire Wisconsin delegation, Republican
and Democrat alike, have sent you a letter supporting this
application, and yet we have not received a response to waiver
application and we are interested in knowing about the renewal
process.
So I am asking you, Mr. Secretary, what assurances you can
give me and Wisconsinites that this successful and cost
effective program will be allowed to continue?
Secretary Leavitt. Ms. Baldwin, thank you for your
effective and cheerful advocacy. I am quite aware of Senior
Care and I have spent a fair amount of time with Governor Doyle
reviewing the waiver. As you are fully conscious, Senior Care
came about before part D was on the scene and it now does
provide hundreds of thousands of Wisconsin residents the
benefit of part D.
We continue to analyze the waiver request. I think I have
been quite clear with the Governor, however, that the Federal
Government is relying on part D for most of what we are
providing seniors and while we have enacted, we are heartened
by the success of part D in Wisconsin.
Ms. Baldwin. We are heartened by the success of Senior Care
in Wisconsin. Obviously there is a necessity of certainty. As
we plan ahead, I would like to hear from you when we might
expect----
Secretary Leavitt. Senior Care can certainly continue. The
issue is whether or not the Federal Government contributes
money in Wisconsin and not in other States for that purpose,
and so that becomes the issue.
Ms. Baldwin. Of course, of crucial importance to us.
Let me just return to the issue of State innovation. As you
heard, I was, I took note and was delighted to hear the
President highlight the issue of State innovation in his State
of the Union Address. And I think that we can all agree that
the proposals that we are seeing in States like Massachusetts,
California, Maine and my home State of Wisconsin represent real
progress in the debate about how we best expand access to
health care.
I have authored bipartisan legislation to promote such
things. However, I noted the President's proposal involving
State initiatives is limited to initiatives that use the
private sector to expand coverage, and I don't think we should
limit the States in that way.
We should really encourage thinking outside of the box,
innovations beyond that narrow array that the President may be
talking about, and I am wondering if the administration is
opening to allowing States to test other initiatives as well.
Secretary Leavitt. We are interested in two things. One,
affordable basic plans. Let me just restate that. Basic plans.
And that, second, making them affordable. I just mentioned
looking across the dais you mentioned Wisconsin. I was recently
in Texas. I met with Governor Perry, who has put forth a
proposal. I have been in California. I have been in Tennessee.
I have been in New Jersey. I have been in virtually--I can't
say every State, but most States right now are very focused
this. But there are two problems they cannot solve on their
own--at least one of them, and I have mentioned it a couple of
times today.
They can't resolve this discrimination that occurs between
people who buy it in the employer market and those who don't
have that opportunity. And we have to solve that problem if we
are going to see the kind of innovation that you and I both
aspire.
The second part of this dilemma is that once you have a
basic health plan there are still going to be people who can't
afford it.
And that is the point at which we need to step up and be
able to help people who can't even afford the basic health
plan, and we are looking for opportunities to do that.
Ms. DeGette. The gentleman from Mississippi, Mr. Pickering,
is recognized for 4 minutes.
Mr. Pickering. Thank you, Madam Chairman. Thank you, Mr.
Secretary, for your leadership and thank you for all the help
you have given to my home State of Mississippi as we recover
from Katrina.
Let me quickly go through some questions.
First, as you know, we passed a Combating Autism Act in the
last days of the last Congress which increases the authorized
funding to around $168 million, and that includes funding for
you as Secretary to lead education, early intervention and
detection, CDC has significant funding, and then NIH is a
coordinating agency.
My question is do you support fully funding those
authorized levels or what is the current plans in the
President's budget, and as the Secretary, for funding these
initiatives?
Secretary Leavitt. We will, in fact, use whatever the
Congress appropriates in the most efficient way we possibly
can. We recognize that the discussion of how much of the
authorization will be funded will be part of what is resolved
hopefully in this Congress.
Mr. Pickering. So you support whatever Congress
appropriates is your answer?
Secretary Leavitt. I think you know that I support whatever
the President proposes.
Mr. Pickering. Do you know what the President has proposed
on autism funding?
Secretary Leavitt. I don't.
Mr. Pickering. Do you know if he proposed anything in that
funding in his budget and as it relates----
Secretary Leavitt. I have had magically appear in front of
me information that with tell me we have proposed $123 million
in 2007 and $123 million in 2008.
Mr. Pickering. Now, where that is relevant that is CR, is
not specific. It does not give you, I believe, any direction.
So the $123 million as it relates to autism, if you could,
please let me know how you will break that down between your
office, the CDC and NIH.
Secretary Leavitt. That might be better able to respond in
writing to you. It is not an issue that has happened recently
enough that I don't know that that policy has been developed.
Mr. Pickering. I appreciate and look forward to working
with you on these very critical issues. As you know, one in 166
of America's children is now diagnosed with some autism-related
spectrum disorder, which is more than pediatric cancer,
diabetes and AIDS combined. So we look forward to creating the
emphasis and priority as we combat something that affects
families across the country.
And the other question that I would like to ask and this
deals with the efforts in the last Congress and as we go
forward on an issue your budget reflects the emphasis on using
health information technology to create efficiencies and
transformation of our health care delivery system.
And on this, there is one component that I would like to
ask and this is as it relates to remote monitoring of patients,
whether it is diabetes or those who suffer from congestive
heart failure.
Do you support incenting remote monitoring through the
physician fee schedules?
Secretary Leavitt. I support, first of all, developing
standards that will allow us to assure that remote monitoring
is compatible with other parts of the electronic medical
record.
Second, to the degree that we are able to identify clear
financial benefits from it, then it is something very clearly
we ought to consider.
Mr. Pickering. I look forward to working with you on both
of these efforts on the standards and on whether remote
monitoring can be used extremely well.
And just in closing, and this is not a question but just an
encouragement that I hope that you go back and look at the
pharmaceutical, the A&P price. The GAO standard is independent
analysis. I realize that there is a disagreement but I do hope
that you can go back, listen to all sides and find a better
solution than simply to disagree.
Secretary Leavitt. Thank you.
Mr. Pickering. Thank you.
Ms. DeGette. Chair recognizes Mr. Gonzalez from Texas for 4
minutes.
Mr. Gonzalez. Thank you very much, Madam Chair, and
welcome, Secretary Leavitt. Thank you for your service and your
patience.
Whether it is policy or physics, but I like to think semi
in terms of for every action there is always an opposed and
equal reaction. So what is going to be the reaction or
consequences of what the President is proposing? You seem to
proffer that it all is going to be a good reaction. But there
are those that would disagree with you and the administration.
So what I always do is I go back home and I ask the people
in the health care field what are their greatest fears
regarding the President's proposal. This is from the Texas
Medical Association. The TMA just reported the results of their
2006 physician survey which is done every 2 years in the fall.
Below are some of the results compared to the 2004 survey. 2004
we are talking about new patients being accepted by physicians
in the State of Texas under Medicaid. It used to be 45
percent--only 45 percent in 2004. In 2006 it is a decline to 38
percent. Doctors accepting new Medicare patients in 2004, 68
percent. Today or last year; that is, during the survey, it is
62 percent. In 2002, those Medicare patients, the new ones,
were being accepted by about 75 percent of the physicians in
Texas.
So one of the possible reactions is we are going to have
fewer doctors tending to the patients under both Medicare and
Medicaid. And I just will want your opinion when I finish with
the other two examples.
The next concerns, expressed by Methodist Hospital out of
San Antonio, quote, health care providers in today's world must
deal with costs associated with emergency preparedness, bad
debt, the uninsured and expansion of services and facilities to
better serve their community. How can the end result of these
cuts not trigger an increase in health care costs to the
private sector which would correspondingly increase the cost of
health care insurance for everyone? So again this is going to
be the reaction is not a positive one. It drives the cost of
health care insurance up.
Last, Christa Santa Rosa Children's Hospital, the President
budget aims to redirect Medicaid DSH funding from supporting
institutions to private health insurance. Some hospitals
serving high proportions of indigent patients rely heavily on
Medicaid DSH. The President's budget has a double hit toward
hospitals, and there are also cuts proposed on the Medicare
side.
As we talk about the needs for hospitals to improve quality
and incorporate health information technology, are you
concerned that this budget will make those things even more
difficult?
Secretary Leavitt. Quick response. With respect to
reimbursement rates, as you are probably aware, reimbursement
rates by Medicaid are set by the State, and if they are
beginning to see slippage in their patient acceptance that is
something the State very clearly ought to deal with.
With respect to Medicare, we monitor those very carefully
and it sounds to me as though they are relatively stable in
Texas, although it is something we are concerned about on a
continual basis.
Bad debt. We think that the bad debt is built into the
rates that the hospital charges us and we think it is
unreasonable for us to be paying both reimbursements for their
bad debt and paying a rate that builds it in as an expense. As
you pointed out, they build it into the expense. And if bad
debt goes up, then what the bad debt reimbursement amounts to
is essentially a foundation support for their overhead.
With respect to health care indigent care, there are three
areas that I am concerned about and we have to be very careful
about. One is, despite efforts to have efforts to have every
person have affordable basic insurance, there are going to be
people who don't have it and hospitals need a way to get paid
for that care. That is a given.
Second, there are some public hospitals that very clearly
need to have some support to keep their doors open. We need to
provide that. But if we are successful, as we aspire to be, in
getting high numbers of people who are currently having their
medical bills perpetually paid by the Federal Government, if we
can get them insured then there is no reason that we would need
to pay the same amount of money that we are currently paying to
the hospitals.
Some of that money ought to be used to help people get
insurance. And so we are just looking for where that balance
is. And we want to work with Congress to say, where is the
balance? We want to work with States to make certain that we
are not----
Mr. Gonzalez. Thank you for a very over optimistic outlook
on the President's policies.
Ms. DeGette. The Chair now recognizes Mr. Matheson from
Utah for 4 minutes.
Mr. Matheson. Thank you, Madam Chairwoman, and in my first
hearing it is great to have my Governor and friend Secretary
Leavitt here before us. Being now on the front row, you get a
chance to ask questions after everyone else has and they have
raised a number of issues that are very important to all of us,
SCHIP, SGR. Even you mentioned the graduate medical education.
In an effort to try to have something different to talk
about as one of the last questioners, I feel like we are all
talking about these issues, they are all of great importance
and we are ignoring kind of a broader issue at the macro level,
and that is I feel that our health care system in this country
is on a path that is not sustainable.
The fact of the matter is this country spends more by far
than any other country in the world on health care per capita,
and by various measures our outcomes are not as good as a lot
of other countries.
And if we are ever going to get around this effort to make
sure children have access to health care or make sure we are
training good doctors or all these other issues, it seems to me
we also need to address the issue of we have a system that
seems to be going down a path where costs are growing above
inflation every year and you have to wonder how long that is
going to last.
In the ridiculously limited amount of time we have to talk
about this, I would just like to highlight three things to see
what your thoughts are.
One is we often hear the lifestyle choices in this country
affecting and driving a lot of health care issues. If we could
get people to stop smoking, to eat well, to exercise, we would
have a more healthy population. I certainly don't support any
Government mandates on that activity. I am sure you don't
either, but are there efforts we can do to try to address that
dynamic to create a more healthy population?
Second, I just heard this weekend at a retreat we were
attending that in our health care system in the United States
administrative costs represent 34 percent of all the money
spent on health care. And the next highest country in the
world, according to the presenter, was Canada, where it is 18
percent of administrative cost. This is private and public, not
just government. And that differential from 34 down to 18 is
hundreds of billions of dollars.
Are there thoughts about how we can work out a health care
system in a way that would get more dollars going to actually
providing services to patients and less in the administrative
components of what we are doing?
And finally, the notion proffered by a lot of people is
that if we can actually achieve some form of universal access
it actually represents a cost savings to our country. And I
just want to throw these three items out to give us more
transformational thinking about what can we do to get a handle
on this cost situation and from a public policy arena how
should we be looking at this?
Secretary Leavitt. I could not agree more with my friend
from Utah on virtually every point you raised. We are
surrounded by economic systems. I have a credit card I got from
a bank. You have a different bank. But they use the same system
to optimize the value we get. I have a cell phone. You have a
cell phone. We buy them from different vendors, but they work
together. It is an economic system. I fly on an airline. It is
a different airline than you do, but they use the same system.
There is an economic system in all of these sectors of our
economy.
There is no system of health care in the United States.
What we have is a sector that is without the discipline of a
system that connects it. It has to be electronically connected.
There has to be quality standards that can measure it. We have
to figure out what the cost is so people can know it and
compare it and then we can begin to deploy incentives.
When we do people will begin to drive value up by having
better control of costs. I could not agree more, and I would
look forward to working with you and other members of this
committee to drive that home.
Mr. Matheson. I appreciate that. I think we need to get
away from a lot of the partisan rhetoric that dominates the
issue. I think there are practical ideas we can work on, and I
look forward to doing that with you. Thanks so much.
Ms. DeGette. Thank you so much. Last but not least, Mr.
Green from Texas for 4 minutes.
Mr. Green. Thank you, Madam Chairman, and again welcome,
Secretary Leavitt. And I am the last one because I just came in
this morning from Houston because we did a paying for college
workshop last night, as we have done for a number of years in
our district, and it really works.
I have two quick questions. One is that the President
proposes $25.7 billion in Medicaid cuts in 2008, including $5
billion in Medicaid cuts through currently proposed regulation.
Is there a state-by-state analysis of that?
Secretary Leavitt. Well, what we are proposing is a series
of savers. Running any program, you would expect that as
Secretary I would periodically say it just doesn't make any
sense that we pay that way or that we do it this way. We are
proposing a group of actions that we think are just good
management decisions.
Mr. Green. My concern is that Texas is one of the States
that we utilize intergovernmental transfers for our safety net.
And I have gotten letters over the last few years saying that
what Texas does as compared to other States there is no problem
with it, with using this for the safety net, that we utilize
it.
Without knowing the effects of regulations on the States,
are you prepared to offer States any assurance that critical
medical services relied on by Medicaid and uninsured patients
will continue if we are using again the IGT that had been OKed
in the past?
Secretary Leavitt. There is nothing inherently wrong about
an intergovernmental transfer unless it is taking Federal
money, recirculating it and using it as the match for Federal
money. That doesn't work for us nor should it for any taxpayer.
What we want is a program based on a partnership with the
State where both partners are putting up real money.
Mr. Green. OK. Again I think we tried to deal with that
through our committee process before.
My next question is you and the President have shared many
of the Members' commitment and expanded the reach of our
community health centers, and I am glad Mr. Shimkus brought it
up, and I worked closely with our FQHCs in my own area and seen
firsthand the quality they have. I noticed the President's
budget has a $224 million increase.
Now the CR that the House passed last week was $206
million. Now is it the intent to have $224 million on top of
that $206 million for the current year, so it would be $224
million for the next year?
Secretary Leavitt. Mr. Green, I am going to confess to you
that all these different things you are trying to compare to
just confused me. But I will tell you we do intend to meet the
President's objective of having 1,200 and the actual number we
have to reconcile with somebody who has all four of those
budgets in front of them.
Mr. Green. Obviously, I would be happy about that, if we
could get the 206 through the Senate and then get 224.
And to follow up on that on the program of the, High
Poverty County Initiative, I represent Harris County in
Houston, Texas, and you were there during Katrina and you saw
that our infrastructure is not what it is in other States and
particularly urban areas.
My concern about going to only certain counties we have so
few FQHCs per population in Harris County, the fourth largest
city, and the third largest city in country actually has 80,
and we are nowhere near half that. In fact we are probably
about a third. And if there are no new funds in health center
programs, how will it be that in counties that are underserved,
very urban counties like Houston, Harris County, TX, that we
will be able to deal with that? Again we have 800,000 uninsured
Americans living in our county today. And these FQHCs are
really the only net that we have to bring those folks in.
Secretary Leavitt. I have been aware of the increase in
community health centers in your area. Actually I was there for
the announcement of, I think, four not too many months ago. So
I am pleased we are making progress. It is one of the areas in
our budget where there is substantial new money, and for the
reasons that you have articulated.
Mr. Green. Thank you, Mr. Secretary, and again welcome.
Thank you, Madam Chairman.
Ms. DeGette. Secretary Leavitt, thanks again, and on behalf
of the whole committee, for coming today and for graciously
extending your time. These are tough issues and we will look
forward to working with you in the coming session.
The committee stands adjourned.
[Whereupon, at 1:00 p.m., the committee was adjourned.]
[Material submitted for inclusion in the record follows:]
Testimony of Hon. Michael O. Leavitt
Chairman Dingell and Congressman Barton, thank you for the
invitation to discuss the Department of Health and Human
Services' budget proposal for fiscal year 2008.
For the past 6 years, this administration has worked hard
to make America a healthier, safer and more compassionate
nation. Today, we look forward to building on our past
successes as we plan for a hopeful future.
The President and I have set out an aggressive, yet
responsible, budget that defines an optimistic agenda for the
upcoming fiscal year. This budget reflects our commitment to
bringing affordable health care to all Americans, protecting
our nation against public health threats, advancing medical
research, and serving our citizens with compassion while
maintaining sensible stewardship of their tax dollars.
To support those goals, President Bush proposes total
outlays of nearly $700 billion for Health and Human Services.
That is an increase of more than $28 billion from 2007, or more
than 4 percent. This funding level includes $67.6 billion in
discretionary spending.
For 2008, our budget reflects sound financial stewardship
that will put us on a solid path toward the President's new
goal to achieve a balanced budget by 2012.
I will be frank with you. There will never be enough money
to satisfy all wants and needs, and we had to make some tough
choices.
We take seriously our responsibility to make decisions that
reflect our highest priorities and have the highest pay-off
potential. We recognize that others may have a different view,
and there are those who will assume that any reduction signals
a lack of caring. But reducing or ending a program does not
imply an absence of compassion. We have a duty to the taxpayers
to manage their money in the way that will benefit America the
most.
I would like to spend the next several minutes highlighting
some of the key programs and initiatives that will take us down
the road to a healthier and safer nation.
Transforming the Health Care System
Helping the Uninsured
The President has laid out a bold path to
strengthen our health care system by emphasizing the importance
of quality, expanded access, and increasing efficiencies.
The President's Affordable Choices Initiative will
help States make basic private health insurance available and
will provide additional help to Americans who cannot afford
insurance or who have persistently high medical expenses.
It moves us away from a centralized system of
Federal subsidies; and,
It allows States to develop innovative approaches
to expanding basic health coverage tailored to their
populations
The President's plan to reform the tax code with a
standard deduction ($15,000 for families; $7,500 for
individuals) for health insurance will make coverage more
affordable, allowing more Americans to purchase insurance
coverage.
Value-driven Health Care
The budget provides funds to accelerate the movement
toward personalized medicine, in order to provide the best
treatment and prevention for each patient, based on highly-
individualized information.
It provides $15 million for expanding efforts in
personalized medicine using information technology to link
clinical care with research to improve health care quality
while lowering costs; and,
It will expand the number of Ambulatory Quality Alliance
Pilots from 18 sites in fiscal year 2008.
Health IT
The President's budget proposes $118 million for
the Office of the National Coordinator for Health Information
Technology to keep us on track to have personal electronic
health records for most Americans by 2014 by supporting our
efforts to:
Implement agreed upon public-private health data
standards.
Initiate projects in up to twelve communities
based on recommendations of the American Health Information
Community. These projects will demonstrate the value of
widespread availability and access of reliable and
interoperable health information.
Develop the Partnership for Health and Care
Improvement, a new, permanent non-governmental entity to effect
a sustainable transition from the AHIC.
Addressing the Fiscal Challenge of Entitlement Growth
The single largest challenge we face is the unsustainable
growth in entitlement programs such as Medicare and Medicaid.
The administration is committed to strengthening the long-term
fiscal position of Medicare and Medicaid and to moderating the
growth of entitlement spending. The fiscal year2008 budget
begins to address Medicare and Medicaid entitlement spending
growth by proposing a package of reforms to promote efficiency,
encourage beneficiary responsibility, and strengthen program
integrity.
Medicaid
Medicaid is a critical program that delivers compassionate
care to more than 50 million Americans who cannot afford it. In
2008 we expect total Federal Medicaid outlays to be $204
billion, a $12 billion increase over last year.
The Deficit Reduction Act (DRA) that President Bush signed
into law last year has already transformed the Medicaid
program. The DRA reduced Medicaid fraud and abuse and also
instituted valuable tools for States to reform their Medicaid
programs to resemble the private sector.
In fiscal year 2008, we are also proposing a series of
legislative and administrative changes that will result in a
combined savings of $25.3 billion over the next five years,
which will keep Medicaid up to date and sustainable in the
years to come. Even with these changes, Medicaid spending will
continue to grow on average more than 7 percent per year over
the next five years.
Along with the fiscally responsible steps we are taking
with Medicaid, we are following the same values in modernizing
Medicare.
Medicare
Gross funding for Medicare benefits, which will help 44.6
million Americans, is expected to be nearly $454 billion in
fiscal year 2008, an increase of $28 billion over the previous
year.
In its first year, the Medicare prescription drug benefit
has been an unparalleled success. On average, beneficiaries are
saving more than $1,200 annually when compared to not having
drug coverage, and more than 75 percent of enrollees are
satisfied with their coverage. Because of competition and
aggressive negotiating, payments to plans over the next ten
years will be $113 billion lower than projected last summer.
We also plan a series of legislative reforms to strengthen
the long-term viability of Medicare that will save $66 billion
over 5 years and slow the program's growth rate over that time
period from 6.5 percent to 5.6 percent.
Similarly, we are proposing a host of administrative
reforms to strengthen program integrity; improving efficiency
and productivity; and reduce waste, fraud and abuse-all of
which will save another $10 billion over the next 5 years.
Promoting Health and Preventing Illness
We are also taking steps in other ways to transform our
health care system. Helping people stay healthy longer also
helps to reduce our nation's burden of health care costs. The
President's budget will:
Fund $17 million for CDC's Adolescent Health
Promotion Initiative to empower young people to take
responsibility for their personal health.
Strengthen FDA's drug safety efforts and modernize
the way we review drugs to ensure patients are confident the
drugs they take are safe and effective.
Enhance FDA and CDC programs to keep our food
supply one of the safest in the world by improving our systems
to prevent, detect and respond to outbreaks of food borne
illness; and,
Include $87 million to increase the capacity for
the review of generic drugs applications at the FDA and
increase access to cheaper generic drugs for American
consumers.
Providing Health Care to Those in Need
SCHIP expires at the end of fiscal year 2007 and the
President's budget proposes to reauthorize SCHIP for five more
years, to increase the program's allotments by about $5 billion
over that time, to refocus the program on low-income uninsured
children, and to target SCHIP funds more efficiently to States
with the most need.
The President's budget proposes nearly $2 billion to fund
health center sites, including sites in high poverty counties.
In fiscal year 2008, these sites will serve more than 16
million people.
We propose increasing the budget of the Indian Health
Service to provide health support of federally recognized
tribes to over $4.1 billion, which will help an estimated 1.9
million eligible American Indians and Alaskan Natives next
year.
We are also proposing nearly $3 billion to support the
health care needs of those living with HIV/AIDS and to expand
HIV/AIDS testing programs nationwide.
In addition, we are requesting that Congress fund $25
million in fiscal year 2008 for treating the illnesses of the
heroic first responders at the World Trade Center.
Protecting the Nation Against Threats
We must continue our efforts to prepare to respond to
bioterrorism and an influenza pandemic.
Some may have become complacent in the time that has passed
since the anthrax-laced letters were delivered in 2001, but we
have not. Others may have become complacent because a flu
pandemic has not yet emerged, but we have not.
The President's budget calls for nearly $4.3
billion for bioterrorism spending.
In addition, we are requesting a $139 million in
funding to expand, train and exercise medical emergency teams
to respond to a real or potential threat.
Our budget requests $870 million to continue
funding the President's Plan to prepare against an influenza
pandemic. The budget requests funding to increase vaccine
production capacity and stockpiling; buy additional antivirals;
develop rapid diagnostic tests; and enhance our rapid response
capabilities.
In fiscal year 2008, the Advanced Research and
Development program is requested within the Office of the
Assistant Secretary for Preparedness and Response (ASPR). Total
funding of $189 million will improve the coordination of
development, manufacturing, and acquisition of chemical,
biological, radiological, or nuclear (CBRN) Medical
Countermeasures (MCM).
Advancing Medical Research
The research sponsored by NIH has led to dramatic
reductions in death and disease. New opportunities are on the
horizon, and we intend to seize them by requesting $28.9
billion for NIH.
Our proposal in fiscal year 2008 will allow NIH to fund
nearly 10,200 new and competing research grants, continue to
support innovative, crosscutting research through the Roadmap
for Medical Research, and support talented scientists in
biomedical research.
Protecting Life, Family and Human Dignity
Our budget request would fund $884 million in activities to
help those trying to escape the cycle of substance abuse;
children who are victims of abuse and neglect; those who seek
permanent, supportive families through adoption from foster
care; and the thousands of refugees that come to our country in
the hopes of a better life.
Improving the Human Condition Around the World
If we are to improve the health of our own people, we must
reach out to help other nations to improve the health of people
throughout the world.
Our budget requests $2 million to launch a new Latin
America Health initiative to develop and train a cadre of
community health care workers who can bring much needed medical
care to rural areas of Central America.
CDC and NIH will continue to work internationally to reduce
illness and death from a myriad of diseases, and in so doing
will support the President's Malaria Initiative; the Global
Fund to Fight HIV/AIDS, Tuberculosis, and Malaria; and the
President's Emergency Plan for AIDS Relief.
These are just some of the highlights of our budget
proposal. Both the President and I believe that we have crafted
a strong, fiscally responsible budget at a challenging time for
the Federal Government, with the need to further strengthen the
economy and continue to protect the homeland.
We look forward to working with Congress, States, the
medical community, and all Americans as we work to carry out
the initiatives President Bush is proposing to build a
healthier, safer and stronger America.
Now, I will be happy to take a few questions.