[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]




 
        THE LACK OF HOSPITAL EMERGENCY SURGE CAPACITY: WILL THE 
          ADMINISTRATION'S MEDICAID REGULATIONS MAKE IT WORSE?

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

                                HEARINGS

                               before the

                         COMMITTEE ON OVERSIGHT
                         AND GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS

                             SECOND SESSION

                               __________

                           MAY 5 AND 7, 2008

                               __________

                           Serial No. 110-95

                               __________

Printed for the use of the Committee on Oversight and Government Reform


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


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              COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

                 HENRY A. WAXMAN, California, Chairman
EDOLPHUS TOWNS, New York             TOM DAVIS, Virginia
PAUL E. KANJORSKI, Pennsylvania      DAN BURTON, Indiana
CAROLYN B. MALONEY, New York         CHRISTOPHER SHAYS, Connecticut
ELIJAH E. CUMMINGS, Maryland         JOHN M. McHUGH, New York
DENNIS J. KUCINICH, Ohio             JOHN L. MICA, Florida
DANNY K. DAVIS, Illinois             MARK E. SOUDER, Indiana
JOHN F. TIERNEY, Massachusetts       TODD RUSSELL PLATTS, Pennsylvania
WM. LACY CLAY, Missouri              CHRIS CANNON, Utah
DIANE E. WATSON, California          JOHN J. DUNCAN, Jr., Tennessee
STEPHEN F. LYNCH, Massachusetts      MICHAEL R. TURNER, Ohio
BRIAN HIGGINS, New York              DARRELL E. ISSA, California
JOHN A. YARMUTH, Kentucky            KENNY MARCHANT, Texas
BRUCE L. BRALEY, Iowa                LYNN A. WESTMORELAND, Georgia
ELEANOR HOLMES NORTON, District of   PATRICK T. McHENRY, North Carolina
    Columbia                         VIRGINIA FOXX, North Carolina
BETTY McCOLLUM, Minnesota            BRIAN P. BILBRAY, California
JIM COOPER, Tennessee                BILL SALI, Idaho
CHRIS VAN HOLLEN, Maryland           JIM JORDAN, Ohio
PAUL W. HODES, New Hampshire
CHRISTOPHER S. MURPHY, Connecticut
JOHN P. SARBANES, Maryland
PETER WELCH, Vermont
------ ------

                     Phil Schiliro, Chief of Staff
                      Phil Barnett, Staff Director
                       Earley Green, Chief Clerk
               Lawrence Halloran, Minority Staff Director


                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on:
    May 5, 2008..................................................     1
    May 7, 2008..................................................   175
Statement of:
    Chertoff, Michael, Secretary of Homeland Security............   205
    Hoffman, Bruce, Ph.D., professor, Edmund A. Walsh School of 
      Foreign Service, Security Studies Program, Georgetown 
      University; Jay Wayne Meredith, M.D., professor and 
      chairman, Department of General Surgery, Wake Forest 
      University Baptist Medical Center; Colleen Conway-Welch, 
      Ph.D., dean, Vanderbilt School of Nursing; Roger Lewis, 
      M.D., Ph.D., Department of Emergency Medicine, Harbor-UCLA 
      Medical Center; and Lisa Kaplowitz, M.D., deputy commission 
      for emergency preparedness and response, Virginia 
      Department of Health.......................................    19
        Conway-Welch, Colleen, Ph.D..............................    50
        Hoffman, Bruce, Ph.D.....................................    19
        Kaplowitz, Lisa, M.D.....................................    80
        Lewis, Roger, M.D., Ph.D.................................    64
        Meredith, Jay Wayne, M.D.................................    41
    Leavitt, Michael O., Secretary of Health and Human Services..   184
Letters, statements, etc., submitted for the record by:
    Chertoff, Michael, Secretary of Homeland Security, prepared 
      statement of...............................................   207
    Conway-Welch, Colleen, Ph.D., dean, Vanderbilt School of 
      Nursing, prepared statement of.............................    53
    Davis, Hon. Tom, a Representative in Congress from the State 
      of Virginia:
        Wall Street Journal article..............................   218
        Prepared statement of....................................   182
    Hoffman, Bruce, Ph.D., professor, Edmund A. Walsh School of 
      Foreign Service, Security Studies Program, Georgetown 
      University, prepared statement of..........................    22
    Issa, Hon. Darrell E., a Representative in Congress from the 
      State of California, various documents from the Governor of 
      Virginia...................................................   132
    Kaplowitz, Lisa, M.D., deputy commission for emergency 
      preparedness and response, Virginia Department of Health, 
      prepared statement of......................................    83
    Leavitt, Michael O., Secretary of Health and Human Services, 
      prepared statement of......................................   187
    Lewis, Roger, M.D., Ph.D., Department of Emergency Medicine, 
      Harbor-UCLA Medical Center, prepared statement of..........    66
    McCullum, Hon. Betty, a Representative in Congress from the 
      State of Minnesota, various prepared statements............   231
    Meredith, Jay Wayne, M.D., professor and chairman, Department 
      of General Surgery, Wake Forest University Baptist Medical 
      Center, prepared statement of..............................    44
    Sali, Hon. Bill, a Representative in Congress from the State 
      of Idaho, letter dated May 12, 2008........................   238
    Shays, Hon. Christopher, a Representative in Congress from 
      the State of Connecticut:
        Articles published in the Society for Academic Emergency 
          Medicine...............................................    97
        Prepared statement of....................................    14
    Waxman, Chairman Henry A., a Representative in Congress from 
      the State of California, prepared statements of........... 4, 177


        THE LACK OF HOSPITAL EMERGENCY SURGE CAPACITY: WILL THE 
      ADMINISTRATION'S MEDICAID REGULATIONS MAKE IT WORSE? DAY ONE

                              ----------                              


                          MONDAY, MAY 5, 2008

                          House of Representatives,
              Committee on Oversight and Government Reform,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 10 a.m., in room 
2154, Rayburn House Office Building, Hon. Henry A. Waxman 
(chairman of the committee) presiding.
    Present: Representatives Waxman, Watson, Norton, Shays, 
Issa, and Bilbray.
    Staff present: Phil Barnett, staff director and chief 
counsel; Karen Lightfoot, communications director and senior 
policy advisor; Andy Schneider, chief health counsel; Sarah 
Despres, senior health counsel; Steve Cha, professional staff 
member; Earley Green, chief clerk; Carren Audhman and Ella 
Hoffman, press assistants; Leneal Scott, information systems 
manager; Kerry Gutknecht and William Ragland, staff assistants; 
Larry Halloran, minority staff director; Jennifer Safavian, 
minority chief counsel for oversight and investigations; 
Christopher Bright, Jill Schmaltz, Benjamin Chance, and Todd 
Greenwood, minority professional staff members; John Cuaderes, 
minority senior investigator and policy advisor; and Ali Ahmad, 
minority deputy press secretary.
    Chairman Waxman. The meeting of the committee will please 
come to order. Today we're holding the first of 2 days of 
hearings on the impact of the administration's Medicaid 
regulations on hospital emergency surge capacity and the 
ability of hospital emergency rooms to respond to a sudden 
influx of casualties from a terrorist attack.
    The committee held a hearing in June 2007 on the Nation's 
emergency care crisis. We heard from emergency care physicians 
that America's emergency departments are already operating over 
capacity. We were warned that if the Nation does not address 
the chronic overcrowding of emergency rooms their ability to 
respond to a public health disaster or terrorist attack will be 
severely jeopardized.
    The Department of Health and Human Services was represented 
at that hearing, but despite the warnings the Department has 
issued three Medicaid regulations that will reduce Federal 
funds to public and teaching hospitals by tens of billions of 
dollars over the next 5 years. The committee held a hearing on 
these and other Medicaid regulations in November 2007. An 
emergency room physician told us that if these regulations are 
allowed to go into effect, the Nation's emergency rooms will 
take a devastating financial hit.
    The two hearings that we will be holding this week will 
focus on the impact of these Medicaid regulations on our 
capacity to respond to the most likely terrorist attack, one 
using bombs or other conventional explosives.
    Today we will be hearing from an independent expert on 
terrorism, an emergency room physician, a trauma surgeon, a 
nurse with expertise in emergency preparedness, and a State 
official responsible for planning for disasters like a 
terrorist attack.
    On Wednesday, we'll hear testimony from the two Federal 
officials with lead responsibility for Homeland Security and 
for Medicaid, the Secretary of Homeland Security, Michael 
Chertoff, and the Secretary of Health and Human Services, 
Michael Leavitt.
    In preparation for this hearing the committee majority 
staff conducted a survey of emergency room capacity in five 
cities considered at greatest risk of a terrific attack, 
Washington, DC, New York, Los Angeles, Chicago and Houston, as 
well as Denver and Minneapolis, where the nominating 
conventions will be held later this year. The survey took place 
on Tuesday, March 25th at 4:30 p.m. Thirty-four Level 1 trauma 
centers participated in the survey.
    What the survey found was truly alarming. The 34 hospitals 
surveyed did not have sufficient ER capacity to treat a sudden 
influx of victims from a terrorist bombing. The hospitals had 
virtually no free intensive care unit beds to treat the most 
seriously injured casualties. The hospitals did not have enough 
regular inpatient beds to handle the less seriously injured 
victims.
    The situation in Washington, DC, and Los Angeles was 
particularly dire. There was no available space in the 
emergency rooms at the main trauma centers serving Washington, 
DC. One emergency room was operating at over 200 percent of 
capacity. More than half the patients receiving emergency care 
in the hospital had been diverted to hallways and waiting rooms 
for treatment.
    And in Los Angeles three of the five Level 1 trauma centers 
were so overcrowded that they went on diversion, which means 
they closed their doors to new patients. If a terrorist attack 
had occurred in Washington, DC, or Los Angeles on March 25th 
when we did our survey, the consequences could have been 
catastrophic. The emergency care systems were stretched to the 
breaking point and had no capacity to respond to a surge of 
victims.
    Our investigation has also revealed what appears to be a 
complete breakdown in communications between the Department of 
Homeland Security and the Department of Health and Human 
Services.
    In October 2007, the President issued Homeland Security 
Directive No. 21. The directive requires the Secretary of HHS 
to identify any regulatory barriers to public health and 
medical preparedness that can be eliminated by appropriate 
regulatory action. It also requires the Secretary of HHS to 
coordinate with the Secretary of DHS to ensure we maintain a 
robust capacity to provide emergency care. Yet when the 
committee requested documents reflecting an analysis of the 
potential implications of the Medicaid regulations on hospital 
emergency surge capacity, neither department was able to 
produce a single document.
    This is incomprehensible. It appears that Secretary Leavitt 
signed regulations that will take hundreds and millions of 
dollars away from hospital emergency rooms without once 
considering the impact on national preparedness. And it appears 
that Secretary Chertoff never raised a single objection.
    The Department of Health and Human Services was represented 
at the committee's June 2007 hearing on emergency care crisis. 
The importance of adequate Federal funding for emergency and 
trauma care was repeatedly stressed by the expert witnesses at 
the hearing. If Secretary Leavitt approves the Medicaid 
regulations without considering their impact on preparedness 
and without consulting with Secretary Chertoff, that would be a 
shocking and inexplicable breach of responsibilities.
    The most damaging of the administration's Medicaid 
regulations will go into affect on May 26th, just 3 weeks from 
today. As the House voted overwhelmingly, the regulation should 
be stopped until their true impacts can be understood. I don't 
know whether the House legislation will pass the Senate or, if 
it does, whether the bill will survive a threatened 
Presidential veto. But I do know that Secretary Leavitt and 
Secretary Chertoff have the power to stop these destructive 
regulations from going into effect. And I intend to ask them 
whether they will use their authority to protect hospital 
emergency rooms.
    The Federal Government has poured billions of dollars into 
homeland security since the 9/11 attack. As investigations by 
this committee have documented, much of this investment was 
squandered on boondoggle contracts. This was evident after 
Hurricane Katrina when our capacity to respond fell tragically 
short.
    The question we will be exploring today and on Wednesday is 
whether a key component of our national response hospital 
emergency rooms will be ready when the next disaster strikes.
    I want to recognize Mr. Shays. He is acting as the ranking 
Republican for today.
    [The prepared statement of Chairman Henry A. Waxman 
follows:]

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    Mr. Shays. Thank you, Mr. Chairman. I appreciate, Chairman 
Waxman, your calling today's hearing to review the relationship 
between emergency medical surge capacity and Medicaid 
reimbursement policies. The sad reality we must contend with 
every day is the need to be ready for that one horrible day 
when terrorism sends mass casualties to an already overburdened 
medical system.
    Medicaid reimbursement policies may need to change to 
better support large urban emergency and trauma centers, but 
those changes alone will never assure adequatesurge capacity. 
We cannot afford to build and maintain idle trauma facilities 
waiting for the tragic day we pray never comes when they will 
be needed.
    In 2004, 10 terrorist bombs exploded simultaneously on 
commuter trains in Madrid, Spain, killing 177 people and 
injuring more than 2000. The nearest hospital had to absorb and 
care for almost 300 patients in a very short time.
    In the event of a similar attack here our hospitals will be 
tasked with saving the greatest number of lives while 
confronting a large surge of patients and coping with the wave 
of the worried well. Many will arrive suffering injuries not 
typically seen in emergency departments. Medical staff will be 
facing the crisis with imperfect information about the causes 
and scope of the event and under severe emotional stress. To 
reduce the stress and treat mass casualties effectively 
decisions need to be made, resources allocated, and 
communication established now, not during the unexpected but 
perhaps inevitable catastrophic event.
    Today's hearing is intended to focus on a single aspect of 
emergency preparedness, Federal reimbursement policies and 
their implications for Level 1 trauma centers in major 
metropolitan areas.
    I appreciate Chairman Waxman's perspective on the 
administration's proposed Medicaid regulation changes and join 
him in voting for a moratorium on their implementation. But I 
am concerned that a narrow focus on just one component of 
medical preparedness risks oversimplifying the far more complex 
realities the health system will face when confronting a 
catastrophic event.
    Stabilizing Medicaid payment policies alone won't guarantee 
readiness against bombs or epidemics any more than an annual 
cost to assure people they're safe against inflation or 
recession. It is a factor to be sure, but not the sole or even 
the determinative element to worry about when disaster strikes.
    We should not miss this opportunity to address the full 
range of interrelated issues that must be woven together to 
build and maintain a prepared health system. That being said, 
there is no question emergency departments are overcrowded, 
often are understaffed and operating with strained resources on 
a day-to-day basis. Ambulances are often diverted to distant 
hospitals and patients are parked in substandard areas while 
waiting for an inpatient bed.
    In 2006, the Institutes of Medicine [IOM], found few 
financial incentives for hospitals to address emergency room 
overcrowding. Admissions from emergency departments are often 
the lowest priority because patients from other areas of the 
hospital generate more revenue. This is not to disparage 
hospitals. They operate on tight margins and must navigate 
challenging, often perverse financial incentives, including 
Federal reimbursement standards. Strong management, regional 
cooperation and greater hospital efficiencies offer some hope 
for alleviating the strain on emergency departments, but during 
a catastrophic event bringing so-called surge capacity online 
involves very different elements.
    In a mass casualty response regional capacity is more 
important than any single hospital capability. Hospitals that 
normally compete with each other need to be prepared to share 
information about resources and personnel. They need to agree 
beforehand to cancel elective surgeries, move noncritical 
patients and expand beyond the daily triage and intake rates.
    Unlike daily operations, surge and emergency response 
requires interoperable and backup communication systems, 
interoperable and backup communication systems, altered 
standards of care, unique legal liability determinations and 
transportation logistics. Should regional resources or capacity 
prove inadequate, State assets will be brought to bear. 
Available beds and patients will need to be tracked in realtime 
so resources can be efficiently and effectively matched with 
urgent needs. Civilian and even military transportation systems 
will have to be coordinated. If needed, Federal resources and 
mobile units will be integrated into the ongoing response. All 
of these levels and systems have to fall into place in a short 
time during a chaotic situation.
    So it is clear daily emergency department operations are at 
best an indirect and imperfect predictor of emergency response 
capabilities. The better approach is for local, State and the 
Federal Governments to plan for mass casualty scenarios and 
exercise those plans. That way specific gaps can be identified 
and funding can be targeted to address disconnects and 
dysfunctions in the regional response. Fluctuating per capita 
Medicaid payments probably will not and often cannot be used to 
fund those larger structural elements of surge capacity.
    Today's hearing can be an opportunity to evaluate all the 
elements of emergency medical preparedness. We value the 
expertise our witnesses bring to this important discussion, and 
we look forward to their testimony.
    [The prepared statement of Hon. Christopher Shays follows:]

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    Chairman Waxman. Thank you very much. Mr. Shays.
    While the rules provide for just the chairman and the 
ranking member to give opening statements, I do want to give an 
opportunity for the two other Members that are with us to make 
any comments they wish to make.
    Ms. Watson.
    Ms. Watson. Thank you very much, Mr. Chairman the Los 
Angeles County board of supervisors visited Capitol Hill last 
week. And the No. 1 theme that continued to surface in my 
conversations with many of the supervisors was the widening gap 
between the demand for Medicare/Medicaid assistance and the 
administration's new regulations that will limit the amount of 
Medicaid/Medicare reimbursement to the State.
    The administration estimates that the total fiscal impact 
of the regulatory changes of $15 billion, but a committee 
report, based on States that responded to the committee's 
request for information, concludes that the change in 
regulations would reduce Federal payments to States by $49.7 
billion over the next 5 years. The cost to California alone is 
estimated to be $10.8 billion over 5 years.
    Mr. Chairman, as you well know, in the case of California 
the reductions and Federal funding would destabilize an already 
fragile medical care delivery service for low income residents 
and the uninsured. The impact of these changes will be far 
reaching and potentially catastrophic. In the last year we have 
witnessed the closing of many of King/Drew's hospital medical 
facilities located in Watts, CA. The emergency care facility 
has been closed now for some time. The impact of this closing 
is that residents from this underserved area of Los Angeles are 
transported to other areas of town and the critical minutes 
that are needed to administer care to save lives are now lost.
    The impact of King/Drew closing has had a cascading effect 
on all the other area hospitals, including those outside of the 
Los Angeles area, that now must pick up the slack. I cannot 
imagine what would happen in these areas in the case of a mass 
catastrophic event such as a terrorist attack using 
conventional explosives or a natural disaster since they are 
already suffering from a lack of adequate emergency medical 
care facilities.
    So I look forward to the testimony from today's witnesses 
who are experts in medicine and medical delivery services and 
counterterrorism. Again, thank you, Mr. Chairman, for holding 
this hearing.
    Chairman Waxman. Thank you, Ms. Watson.
    Mr. Issa.
    Mr. Issa. Thank you, Mr. Chairman, for holding this 
hearing.
    Mr. Chairman, I'm troubled with today's hearing for one 
reason. I think there's a legitimate problem, overcrowding of 
our emergency rooms. That overcrowding comes from a combination 
of illegal immigration, legal immigration and a pattern of 
going to emergency rooms when in fact urgent care would be a 
better alternative. I think it is part of a bigger problem we 
particularly in California face that we have in fact a large 
amount of uninsured. But they are not insured, they are insured 
at the emergency room. That overcrowding needs to be dealt 
with.
    And I trust that on a bipartisan basis in good time we will 
deal with the challenges created by illegal immigration, 
individuals who either because of that or because they lack 
insurance are choosing the emergency room over more effective 
and efficient delivery systems.
    Having said that, I particularly am concerned that a 
partisan amateur survey was done in order to justify or 
politicize today's hearing. It's very clear both by the ranking 
member's opening statement and by the facts that we will 
clearly see here today that a survey of emergency rooms done by 
Democrat staff for the purpose of getting the answer they 
wanted, which was of course we're overcrowded at the emergency 
room, is self-serving and unfortunately short-sighted.
    The number of beds that could be made available in a 
hospital, the number of health care professionals, doctors, 
nurses and the like that could be brought to bear within a 
period of time would have been part of any effective analysis 
of what the surge capacity could be, the number of patients 
who, although in the hospital, could be removed to other 
facilities of lesser capability to make room for severely 
injured people.
    Although this would not change the fact that if we had a 
Madrid type occurrence, even in a city like Los Angeles, 2000 
severely injured people would strain our capacity in the first 
few hours. And undoubtedly, undoubtedly, just like a 200-car 
pileup on the 405, we would have loss of life that we would 
have not have in a lesser occurrence.
    I do believe that the challenges of Medicare and Medicaid 
in dealing with escalating costs, and particularly for 
California the cost of reimbursement which has not been 
sufficient, needs to be looked at. I hope that we can work on a 
bipartisan basis to deal with these problems. I hope that 
today's hearings will in fact cause us all to understand the 
causes and the cures for overcrowding of our emergency rooms.
    However, I must reiterate that the Federal response for 
this type of emergency needs to be to pay to train and to pay 
to test for these kinds of emergencies. That's the appropriate 
area for the Federal Government to deal with in addition to 
providing certain life saving resources such as mass 
antibiotics like Cipro and of course also smallpox and other 
vaccinations in case of an attack.
    These are the Federal responses that were agreed to after 
9/11 on a bipartisan basis, and I would trust that at a minimum 
we would not allow an issue such as how much is reimbursed to 
California on a day-to-day basis to get in the way of making 
sure that we fully fund those items which would not and could 
not be funded locally or by States.
    Mr. Chairman, I look forward to today's hearing. You have a 
distinguished panel that I believe can do a great deal to have 
us understand the problem. With that, I yield back.
    Chairman Waxman. Our witnesses today do amount to a very 
distinguished panel and we're looking forward to hearing from 
them. Dr. Bruce Hoffman is professor of the Edmund A. Walsh 
School of Foreign Service at Georgetown University here to 
discuss mass casually events involving conventional explosives 
in general and suicide terrorism in particular. He will also 
discuss his research on the Australian, British and Israeli 
responses to these types of terrorist attacks.
    Dr. Wayne Meredith is a professor and chairman of the 
Department of General Surgery at Wake Forest University Baptist 
Medical Center. In his role as a trauma surgeon Dr. Meredith 
will discuss the clinical importance of immediate response to 
trauma such as that resulting from a blast attack as well as 
the importance of adequate financing to maintain a coordinated 
trauma care system.
    Dr. Colleen Conway-Welch is the dean of the School of 
Nursing at Vanderbilt University. She'll discuss the 
implications of the Medicaid regulations for hospital emergency 
and trauma care capacity, including whether States or 
localities will be able to hold hospitals harmless against the 
loss of Federal funds that will result from the regulations.
    Dr. Roger Lewis is an attending physician and professor in 
the Department of Emergency Medicine at Harbor-UCLA Medical 
Center. He will discuss the connections between emergency 
department crowding, surge capacity and disaster preparedness. 
He will also discuss the impact of the Medicaid regulations on 
his hospital, which participated in the majority staff snapshot 
survey.
    Dr. Lisa Kaplowitz is the deputy commissioner for emergency 
preparedness and response at the Virginia Department of Health. 
She will present the State perspective on emergency 
preparedness in response to mass casualty events, including the 
lessons learned from the Virginia Tech shootings.
    We're pleased to have you all here today. We welcome you to 
our hearing. It's the policy of this committee that all 
witnesses that testify before us do so under oath. So if you 
would please rise and raise your right hands, I would 
appreciate it.
    [Witnesses sworn.]
    Chairman Waxman. The record will indicate that each of the 
witnesses answered in the affirmative. Your prepared statements 
will be made part of the record in full. What we'd like to ask 
you to do is to acknowledge the fact that there's a clock that 
will be running, indicating 5 minutes. For the first 4 minutes 
it will be green, for the last minute will be orange, and then 
when the time is up it will be red. And when you see the red 
light we would appreciate it if you would try to conclude your 
oral presentation to us. If you need another minute or so and 
it is important to get the points across, we're not going to be 
so rigid about it, but this is some way of trying to keep some 
time period that's fair to everybody.
    Dr. Hoffman, let's start with you. There's a button on the 
base of the mic, we'd like to hear what you have to say.

STATEMENTS OF BRUCE HOFFMAN, PH.D., PROFESSOR, EDMUND A. WALSH 
SCHOOL OF FOREIGN SERVICE, SECURITY STUDIES PROGRAM, GEORGETOWN 
 UNIVERSITY; JAY WAYNE MEREDITH, M.D., PROFESSOR AND CHAIRMAN, 
 DEPARTMENT OF GENERAL SURGERY, WAKE FOREST UNIVERSITY BAPTIST 
 MEDICAL CENTER; COLLEEN CONWAY-WELCH, PH.D., DEAN, VANDERBILT 
  SCHOOL OF NURSING; ROGER LEWIS, M.D., PH.D., DEPARTMENT OF 
   EMERGENCY MEDICINE, HARBOR-UCLA MEDICAL CENTER; AND LISA 
 KAPLOWITZ, M.D., DEPUTY COMMISSION FOR EMERGENCY PREPAREDNESS 
          AND RESPONSE, VIRGINIA DEPARTMENT OF HEALTH

               STATEMENT OF BRUCE HOFFMAN, PH.D.

    Mr. Hoffman. Thank you, Mr. Chairman, for the opportunity 
to testify before this committee on this important issue. As a 
counterterrorism specialist and a Ph.D., not an M.D., let me 
share with the committee my impressions of the unique 
challenges conventional terrorist bombings and suicide attacks 
present.
    This is not a place to have a wristwatch, Dr. Shmuel 
``Shmulik'' Shapira observed as we looked at x-rays of suicide 
bombing victims in his office in Jerusalem's Hadassah Ein Kerem 
Hospital nearly 6 years ago. The presence of such foreign 
objects in the bodies of his patients no longer surprised Dr. 
Shapira, a pioneering figure in the field called terror 
medicine. We had cases with a nail in the neck or nuts and 
bolts in the thigh, a ball bearing in the skull, he recounted. 
Such are the weapons of terrorists today, nuts and bolts, 
screws and ball bearings or any metal shards or odd bits of 
broken machinery that can be packed together with enough 
homemade explosive or military ordnance and then strapped to 
the body of a suicide terrorist dispatched to attack any place 
people gather.
    According to one estimate, the total cost of a typical 
Palestinian suicide operation, for example, is about $150. Yet 
for this--yet this modest sum yields a very attractive return. 
On average suicide operations worldwide kill about four times 
as many persons as other kinds of terrorist attacks. In Israel 
the average is even higher, inflicting six times the number of 
deaths and roughly 26 times the number of casualties than other 
acts of terrorism.
    Despite the potential array of atypical medical 
contingencies that the U.S. health system could face if 
confronted with mass casualty events [MCE], resulting from 
terrorist attacks using conventional explosives, it is not 
clear that we are sufficiently prepared. Historically the bias 
and most MCE planning has been toward the worst case scenarios, 
often containing weapons of mass destruction, such as chemical, 
biological, radiological and nuclear weapons, on the assumption 
that any other MCEs, including those where conventional 
explosions are used, could simply be addressed as a lesser 
included contingency.
    By contrast, Israeli surgeons have found that the metal 
debris and other anti-personnel matter packed around the 
explosive charge causes injury to victims, victims that are 
completely atypical of other emergency traumas in severity, 
complexity and number.
    Unlike gunshot wounds from high velocity bullets that 
generally pass through the victim, for instance, these 
secondary fragments remain lodged in the victim's body. Indeed, 
although much is known about the ballistic characteristics of 
high velocity bullets and shrapnel used in military ordnance, 
very little research has yet to be done on the ballistic 
properties of the improvised and anti-personnel materials used 
in terrorist bombs.
    The over pressure caused by the explosion is especially 
damaging to the air filled organs of one's body. For this 
reason the greatest risk of injury are to the lungs, 
gastrointestinal tract and auditory system. The lungs are the 
most sensitive organ. And ascertaining the extent of damage can 
be particularly challenging given that signs of respiratory 
failure may not appear until up to 24 hours after the 
explosion.
    And over 40 percent of victims injured by secondary 
fragments from bombs suffer multiple wounds in different places 
of their body. By comparison fewer than 10 percent of gunshot 
victims typically are wounded in more than one place on their 
body. A single victim may thus be affected in a variety of 
radically different ways.
    In addition, severe burn injuries may have been sustained 
by victims on top of all the above trauma. Thus critical 
injuries account for 25 percent of terrorist victims in Israel 
overall compared with 3 percent with nonterrorism-related 
injuries.
    Australia's principal experiences with terrorist MCEs has 
primarily been as a result of the October 2002 bombings in 
Bali, Indonesia, where 91 Australian citizens were killed and 
66 injured. The survivors were air lifted to Darwin where the 
vast majority were treated at the Royal Darwin Hospital.
    Forty-five percent of these survivors were suffering from 
major trauma and all had severe burns. The large number of burn 
victims presented a special challenge to the Royal Darwin 
Hospital, as indeed no one hospital in the entirety of 
Australia had the capacity or capabilities to manage that many 
blast and burn victims. Accordingly, the Australian medical 
authorities decided to move them to other hospitals across 
Australia.
    London's emergency preparedness and response in the event 
of terrorist MCEs had been based on New York City's experience 
with the 9/11 attacks. However, the suicide bombings of the 
three subway cars and bus on July 7, 2005 was a significantly 
different medical challenge.
    In New York City on 9/11 many persons died and only a few 
survived. The opposite occurred on July 7th when only a small 
proportion of victims lost their lives, 52 persons tragically, 
but more than 10 times that number were injured. London's long 
experience with Irish terrorism, coupled with extensive 
planning, drills and other exercises ensured that the city's 
emergency services responded quickly and effectively in a 
highly coordinated manner. But even London's well-honed 
response to the MCE on July 7, 2005 was not without problems. 
For example, communications between first responders with 
hospitals or their control rooms were not as good as they 
should have been, which resulted in uneven and inappropriate 
distribution of casualties among area hospitals.
    What emerges from this discussion the medical communities 
emergency response and preparedness for terrorist MCEs 
involving conventional explosions and suicide attacks are two 
main points: First, that there are lessons we can learn from 
other countries' experiences with terrorist bombings and 
suicide attacks that would significantly improve and speed our 
recovery should terrorists strike here. Israel, Australian, 
Britain and others are highly relevant examples.
    The second is that the best way to save as many lives as 
possible after a terrorist bombing or suicide attack is for 
physicians and other health care workers to undergo intensive 
training and preparation before an attack, including staging 
drills at hospitals to cope with sudden overflow of victims 
with a variety of injuries from terrorist attacks.
    Medical professionals and first responders must also 
understand that the specific demands of responding to bombings 
and suicide attacks are uniquely challenging. Death and injury 
may come not only from shrapnel and projectiles, but also from 
collapsed and pulverized vital organs, horrific burns, seared 
lungs and internal bleeding.
    It is crucial that emergency responders evaluate their 
response protocols and be prepared for the unusual 
circumstances created by bomb attacks. Moreover, given the 
increased financial stress on our Nation's health system in 
general and urban hospitals in particular, any degradation of 
our existing capabilities will pose major challenges to our 
Nation's readiness for attack. Indeed, the opposite is 
required, a strengthening of our capabilities of hospitals and 
for the emergency services that we require to effectively 
respond to a terrorist MCE involving conventional bombing and 
suicide attacks.
    Thank you.
    [The prepared statement of Mr. Hoffman follows:]

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    Chairman Waxman. Thank you very much, Dr. Hoffman.
    Dr. Meredith.

             STATEMENT OF JAY WAYNE MEREDITH, M.D.

    Dr. Meredith. Thank you, Chairman Waxman, Representative 
Shays, distinguished members of the community, and guests. 
Thank you for the opportunity to appear before you today to 
discuss the impact of the proposed Medicaid regulations we have 
on trauma centers and trauma center preparedness in our 
country.
    My name is Wayne Meredith. I'm the chairman of the Surgery 
Department at Wake Forest University School of Medicine, and I 
volunteer as the medical director of Trauma Programs at the 
American College of Surgeons.
    What is trauma? Trauma is a major public health problem of 
which I am sure you are aware, but want to emphasize for you it 
is the No. 1 killer of people under the age of 44. That means 
if your children or grandchildren are going to die the reason 
they are going to die is most likely going to be from an 
injury. And the appropriate best way to keep that injury from 
happening is to have them treated in a trauma center, to make a 
trauma center available to them. That's been shown to reduce 
their risk of dying from a serious 25 percent. That's better 
than many other treatments that we consider standard treatment 
for any other condition. It is not standard treatment across 
America today because trauma center care, the systems are 
disorganized, the availability of trauma centers for providing 
that system are disorganized.
    Trauma care is emergent, but not all emergency care is 
trauma care. These are serious injuries. It requires a level of 
readiness of the hospital, it requires a level of expertise of 
the people to be there to make it so that they can be available 
when it occurs.
    I've had the great privilege of treating well over 10,000 
patients over the years who have survived and overcome 
significant injuries. Just a small sampling of those patients 
include such patients as Greg Thomas, who was a 40-year old 
social worker riding to work. He was struck by a car and 
severely injured, he was wish-boned, tearing your leg apart and 
splitting your body halfway up the middle. He--he had a crushed 
chest, his pelvis was broken in two, his left leg finally had 
to be amputated, but he was able to survive because he got to a 
trauma center immediately, he had the kind of care he required. 
He now comes back to volunteer at our hospital to help with the 
psychological help for other people that are being treated 
there.
    Josh Brown was being a good Samaritan, stopped to help 
someone change a tire, was struck by a car while he was doing 
that. Arrived bleeding to death in shock, and he had available 
to him a team of people waiting 24/7 to be available to take 
care of him and is therefore able to be discharged.
    And a story I particularly like, Jason Hong was a student 
at our college. He worked--he was working in his family's 
convenience store in town. The convenience store was robbed. He 
was shot in his thigh, striking a major artery and vein in his 
thigh and was bleeding to death from that. Took him to the 
trauma center immediately. We opened his leg, stanched the 
bleeding which was profuse. Repaired those injuries by taking 
vein from his other leg and placing it there. He survived, and, 
kept his leg. Now he ultimately came back to decide he wanted 
to be a doctor. He is now graduating from medical school this 
May and he will be joining our residency and starting to be a 
surgery resident in July of this year.
    Trauma centers have to be prepared to respond on a minute's 
notice for all kinds of trauma, including those of terrorist 
attacks. They are the baseline of readiness, in my opinion, for 
any sort of capability to be prepared for the everyday type of 
terrorism that we can expect.
    Are they ready? Unfortunate--and could they meet the surge 
of 450 type victims that occurred at 9/11? I think the result--
the answer to that is no. We're not ready to be able to surge 
at that level the way trauma centers are set up today.
    Saving people--there are other studies the National 
Foundation for Trauma Care, which I was the founding member of 
the board, also did a study about a year and a half ago which 
showed that our overall preparedness with trauma centers is 
about C-minus, if you look at that, for being prepared in our 
trauma centers to surge to a terrorist event.
    Saving people from the brink of death, however, or from 
everyday trauma, even a terrorist attack, is costly and it's 
resources intensive but absolutely necessary. Our trauma care 
delivery system has several requirements all of which must be 
met.
    Coordinated trauma system care. I talked in the very 
beginning statement that got you off track, Mr. Shays, 
extemporaneously talked about our lack of a coordinated system 
across our country. It is a very patchwork quilt of system 
currently and it needs to be organized.
    The work force issues. Trauma surgeons are in great debt. 
We have a tremendous lack of trauma surgeons. Over half of our 
surgery--of our trauma fellowships go unfilled, we have no 
nurses. We have--if you more than regionalize trauma care there 
are not as many neurosurgeons in America today as there are 
emergency rooms in America today. There is not one--if they 
stayed in the house all the time, lived there, were chained 
there, could not leave, there aren't as many neurosurgeons in 
America as there are emergency rooms. Workforce shortage is 
going to be something that you--that we'll be facing 
dramatically going forward.
    Trauma centers have to have sufficient resources to care 
for all their victims and to do the cost shifting it takes to 
take care of the uncompensated care and prepare for them. We 
must be prepared for the trauma that we see every day. Jason 
Hong gets shot in the leg on an everyday basis. We need to be 
prepared for the catastrophic events, the bridge collapses that 
occurred in Minnesota. We need to prepare for national 
disasters whether they are Katrina level or just earthquakes or 
tornados. And we need to be prepared for the major events that 
could occur from terrorism, which I think are more likely to be 
bombing in a cafe than they are an anthrax attack or some major 
bio event, I think is much more likely. So trauma centers are 
threatened by that.
    The effects of the Medicaid changes will be dramatic in our 
hospital. It is estimated it will cost us--let me see. Medicaid 
regulations is not something--it will be $36 million from our 
hospital. It currently costs about $4\1/2\ million of 
infrastructure to keep the trauma center alive. And we use 
about $13 million in costs in uncompensated care. Add to that 
$36 million our trauma center will go under. We will not be a 
part of the infrastructure for health care in our part of the 
region. We serve western--all of western North Carolina.
    So with that I'll truncate my remarks and thank you for 
this. I just beg you to stop the Medicaid cuts and enact H.R. 
5613, the Dingell-Murphy bill, fully funded the trauma systems 
planning program and ensure maintenance of systems and 
adequately fund H.R. 5942, the Towns-Burgess-Waxman-Blackburn 
legislation, and fully fund the hospital preparedness program 
and hospital partnership grants to ensure the highest level of 
preparedness, funding for all hospitals and most particularly 
for trauma centers. I want to thank the committee for having 
these hearings and to thank you for having me participate in 
them.
    [The prepared statement of Dr. Meredith follows:]

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    Chairman Waxman. Thank you very much, Dr. Meredith. Dr. 
Welch.

            STATEMENT OF COLLEEN CONWAY-WELCH, PH.D.

    Dr. Conway-Welch. Good morning. My name is Colleen Conway-
Welch. I've been dean at the School of Nursing at Vanderbilt 
for 24 years.
    Chairman Waxman. Would you pull the mic just a little 
closer? You don't have to move closer, pull the mike closer.
    Dr. Conway-Welch. Thank you.
    Over the last decade, however, I have taken a special 
interest in the area of emergency preparedness. I am here today 
to make the link between the consequences of reduced Medicaid 
funding, a fragmented public health infrastructure, and a 
reduced level of emergency preparedness, and to urge the 
committee to recommend a moratorium on these actions until at 
least March 2009.
    I want to make three specific points about implementation 
of the following three changes, limiting Medicaid payments to 
public providers only, dropping Medicaid funding for graduate 
medical education and limiting Medicaid dollars for services in 
out patient settings.
    If the changes anticipated for May 26th occur, it will be 
virtually impossible to fix these rules legislatively in a 
rushed and piecemeal manner. And DHHS will be hard pressed to 
effectively respond HSPD 21, which directs the Department to 
look at regulations that impact emergency preparedness.
    If Medicaid dollars are reduced in these three areas, a 
reduction in personnel and readiness will occur in our 
hospitals and emergency departments across the country and, 
even worse, it will occur in the midst of a serious and 
intractable nursing and nursing faculty shortage and limit our 
ability to respond to a disaster, particularly a blast or 
explosive injury with serious burns.
    It is also reasonable to assume that States, including 
Tennessee, will not hold the providers harmless if Federal 
matching funds are lost. There would be no easy way to redirect 
or make up money to those who are losing it, such as the 
medical schools and safety net provider hospitals. Even if the 
State were able to redirect State dollars to areas eligible for 
a Federal match, those funds would most likely be distributed 
in Tennessee to the managed care organizations and then be part 
of the overall payment structure of all of our hospitals.
    I want to speak now specifically to the three changes. No. 
1, limiting payment only to providers who are a unit of 
government puts our rural, community, private, and 501(c)(3) 
hospitals at even greater risk since they must already pick up 
the slack of escalating numbers of uncompensated care and are 
tied to a public health infrastructure that is increasingly 
unfunded, unavailable and marginally functional. In Tennessee 
this would result in only one hospital, Nashville Metro General 
Hospital, being included. The TennCare Medicaid program would 
lose over $200 million per year in matching funds. This would 
put all of the hospitals in Tennessee, except Metro General, in 
a position of cost shifting and service reductions, as well as 
limiting access even further.
    For example, Vanderbilt already provides more than $240 
million a year in uncompensated care. While I'm discussing 
Tennessee, these are issues across the country.
    All disasters are local, that is true, and conventional 
explosive attacks are especially local. The casualties are 
immediate and nobody should expect outside help for at least 24 
hours. Only a true system of local, functional, systematically 
linked emergency departments and hospitals can address the 
casualties of this most probable form of attack.
    Proposal two, eliminating Federal support for graduate 
medical education programs will result in a reduction of 
medical residents in a wide variety of settings, including ERs, 
trauma burn and intensive care units. They will also not have 
the support of my skilled trauma nurses since these numbers 
will be reduced as well.
    As an example, in Tennessee the four medical schools in the 
State would lose $32 million annually. These schools also serve 
as the safety net providers and would be forced to reduce their 
numbers of students.
    Proposal three, limiting the amount and scope of Medicaid 
payment for outpatient services will weaken our ER ability to 
handle a surge of victims. Our large hospitals will quickly 
experience automobile gridlock.
    It is also absurd to think about evacuating hospitals in a 
time of disaster with the high acuity level we maintain every 
single day, including patients on ventilators. At Vanderbilt, 
for example, the burn unit and the ICUs are already at 
capacity. If disaster hits, health care providers will need to 
be dispatched to community and rural clinics to help them care 
for patients with serious injuries who cannot be transported or 
accommodated by hospitals. As clinics, we do services and 
personnel commensurate with reduced Medicaid dollars. Their 
ability to avoid triage and care to patients will be 
significantly impacted.
    Federal disaster preparedness money that comes to Tennessee 
is much appreciated. However, Federal money does not require an 
outcome of increased documented operational capacity building 
and it should. Tabletop exercises are marginally useful, are an 
income opportunity for Beltway bandits. However, lessons 
learned from one exercise are not necessarily applied to the 
next.
    To many health care professionals of both political parties 
in the field of emergency preparedness, it appears that DHHS 
and DHS do not have a mechanism to assess and monitor the 
extent to which States, counties and cities have the capability 
and game plan in place to respond to a disaster such as a blast 
explosion and are not able to provide guidance on which to base 
these plans.
    There is no one place anywhere in our Nation or at any 
level of government where one can go to receive reliable 
information on resources; for example, how many burn beds there 
are in Tennessee or how many ICU beds there are in Nevada. 
There is no one-stop shop to answer it on a Federal level and 
disasters are frequently not limited to one State. So regional 
statistics and information are needed. For example, Tennessee 
has 48 burn beds, 28 of which are at Vanderbilt and the eight 
Southeast States have a total of 240, but I had to go to the 
American Burn Association to get those numbers.
    In summary, I am encouraging a moratorium on these Medicaid 
changes, a requirement that coordination between and among 
various Federal, State and local entities be enhanced to 
achieve a double whammy; namely, improving emergency 
preparedness response while improving the fractured public 
health infrastructure. It is important to point out that 
continued cuts to providers negatively impact every service a 
hospital provides. Vanderbilt has historically soaked up these 
reductions and looked for other sources of revenue, but that is 
becoming more and more difficult.
    It is logical to assume that we would have to cut such 
programs as helicopter transport, HIV/AIDS programs and certain 
medical and surgical specialties, including emergency 
preparedness. We now support emergency preparedness in a robust 
way, but we would need to limit our participation and regional 
drills and internal administrative planning, as well as reduce 
our commitment or eliminate stockpiling of medical supplies and 
equipment that are critical.
    In conclusion, please extend the moratorium until next 
year. Charge DHHS and DHS to thoughtfully work together to 
address the declining public health infrastructure from the 
prospective of improving our emergency preparedness, and urge 
that the rules be withdrawn since Congress did not direct their 
propagation. A simple and immediate cut in Medicaid funding to 
these three areas is not a thoughtful solution, will not work 
and will have a devastating effect on our hospitals and 
providers to respond in a disaster. In the final analysis if 
these rules are enacted as proposed when our citizens need us 
most, we will not be there.
    Thank you.
    [The prepared statement of Ms. Conway-Welch follows:]

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    Chairman Waxman. Thank you very much, Dr. Welch.
    Dr. Lewis.

             STATEMENT OF ROGER LEWIS, M.D., PH.D.

    Dr. Lewis. Mr. Chairman, members of the committee, thank 
you for inviting me. My name is Roger Lewis. I'm a professor 
and attending physician at the Department of Emergency Medicine 
at Harbor-UCLA Medical Center, and I've been working as a 
physician at that hospital since 1987.
    Harbor-UCLA Medical Center is a publicly funded Level 1 
trauma center and a teaching hospital. We're also a federally 
funded disaster resource center and in that capacity work with 
eight of the surrounding community hospitals to ensure disaster 
preparedness and, in the event of a disaster, an effective 
disaster response serving a population of approximately 2 
million people. We're proud of that work and believe it is 
important.
    Over the last 5 or 10 years my colleagues and I at Harbor-
UCLA have witnessed an extraordinary increase in the demand for 
emergency care services of all types. We have seen an 
increasing volume in the number of patients who come to our 
emergency department and in their degree of illness and their 
need for care.
    At the same time we've had a constant decrease in our 
available inpatient hospital resources and this has predictably 
led to a frequent occurrence of emergency department gridlock 
and overcrowding. Patients wait hours to be seen, ambulances 
carrying sick individuals are diverted to hospitals that are 
farther away and admitted patients in the emergency may wait 
hours or days for an inpatient bed.
    Now I became an emergency physician because I wanted to be 
the kind of doctor that could treat anybody at the time of 
their greatest need. And similarly, my institution is proud of 
its work as a disaster resource center because it wants to be 
the kind of institution that can provide for the community as a 
whole in its time of greatest need.
    It never occurred to me during my training that I'd be in 
the position in which patients that I knew clearly needed to be 
treated in minutes instead had to wait for hours, that 
ambulances carrying sick patients would be diverted to 
hospitals farther away, or that we would pretend that hospitals 
that have no available beds and a full emergency department 
would have adequate surge capacity to respond to the most 
likely type of mass casualty incidents; namely, the results of 
a conventional explosive. Yet that is exact the situation in 
which we find ourselves.
    Now in trying to think about how to illustrate this 
situation several people suggested to me that I give an 
anecdote, that I tell a patient's story. And without detracting 
from the important examples that have been given by the other 
panel members, I would just like to comment that I don't think 
any single patient's story really captures the scope and the 
impact of the problem. This is the situation in which one has 
to think carefully about the meaning of the statistics that are 
widely available.
    In fact, yesterday's anecdote, those stories about 
individuals who deteriorate in the emergency department or on 
the way to the hospital because their ambulance has been 
diverted, are really today's norm. These events are happening 
every day. Right now an ambulance in this country is diverted 
from the closest hospital approximately once every minute.
    There is a common misconception that emergency department 
overcrowding is caused by misuse of an emergency department by 
patients who have routine illnesses or could be treated in 
urgent care settings. This is clearly not true. Numerous 
studies done by nonpartisan investigators have shown that only 
14 percent of patients in the emergency department have routine 
illnesses that can be treated elsewhere. And much more 
importantly, those patients use a very small fraction of the 
emergency department resources and virtually never require an 
inpatient bed.
    Emergency department overcrowding is a direct result of 
inadequate and decreasing hospital inpatient capacity. It is a 
hospital problem, not an emergency department problem. There is 
a direct cause and effect relationship between the hospital 
resources, inpatient capacity, emergency department 
overcrowding and surge capacity.
    The hospital preparedness program, a federally funded 
program that is intended to increase disaster preparedness, has 
focused on bioterrorism and on the provision of supplies and 
equipment for participating hospitals. And whereas these things 
are important, they focus on one of the less probable types of 
mass casualty incidents and do not in any way directly address 
surge capacity.
    For my hospital the proposed Medicaid rules are estimated 
to result in a 9 percent decrease in the total funding for the 
institution. That would have an exponential effect on the 
degree of overcrowding and directly result in reductions in our 
inpatient capacity. For Los Angeles County as a whole the 
projected impact is $245 million. That would require a 
reduction to services equal to one acute care hospital and 
trauma center. We have already witnessed what happens in our 
area with the closure of such a hospital.
    So in summary, hospitals and emergency departments across 
the United States increasingly function over capacity and prior 
fiscal pressures have resulted in a reduction in the number of 
inpatient beds and overcrowding. Current Federal programs 
intended to enhance disaster response capability have 
emphasized supplies and equipment and it largely ignored surge 
capacity.
    The proposed Medicaid regulations will directly result in 
further reductions in hospital ED capacity and ironically 
specifically target the trauma centers, teaching hospitals and 
public institutions whose surge capacity we must maintain if 
they are to function at the time of a disaster.
    Thank you very much, Mr. Chairman.
    [The prepared statement of Dr. Lewis follows:]

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    Chairman Waxman. Thank you very much, Dr. Lewis.
    Dr. Kaplowitz.

               STATEMENT OF LISA KAPLOWITZ, M.D.

    Dr. Kaplowitz. Good morning Mr. Chairman, members of the 
committee. I'm Lisa Kaplowitz. I'm deputy commissioner for 
emergency preparedness and response for Virginia Department of 
Health. In that role, I'm responsible for both the public 
health and health care response to any emergency. And we take a 
very all-hazards approach to emergencies in Virginia.
    Virginia is large and diverse and has been impacted by any 
number of emergencies since 9/11. Certainly we were impacted by 
the Pentagon, which is located within Arlington County, but we 
have experienced the anthrax attack, sniper episode, Virginia 
Tech and multiple weather emergencies.
    A few lessons from 9/11. First of all, this truly was a 
mass fatality event, not really a mass casualty event. But we 
certainly have learned that one key to response is coordination 
of all the health care facilities in the area, cross borders in 
the national capital region; that's Virginia, Washington, DC, 
and Maryland. And we all need to work together, both in the NCR 
and throughout the Commonwealth. We knew we needed a much 
improved communication system among health care facilities and 
with public health communications really was inadequate during 
9/11. We had no back-up communications present. We needed a 
mass fatality plan, and we needed to include mental health 
planning in all emergency planning.
    The Congress allocated funds for both public health and 
health care preparedness as a result of 9/11 and anthrax. I 
won't spend a lot of time on the public health preparedness--
I'm responsible for that--except to mention that we have 
coordinated our public health and health care response. They 
work very closely together.
    In terms of our health care system preparedness, the key to 
our success has been partnership with the hospital association 
which contracts with hospitals throughout the Commonwealth, and 
we got buy-in from the hospitals very quickly. We also do 
regional planning. We have three hospital planning regions, a 
hospital coordinator and a regional coordinating center for 
each of our regions.
    The funding from ASPR has been very, very valuable. It's 
enabled us to purchase redundant communication systems for 
hospitals, to develop a statewide Web based tracking system. We 
can now track beds in a realtime basis throughout the 
Commonwealth during any emergency. We've purchased supplies and 
equipment often done on a regional or statewide basis. This has 
included portable facilities that are located in four regions 
of the Commonwealth and can be moved all around. We've 
purchased ventilators that are the same ventilators statewide 
that are being used in hospitals so people know how to use 
them. We've purchased over 300 ventilators for use in a surge. 
We've purchased antivirals and antibiotic medication located in 
hospitals. And we've developed a volunteer management system.
    Before I move on to trauma and burn care systems, I do want 
to say that the ASPR funds are very valuable but are only a 
fraction of hospital funding for emergency response. The trauma 
system in Virginia was established in 1980. We now have five 
Level 1 trauma centers, three Level 2 and five Level 3 centers 
in the Commonwealth. We have three burn centers, for a total of 
37 burn beds within the Commonwealth.
    Our general assembly did a study in 2004 documenting a 
large amount of unreimbursed trauma care. In 2003, it amounted 
to over $44 million, and I know it's vastly greater than that 5 
years later. As a result of this study, the general assembly 
did create a trauma fund which helps with our reimbursed care 
but, again, only provides a fraction of unreimbursed care. It's 
based on fees for reinstatement of driver's license and DUI 
violations.
    I do want to talk a little bit about lessons learned from 
Virginia Tech. Nobody expected to have a shooting event, a mass 
shooting event in rural Virginia, such as occurred a year ago. 
What many people don't realize is that, because of the winds 
and the snow, none of the injured could be transported to a 
Level 1 trauma center or even a Level 2 trauma center. The 
three closest hospitals, two were Level 3 trauma centers; one 
was not a designated trauma center. We had planned for this, 
recognizing that all facilities need the capability of handling 
trauma care. And we're very proud of the fact that none of the 
injured transported to hospitals from Norris Hall died. That's 
due to our coordination of EMS, as well as hospitals, public 
health and our regional coordinating center. So some of our 
lessons learned from Virginia Tech concerning mass trauma 
include the need for coordination of all parts of public health 
in the health care system.
    Cross training is key. This has been mentioned already. In 
a mass casualty event, all facilities need to be able to handle 
trauma care. That not only involves supplies but training of 
staff in all facilities. We have purchased supplies for all 
facilities in the Commonwealth to handle a certain level of 
trauma and burn care. We know that burn care will be key here, 
and we want all facilities to be able to handle that. And we 
need a real time patient tracking system which didn't exist, 
and we're working very closely on that now so that patients can 
be tracked from the time EMS picks them up until the time 
they're in the hospital and, unfortunately, for our chief 
medical examiner as well. We're very fortunate to have a very 
strong Medical Examiner's Office because this was a crime scene 
and had to be handled as a crime scene, and they handled it 
very well.
    We need to recognize that at any mass casualty event, there 
will be fatalities. So, in terms of trauma surge planning in 
Virginia, we've focused on a number of different aspects here: 
Again, as I mentioned, purchase of key supplies and medications 
for burn and trauma care in all facilities, and this has been 
very basic, looking at basic supplies to be stockpiled.
    Training of physicians and staff in all hospitals to 
provide basic trauma and burn care, because we don't know where 
trauma is going to occur, and we'll need the help of all our 
facilities.
    Training of EMS and hospital staff on appropriate triage. 
Unfortunately, during a mass casualty event, we won't have the 
luxury of transporting people to solely our trauma centers. But 
we're very dependent on these centers to have the expertise 
that they can then use to train others.
    And we need mass fatality planning as a component of mass 
casualty planning.
    I was asked to make a few comments about our recent 
tornadoes. We were fortunate; nobody died as a result of those 
tornadoes, and there were only three serious injuries. But I 
will say that there was excellent communication among the 
hospitals in the area. Once again, this was a very rural area. 
They communicated well. We called on our medical reserve corps 
to help. Our public health folks were available immediately and 
are working in the area now. So our planning has really paid 
off there.
    A few comments in summary. Hospital and health system 
emergency preparedness can be achieved only through close 
collaboration and regional planning efforts for public health 
and health care. There must be a system prepared to respond, 
especially for mass casualty and fatality events. Preparedness 
is tested not only through exercises but through actual events. 
We do an after-action report for every single event and take 
our lessons learned to modify our plans. A coordinated trauma 
system is essential, but we have to have a well thought out 
trauma and health care surge plan to effectively respond to 
large-scale events. Trauma care provided only through 
designated trauma centers will not be adequate, but we need 
those centers as resources to train others.
    We desperately need continued Federal funding for public 
health and health care preparedness. Our CDC and ASPR funds 
have been very valuable, but I need to point out that it's only 
a fraction of the moneys used for preparedness. It's a 
relatively small amount in the Commonwealth. It doesn't even 
come close to covering, for example, unreimbursed care, and 
it's not for operational funding. But it has been very 
valuable, and I plead with you not to have further cuts in 
either CDC or ASPR funding. Thank you again for the opportunity 
to share Virginia's plans, challenges and accomplishments, and 
I'll be glad to answer questions.
    [The prepared statement of Dr. Kaplowitz follows:]

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    Chairman Waxman. Thank you very much. We're going to 
proceed with questions. Ten minutes will be controlled by the 
majority; 10 minutes controlled by the minority; and then we'll 
go right to the 5-minute rule.
    But before I even begin questions, let me just get for the 
record something that I'm not sure I fully understand. Dr. 
Kaplowitz, what is a Level 1 trauma center? What is a Level 2 
trauma center? What is an emergency room? How do these all fit 
in as you plan for emergency preparedness?
    Dr. Kaplowitz. Well, actually, many people on the panel are 
better able to discuss the differences of Level 1, 2 and 3. 
Level 1 trauma centers require expertise to be present within 
the fatality all the time, to be able to handle any level of 
trauma. Level 2 and Level 3, some of that expertise can be 
outside the facility but available very quickly. So, again, 
Level 1 trauma centers have tremendous costs just to maintain 
that ability to provide trauma care. And that's a big part of 
what costs a great deal to maintain trauma centers. It's not 
only the care per se, but the infrastructure as well as a 
quality improvement plan, which we have a very good one in 
Virginia.
    Emergency rooms are places where people can show up for 
emergency care in any facility, whether they're a designated 
trauma center or not. I will say that there are fewer and fewer 
designated trauma centers in the Commonwealth because of the 
cost to maintain a trauma center. It's been very, very 
difficult and becoming more and more expensive, and that's been 
very problematic.
    Chairman Waxman. Thank you very much.
    As I indicated in my opening statement, we asked the staff 
to do a survey of emergency care capacity in seven U.S. cities. 
At the time of the survey, none of the 34 Level 1 trauma 
centers that participated had enough treatment spaces in their 
emergency rooms to handle the victims of a terrorist attack 
like the one that happened in Madrid in 2004. In fact, more 
than half of the ERs were already operating above capacity. 
That means, on an average day, patients were already being 
treated in hallways, waiting rooms and administrative offices.
    Dr. Meredith, should the findings in this survey be of 
concerns to Americans?
    Dr. Meredith. Yes, sir. I think the capacity available 
today in our safety net hospitals is a problem, it is a threat. 
If you think about a bottle-neck theory, the patients are 
building up in the emergency departments, not because there's 
so many patients coming to them who shouldn't be there but 
because there's no place for them to go. The ability for our 
hospitals to absorb them just in terms of numbers of beds and 
numbers of doctors that take care of patients is lacking. And 
that's what's causing this emergency department overflow 
overloading and buildup. And the other pieces, one of the 
strategies is to move patients around, but as several of the 
other people on our panel have said, most of the kinds of 
patients that are occupying intensive care unit beds, 
ventilator beds, burn unit beds are not going to be very easily 
moved. They will be very difficult to move. And to move them 
from the Level 1 trauma centers and the burn units to other 
facilities is probably not the best way to manage them. So it's 
a problem.
    Chairman Waxman. It's been over 6 years since we suffered 
the attacks on 9/11. Are our emergency rooms prepared to handle 
the surge of victims that could result from a terrorist attack?
    Dr. Meredith. If you just--no, sir. I will just tell you 
from going to trauma center to trauma center, and I've been in 
a lot of them, there is very little surge capacity available in 
the trauma centers in the safety net hospitals in our country 
today.
    Chairman Waxman. One of the striking findings of the survey 
is how overcrowded emergency rooms are on a normal day. This 
day, when our staff called the trauma centers and emergency 
rooms in the major cities, was just an ordinary day, and they 
were already over capacity. They had to treat patients in 
hallways and waiting rooms. I would like to ask, is 
overcrowding in emergency rooms jeopardizing the health of 
patients and the ability of hospitals to provide the best care 
possible?
    Dr. Lewis.
    Dr. Lewis. First of all, the day that survey was conducted 
was a typical day, at least in Los Angeles. During that week in 
the prior 4 days we had been on diversion--I'm sorry, in the 
prior week, we had been on diversion for more than the 
equivalent of 4 days. So that was a typical situation. It 
absolutely negatively impacts the availability of the emergency 
department resources and the ability of patients to receive 
care for emergent medical conditions. There are delays in 
treating patients with chest pains, patients with potentially 
important infections and with a wide variety of illnesses and 
injuries.
    Chairman Waxman. Well, the ability to respond to a bombing, 
such as occurred in Madrid, is called surge capacity. Surge 
capacity depends on more than just the emergency room. A 
hospital needs enough resources in places like the intensive 
care unit and hospital beds. But in the survey by committee 
staff, the problems extended beyond the emergency room. One 
major problem is something called boarding. Could you tell us, 
Dr. Lewis, what is boarding, and what impact does this have on 
emergency room abilities to deal with a surge?
    Dr. Lewis. Mr. Chairman the term boarding refers to the 
holding of a patient.
    Chairman Waxman. Is your mic on?
    Dr. Lewis. Yes, it is. The term boarding refers to the use 
of emergency department treatment spaces for the holding of 
patients who are ill enough to require admission to the 
hospital, whose emergency care has been completed, they have 
been stabilized, and who the decision has been made to admit 
them into the hospital but there is no room in the hospital to 
treat that patient. Boarding has a number of important effects. 
The two most important effects are a reduction in the quality 
of care for that individual patient, because they are not 
receiving the ICU care in a comfortable and streamlined 
environment. But more importantly from my point of view and the 
purpose of this hearing is it reduces the total effective 
capacity of that emergency department. On a typical day in my 
emergency department, for example, one-quarter or as much as a 
third of the treatment spaces and the most intensive treatment 
spaces may be taken up by a boarder once we get to the 
afternoon hours, and that reduces the effective size of my 
emergency department by that percentage.
    Chairman Waxman. Well, what happened in Madrid was a 
terrorist bombing, just a bombing, and not a--when I say ``just 
a bombing,'' not weapons of mass destruction or anything 
catastrophic other than what a terrorist attack using bombs can 
produce; 89 patients needed to be hospitalized, and 20 needed 
critical care. But not one of the hospitals surveyed had that 
many in-patient beds or critical care beds. In fact, the 
average hospital surveyed only had five intensive care unit 
beds, just a fraction of the 29 critical care beds needed in 
Madrid. Six hospitals had no ICU beds at all. Dr. Lewis and Dr. 
Conway-Welsh, are you concerned about these findings?
    Dr. Lewis. Obviously I'm concerned about the findings. One 
of the comments that's made in response to data like that is 
this idea that many of those patients could be rapidly moved 
out of the hospital in the event of an unexpected and 
catastrophic event. But, in fact, the information on intensive 
care unit availability is particularly problematic because 
those are patients that are too ill even to be in the normal 
treatment area of the hospital. So, as was mentioned by some of 
my colleagues, those patients are virtually impossible to move 
out. And so those spaces if they are used are truly encumbered 
and will not be available even in the setting of a mass 
casualty incident.
    Dr. Welsh.
    Dr. Conway-Welsh. There is another issue to that as well, 
and that is automobile gridlock. Many of our emergency rooms 
have not been designed to handle a large influx of private 
vehicles, which is what would happen. And I know, at 
Vanderbilt, if we got 50 cars lined up for our ER, that's it. I 
mean, they're not going anywhere. So I think that the gridlock 
issue as a concern for our emergency rooms is also very real.
    I think Dr. Lewis made an important point when he said that 
the ER overcrowding, if you will, is actually a hospital 
problem. And I believe that is absolutely correct. And we're 
trying to fix something piecemeal when there's much larger 
problems, of which you are well aware, that really need to be 
addressed in a coordinated fashion by DHS and DHHS.
    Chairman Waxman. Could you expand on that?
    Dr. Conway-Welsh. Well, the role of coordination and 
guidance among those two offices is, frankly, very murky. And 
there is--if we recall the problems that happened with Katrina, 
it was sort of a right hand not knowing what the left hand was 
doing. There was, frankly, nobody to step in as a parent and 
say, you will play well in the sand box, you will get this 
done. And there was a lot of uproar between it's a State issue 
or a Federal issue or a city issue. That simply has to be 
stopped.
    Chairman Waxman. It's been suggested that all of these 
things are supposed to be handled at the local level. The State 
ought to be able to coordinate emergency services. The 
hospitals ought to be prepared for whatever needs they might 
have. Some people have said that it won't really matter whether 
a hospital ER is operating way above capacity or even under 
diversion. If a bombing occurs and there are hundreds of 
casualties need immediate care, then the hospital will simply 
clear out all patients who don't have life-threatening 
conditions. And if a local ER somehow can't create enough 
capacity, then care will be available in neighboring hospitals, 
in nearby communities or from emergency response teams deployed 
by the Federal Government. I wonder, is this grounded in 
reality, or is this an exercise in denial about the lack of 
emergency care surge capacity at the cities at the highest risk 
of a terrorist attack? Whichever one of you wants to respond.
    Dr. Conway-Welsh. I think Tennessee accepts the 
responsibility that we must care for our own citizens. 
Frequently there are, particularly with blast explosions that 
can occur across State lines. Something else that is a real 
problem is that, for instance, the National Guard, which would 
be called up, they wouldn't get there immediately, but they 
would be called up, rely on the hospitals for a large part of 
their plans for response.
    Chairman Waxman. Before my time is expired, let me just ask 
one last question. We talked about whether we're prepared and 
what the consequences would be for Medicaid funding to the 
States. Medicaid, of course, is health care for the very poor. 
Whether people agree or not about this particular issue on the 
Medicaid regulations, it will reduce Federal Medicaid revenues 
to Level 1 trauma centers and other hospitals throughout the 
country. Now, when that loss of Federal funds, which probably 
will vary from hospital to hospital, and for some Level 1 
trauma centers, will these losses be substantial, forcing 
reductions in services and degrading emergency response 
capacity?
    Dr. Meredith.
    Dr. Meredith. Without question, that is one of my greatest 
fears as a result of this, is that the trauma centers which 
serve as the nucleus for this preparedness piece and for the 
problems that occur every day, every car wreck, the No. 1 
killer of Americans under the age of 44, will not be able to 
survive without--if they have this much drop loss to their 
bottom line, they won't be able to do the things it takes to be 
able to be ready on an every day basis, much less be able to 
participate in any sort of surge. And that is frightening to me 
as a trauma surgeon.
    Chairman Waxman. Thank you very much.
    Mr. Shays.
    Mr. Shays. Thank you very much, Mr. Chairman.
    Dr. Lewis, are you familiar with research conducted at 
Johns Hopkins University and published in the Society for 
Academic Emergency Medicine that found there are key 
differences between daily surge capacity and catastrophic surge 
capacity? Specifically the research found that, quote, daily 
surge is predominantly an economic hospital-based issue with 
much of the problem related to in-patient capacity but with the 
consequences concentrated in the emergency department. By 
contrast, catastrophic surge has significantly more components.
    Do you agree with the statement?
    Dr. Lewis. I agree with the statement, absolutely. The 
point that was being made----
    Mr. Shays. Translate. Give me some meaning to this. Tell me 
what it means.
    Dr. Lewis. I think the distinction that's being made has to 
do with the ability of the hospital to respond to every day 
fluctuations in the need for care. For example, when there's a 
multi-car vehicle incident on the 405, and many of the 
hospitals in Los Angeles County have difficulty responding to 
those things but are able to respond by bringing in overtime 
staff, bringing in staff that aren't usually covered by the 
budget but for this one time can be brought in to open up beds 
that although physically available are not covered by nursing 
staff, those kinds of thing. However, doing that on a day-to-
day basis over a fiscal year drives the hospital into the red. 
And so there are economic constraints on our ability to deal 
with so-called daily surge. In the setting of a mass casualty 
incident or a disaster surge, obviously there are some 
extraordinary things that would be done. I think the critical 
question is the extent with which those critical things could 
be done and how effective they would be given the number of 
acutely ill patients who in fact could not be moved out of the 
hospital.
    Mr. Shays. Thank you.
    Dr. Meredith, did you want to comment on it? You just 
seemed to light up a bit.
    Dr. Meredith. Well, I think there is a lot--that's exactly 
right, and there's a lot of truth to that. You're much more 
able to lift a 300-pound weight if it's on your foot than you 
can if it's just sitting in the room. So we are able to be able 
to surge differently for an emergency and for a short period of 
time than you can do for a long period of time. There's also a 
disproportionate availability of bed capacity in our hospitals 
between the big urban and the Level 1 trauma hospitals and the 
smaller rural hospitals so that if you just look at the overall 
bed capacity over the country, it's mismatched between where 
these would occur, where the capacity is and so forth.
    Mr. Shays. Mr. Chairman, I would request unanimous consent 
that the following articles published in the Society for 
Academic Emergency Medicine be entered into the record. There 
are 1, 2, 3, 4 of them. And I have them listed here if I could.
    Chairman Waxman. Without objection, they will be entered in 
the record.
    [The information referred to follows:]

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    Mr. Shays. Thank you very much.
    Dr. Hoffman, I find it nonsensical that we talk about the 
capacity in emergency centers and so on, that we are strained, 
when particularly in California my sense is that a lot of this 
deals with the uncompensated care, not the undocumented worker 
because that doesn't describe them. It's individuals who are 
literally here illegally. Is there any sense of a disconnect 
when we say we are providing national security for our homeland 
when in fact we allow individuals to literally come into this 
country at will, then call them undocumented, as if somehow 
they don't represent a national security issue?
    Mr. Hoffman. Well, Congressman, it's an issue somewhat 
outside of my ken. In looking at the terrorist threat, I would 
say, when one focuses back on 9/11, all of the 19 hijackers 
entered the country, firstly, legally and withproper 
documentation. So certainly you're right in pointing to the 
threat that illegal aliens and undocumented people have, but I 
think the threat is even much wider than that.
    Mr. Shays. But isn't it the responsibility of the National 
Government to defend its borders. And we have a visa process 
and so on that let's us know who is here and who is not. People 
here illegally are here without our knowledge. Doesn't that 
strike you as somewhat absurd to then suggest that we have the 
capability to deal with a potential terrorist threat?
    Mr. Hoffman. I think the lesson that 9/11 teaches us is 
that we have to have the kind of dynamic and flexible approach 
that can deal at multiple levels.
    Mr. Shays. Let me ask you, those in the hospital, how is it 
that we need to be able to deal with a surge capacity when we 
are dealing in a sense with a surge of illegal immigrants? How 
do we sort that out? How does that fit into the equation? Isn't 
it a fact that illegal residents tend to use the emergency 
facilities of a hospital more than just knocking on--going 
through the regular process of interacting with a doctor? 
Unless we have, and we have expanded our community-based health 
care clinics, but without community-based health care--let me 
ask it this way. Aren't these facilities being overworked by 
the fact that we have illegal residents who are using these 
facilities?
    Dr. Lewis. It is not my impression that any significant 
part of the overcrowding or the use of the resources is 
directly tied to the illegal immigrants who work in Los Angeles 
County.
    Mr. Shays. How would you know that? Do you find out if 
they're here illegally?
    Dr. Lewis. One often finds out when one is taking a social 
history and asking about family background, travel history, 
that sort of thing.
    Mr. Shays. So you're under oath right now, and you're 
saying that, under oath, you do not believe that you have an 
overuse of these facilities by people who have no other ability 
to have health care, and that this is not in any way caused by 
illegal immigrants?
    Dr. Lewis. Let me just ask a clarifying question. When you 
use the term ``overuse,'' do you mean any use?
    Mr. Shays. Any use.
    Dr. Lewis. If you define any use of our emergency 
department by people who are in the country illegally, the 
answer is, absolutely, there is such use. If you mean overuse 
in the sense that the use is disproportionate because of their 
illegal status, I believe the answer is no.
    Mr. Shays. I actually mean both. Why wouldn't it be? 
Logically it would seem to me to make sense that if they had 
nowhere else to go, they're going to go to the hospital. That's 
what we are encountering on our side in the East Coast. Every 
hospital tells me that you have an overuse in our emergency 
wards by people who simply have no other place to go.
    Dr. Lewis. I think that we're mixing a couple of different 
distinctions. My impression, and I have not collected data on 
this and I'm not prepared to give you numbers, is that most of 
the illegal immigrants when they have nonurgent medical 
conditions choose to seek care in a variety of outpatient 
facilities that are scattered around the city, and they don't 
actually want to come to the emergency department. The second, 
if I could just answer the second part of your question.
    Mr. Shays. Make it shorter, though, please.
    Dr. Lewis. When you are told that a significant burden on 
the system is by people who have nowhere else to go, the 
majority of those people are legal residents or citizens of 
this country who have no place else to go because they don't 
have health insurance, not because of their legal status.
    Mr. Shays. Thank you.
    I yield the balance of my time.
    Mr. Issa. Thank you.
    Dr. Lewis, I'll followup in this same area. And I agree 
with you as a fellow Californian that we can't have it both 
ways. We can't say that the uninsured seek emergency room care 
disproportionately because they can go there, they essentially 
are covered by the umbrella of last resort because they're poor 
and uninsured, and then not use the term broadly uninsured 
rather than illegal versus legal, etc. So, although I think 
illegal represents more than perhaps you're saying, I think it 
is appropriate, at least in California, to look at it in terms 
of the uninsured using the emergency room as essentially the 
guaranteed insured area for the poor and uninsured.
    I'm concerned about this survey that was done. You 
participated in the survey. And UCLA Medical Center that day 
said that there were 14 patients boarded by the emergency 
department presumably waiting for in-patient beds to become 
available. How do you explain the fact that you had 14 in-
patient beds available that same day? Wouldn't it be fair to 
assume that, to a certain extent, you could have made them all, 
you could have put them all in immediately if you gave them the 
highest priority? And rather, quite frankly, there has to be 
some credibility to the reserve for higher-paying accounts, 
wouldn't be that correct?
    Dr. Lewis. No.
    Mr. Issa. So you're saying that you had 14 boarded patients 
and you had 48 in-patient beds available and that--I'm trying 
to understand. Clearly you had beds available, and you could 
have shifted people into them, isn't that correct?
    Dr. Lewis. I believe that you are making a common 
misinterpretation of the information that was given to you, and 
I've seen the same information. It has to do with how one 
defines an available bed. To a hospital administrator, an 
available bed is a bed that is physically there; you walk in 
the room, there is a bed, and there is no patient in it.
    Mr. Issa. OK. So as a followup, what you're saying is you 
were not staffed to put people into those beds?
    Dr. Lewis. That's a very important distinction because the 
staffing is directly related to the level of hospital 
resources.
    Mr. Issa. And I just would like to followup.
    Chairman Waxman. The gentleman's time is up, but did you 
complete your answer?
    Dr. Lewis. No. I was trying to make the point that the 
issue has to do with staffing. And therefore, when one is 
trying to get data on the number of available beds, especially 
in the setting of disaster preparedness, the important question 
is what number of beds are available or could be staffed in the 
next few hours. And I don't believe the questionnaire was clear 
in that regard.
    Mr. Issa. Mr. Chairman, I know you went on for a little 
while. This will be very short.
    Chairman Waxman. The gentleman's time is expired.
    Ms. Watson.
    Ms. Watson. Mr. Chairman, I think some of the questions 
that are being asked of the witnesses ought to be asked of the 
Members sitting up here who make the policy.
    Dr. Lewis, I am so glad you're here. I am intimately 
familiar with the situation down in Watts, CA, and Martin 
Luther King Hospital. And when that hospital's Medicare funds 
were pulled and Medicaid funds were reduced, many of the 
patients that would have gone to King had to come to 
surrounding hospitals. They're overcrowded. And I know on the 
day of the survey, 33 of your ER patients were being treated in 
chairs or hallways. I have been in that situation myself in one 
of our most prominent hospitals waiting 2 hours and 15 minutes, 
and people had been there for 4 days. We have a critical 
problem in our community, in our county hospital system. And we 
probably have one of the largest ones in the State in the Los 
Angeles area. The day we took this survey, was that an unusual 
day for your hospital?
    Dr. Lewis. In reviewing the numbers, and I should clarify 
that I was not working that day, but in reviewing the numbers 
that were submitted, my impression was that was a slightly less 
busy than usual day. It was done on a weekday.
    Ms. Watson. Now, Saint Francis Hospital, you're aware of 
it?
    Dr. Lewis. Yes.
    Ms. Watson. Is a DSH hospital, and it, too, is 
complaining--Doctors Hospital. I can name all the hospitals in 
the area. I chaired the Health and Human Services Committee in 
Sacramento in the Senate for 17 years. I am intimately aware of 
our problem. What is it that we need to have a functional and 
comprehensive care system for the indigent? And I know you're 
not in the business of doing the work of immigration officials 
and seeking; you treat people as needed. What would you want to 
see in this Los Angeles County area, and maybe some of the rest 
of you in other States would want to respond, too, that would 
make our system viable to care for the needy, to care for the 
people who come through your doors, regardless of whether 
they're there legally or illegally?
    Dr. Lewis. If I was limited to a single answer----
    Ms. Watson. Yes.
    Dr. Lewis [continuing]. My answer would be an increase in 
the number of available in-patient beds in the hospital that 
are staffed by qualified nursing personnel who are available 24 
hours, 7 days a week.
    Ms. Watson. When Dr. Levitt--thank you for your response.
    When Dr. Levitt cut the Medicare dollars from King, or from 
L.A. County, that was 50 percent of the resources. So it 
impacted all of not only the county hospitals but private 
hospitals as well. Staffing of emergency personnel, what would 
you like to see there, and you talked about other beds, but 
emergency and trauma?
    Dr. Lewis. The most pressing shortage that we have right 
now in Los Angeles County is related to nurses in the emergency 
department. There's a nationwide nursing shortage. The working 
conditions and the stress level in the emergency department 
makes it not a popular long-term career choice for the best 
nurses. And that is the most pressing immediate personnel need 
that we have.
    Ms. Watson. OK. How do we solve that problem, and I will 
ask that of all of the witnesses?
    Dr. Welsh.
    Dr. Conway-Welsh. I have several suggestions. The amount of 
Federal dollars that are available for nurses to go back to 
school and to become either BSNs or masters-prepared nurses is 
very, very limited. The faculty scholarship program is very, 
very limited.
    Let me take a little bit different cut though on your 
question about what could be done. The School of Nursing at 
Vanderbilt has just received status as a clinic, a nurse-run 
faculty clinic, as an FQHC. That process took us almost 10 
years to be designated as an FQHC. There are schools of nursing 
all over this country that close their clinics once their 
education dollars run out from HRSA because they can't maintain 
it because all of our patients are indigent and poor. An 
increase in the amount of FQHC support would be extremely 
helpful.
    And then the last point I might make is that we have many, 
many nurse practitioners who are not able to practice in the 
full scope of their practice because of State problems with the 
Medical Practice Act and the Nurse Practice Act. We need a 
Federal preemption that would allow the current nurse 
practitioners to practice in the full scope of practice.
    The other thing that we need to do is nurses are hunters 
and gatherers in hospitals. There's 30 to 40 percent of what 
they do that they shouldn't be doing. But the system doesn't 
allow them to give that up. There's not enough support of the 
non-nurse personnel for nurses to stop being hunters and 
gatherers. We would significantly address the nursing shortage 
in this country if we could just allow nurses to nurse and if 
we could fully utilize our nurse practitioners.
    Chairman Waxman. Thank you, Ms. Watson.
    Mr. Issa, you're now recognized for just 5 minutes.
    Mr. Issa. Thank you, Mr. Chairman.
    Can I ask unanimous consent to submit eight documents into 
the record that reflect the Commonwealth of Virginia's 
emergency response preparedness, both alone and in conjunction 
with the rest of the National Capital Region?
    Chairman Waxman. We'll review the documents before we're 
willing to give unanimous consent, and we'll see if we can get 
the unanimous consent.
    Mr. Issa. So you're reserving an objection?
    Chairman Waxman. I object until I get a chance to review 
the documents.
    Ms. Watson. Mr. Chairman can we see the documents, too? I 
don't want to vote unless I know what it is.
    Mr. Issa. Mr. Chairman, here are the documents.
    Dr. Lewis, because I ended the last round, I was just going 
to comment that in your own statement, you had said that you 
had surge capacity; you could bring in people that you wouldn't 
otherwise have, but it would put you into the red. And I'm not 
going to further elaborate because of the shortness of time, 
but if you have 48 beds and you don't fill them and 14 people 
say boarded, to me it sounds like you were unwilling to go into 
the red in order to board those people. But you did have 48 
capacity, assuming those higher cost resources were available, 
but your hospital chose not to do it that day.
    Dr. Kaplowitz, I'm very intrigued by your testimony, these 
documents that are pending going into the record. If I 
understand you correctly, if there were a significant crash or 
something on the Orange Line or Blue Line today representing 
dozens or even maybe 100 significant injuries, you would be 
prepared to put together the resources to take care of that. Is 
that correct?
    Dr. Kaplowitz. We would be working very closely with the 
District of Columbia and Maryland in terms of appropriate 
distribution of patients working through EMS as well as the 
hospitals. We would activate our Northern Virginia coordinating 
hospital, which is at Innova Fairfax, and do the best we can 
for optimal distribution of patients. I can't tell you what 
would happen. You know, first of all, that could be anywhere.
    Mr. Issa. Sure, I understand on a given day that you can't 
answer. But in general, and we'll go back to Virginia Tech. 
Virginia Tech was an example of the worst of all worlds, a 
place you didn't expect it, a weather condition that wasn't 
cooperative and hospitals that generally were not prepared. And 
yet the response, looking back, you were able to rise using 
resources as you could transport people and/or--people one 
direction or the other. Is that correct?
    Dr. Kaplowitz. Virginia Tech was not truly a mass casualty 
event. It stressed rural hospitals. And we were prepared to 
pull in people. However, no hospital was pushed beyond what 
they were capable of doing and wasn't hundreds of people at the 
same time.
    Mr. Issa. And, Doctor, I know it's always unfair to do 
hypotheticals, but in general, the amount of times that America 
is going to be attacked in mass by a dirty bomb, chemical 
attack or aircraft from the sky, compared to the amount of time 
in which an airplane crashes as it is landing in Iowa, a DC-10, 
the Blue Line does have an electrical failure and people are 
damaged or burned, a gasoline truck on the 405 jackknives and 
bursts into flames, a fire in a refinery, such as Long Beach, a 
widespread hurricane or tornado that injures many; aren't all 
of these dramatically more likely? And I'll be self-serving and 
say, since it happens every year in America, every single year 
one or more of these, actually almost all of them happen at 
least once or twice a year, mass casualties occur every year in 
America. Isn't it true that, in fact, if we take the war on 
terror, the likelihood of another attack like 9/11 completely 
out of the scenario, that the need is greater in frequency and 
even likelihood of dozens or hundreds of people needing care, 
isn't it greater based on these? And I will throw in just one 
more for good measure, Dr. Lewis, an earthquake in Northridge?
    Dr. Meredith. Yes, it is, and we're not ready to deal with 
that. Whether you survive an injury in America today on 
Interstate 40 from Wilmington, NC, to Barstow, CA, depends on 
how well you get hurt and how well the trauma system is 
organized between those two points.
    Mr. Issa. And, Dr. Kaplowitz, I'm particularly intrigued 
because you seem to be positive in saying that, at least within 
the resources available, Northern Virginia and Virginia in 
general has done a good job of being prepared. And I'm 
particularly concerned because I'm a Californian, and it 
appears as though California feels they're not prepared. Could 
you comment further on why you feel fairly prepared within the 
resources available?
    Dr. Kaplowitz. Preparedness is all relative. We've put a 
great many things in place to go beyond where we were on 9/11. 
I can't tell you how we would handle hundreds, you know, 
whether people would be happy with how we handled hundreds. We 
would have a plan, a communication system.
    Mr. Issa. One final question for the panel. If I had a 
billion dollars sitting in the center of this room and I gave 
it to you for preparation, training for these mass events or I 
spread it around the country to staff up or reimburse Medicaid, 
which would you rather have that billion dollars go to, 
assuming there was only one pile of $1 billion available today?
    Dr. Kaplowitz. I would like to see our emergency 
departments and our capability, able to function on a daily 
basis. Because much as I've talked about surge, I also agree 
that if we don't do a better job on handling emergencies on a 
daily basis, we're going to be at a disadvantage when there is 
a mass casualty event. We have to be able to empty our 
emergency rooms more rapidly because that's going to be even 
more important in an emergency event. Again, I'm positive in 
terms of what we've put in place in the kinds of 
communications. However, I recognize full well the stresses on 
our emergency system on a daily basis, and we can't ignore 
that. They're interrelated.
    Mr. Issa. Mr. Chairman, I would appreciate it if the others 
could answer for the record which way they would spend the 
money or if you would like to give them additional time.
    Chairman Waxman. Well, whichever of you want to respond.
    Yes, Dr. Lewis.
    Dr. Lewis. I agree absolutely with what Dr. Kaplowitz said. 
But in addition, I would like to point out that even if one 
chose to spend the $1 billion on training and equipment and 
things that would only be used in those very unusual events 
that you pointed out, one of the key decisions is whether we 
want to be prepared for the most likely of those catastrophic 
events or whether we want to instead be prepared for the least 
likely, meaning bioterrorism or nerve agents.
    Mr. Issa. Good point.
    Dr. Conway-Welsh. I would take the $1 billion and apply it 
to the public health infrastructure in our country. That is 
critical to any kind of a response in any kind of a disaster. 
And we are in grave danger of a really crumbling public health 
infrastructure in our country.
    Dr. Meredith. You could fund the Federal infrastructure to 
support the States to develop trauma systems for $20 million or 
$10 million--million, million dollars. You know, you'll drop 
that on the way to work in the morning. So that should be done.
    The next piece is just to your question, Representative 
Issa, can we plan to surge on a daily basis and always be ready 
nationwide? I don't think that is do-able or the smart way to 
do it. But I do think we are not ready on a daily basis to do 
what we have to do every day. And that frightens me immensely 
because we're not prepared for the bomb in a cafe or the mall 
or a bus falling off a bridge because we don't have the 
capacity on the every day basis.
    Mr. Hoffman. This isn't exactly my expertise, but I would 
say that I agree completely with Dr. Lewis' statement. And I 
would point out that as unlikely as a terrorist attack may or 
may not be in the future of the United States, I think that the 
American people would expect that, years after 9/11, we would 
be prepared adequately to respond to any kind of threat like 
that.
    Chairman Waxman. Thank you. And of course, they would 
expect we're not going to make things worse by Medicaid cuts.
    Ms. Norton.
    Ms. Norton. Thank you, Mr. Chairman.
    And I must say, because I represent the city, I'm 
especially grateful that you brought some sunlight to this 
really urgent problem as we face Medicaid cuts. I want to note 
that I have constituents from Anacostia High School who would 
be very much affected if in fact there was such an event here.
    Mr. Chairman, since 9/11, I've been trying to get funds out 
for what are called ER-1. It was to be a demonstration here. 
People came from hospitals all over the country to see how we 
did it here and then to see if they could replicate it. And 
essentially it would add to the Metropolitan Hospital Center a 
surge capacity and a way to quickly add on that capacity.
    I want to--my concern, I will say to the panel, is that you 
have a mix of residents here. So if you try to separate out who 
you're talking about, undocumented, poor, who overuse, of 
course, emergency rooms from the ordinary emergency, you're 
going to have a hard time, which is why this ER-1 notion was to 
try to say this is the place, it is close to the Capitol, to 
send trauma victims. We have a burn center, for example. They 
brought people there from Virginia after 9/11. On top of 
600,000 people who live here, we've got 200,000 Federal workers 
and other workers who just come in every day and go out, 
creating a potential for a true catastrophic situation. They 
won't be able to get out on the roads. Some of them will try to 
get out if they are hurt. So the point is to let them know 
quickly what the place is to go.
    Now, Virginia, and Dr. Kaplowitz you testified about what 
Virginia is trying to do with what money it had, and that 
caught my attention, placing key, according to your testimony, 
key supplies and medications in various places. Of course, 
Virginia went through 9/11 and trying to deal with surge in its 
various hospitals. I would like to ask you, and then that 
inclined me to look at how much in Medicaid funds Virginia 
would lose to see whether Medicaid funds were implicated. And I 
learned that Virginia--and when we talk about Virginia, 
Maryland and the District of Columbia, we're talking about one 
place virtually, except that if the event occurred here, unlike 
the Pentagon, if the event occurred here in this crowded space 
and people went to various hospitals, you would only make the 
situation worse, which is why we're working on this ER-1. The 
administration has supported it. We have not been able to get 
it through appropriations, even though they found considerable 
support for it.
    Virginia would lose $93 million in Federal Medicaid funds 
over the next 5 years. I'm trying to discern what impact the 
loss of Federal Medicaid funds would have on the surge capacity 
they're trying to create out of whole cloth.
    Dr. Kaplowitz. I've been thinking about that, knowing I was 
going to be here today. I know you've heard from Dr. Sheldon 
Retchin, who spoke about the impact on the VCU health system. 
Again, if we lose much of the capability to handle emergencies 
on a daily basis, it's going to definitely put us at a 
disadvantage.
    I know full well how much Level 1 trauma centers depend on 
Medicaid funding in general, not only for trauma care but in 
general, whether it's the VCU health system or Innova Fairfax. 
And I'm very, very concerned of the impact it's going to have 
on the ability of those facilities to function, not only in an 
emergency but on a daily basis. And they do work together. It's 
hard to expect a facility to add surge if they're to stressed 
on a daily basis. Nonetheless, we are planning for surge 
capability, surge beds for an emergency no matter what the 
situation is on a daily basis. We have to plan for the 
emergency and recognize that there are stresses on a daily 
basis. So I know there's going to be enormous impact on a 
number of facilities, especially our Level 1 trauma centers on 
a daily basis. It will impact their ability to surge in 
emergencies. That's not going to stop us from continuing to 
plan for that large event looking at distribution of patients 
and hoping facilities respond appropriately.
    Ms. Norton. Level 1 trauma centers are the ones that, 
because they are the hospitals that have the greatest capacity, 
tend to be the ones that are overcrowded?
    Dr. Kaplowitz. Absolutely. There's one other point here 
that's not related to Medicaid funding but related to surge. 
And that is the concern that hospitals have of the funding 
they're going to receive after an emergency. I bring this up 
because it's a major issue when hospitals are talking about 
surging in emergencies. Most hospitals, most health care is 
private. And there's been a lot of discussion and stress about 
what kind of reimbursement they would get in responding to 
emergencies. They're going to respond, but are they going to be 
dramatically hurt financially?
    Ms. Norton. Following 9/11, it was easier to get funds out 
after the fact, and this is what's so frustrating to me. 
Because in the face of a catastrophe and living in a country 
that doesn't prepare for anything, money went out. But 
preparing for such an event is very bothersome. I am concerned, 
and I would like finally to ask this, if in fact these patients 
are distributed to the trauma centers wherever they are in a 
place like the District of Columbia, rather than to have a 
place that is specially outfitted to deal with traumas, if you 
would tell me how an emergency room is supposed to decide how 
to quickly separate the traumas that come, let us say from the 
District of Columbia, the other people who have serious 
emergency problems who come in, the people who shouldn't be in 
the emergency room but perhaps should be referred? I mean, I'm 
worried about the chaos of just sending everybody to trauma 
centers in the first place.
    Dr. Meredith, did you have an----
    Chairman Waxman. The gentlelady's time is expired but we'll 
get an answer to the question.
    Dr. Meredith. The trauma center itself is designed to do 
that exact question. A lot of work has been done to define what 
kind of patient is the trauma patient and how should they move. 
And those questions are answered. There are about 230 Level 1 
trauma centers and about 320 Level 2 trauma centers, so we're 
talking about saving 550-ish maybe between that and 600 
hospitals that are a core of the safety net for patients in the 
country.
    Ms. Norton. Thank you.
    Mr. Chairman, I want to just say I'm very concerned that if 
people simply go to the hospital closest to them as opposed to 
the hospital that in fact has been most prepared to handle the 
surge from the event, all of the placement that Virginia is 
trying to do for example, kind of a little bit everywhere 
without Medicaid funds, will not serve us well in the event of 
a truly major capacity. If I may say so Virginia was not the 
kind of event that we in the District of Columbia are most 
afraid of following 9/11.
    Chairman Waxman. Thank you, Ms. Norton.
    I want to ask this. We have a health care system in this 
country that's the most expensive in the world, and yet we have 
47 million people who are uninsured. Most of them are working 
people, and they don't have insurance. So if they get sick, 
they go to the emergency room. If they don't have insurance, 
the hospital doesn't get paid for the care that they're given. 
So hospitals then have to figure out how to survive 
economically without getting paid for a lot of these emergency 
room patients. Isn't it true that the people that are in 
hospitals today because of this whole crazy system we have are 
some of the sickest people, unlike in other countries where 
they're not the sickest, they're not the ones that you just 
can't deny hospital care, but in our country, it's the sickest?
    Is that right, Dr. Meredith, do you know.
    Dr. Meredith. I don't know. It's a hard system to figure 
out, and I work in it every single day.
    Chairman Waxman. Well, it's a hard system to figure out. 
But let's look at the system. There's not enough money in the 
system for all the people who use it who don't have health 
insurance coverage.
    Now, does it make any sense--Dr. Hoffman, does it advance 
the goal of Homeland Security for the Federal Government to 
then be withdrawing funds from Level 1 trauma centers, whether 
through the Medicaid program or some other funding source? Is 
it reasonable for the Federal Government to assume that States 
and localities are going to make up these losses to the 
hospitals or the market forces will make up for the short fall?
    Mr. Hoffman. Mr. Chairman, you know, I think we've already 
learned the lesson of not being adequately prepared before 9/
11, so, no, it doesn't make sense from my perspective as a 
terrorist analyst.
    Chairman Waxman. As a terrorist analyst.
    How about those of you who are in the medical field? Does 
it make sense when you're struggling to keep these hospitals 
going under ordinary circumstances and trying to find out how 
to fund them for the Federal Government to withdraw Medicaid 
funds?
    Dr. Meredith. Market forces will not make up for the loss 
that this money represents to the safety net hospitals and to 
these few trauma centers, I'm certain, because of the way the 
patients are moved around now. They will still get those 
patients. And when it represents such a loss that they can't 
sustain it, they will stop being trauma centers, and we'll lose 
them from the system, and it will be tragic.
    Chairman Waxman. A lot of hospitals are already closing 
their doors for the emergency rooms because they can't afford 
to keep them open.
    Dr. Kaplowitz, you're trying to find out how to plan, 
you're trying to plan for an ordinary catastrophe or a 
terrorist kind of catastrophe. Does it help your planning 
efforts when the Federal Government withdraws money from the 
Medicaid program or some other funding source?
    Dr. Kaplowitz. Not at all. And as I mentioned already, 
we're very grateful for getting some funding for emergency 
planning. But that's only a fraction of the funds hospitals 
receive. It couldn't then begin to replace the Medicaid dollars 
or the other dollars they need to maintain their 
infrastructure. So absolutely it makes no sense at all to lose 
that much funding.
    Chairman Waxman. Now, some people say disasters are local. 
Local communities need to prepare for a terrorist bombing or 
similar attack. But it's also true that the Federal Government 
has a responsibility here, which starts with at least doing no 
harm. And that means not withdrawing Federal Medicaid funds 
that now support Level 1 trauma centers in the highest risk 
cities. I wanted to pursue another point about how we prepare 
for a terrorist attack. There has been, Dr. Hoffman, 
evaluations of potential terrorist attacks. In fact, I think 
the Centers for Disease Control brought together a panel. Is it 
the consensus of people looking at possible terrorist attacks, 
if we're going to have one, it's going to be using conventional 
weapons rather than a weapon of mass destruction?
    Mr. Hoffman. Absolutely. Again, I don't think we can rule 
out any potentiality. But certainly the higher probability 
event is conventional explosives and perhaps with suicide 
attacks.
    Chairman Waxman. In fact, according to the CDC report that 
was produced, they said a terrorist bombing attack in the 
United States would be a predictable surprise, like a hurricane 
is a predictable surprise, or a major automobile traffic 
accident could be a predictable surprise. Yet the Federal 
Government, under existing law, has a responsibility for 
developing national medical surge capacity to respond to a mass 
casualty event, such as a terrorist attack with weapons of mass 
destruction. Last October, the President issued Homeland 
Security Presidential Directive No. 21, which established a 
national strategy for public health and medical preparedness 
for this kind of an event. It's crucial that we be prepared for 
an event using a dirty bomb or biological weapon. But I don't 
know that there's any national strategy to prepare for or 
respond to a terrorist attack using conventional explosives, 
such as happened in Madrid or here in Oklahoma City or at 
Centennial Park in Atlanta. Dr. Hoffman, is there such a 
Federal response being prepared by this administration that 
says, the buck stops here?
    Mr. Hoffman. No, my understanding is that incidents like 
terrorist attacks involving conventional explosives are viewed 
to a lesser included contingency, and the assumption has long 
been, going back from what I testified before a subcommittee of 
this committee that Congressman Shays chaired nearly a decade 
ago, is that generally these more conventional types of 
terrorist attacks don't receive the same type of attention that 
the high end, less likely threats do.
    Chairman Waxman. Well, this is exactly what we want to ask 
the Secretary of Health and Human Services and the Secretary of 
Homeland Security. What is the Federal Government doing? What 
do we have in place? What are we planning in case a predictable 
event such as a terrorist attack occurs. And some people think 
that's partisan to ask those questions. I think it is something 
we ought to be asking on a bipartisan basis.
    Mr. Shays.
    Mr. Shays. Thank you. Dr. Hoffman, Hadassah Hospital in 
Jerusalem has a facility that has a whole floor designed for a 
surge capacity, but they have no doctors to man it. In other 
words, it's--and it is there for a potential chemical attack, 
and so on, where they can isolate patients and so on. I see the 
logic of doing that, but I don't see the logic of staffing it. 
And so then they compromise and they bring other people in from 
different places. Isn't that a model that makes sense for the 
United States?
    Mr. Hoffman. Well, sir, I used to think I was in a 
depressing field studying terrorism until I sat on this panel 
with my distinguished colleagues. And given everything that 
I've heard about the capacity of our trauma centers this 
morning, it's a different situation.
    Mr. Shays. I don't know why it's different. They have to 
deal with a terrorist attack and that's what we're talking 
about right now. I mean, you know, Dr. Lewis, your hospital was 
kind of shut down for a while because they required you to have 
more people present. I mean the requirements changed and so it 
took a while to get back up to speed because of, I think, new 
regulations; is that correct?
    Dr. Lewis. I don't believe our hospital was shut down at 
any time.
    Mr. Shays. I mean--you know what I'm making reference to. 
Do you want to explain it?
    Dr. Lewis. Actually I'm not sure. Are you talking about a 
citation we received in response to long waiting times in the 
emergency department?
    Mr. Shays. Right. I meant only--I'm sorry, I didn't mean 
hospital, I meant in the emergency room. This is not a trick 
question. I mean, the point that I'm trying to make was that 
you had to staff it at certain level and you weren't able do 
that, correct?
    Dr. Lewis. The citation was in response to delays in seeing 
patients with acute medical conditions because of the long 
waiting time in the emergency department.
    Mr. Shays. Right, but----
    Dr. Lewis. Let me try to answer your question. The staffing 
was simply a way of more quickly screen--additional staffing to 
screen those patients.
    The question you asked about how Israel is different, one 
very important way that Israel is different is that because of 
the constant concern over mass casualty incidents they do not 
allow their emergency departments to become overcrowded. And 
one way they accomplish that is that if the emergency 
department becomes overburdened they immediately move those 
patients up into non-normal treatment areas inside the hospital 
so the emergency department does not get gridlocked. And that's 
a reflection of their greater day-to-day awareness of this 
threat.
    Mr. Shays. So but the bottom line is they have a surge 
capacity in space, not necessarily in terms of doctors on duty 
and nurses on duty. And it would strike me that's part of the 
model. It would strike me that part of the model that we have 
to work on is better coordination and how we move patients and 
so on. And we're connecting two things that maybe need to be 
connected. But in the process we're really talking about two 
separate issues. One, do you have the capability to deal with 
your basic emergency needs day in and day out? I mean I'd love 
to know--I'd love to keep going because I'd love to know is 
there a rule of thumb with so much population you need a trauma 
1, a trauma 2 and a trauma 3. Some States may not have it. I 
think West Virginia doesn't. Is there--should every hospital 
have an emergency facility? And I understand that some don't 
now. You know, so those are all legitimate, you know, questions 
that I have no answer to.
    Dr. Lewis. I'd just like to comment that there are standard 
rules regarding for a population of a given size the number of 
inpatient hospital beds. Prior fiscal pressures have forced 
many hospitals to reduce the number of inpatient beds that they 
either maintain physically or maintain staffing for. So fiscal 
pressures over the last 10 or 15 years have resulted in most or 
at least many metropolitan areas having a number of inpatient 
beds far below the originally recommended number.
    Mr. Shays. Right.
    Dr. Lewis. That's the direct cause of the ED overcrowding 
that we've been talking about. So there are rules of thumb and 
we violate them.
    Mr. Shays. But what would be a shame in this process is I 
happen to have opposed the changes in requirements. And we 
voted to try to hold them, but what would be a shame would be 
to not be having the dialog about all the other things that 
don't take money necessarily, but talk about coordination, 
which we're not even getting into.
    Dr. Kaplowitz, my understanding is Virginia does a better 
job of anticipating these kinds of challenges.
    Dr. Kaplowitz. Well, we've had to out of necessity but I 
wanted to make the comment about Israel. I've been there. 
Israel provides health care coverage for everybody in their 
population.
    Mr. Shays. Right.
    Dr. Kaplowitz. Their facilities are not under the same 
financial stresses as ours are here. Not only do they deal with 
suicide bombing, but every single one of their hospitals is a 
hospital when they have a war. It's a different mindset, but 
the fact that everybody has coverage, everybody has a medical 
home, it's made an enormous difference in terms of their 
emergency preparedness and the stresses on their individual 
hospitals.
    Mr. Shays. Let me just end with this comment. First, one 
area where the administration doesn't get enough credit is the 
effort they have gone with community-based health care clinics. 
We've expanded from 10 million to about 16, 17 million people 
covered. That's one area where they do deserve credit. And 
there's areas where they, you know, rightfully should be 
criticized.
    I happen to be on legislation cosponsoring with Jim 
Langevin that says we're going to go to universal coverage 
giving--providing the same health care benefits that Federal 
employees have as a choice to everyone. Where I have my big 
disconnect, and it seems like it's an issue we don't want to 
ever discuss in this country, is how we deal with the 13 to 20 
million people who are here illegally. They are not 
undocumented. Undocumented means that somehow all they have to 
do is be documented. By not being documented they are here 
illegally and they are here illegally. And it doesn't seem to 
come up. And I know for a fact these are folks that don't have 
coverage and intuitively they are going to go wherever they can 
get help and they are going to go to emergency wards. And the 
fact that we like want to dance around this just blows me away.
    That's my comment.
    Dr. Kaplowitz. I did want to make a comment about a public 
health study that has shown that recent immigrants actually 
used less medical care than the rest of Americans. This was 
brought up in the recent series about disparities in care. So 
while I acknowledge that there are significant numbers of 
people who may we here illegally, they actually used less 
medical care than----
    Mr. Shays. And let me tell you why I think that is an 
irrelevant statement. They use less care and when they do use 
it they go where they can get it, which is an emergency ward. 
And therefore the logic is that when they do use it, they are 
using it there.
    Dr. Kaplowitz. They----
    Mr. Shays. Thank you.
    Dr. Kaplowitz. I will add another comment. They are not 
only going to emergency rooms. I'm on the board of a free 
clinic--free clinics--an enormous amount of care, including to 
undocumented persons. So they don't all go to emergency rooms.
    Mr. Shays. They go to community-based health care clinics, 
we know that, and that's one thing the administration has done 
well.
    Chairman Waxman. I want to raise a point that I think this 
issue of illegal immigrants is a red herring.
    Mr. Shays. Why?
    Chairman Waxman. The reason it is a red herring is that 
illegal immigrants are not eligible for Medicaid, they are not 
eligible for Medicare. They may get private insurance, and if 
they do, their insurance company is paying the bills based on 
their payment to the insurance company.
    Mr. Shays. But isn't that----
    Chairman Waxman. I'll take a time and then I'll let you 
take a time.
    Mr. Shays. Thank you. OK, no problem.
    Chairman Waxman. I'm not going to get interrupted.
    So when the people who are illegal come to an emergency 
room, it's usually as a result of a trauma.
    Dr. Lewis and Dr. Meredith, from your experience and 
knowledge of what goes on in emergency rooms, are most of the 
people in emergency rooms for trauma undocumented aliens or are 
they people that don't have insurance coverage when the 
hospital ends up with a bad debt?
    Dr. Meredith. Most of the people in the emergency 
departments are not for trauma, they are for other emergency 
conditions. Trauma is very important to me, but a smaller part 
of what goes on in emergency departments. Most of the patients 
who are trauma patients are not undocumented or illegal, they 
are a spectrum of American civilization. They--everybody gets 
hurt, and they are a complete spectrum of people, a complete 
spectrum of people. We take care of them all. We just stop 
their bleeding, that's all we can do.
    Chairman Waxman. Dr. Lewis.
    Dr. Lewis. I agree with the statement, trauma is a 
nondiscriminate force and it doesn't ask you about your 
legality status before you get hurt.
    Chairman Waxman. Now, let's say Dr. Meredith rightfully 
pointed out that emergency care is not just trauma care. So 
someone gets sick, and they don't know where else to go, and 
they don't have health insurance and they end up in an 
emergency room. Of course that's the most expensive setting for 
people to get health care, which is one of the problems in our 
non-system of health care in the country. People get seen and 
treated in the most expensive way. They could go to a community 
health clinic.
    When you see people who come in because they have no health 
insurance with a minor problem, do they get something 
extraordinary? Do they get a lot of time and attention which 
will encourage them to come back with these smaller problems?
    Dr. Lewis. It is my impression that the--if we're focusing 
specifically on illegal immigrants in Los Angeles County who 
come to my hospital, my impression is that the vast majority 
have attempted to seek care in other facilities first for the 
same problem, except for acute serious illness that couldn't be 
treated anywhere else. And occasionally they find that the 
community health clinics, some of which are federally 
supported, some of which are just free-standing, have been 
unable to take care of their problem because it has either 
gotten worse despite treatment or there has been some 
complication. But it is my impression the vast majority of them 
attempt other avenues for seeking medical care before they come 
to my department.
    Chairman Waxman. Now there are 47 million people without 
health insurance. I've heard an estimate that there may be as 
many as 5 million illegal immigrants. Now 47 to 5, of those 5 
million illegal immigrants, some of them have health insurance, 
isn't that true? They have a job where they are provided health 
insurance, probably most of them don't. And if they need health 
care, they'll go to a clinic. It's the right thing to do for us 
to have put in more money into the community health centers 
programs. But it doesn't deal with the problem that we have. 
Let's say 47 plus 5, 52 million people. Yet if something 
terrible happens to them they have to go to get care 
immediately, they are not going to go to a clinic, they are 
going to go to an emergency room.
    What should the Federal response be for emergency rooms 
that are facing 47 plus 5, 52 million people without insurance? 
Well, the hospitals can't turn them away. Well, what most 
hospitals do if they are private hospitals they will close 
their emergency room. And then if they don't have an emergency 
room, these people have to go to places where there are 
emergency rooms. But if those emergency rooms are already 
overburdened, they are diverted to other emergency rooms. Isn't 
that what happens?
    Dr. Lewis. Yes, that's correct. And although I don't have a 
good suggestion for what the Federal Government should do, what 
I am sure that it should not do is reduce the funding for those 
safety net hospitals prior to having a viable alternative 
solution.
    Chairman Waxman. And certainly they shouldn't do it without 
finding out what the consequences are. That's what's so 
shocking to me about these Medicaid cuts. The Center for 
Medicaid Services and the Department of Health and Human 
Services never even did an evaluation of what the impact would 
be if these kinds of cuts took place. They simply said we'll 
let the States and local governments figure out how to deal 
with this.
    Well, it seems like they are trying to make the States and 
local governments have to deal with everything. And at least 
when it comes to a terrorist attack there certainly ought to be 
a Federal responsibility. I believe there ought to be a Federal 
responsibility for all people in this country who don't have 
access to health care because this is distorting our whole 
health care system. So that's why I say it is a red herring to 
say the problem is all these illegal immigrants. It's not just 
that. That's an over simplification and a diversion from the 
much more serious problem that this administration for 7 years 
has not given us any ideas except maybe give a tax break--which 
is inadequate to even buy health insurance--to a lot of people 
who couldn't then afford to buy health insurance even with that 
tax break.
    Mr. Shays, I will recognize you for the last 5 minutes, and 
then we will continue.
    Mr. Shays. Thank you. And I would be happy to have you 
interrupt me if you'd like--I mean to ask a question.
    Chairman Waxman. No, I will not interrupt you.
    Mr. Shays. What I'm looking for is meaningful dialog. I 
don't have any dog in this race. I mean I'm just trying to 
understand something. And I get confused because in the 
Medicare Modernization Act funds were included for hospitals in 
States with high numbers of illegal immigrants because these 
hospitals complained about the problem of illegal immigrants 
who were in fact stressing their hospitals. So you know----
    Chairman Waxman. In the Medicare----
    Mr. Shays. In the Modernization Act.
    Chairman Waxman. Do any of you know whether that's 
accurate, because I don't believe that's accurate.
    Mr. Shays. The question I have is first off, I do not 
believe that this is the cause of the problem. I think it is a 
part of the problem. It is news to me that if we have anywhere 
from 13 to 20 million people there illegally, that only 5 
million don't have health coverage. That's news to me. And we 
have 13--we have 12 million people who are here legally who are 
documented, but not citizens. We have a range between 13 and 20 
million who are not here legally. They are here illegally and I 
make an assumption, maybe incorrectly, that a majority don't 
have health care. Because it would really be surprising to 
think that 85 percent of Americans have health care, but you 
know undocumented workers have that same average or even half 
that.
    I happen to believe that we need to have universal 
coverage. All I want is an answer from folks who are there that 
my understanding is you got two options for someone without 
health care. You go to a community-based health care clinic or 
you go to the emergency ward. I mean, I don't know if there are 
other options. And so it strikes me that we are stressing the 
emergency rooms. And they are hugely costly. I went where I had 
three stitches. The hospital got into a dispute with the 
insurer and sent me a bill for 1,300 bucks for three stupid 
stitches. Had I gone somewhere else it wouldn't have been 
obviously that expensive.
    And so I'm just trying to make the point to you, Henry, 
that I think that we spend a fortune on health care, far more 
than other countries, and that we keep saying well, we just 
have to spend more money. We're at 18 percent of our gross 
domestic product and I don't think we can actually find a lot 
more money. And so what I struggle with is are there things 
that don't involve money where we can deal with the surge 
capacity.
    And Dr. Hoffman, you didn't seem to want to jump in on some 
of this, like all of a sudden this was outside your expertise. 
But it strikes me that we can learn from what other places do. 
And they don't put a lot more money in, they have extra bed 
space with no doctors.
    What I was confused by Dr. Lewis in the dialog with Mr. 
Issa, you said, well, we have 45 beds, but they are unmanned. 
Is that a bad thing that they are unmanned? Is it good that you 
have this space in case you have a need for surge capacity?
    And another question I ask all of you, aren't there times 
when we're going to have to break the rules of so many nurses 
and so many doctors when you have an emergency. Then it seems 
to me you throw it out the window, you may have doctors working 
overtime, nurses working overtime and some rules being broken 
during a surge--a needed surge.
    Dr. Lewis. First of all, I agree with you 100 percent that 
there are issues of coordination and response to major, very 
infrequent events that could be used without substantial 
funding to improve our ability to respond. I think there's no 
question that is correct.
    The issue regarding the unstaffed beds in the hospital has 
something to do with the funding source. We're a publicly 
funded institution. The vast majority of our funds either come 
from or come through Los Angeles County. These are public 
funds. Such--the similar kind or type that you're responsible 
for administering.
    Our hospital administrators cannot make a decision to go 
over their budget and staff those beds. It is not their 
authority. It is a public process that's overseen by the board 
of supervisors, who I understand were here recently. So it's--I 
got the impression or the implication was made that a hospital 
administrator was not staffing them to avoid losing money. 
That's not the case. It is just not an option.
    Second, with respect to the money that is already being 
spent in preparedness, I think a number of us have tried to 
point out the disconnect between the most likely unusual mass 
casualty incidents and the types of incidents that seem to have 
been focused on by the existing hospital preparedness program. 
That program used to have the term, I believe, bioterrorism in 
its name. They took out the bioterrorism part of the name, but 
still maintained most of the focus on supplies and equipment 
that are related to relatively unlikely events.
    So one thing that we can do without asking for additional 
money is to focus on the most likely events, and I'm not 
talking about the everyday surge events, the most likely true 
mass casualty incidents.
    And then last, I'd like to simply point out that in Los 
Angeles County the public funds that support our institution, 
part of them come from tax revenues. Those tax revenues are 
driven by the economic activity in that area. I'm in no 
position to speculate regarding what the effect of removing 
those illegal workers would be from our economy, but I'm not 
actually sure that the net effect on the funding of our health 
care system would be beneficial. I actually think it would 
probably be detrimental. Clearly a health economist would have 
to look at that, hopefully one not driven by partisan concerns.
    Chairman Waxman. Thank you, Mr. Shays.
    Ms. Watson, did you----
    Ms. Watson. I sure do. And I just want to say, I don't 
think it's really clear to some Members that if you are an 
illegal immigrant you are not eligible, you're not eligible for 
Medicare and Medicaid.
    As Dr. Lewis astutely notes, there are some Federal 
policymakers who still do not see the relationship between 
maintaining robust emergency and trauma care capacity and a 
successful homeland defense strategy. Hello.
    I would like to ask Dr. Hoffman and Dr. Kaplowitz, both of 
whom know a great deal about emergency preparedness and 
response, to help us connect the dots. While there is much 
dispute about whether the Medicaid regulations are justified, 
there's no dispute that they will reduce the amount of Federal 
Medicaid revenues to Level 1 trauma centers and other hospitals 
throughout the country.
    There is also no dispute that the loss of Federal funds 
will vary from hospital to hospital and that for some Level 1 
trauma centers these losses will be substantial, potentially 
forcing reductions in services and degrading their emergency 
response capacity.
    So Mr. Hoffman, does it advance the goal of Homeland 
Security for the Federal Government to be withdrawing funding 
from Level 1 trauma centers whether through the Medicaid 
program or some other funding source? And is it reasonable for 
the Federal Government to assume that States or localities will 
make up these losses to the hospitals or that market forces 
will make up for the shortfall?
    Mr. Hoffman--Dr. Hoffman, excuse me.
    Mr. Hoffman. Well, I think certainly not in those cities, 
for instance, that the Department of Homeland Security have 
identified at least the most likely threat of a terrorist 
attack.
    Ms. Watson. Excuse me, when you say most likely those 
areas, how do you define the areas that are most likely the 
target of terrorist attacks?
    Mr. Hoffman. Well, the Department of Homeland Security and 
also private risk management firms have assessed on a variety 
of indicators in terms of terrorist interests, in terms of the 
vulnerability facilities in those cities, which cities in the 
United States would be more likely than others perhaps.
    Ms. Watson. Would you consider the West Coast or Los 
Angeles area?
    Mr. Hoffman. Certainly Los Angeles and southern California. 
San Francisco probably falls into that category as well.
    Ms. Watson. OK.
    Mr. Hoffman. I mean given the pattern of terrorists, and 
certainly since 9/11 there is a very high concentration of 
these activities, fortunately not yet in the United States but 
overseas in major cities that are at least if not the capital 
of their nations, then at least are business centers or 
transportation hubs.
    Ms. Watson. I just wanted to hear your response. Thank you.
    Mr. Hoffman. But if I could just finish for a second?
    Ms. Watson. Yes.
    Mr. Hoffman. I would go back to what Dr. Kaplowitz said 
about Israel, which I think is absolutely correct, is that 
their energy services are not as over stressed in terms of 
their personnel as it appears in the United States. London by 
contrast though I think is very similar to the United States in 
that respect with emergency rooms that have--that already are 
burdened by a health system with lots of people in urban areas 
coming into them. You can see the difference in the response of 
the London hospitals to the July 7, 2005 attacks. There I think 
the coordination was not as good, even though they had 
extensive drills and extensive training, the planning--the 
system broke down in essence because there were insufficient 
personnel on that because the systems themselves were stressed.
    Ms. Watson. Dr. Kaplowitz, as a State official you've been 
involved in a great deal of planning for emergency preparedness 
and response throughout Virginia. Does it help your planning 
efforts when the Federal Government withdraws funding from 
Level 1 trauma centers, whether through the Medicaid program or 
some other funding sources?
    Dr. Kaplowitz. Not at all. I need those facilities to 
survive. And I know what kind of stress they are under on a 
daily basis. You remove Medicaid funding, it could be 
disastrous. We have seen any number of hospitals need to close 
their doors. The last thing I need is for any more hospitals to 
not be able to survive financially. And the stressors for 
trauma centers are enormous. The additional cost it takes to 
keep your trauma center open is significant. And these 
facilities are functioning with very small margins. So I need 
them to be able to function and stay open, and I need them to 
maintain their expertise in order to appropriately respond to 
emergencies.
    I've been at the Health Department almost 6 years. In my 
prior life I was at the VCU health system for 20 years, 
including working in hospital administration, and I know what 
kind of stress that facility is under on a day-to-day basis. 
You take away significant Medicaid funding, it's going to be 
disastrous. And the sameis true of all trauma centers in the 
Commonwealth.
    Ms. Watson. Thank you for that.
    Chairman Waxman. Thank you, Ms. Watson. And I want to thank 
this panel. I think you've given us a lot of good information, 
some of it quite startling, and I think we have to pay a lot of 
attention to it and ask the people in charge, the Secretary of 
Health and Human Services and the Secretary of Homeland 
Security, both of whom are going to be here Wednesday, how to 
respond to some of these concerns what the Federal Government 
is doing and at least find out whether we're doing harm with 
some of the proposals that are being pushed.
    That concludes our hearing today--oh, yes, there was one 
item, Mr. Issa requested unanimous consent to put in documents. 
I have no objection. Does anybody?
    Ms. Watson. No objection.
    Chairman Waxman. Without objection, those documents will be 
part of the record. We stand adjourned.
    [The information referred to follows:]

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        THE LACK OF HOSPITAL EMERGENCY SURGE CAPACITY: WILL THE 
      ADMINISTRATION'S MEDICAID REGULATIONS MAKE IT WORSE? DAY TWO

                         WEDNESDAY, MAY 7, 2008

                          House of Representatives,
              Committee on Oversight and Government Reform,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 9:31 a.m., in 
room 2154, Rayburn House Office Building, Hon. Henry A. Waxman 
(chairman of the committee) presiding.
    Present: Representatives Waxman, Cummings, Tierney, Norton, 
McCollum, Van Hollen, Murphy, Sarbanes, Davis of Virginia, 
Shays, Issa and Sali.
    Staff present: Phil Barnett, staff director and chief 
counsel; Karen Nelson, health policy director; Karen Lightfoot, 
communications director and senior policy advisor; David 
Rapallo, chief investigative counsel; Andy Schneider, chief 
health counsel; John Williams, deputy chief investigative 
counsel; Sarah Despres, senior health counsel; Steve Cha, 
professional staff member; Earley Green, chief clerk; Zhongrui 
``JR'' Deng, chief information officer; Leneal Scott, 
information systems manager; Kerry Gutknecht, William Ragland, 
Miriam Edelman, and Jennifer Owens, staff assistants; Sheila 
Klein, office manager/general assistant to the staff director; 
Larry Halloran, minority staff director; Jennifer Safavian, 
minority chief counsel for oversight and investigations; Keith 
Ausbrook, minority general counsel; Christopher Bright, Jill 
Schmaltz, Benjamin Chance, and Todd Greenwood, minority 
professional staff members; Patrick Lyden, minority 
parliamentarian and member services coordinator; and Ali Ahmad, 
minority deputy press secretary.
    Chairman Waxman. The meeting will please come to order. 
Today we are holding the second of 2 days of hearings on the 
impact of the administration's Medicaid regulations on the 
ability of our Nation's emergency rooms to respond to a sudden 
influx of casualties from a terrorist attack.
    On Monday we heard from the leading experts that the 
emergency rooms in our Nation's premier trauma centers have 
little or no surge capacity. We learned from them that many 
Level I trauma centers do not have the capacity to respond to a 
terrorist bombing like the one that happened in Madrid in 2004. 
And we learned that the administration's new Medicaid 
regulations are expected to make these problems worse by 
cutting off crucial funding.
    The hearing left us with a number of important questions, 
which we hope to answer this morning. Why would the Department 
of Health and Human Services, knowing that the Nation's 
emergency care system is already stretched to the breaking 
point, withdraw billions of Federal dollars from the hospitals 
that provide the most comprehensive emergency care to the most 
seriously injured? Why would the Department of Health and Human 
Services take this drastic step without first considering the 
impact of its actions on emergency preparedness or consulting 
with the agency with lead responsibility for homeland security? 
Why would the Department of Homeland Security, which is the 
Federal agency with lead responsibility for protecting the 
Nation from terrorist attacks, stand by while local emergency 
surge capacity is compromised?
    The impact of the Medicaid regulations on our health care 
safety net is not a partisan issue. Last month Republicans in 
the House joined with Democrats in passing bipartisan 
legislation that would postpone the regulations and give 
Secretary Leavitt and Secretary Chertoff an opportunity to 
reevaluate their implications for homeland security.
    The issue we are considering today is one that concerns all 
Americans: how to ensure that we have a robust response 
capacity in our emergency rooms. If the unthinkable happens, 
and we have learned that the unthinkable can happen, lives will 
be lost unless emergency care is immediately available. If a 
major city experiences a terrorist bombing like the one that 
occurred in Madrid, there will be a golden hour, an hour in 
which the fate of those who are injured will be determined, 
whether the most severely injured survive or die. The Federal 
Government's job is to do everything possible to ensure that 
emergency care resources are ready during that golden hour.
    Certainly our government should not be taking actions that 
undermine the prospect of an effective emergency response. That 
is why we are having this hearing today, and that is why I look 
forward to the testimony of the two men in charge, Secretary 
Chertoff and Secretary Leavitt.
    [The prepared statement of Chairman Henry A. Waxman 
follows:]

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    Chairman Waxman. But before we go on, I want to recognize 
Mr. Davis for an opening statement.
    Mr. Davis of Virginia. Well, thank you, Mr. Chairman. As 
you said, we are here today to discuss two issues, Medicaid 
reimbursement regulations and the hospital surge capacity in 
response to predictable, some say inevitable, mass-casualty 
events. And we are fortunate to have two very distinguished 
witnesses to inform our discussion. Welcome Secretary Leavitt 
and Secretary Chertoff. We appreciate your taking your valuable 
time to be with us today.
    As we learned from Monday's testimony on these same 
subjects, the nexus between Medicaid payments to hospitals and 
emergency preparedness may seem intuitive, but it is not by any 
means proven. Extrapolating directly from daily emergency 
department utilization rates to catastrophic surge capacity 
overlooks complex and interrelated factors that differentiate 
single-facility financial management from the broader resources 
needed to mount a coordinated regional disaster response. But 
extrapolate the committee did in releasing a 1-day snapshot of 
hospital emergency room occupancy in seven major cities and 
concluding it painted a complete picture of surge capacity.
    Consulting the issues of Medicaid reimbursement and 
terrorism preparedness simultaneously oversimplifies and 
obscures both issues. I happen to agree with Chairman Waxman, 
we ought to know more about the impact of the administration's 
proposed regulation changes before exacting further cost 
savings from an already stressed health care system. But 
wrapping that issue in the mantle of terrorism creates the 
false impression solving the problem of emergency room capacity 
on Tuesday means we are ready for doomsday. It does not. As one 
peer-reviewed study put it, surge capacity planning involves 
ensuring the ability to rapidly mobilize resources in reaction 
to such a sudden unexpected increase in demand regardless of 
baseline conditions.
    It is just too simple and fiscally untenable to say there 
can never be cost savings in Medicaid as long as we are not 
ready for a Madrid-style attack. Both Medicaid efficiencies and 
preparedness need to be pursued, not one pitted against the 
other. So I hope we can move beyond limited snapshots and talk 
about the dynamic range of factors in addition to baseline 
facility funding that make up real surge capacity organization, 
leadership, standards of care, medical education and training, 
interoperable communications, transportation coordination and 
information technologies.
    Finally, we appreciate the fact that our witnesses made a 
tough choice to be here today. As we speak, the Federal 
Government is conducting a national continuity of operations 
exercise, testing many of the response elements needed to treat 
a surge of trauma patients. I hope the exercise goes well in 
their absence, and trust the committee's approach to these 
issues will continue to be constructive and supportive of 
executive branch efforts to prepare the Nation for catastrophic 
events. Thank you.
    Chairman Waxman. Thank you very much, Mr. Davis.
    [The prepared statement of Hon. Tom Davis follows:]

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    Chairman Waxman. Because of time constraints, we will leave 
the record open for all Members to insert an opening statement 
in the record.
    But we will go right to our very distinguished witnesses, 
and we are privileged to have both capable Secretaries with us 
today with distinguished careers in public service.
    Secretary Michael Chertoff served as the Secretary of 
Homeland Security since February 2005. That capacity is a 
challenge. He has a challenging and critical responsibility to 
lead the Nation's efforts to prepared for, protect against, 
respond to and recover from terrorist attacks, major disasters 
and other catastrophic emergencies, whether man-made or natural 
disasters, that affect our homeland. And before taking the helm 
at the Department of Homeland Security, Secretary Chertoff 
served as a judge on the Third Circuit Court of Appeals. Prior 
to that he served as Assistant Attorney General of the Criminal 
Division at the Department of Justice.
    Secretary Michael Leavitt has been the Secretary of the 
Department of Health and Human Services since January 2005. As 
Secretary of HHS, he is responsible for managing a daunting 
array of medical, public health and human services programs. 
HHS is the lead Federal agency for public health and medical 
preparedness and response. And before coming to HHS, Secretary 
Leavitt was the Administrator of the Environmental Protection 
Agency. He also served as Governor of Utah for three terms, and 
during his 11 years as Governor, Utah was recognized six times 
as one of America's best-managed States. We are pleased to have 
both of you here with us.
    I don't know which one of you wants to go first. Secretary 
Leavitt--both of your prepared statements will be in the record 
in full. We would like to ask you to make your oral 
presentation to us now.

STATEMENT OF MICHAEL O. LEAVITT, SECRETARY OF HEALTH AND HUMAN 
                            SERVICES

    Secretary Leavitt. Good morning, Mr. Chairman. And thank 
you very much, Ranking Member Davis and other members of the 
committee. I am very pleased to discuss HHS leadership role in 
the public health and medical emergency preparedness efforts, 
as well as HHS and CMS efforts to ensure that Medicaid pays 
appropriately for services that are delivered to Medicaid 
recipients.
    As you know, local, State and Federal agencies have a 
shared responsibility for ensuring that the Nation is prepared 
for emergencies. In that context permit me to briefly discuss a 
few of the emergency preparedness efforts that are currently 
being led by HHS.
    On October 18, 2007, President Bush signed the Homeland 
Security Presidential Directive No. 21 [HSPD-21]. It 
established a new national strategy for public health and 
medical preparedness. HSPD-21 mandates the development of an 
implementation plan. HHS chairs the interagency writing team 
that drafted the implementation plan that is currently in the 
process of being finalized.
    As part of the implementation plan, HHS is implementing an 
Emergency Care Coordinating Center. This new center will serve 
as a coordinating focal point for emergency care as an 
enterprise. The ECC, as we have come to know it, charter is 
being finalized, and we anticipate to have the center up and 
running by the end of this year.
    The National Response Framework Emergency Support Function 
[ESF] 8, titled the Public Health and Medical Services 
Function, provides a mechanism for coordinating Federal 
assistance to State, tribal and other local resources in 
response to a medical disaster.
    The Secretary of Health and Human Services leads all of the 
Federal public health and medical response to public health 
agencies. The Secretary of HHS also coordinates through his 
Assistant Secretary or ASPR all of the ESF 8 preparedness, 
response and recovery actions. The National Disaster Medical 
System [NDMS], transferred from the Department of Homeland 
Security to HHS, remains the tip of the spear, if you will, as 
the Federal disaster health care response capacity.
    Over the past 5 years, the Hospital Preparedness Program 
has provided more than $2.6 billion to fund the development of 
medical surge capacity at the State and local level. As part of 
our pandemic planning, we have asked grantees to report 
participating hospitals' ability to track beds electronically, 
to report to the grantee's emergency operations center within 
60 minutes of a request.
    From 2002 to 2007, the Public Health Emergency Preparedness 
Program has provided $5.6 billion to State, local, tribal and 
territorial public health departments. This program has greatly 
increased the preparedness capabilities of the public health 
departments.
    Now turning briefly to Medicaid, it is important to 
remember that Medicaid is fundamentally a Federal-State 
commitment to provide health care for Medicaid beneficiaries. 
First and foremost, our responsibility is to assure that these 
low-income children, pregnant women and people with 
disabilities are able to receive high-quality and appropriate 
care when they need it.
    The package of recent Medicaid regulatory activity will 
help enable, or to ensure rather, that Medicaid is paying 
providers appropriately for services delivered to Medicaid 
recipients, and that those services are effective, and that 
taxpayers are receiving the full value of the dollars that are 
spent through Medicaid.
    GAO and the Office of Inspector General at HHS have 
provided policymakers with numerous reports on various areas in 
which States inappropriately engage in activities that maximize 
Federal revenues. These rules address these types of abuses 
head on. It addresses them by ensuring that the Federal 
Medicaid dollars are matching actual State payments for actual 
Medicaid expenses to actual Medicaid beneficiaries. Medicaid is 
already an open-ended Federal commitment for Medicaid services 
for Medicaid recipients. It should not become a limitless 
account for State and local programs and agencies to draw 
Federal funds for non-Medicaid purposes.
    In conclusion, as I have mentioned earlier, HHS is working 
diligently to improve our Nation's emergency preparedness and 
our medical surge capacity, and we have made extensive funding 
available to hospitals through the States specifically to this 
end.
    Medicaid, however, is fundamentally a partnership that 
relies on both States and the Federal Government to contribute 
their share of the cost of the program. Allowing for the 
continuation of abusive practices that shift costs to the 
Federal Government is not an appropriate way to ensure our 
Nation's preparedness. We are committed through our emergency 
preparedness efforts to continue to make progress and to make 
funding available to States while acting through these Medicaid 
rules to provide greater stability in the program and equity to 
the States. And I want to thank you for the opportunity of 
being here to testify.
    Chairman Waxman. Thank you, Secretary Leavitt.
    [The prepared statement of Secretary Leavitt follows:]

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    Chairman Waxman. Secretary Chertoff.

 STATEMENT OF MICHAEL CHERTOFF, SECRETARY OF HOMELAND SECURITY

    Secretary Chertoff. Thank you, Mr. Chairman. Good morning, 
Ranking Member Davis and other members of the committee.
    Let me just take a few moments now since my full statement 
will be in the record to put into perspective what the role of 
the Department of Homeland Security is with respect to the 
issue of preparedness and response, one dimension of which, but 
only one dimension of which, is the issue of mass care in the 
event of some kind of a terrorist attack or natural disaster. 
But I also underscore the fact that the planning and execution 
of a response to an attack, particularly with respect to the 
issue of mass care, would implicate not only HHS, but would 
also require the participation of the Department of Defense and 
Department of Veterans Affairs. They have a major role to play 
in furnishing the resources and capabilities necessary to 
respond to a medical emergency, and their capabilities are 
built into our plan. So it is not merely a matter of HHS.
    Basically what I would like do is describe the role that we 
play in any kind of a response, and, therefore, what role we 
play in planning in the lead-up to the possibility of a 
response. As you know, under the National Response Framework 
and the National Incident Management System, the Department of 
Homeland Security plays the role of incident coordinator, 
incident manager. That does not mean that we are exercising 
command and control over other departments and agencies. That 
would be prohibited as a matter of law.
    What we do do is bring to the table the agencies that will 
play a role. There is a lead agency designated for particular 
functions; in the case of mass terrorists, the Department of 
Health and Human Services. That is a designation that is both 
prescribed by statute as well as by HSPD 5 and HSPD-21. Our 
role then would be to coordinate and deconflict the various 
capabilities that we bring to the table and the roles and 
responsibilities of the lead agency and other agencies, so 
that, for example, in the case of an attack, let's say a 
conventional attack, we would obviously have to coordinate the 
law enforcement response, although the lead agency there would 
be the Department of Justice. There might well be a security 
response, in which case we would be coordinating with the 
Department of Defense and the National Guard. And to the extent 
there was a mass casualty response, the mission assignment for 
carrying that out would be to HHS, but there would be support 
provided by the Department of Veterans Affairs and the 
Department of Defense. This is all done under the rubric of 
what we call Emergency Support Function 8, and the actual 
undertaking would be coordinated through the National Response 
Coordination Center.
    As part of the preparation for this, we engage in a variety 
of planning exercises. And with respect to the issue of mass 
care, again we look to the Department of Health and Human 
Services to take the lead with respect to identifying what the 
gaps are with respect to potential surge capability, what the 
available resources are, and what are the most efficacious ways 
to provide those resources. That is done with the understanding 
that the initial response obligation lies upon State and local 
public health officials. Therefore, they must participate in 
the planning, and it is their responsibility to make sure that 
they are planning in a way that is synchronized with us.
    We also recognize, however, that these capabilities would 
likely be overwhelmed in 24 hours, or maybe 48 hours. That is 
why we have capabilities such as the National Disaster Medical 
System, which is run by HHS. We would look to the Department of 
Defense to provide mobile field hospitals and other kinds of 
medical capabilities, which we would move into the arena as 
quickly as possible. The National Guard would obviously play a 
major role. And, again, if there were some particular issue 
like a chemical attack or a dirty bomb attack, there would be 
specialized capabilities by the military that would be called 
into play.
    So that is the general role that we play in coordinating 
these issues. We have engaged in planning, strategic planning, 
on a number of scenarios, including some with medical 
dimensions, again looking to HHS as the principal lead in 
identifying what the requirements are, identifying where the 
gaps are, and formulating a way in which those gaps can be 
plugged.
    Thank you, Mr. Chairman.
    Chairman Waxman. Thank you very much.
    [The prepared statement of Secretary Chertoff follows:]

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    Chairman Waxman. Without objection, we are going to begin 
questioning with 10-minute rounds, first controlled by the 
Chair and second controlled by Mr. Davis. After that we will go 
back to the 5-minute rule.
    I am going to start off the questions myself.
    Secretary Leavitt and Chertoff, we are here to answer the 
very simple question, if we had a terrorist attack like what 
happened in Madrid, with conventional bombs or suicide bombers, 
which most terrorist experts say is most likely, not the 
unthinkable weapons of mass destruction, but if the 
unthinkable, unlikely terrorist attack using conventional 
weapons occurred, would we be prepared to deal with it?
    Now, many experts have told us that if we had something 
like an attack on a commuter train where, as in Madrid, 177 
people were killed and more than 2000 were injured, we wouldn't 
have the surge capacity in some of our major cities to deal 
with those people in the Level I trauma centers or even in the 
emergency rooms.
    Secretary Chertoff, do you think we have the capacity to 
deal with such an attack?
    Secretary Chertoff. I do, Mr. Chairman. Now, I want to note 
that HHS is currently engaged in a systematic survey of 
capacities and plans across the country, so there is going to 
be a definitive answer to this. And there is no doubt some 
communities are better prepared than others. But I don't have 
to speculate about it.
    I remember we had a bridge collapse in Minneapolis some 
months ago. That was exactly the kind of event that you are 
talking about. It was not a terrorist event, but it was one 
which certainly posed challenges to casualties. My 
understanding is that in Minneapolis things worked very well.
    Chairman Waxman. Thirteen people went to the emergency room 
under those circumstances. We could have hundreds, if not 
thousands, of people rushed into emergency rooms.
    Secretary Chertoff. We have had air crashes, we have had 
other disasters. I can't give you a definitive statement with 
respect to a particular city. What I can tell you is I am not 
sure that the day-to-day capacity rates of emergency rooms is a 
prediction of the capability of the emergency system to deal 
with a disaster.
    Chairman Waxman. Have you delegated that to HHS?
    Secretary Chertoff. HHS has a principal responsibility, to 
my understanding.
    Chairman Waxman. Well, let me read to you what your Chief 
Medical Officer Jeff Runge told the House Appropriations 
Committee last month. He said, ``I don't think anybody who has 
looked would be under the mistaken notion that we are 
adequately prepared for a hospital surge. We have squeezed all 
the capacity out of the hospitals' budgets, and it's just not 
there.''
    He went on to say, ``We frankly don't have a lot of 
solutions for it. Surge capacity does just not exist in the 
world of hospitals.''
    Mr. Runge did say the Federal assets could be brought to 
the scene of a bombing, as did you earlier, but that could take 
some period of time, maybe a day or more, which may be too long 
for many critically injured victims.
    So your own expert does not think we are prepared. Why, do 
you disagree with Dr. Runge's assessment?
    Secretary Chertoff. I wasn't here for the testimony. I 
think it depends on the number of people. If there are--I can 
certainly imagine an attack of a dimension that would overwhelm 
local resources. That is the very premise of what our position 
is with respect to planning. It is the recognition that the 
Federal Government would have to step in and surge. And 
obviously since we are doing a gap analysis, I am going to be 
the first person to tell you there are undoubtedly gaps that 
need to be plugged, some of which are planning, and some of 
which are capability gaps.
    What I can't tell you is that this is simply a matter of 
emergency rooms. I think it is a much more complicated issue 
than that. I will also obviously acknowledge I am awaiting to 
get more precision in the results of the HHS study with respect 
to the country as a whole.
    Chairman Waxman. Well, I don't doubt it is more complicated 
than one factor or another, but what I fear, and what the 
experts told us a couple days ago, is if we go ahead with these 
Medicaid cuts, withdrawing billions of dollars from hospitals 
that have Trauma I centers and emergency rooms, we will be 
making the problem worse. We will make it less sure that we can 
even meet the response that we found so inadequate in our 
survey on March 25th. At that time the staff called Los 
Angeles, and three of the five Level I hospitals that were so 
overcrowded, they simply shut their doors. There wasn't even a 
terrorist attack. They shut their doors and said divert these 
people somewhere else. And Washington, DC, both Level I trauma 
centers surveyed, they are over capacity and treating patients 
in hallways and waiting rooms.
    So if in the middle of this inadequate capability of our 
emergency rooms to deal with ordinary problems we had a 
terrorist attack, I just think that if we go ahead with the 
billions of cuts in Medicaid funds for those institutions, we 
are making the problem worse. The first thing at the Federal 
level is at least not do any harm. I think a lot of people can 
ask how is it possible that 6 years since 9/11, nearly 3 years 
after Hurricane Katrina, we have spent billions of taxpayer 
dollars on homeland security, and yet our emergency systems are 
not in place?
    I don't doubt that you have very good intentions and a lot 
of helpful initiatives, but the problem is that the positive 
effect of these programs, which involve grants of millions of 
dollars, are going to be overwhelmed when we pull out billions 
of dollars in some of these Medicaid cuts.
    We were told Monday that the Medicaid regulations will 
cripple hospital emergency rooms. The head of Virginia's 
emergency response program said you take away significant 
Medicaid funding, it is going to be disastrous. An expert from 
UCLA said the regulations would cripple emergency care in Los 
Angeles.
    Secretary Leavitt, do you think these experts are wrong?
    Secretary Leavitt. Mr. Chairman, I think we are dealing 
with two fundamentally different assumptions. They are 
fundamentally different assumptions in two areas. The first is 
the way surge capacity works, and that we would have to rely on 
hospitals as the bed for surge capacity. The second is that the 
mission of Medicaid is the assurance of emergency preparedness.
    Let me deal with the first one, surge capacity and the way 
it works.
    Chairman Waxman. I am asking about the Medicaid, the 
Medicaid cuts by these new regulations. I know we contacted you 
and your Department, and we asked for every document that you 
might have that would indicate that you--if you did an analysis 
to find out what the impact would be of these Medicaid 
regulations. And I think we might have even sent the same 
request to the Department of Homeland Security. And we found 
that there was not a single analysis of the effects of the 
Medicaid regulations on our Nation's emergency rooms. If that 
is the case--maybe we haven't received it, but if that is the 
case, no analysis has been done. I just think that is 
irresponsible.
    Secretary Leavitt. Mr. Chairman, we have exercises on a 
regular basis, and the people from CMS sit at the same table as 
those from our Assistant Secretary for Preparedness and 
Response. Medicaid's mission, however, is not emergency 
preparedness; it is to provide health care to people, not to 
support institutions. Now, at HHS we have a very important 
Assistant Secretary for Preparedness and Response who is tasked 
with that responsibility. We have made substantial investments 
in developing surge capacity.
    Chairman Waxman. Did he do an analysis of what the impact 
would be of the Medicaid regulations that withdraw money from 
these institutions?
    Secretary Leavitt. He manages emergency response, not 
Medicaid. The analysis on Medicaid was based on the fact that 
the funds were being drawn for purposes that we believe were 
inappropriate under the mission of Medicaid, which we believe 
to be helping people, not supporting institutions.
    Chairman Waxman. Well, they help people by supporting 
institutions. Our public hospitals are absolutely dependent on 
the Medicaid dollars. They have so many people that come into 
emergency rooms that have no insurance, and the hospitals then 
have to shift the cost. And then if they find that Medicaid is 
not going to pay them for graduate medical education or other 
functions that they serve, they just have to give up the 
expensive things like Level I trauma centers. That is what they 
are telling us. But it looks like they never told you because 
they were never asked the question of what the impact would be 
with these Medicaid cuts.
    Secretary Leavitt. Mr. Chairman, it probably won't surprise 
you that I hear similar expression from those who run schools, 
who say, we need to have more money for our schools, and if we 
can find a way to get Medicaid money to support our school 
effort, it will help our schools. I hear a similar thing from 
those who run child welfare programs; if we could just get some 
Medicaid money, it would help us, and they stretch it over to 
health care. Medicaid was not intended to be our emergency 
response mechanism.
    Chairman Waxman. It wasn't intended, but, in fact, it is.
    Secretary Chertoff, you are head of the Homeland Security. 
You have designated this issue of health care functioning to 
HHS, and yet they are saying that they don't know what the 
impact is going to be of these cuts.
    Congress always holds hearings after the fact. After 
Hurricane Katrina and that disaster, we held hearings, and we 
asked, how could this happen? This is a hearing to find out if 
we are prepared. I don't want it on my conscience years after a 
terrorist attack, God forbid, that we realize that we didn't do 
what was necessary because the bureaucracies weren't 
functioning the way they should, the planning wasn't taking 
place, that there was money being withdrawn so that the whole 
system, which is all very fragile in this country for health 
care, wasn't able to function when it came to emergency care or 
preparedness for a surge of victims of a terrorist attack. I 
don't want it on my conscience.
    Do you feel that you can tell us today that your conscience 
would say that we are doing all that we need to do, Secretary 
Leavitt and Secretary Chertoff?
    Secretary Leavitt. Mr. Chairman, I share with you the worry 
about surge capacity. It is a responsibility that I have and we 
have at HHS. I also worry about the long-term sustainability of 
Medicaid. Medicaid was not designed nor intended to be the 
source of money that we use to design an effective surge 
capacity strategy in this country. We do have a means by which 
that should be done. If Congress in its wisdom believes that 
more money is needed for more surge capacity, we need to use 
the intended vehicle. We need to apply it to a logical, 
thoughtful strategy. That logical and thoughtful strategy will 
not include emergency rooms being the only place where surge 
capacity takes place. There is not an emergency room in America 
that you can't build a scenario for that will blow the doors 
off in a very short period of time.
    Chairman Waxman. So you feel good about the situation?
    Secretary Leavitt. No, that is not what I said at all, Mr. 
Chairman. I said I don't feel good about the situation, but I 
don't believe Medicaid is the way to solve it.
    Chairman Waxman. And you think we ought to give other 
money, but we haven't been asked to give other money for this 
purpose.
    Secretary Chertoff, how do you feel?
    Secretary Chertoff. I actually agree with Secretary Leavitt 
on this. I think that I am the last person to tell you I think 
we are done. I think that we are--and I have been involved in 
more specifically looking at the issue of emergency response in 
the Gulf States. But more generally I think we need to be 
identifying gaps based on planning done at a Federal, State and 
local level. And then if we need to plug the gaps with money, 
the money ought to be targeted to plug the gaps.
    Where I am seeing a bit of a disconnect, I have no reason 
to believe that giving more Medicaid money to hospitals is 
going to result in that money being spent specifically on those 
items which would be required to deal with a surge situation. 
Nor is it obvious to me that the only solution in this surge 
situation is the emergency rooms.
    So the question to me would be do they need to have 
additional beds in storage? Do they need to have additional 
ventilators or medication or things of that sort? And if, in 
fact, there is a gap, that ought to be directly funded, but 
with the understanding that money is going to be spent on those 
issues. I have no reason to believe that Medicaid funding in a 
hospital is necessarily going to be dedicated to emergency 
response as opposed to something else.
    Chairman Waxman. A lot of it is being dedicated to this 
now, and that money is going to be withdrawn, and it is a 
sizable amount of money.
    I have taken up 13 minutes, and I am going to give 13 
minutes to Mr. Davis.
    Mr. Davis of Virginia. Thank you, Mr. Chairman.
    Secretary Leavitt, let me start with you. Thanks for being 
here. Regardless of one's views on the regulation, I am 
concerned about using Medicaid reimbursement to support 
emergency medical preparedness because it is an imperfect 
financial tool. In my experience, hospitals use additional 
revenues created through reimbursement policy. They can be 
reinvested in ways that may not improve emergency capacity, as 
Secretary Chertoff just noted. For example, hospitals may more 
regularly reinvest in expanding capacity for profitable 
services, orthopedics for example.
    Do you think that additional Medicaid reimbursement 
necessarily results in improved emergency surge capacity?
    Secretary Leavitt. There is no evidence that it does.
    Mr. Davis of Virginia. Thank you very much.
    I mean, Medicaid is the fastest-growing part of the Federal 
budget. It is the fastest-growing part of States' budgets as 
well. And to allow this to continue without tampering and 
looking at ways that we can improve service, but at the same 
time cut back costs means there won't be money for a lot of 
other things in the budget downstream.
    Let me ask you this, Secretary Leavitt. For the Homeland 
Security Presidential Directive No. 21, it is my understanding 
that there is a stakeholder group that is working on the 
different financial levers available to improve preparedness. 
The group is looking at Medicare, Medicaid, private payer, 
grant funding and market forces. How does this group's work 
inform future funding decisions made at the Department?
    Secretary Leavitt. That group is looking at that question 
as well as many, many others to form this question. Until I 
receive their report, I don't know what they will say. I think 
it is clear that homeland security is everyone's second job. We 
all have a primary job. The job of Medicaid is to take care of 
people who are poor or indigent or disabled, and States are 
using ambiguities in the law to try and tap that fund for many 
different reasons.
    Mr. Davis of Virginia. Because it is the largest part of 
their budget?
    Secretary Leavitt. And they have determined----
    Mr. Davis of Virginia. Even in economic downturns when 
their revenues are less, the Medicaid costs are going up.
    Secretary Leavitt. In fact, Mr. Davis, I would make the 
point that Medicaid is the single greatest influence on State 
budgets right now.
    Mr. Davis of Virginia. I agree.
    Secretary Leavitt. And if you wanted to see why States were 
not investing and why they were looking for ways in which they 
could divert Federal funds into schools and to child welfare 
and to public health and public safety, it is because Medicaid 
is pushing all those things out and crowding them out. Their 
capacity to do that is being compromised by the fact that the 
program is growing so fast.
    Mr. Davis of Virginia. And understand this, 10, 12 years 
ago it was really not a factor in State governments the way it 
is today.
    Secretary Leavitt. I was elected Governor in 1993, and I 
would have to check this, but I believe it was in the 
neighborhood of 6 percent of the State budget. Today, again, I 
would have to check, but I am guessing it is like every other 
State in that it is close to 20 percent. That means every one 
of those dollars is crowding out education, it is crowding out 
higher education, it is crowding out public response and 
preparedness, all of the things we are talking about.
    Mr. Davis of Virginia. So in point of fact, putting more 
money into this may have the opposite effect?
    Secretary Leavitt. Well, it has had the opposite effect.
    Mr. Davis of Virginia. The Homeland Security Presidential 
Directive No. 21 requires that the group review financial 
incentives that improve preparedness without increasing health 
care costs. There are economic reasons that hospitals have not 
increased emergency department capacity or the number of 
inpatient beds. How does the health system increase capacity 
without increasing costs?
    Secretary Leavitt. Well, I want to emphasize in this 
process the whole concept of all--of being--of all perils 
response. Everything we do to prepare, for example, for a 
pandemic helps us for a bioterrorism event. Anything we can do 
that will use the same assets for multiple things allows us to 
expand capacity without expanding costs. The idea of sharing 
assets.
    The way our surge capacity is designed to work, we know 
that there is a scenario for every hospital, no matter how big, 
no matter how well funded, no matter how sophisticated, that 
the capacity will exceed their ability to deal with that. And 
therefore every hospital and every community needs to have a 
surge capacity plan that allows them to use schools that may, 
in fact, have been mothballed. Or I have seen plans where 
shopping centers are converted into surge capacity. I have 
actually witnessed during Katrina convention centers being 
turned into hospitals, and very good hospitals, in the context 
of 24 hours.
    So surge capacity is about using existing assets to convert 
to hospital capacity very quickly. It is not simply using the 
emergency room. If you were to look at any emergency room in 
this country, you would see that at least half of what is there 
at any given moment would not be considered absolutely 
critical. And if we turn into an emergency, those will be moved 
away or asked to be deferred, and we will have substantial 
capacity that would not have been evident in the snapshot that 
was taken that the chairman referred to.
    Mr. Davis of Virginia. Thank you.
    I would like to ask unanimous consent that a Wall Street 
Journal article, Nonprofit Hospitals Once for the Poor Strike 
It Rich, be included in the hearing record.
    Chairman Waxman. Without objection.
    [The information referred to follows:]

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    Mr. Davis of Virginia. Thank you.
    The majority staff report on the status of emergency 
departments looked at 34 hospitals and found that many were 
operating at or above capacity. Three hospitals were diverting 
ambulances, including one hospital that is undergoing a major 
expansion that includes the recent purchase of 3 million pounds 
of travertine imported from Tivoli, Italy, and 569 flat-panel 
TVs. Another hospital that, according to the majority report, 
had patients in overflow spaces and borders has also undergone 
a significant expansion that included a new women's hospital 
with marble in the lobby, and flat-screen TVs, and birthing 
rooms. Both of these hospitals are nonprofits and appears that 
they have sufficient resources to invest in marble and TVs, but 
not enough to invest in emergency departments.
    Is this typical, and is this appropriate in your view?
    Secretary Leavitt. Well, it is not appropriate, in my mind. 
I don't know how typical it is. I think the point you are 
making is a good one, and that is many times the lack of 
emergency room capacity is because the administration of the 
hospital has chosen not to invest there because it didn't, in 
fact, assist their business model.
    Mr. Davis of Virginia. And, in fact, by raising Medicare 
reimbursement and diverting that money to pay for marble floors 
and flat-screen televisions really doesn't go anywhere to solve 
this problem, does it?
    Secretary Leavitt. You made the point earlier that there is 
no assuredness or no guarantee that money coming from Medicaid 
would going into emergency preparedness, and there is no direct 
link.
    Mr. Davis of Virginia. The question is if we want to look 
at surge capacity, perhaps Medicaid is not the best way to look 
at that.
    Secretary Leavitt. Indeed, Mr. Davis, it is not. I want to 
emphasize I believe that there are deficiencies in our surge 
capacity. I just don't believe Medicaid dollars is the source 
of funds that ought to be directed or looked to to link to that 
solution.
    Mr. Davis of Virginia. Thank you.
    Secretary Chertoff, thanks for being with us today. Does 
DHS have the expertise to determine the appropriateness of any 
of the following matters as it relates to Medicaid? Let me go 
through them. Whether public providers should be limited to 
cost in Medicaid reimbursement.
    Secretary Chertoff. No, we rely on HHS. Frankly, the whole 
issue of Medicaid is not actually within our purview. So the 
short answer is no, we don't have the expertise.
    Mr. Davis of Virginia. Do you have the expertise to 
determine the appropriateness of the definition of unitive 
government for health providers that treat Medicaid patients?
    Secretary Chertoff. No.
    Mr. Davis of Virginia. How about the appropriateness of 
graduate medical education payments in Medicaid?
    Secretary Chertoff. No.
    Mr. Davis of Virginia. How about the scope of 
rehabilitation services?
    Secretary Chertoff. No.
    Mr. Davis of Virginia. How about the appropriateness of the 
administrative claims for schools?
    Secretary Chertoff. No.
    Mr. Davis of Virginia. The definition of the scope of 
outpatient services?
    Secretary Chertoff. No.
    Mr. Davis of Virginia. The definition of the scope of 
targeted case management services.
    Secretary Chertoff. No.
    Mr. Davis of Virginia. Thank you.
    The National Response Framework encompasses a broad array 
of functions and entities.
    Secretary Chertoff. Correct.
    Mr. Davis of Virginia. For example, transportation, 
communication, roads, utility and public work infrastructure 
may all be heavily used in an emergency; however, these 
facilities also have important functions unrelated to disaster 
response or homeland security. Therefore it seems imprudent to 
describe any service that might have a role in an emergency as 
a homeland security activity.
    How do you determine what functions are primarily related 
to homeland disaster compared to those that are tangentially 
related?
    Secretary Chertoff. Well, I agree with you. The key 
philosophy is what is directly related, and the way we go about 
that is we put together a plan. We analyze what are the core 
capabilities that we have to have to respond effectively. We 
then identify and survey whether there are gaps in those 
capabilities, and then we determine what is the best way to 
plug those gaps.
    Mr. Davis of Virginia. Thank you.
    Mr. Shays.
    Mr. Shays. Thank you both for being here, and thank you, 
Mr. Chairman, for having this hearing.
    I am wrestling with the fact that I think we are really 
dealing with two issues. We are dealing with the health care 
issues and the needs of our hospitals, and we are dealing with 
a potential catastrophic event and a surge capacity. I would 
like to know from each of you who has the responsibility? 
First, has there been a study done that looks at the entire 
United States to say how many Trauma I, Trauma II and Trauma 
III centers we need and ideally where they should be located?
    Secretary Leavitt. Mr. Shays, with respect to emergencies, 
we are currently doing a study right now under the matter that 
was referred to earlier.
    Mr. Shays. Can you move the mic a little closer?
    Secretary Leavitt. Yes. We are currently doing a study 
under HSPD-21, the group that was referred to earlier. However, 
I can also tell you that we are asking and requiring grantees 
of HHS for pandemic preparedness to give us information about 
their surge capacity plan. Between those two, we will have a 
very good idea in the future as to what the capacity is and 
where our gaps are.
    I would also like to make the point----
    Mr. Shays. When do you think that would be done?
    Secretary Leavitt. We expect it to be done by the end of 
this year so that we can make the report before the end--
conclusion of this term.
    But I would like you to know that we already have the 
capacity at any given moment to determine where rooms and beds 
are available anywhere in the country within a reasonably short 
period of time. During Katrina I was constantly updated as to 
how many beds we had anywhere in a region that we could move 
patients to. This is an important part of the way surge 
capacity works. We are discussing surge capacity today as to 
what you can put into an emergency room at any given hour. That 
is not the way surge capacity works.
    Mr. Shays. I want to make sure that my colleague has time. 
I would like a brief comment from both of you as to who is 
ultimately responsible for this issue, because it seems to me 
like when two people are, no one is.
    Secretary Leavitt. I think we both agree HHS has 
responsibility for any matter related to medical response in a 
disaster.
    Mr. Shays. And so it would be your job, not DHS, to 
determine how many Trauma I, II and III units we need around 
the country.
    Secretary Leavitt. Well, it will be our determination to 
determine how many we have, what our gap is and how best to 
respond to that.
    Mr. Shays. Thank you.
    Mr. Issa. Thank you.
    Governor, I will continue along that line. With 259 trauma 
centers in the country, 5 in San Diego, 4 in Utah, it is very 
clear that in San Diego we have as much capacity for our 2 
million people in a relatively small area as Utah has in a huge 
area. For all practical purposes, in the case of disasters of 
any sort, take the Northridge earthquake, aren't we essentially 
always assuming for homeland security that they are going to be 
in high-risk areas, where ultimately the people of Utah or 
Oklahoma or Wyoming could just as easily have a huge disaster 
affecting thousands of people over an area that could not 
possibly concentrate the types of hospitals that we have in Los 
Angeles or San Diego? So ultimately isn't the planning for 
major disasters more about the essential planning and training 
and ability to move people than it ever will be about having 
operational extra spaces in one location?
    Secretary Leavitt. Yes. There is no one area of the country 
capable of handling their own surge in an event of sufficient 
size to require that kind of capacity.
    Chairman Waxman. Mr. Davis, your time has expired.
    Ms. McCollum.
    Ms. McCollum. Mr. Chairman, the report conducted by the 
committee highlights serious challenges confronting hospital 
emergency rooms, and crowding is a serious problem. The 
American College of Emergency Physicians released a report last 
month that addresses the crowding issue. The report asks what 
causes crowding, and it responds, ``Over the years the reasons 
for crowding have included seasonal illnesses, visits by the 
poor and the uninsured who have nowhere else to turn except the 
safety net provided by emergency departments. This country can 
continue to expand the capacity of emergency rooms, to serve as 
a provider of last resort for the uninsured and the mentally 
ill, or Congress can work to provide universal health care for 
all Americans. The choice is ours.''
    Mr. Chairman, I don't know about the situation in New York, 
Washington, Chicago, Houston, Denver or Los Angeles. I have 
never visited an emergency in any of those cities, so I will 
take this report's findings as accurate. But I live in 
Minnesota, and I need to set the record straight.
    First, the report inaccurately states that Minneapolis is 
hosting the 2008 Republican Convention. The convention will 
take place in St. Paul, MN, my congressional district, with 
Minneapolis accommodating many of the visitors. This 
distinction is important, especially for the St. Paul 
officials, first responders, health care professionals involved 
in preparing to meet the needs of 40,000 visitors, including 
the President of the United States and Republican nominee for 
President.
    Second, the report examines Hennepin County Medical Center, 
which is an excellent hospital and a Level I trauma center 
located in Minneapolis. In the event of an emergency at the 
national Republican convention, Regions Hospital in St. Paul, 
an excellent facility, will be the primary responder, with the 
hospital examined in the report providing support.
    What concerns me about this report is it examines 
Minneapolis solely as the presence of the national convention, 
yet it evaluates emergency room capacity on a random day, March 
25, 2008. During the 4 days in September when the Republicans 
gather in St. Paul, there will be significant additional 
resources available to ensure a safe, enjoyable convention. 
There will also be an emergency plan and considerable assets in 
place to respond to any foreseen event.
    The Department of Homeland Security designated the national 
party conventions as a national special security event. This 
Congress appropriated $50 million to each host city to ensure 
coordination is seamless between Homeland Security, Secret 
Service, local and State law enforcement and their first 
responders.
    Finally, while I fully understand the use of Madrid 
terrorist attacks as a standard for assessing casualty 
preparedness, real American tragedies like the Oklahoma City 
bombing, Hurricane Katrina, Virginia Tech shooting could also 
have been used as models.
    In the Twin Cities we don't need to investigate emergency 
room capacity using a telephone survey. Our first responders 
were forced to respond to an emergency in real time. Only 9 
months ago on August 1, 2007, at 6:05 during rush hour, 8 lanes 
of traffic on Interstate 35W, the bridge, it collapsed into the 
Mississippi River. That night 13 people died, many my 
constituents. And more that 110 patients required emergency and 
medical attention. The bridge collapsed due to structural 
failure. It just as easily could have been the result of a 
terrorist attack, but the disaster tested the very hospital in 
the committee's report.
    Hennepin County Medical Center and hospitals from the 
entire Twin Cities metropolitan area responded heroically, 
professionally and efficiently. Their response was not a 
simulation or a blind phone survey, it was real. And people are 
alive today because of that response.
    Mr. Chairman, I have statements from Hennepin County 
Medical Center, Regions Medical Center, St. Paul's chief of 
police, Minnesota Hospital Association, I would like to have 
the committee's permission to enter these into the committee 
report.
    Chairman Waxman. Without objection, that will be the order.
    [The information referred to follows:]

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    Chairman Waxman. The gentlelady's time has expired.
    Mr. Sali.
    Mr. Sali. Thank you, Mr. Chairman.
    Secretary Chertoff, border security is an important issue 
affecting Idahoans, and the need for secure travel documents I 
think they consider equally as important. Do you have any 
security concerns specifically with the use of matricula 
consular cards, passport cards, NEXUS and Sentry and PASS 
cards?
    Secretary Chertoff. First, Mr. Chairman, I guess I do have 
to observe when I was invited here, I thought the topic was 
going to be medical surge. It is hard for me to see the 
correlation here, so I have to ask you whether you want me to 
answer this. But if you do, I will go ahead and answer.
    Chairman Waxman. Well, the rules allow each Member to ask 
questions.
    Secretary Chertoff. On any topic.
    Well, the short answer is I think certainly our NEXUS cards 
and Sentry cards, our PASS cards which are about to be issued 
by the Department of State are secure. They reflect a 
substantial step forward in improving the security of our 
documentation. Likewise our laser border-crossing cards.
    The matricula consular is not an American-issued card, so I 
can't warrant or vouch for the security of that. We don't rely 
upon that for purposes of allowing people to come across the 
border.
    Mr. Sali. I think there is a relation here. I hear concerns 
for many areas of the country that part of the problem in 
hospitals is that they are overrun with illegal aliens in 
specific places. And part of the problem in dealing with the 
problem of illegal aliens is making sure that we have legal 
ways for people come to our countries that are secure in fact.
    Was there a recall on the NEXUS, Sentry or PASS cards 
during the last year or two?
    Secretary Chertoff. Not that I am aware of.
    Chairman Waxman. Mr. Sali, it is your time to ask 
questions, but you are off the topic for which we have invited 
the Secretaries to speak, I guess Secretary Chertoff will have 
to decide whether he is prepared to respond. But----
    Mr. Sali. Well, Mr. Chairman----
    Secretary Chertoff. I could find out. I didn't come 
prepared to talk about it.
    Mr. Sali. Perhaps the Secretary would be willing to respond 
to some of these questions in writing----
    Secretary Chertoff. Sure.
    Mr. Sali [continuing]. If I submit them to the committee.
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    Mr. Sali. And if I may continue, do you share the concern 
that the presence of illegal aliens in our country is affecting 
the ability of our hospitals to respond in a surge situation?
    Secretary Chertoff. Well, I don't know if I would connect 
it to a surge, but I would agree that I am aware that the 
presence of people who are in this country illegally does 
strain emergency rooms on a day-to-day basis, because often 
these people don't have health care through their employers, so 
they are relying on the emergency room as a kind of primary 
care facility. And that is one of the things we hoped to 
address when we took up the issue of comprehensive immigration 
reform, but as everybody now knows, that didn't take off in the 
Senate. So in the meantime our approach is to enforce the 
existing laws as vigorously as possible.
    Mr. Sali. Secretary Leavitt, let me ask you the same 
question. Do you share that concern about the presence of 
illegal aliens, overwhelming at times, on the emergency room 
and hospital capabilities in our country, and if you do, what 
is your office doing to relieve that situation?
    Secretary Leavitt. Again, there is no connection 
necessarily between surge capacity. But there is little 
question that many of those who go to emergency rooms to be 
treated are here without proper documentation. Our Department 
does provide substantial assistance to hospitals to pay for 
those, but there is no question about the fact that it is a big 
part of the problem.
    Mr. Sali. How much does your agency pay for treatment for 
illegal aliens each year?
    Secretary Leavitt. That is not a number I have off the top 
of my head. It is a big number.
    Mr. Sali. You will get that for me, though?
    Secretary Leavitt. I would be happy to respond in writing, 
to the degree we have that information.
    Mr. Sali. I have heard both of you say today that the 
presence of illegal aliens is not directly related to the 
surge, and yet both of you have said that illegal aliens use 
emergency rooms as their primary care doorway, if you will, 
into the health-care system.
    Secretary Leavitt. This is an important point, and I want 
to clarify it. On a day-to-day basis, in an emergency room, 
there are many people who are there for what essentially could 
be a clinic, not necessarily an emergency. In such a setting, 
they would be asked to take their health-care problem or defer 
it for another time, and that capacity would be used for the 
surge. Virtually any emergency room would have somewhere 
between 30 to 50 percent of its capacity used in that way.
    So when we say that they are overflowing, they are not 
overflowing necessarily with people who are in life-and-death 
situations. Surge capacity would clear those out in the kind of 
emergency we are talking about to be treated in another way or 
on a different day.
    Chairman Waxman. The gentleman's time has expired.
    Mr. Sarbanes.
    Mr. Sarbanes. Thank you, Mr. Chairman.
    On that last point, we had testimony on Monday that 
suggested that a relatively small percentage of the ED volume 
is from non-urgent kinds of care. So I think that is a red 
herring. We are really talking about people coming into 
emergency rooms that need emergency care.
    We had a number of hearings on the effect of these Medicaid 
regulations. Going back last year, in June, we were told by a 
panel of experts that the emergency rooms are at the breaking 
point and the ability of emergency department personnel to 
respond to a public health disaster is in severe peril.
    In November, the American College of Emergency Physicians 
said that if the regulations we are discussing today went into 
effect, ``The Nation's public hospitals and emergency 
departments will sustain a devastating fiscal blow from which 
recovery may be impossible.''
    And the National Association of Public hospitals--and, by 
the way, public hospitals are the ones really getting hit 
between the eyes. We had a description of a nonprofit hospital 
engaged in some purchases, which I am not sure I would 
necessarily defend myself, but let's not get off on that 
tangent. We are talking about the impact largely on public 
hospitals, which are the ones that would suffer the most from 
implementation of this regulation. The Association of Public 
Hospitals said, ``These regulations have the potential to 
devastate essential safety-net hospitals and health systems in 
many parts of the country.''
    So what is it that these experts understand that the two of 
you don't understand about the impact these regulations are 
going to have?
    Secretary Leavitt. Mr. Sarbanes, let me describe for you, 
as a former Governor, what is happening with respect to public 
hospitals and where I believe we ought to be turning to remedy 
this.
    It is not unusual at all, in our public hospital setting, 
we agree to pay public hospitals an increment more than what we 
do normal hospitals. Many States are taking that increment more 
and essentially taking it off the table, putting it into their 
general revenues, and then using that increment more to pay the 
match that they are supposed to be paying for Medicaid.
    This is essentially a dispute between partners. We are 
saying to the States, we want you to put up real dollars, not 
our dollars recycled, so that you don't have to put up as much 
money.
    Mr. Sarbanes. Let me take that line of thinking and move it 
slightly in a different direction.
    First of all, I want to challenge a premise that I thought 
I heard in your testimony, that perhaps hospitals are not at 
the center of any kind of disaster response. And you talk about 
these other things, convention centers being set up on a short-
term basis or schools or so forth.
    But you both agree that when there is an emergency or a 
disaster, hospital emergency rooms are where people go, are 
they not?
    I mean, I represented hospitals for 16 years. Any kind of 
disaster or occurrence in the community that created pressure, 
the first place they come, the first place they come, because 
they can't think of any other place to go, is to the emergency 
room. True?
    Secretary Leavitt. Mr. Sarbanes, there is no hospital in 
America that can keep enough spare capacity warm all the time 
just in case we have a major catastrophic event.
    Mr. Sarbanes. Let me ask you this question.
    Secretary Leavitt. You can develop a scenario that will 
blow the doors off any emergency room in America----
    Mr. Sarbanes. The doors are already blown off. This is the 
thing. There is this notion that we are waiting for these surge 
situations. But as a practical matter, we have a surge already. 
When you look at the boarding that is going on, the diversions 
that are going on, the fact that the beds in the hospitals for 
inpatient admissions are completely full, we are talking about 
a surge happening right now.
    Now, let me ask you this question: If a hospital is 
underfunded, understaffed and underequipped in its main 
operations and main functions, is it better or less prepared 
for a surge, in your view?
    Secretary Leavitt. This question ought to be directed to 
those who administer and invest in the hospital. Most of the 
hospitals----
    Mr. Sarbanes. I am just asking your personal opinion. If a 
hospital in its core function is underfunded, underequipped and 
understaffed, is it better or less prepared for an emergency in 
a surge?
    Secretary Leavitt. Obviously they are less prepared.
    Mr. Sarbanes. They are less prepared. Well, that is the 
situation many of the hospitals are in.
    So this fascinating but, I think, largely false distinction 
between funding that is going just for a surge as opposed to 
funding that is going to what Medicaid core functions should 
be, this is a red herring, at best.
    And we have to strengthen the underlying core function and 
structure and infrastructure of our public hospital system and 
other parts of our health-care system if we are going to be 
able to respond to this surge.
    Thank you.
    Chairman Waxman. And we shouldn't be cutting money out of 
it if they are already not prepared to deal with the problems.
    Mr. Issa, you are recognized.
    Mr. Issa. Well, thank you, Mr. Chairman.
    And I certainly think that it has been good to wait a 
little while to go today, because I think Mr. Sali's questions, 
although they seemed to start on a tangent, finished pretty 
cogently.
    Secretary Chertoff, the link that you did agree exists 
between our inability to either stop illegal immigration or the 
absence of their having an alternate insurance plan that would 
put them into the normal front-door of hospital and urgent care 
and other places rather than emergency rooms and trauma centers 
is a significant part of the overcrowding and the underfunding 
today.
    From your side, Homeland Security, you seem to very much 
agree that is part of the problem you face when looking at 
surge capacity today, is can you get those centers freed up in 
time of emergency.
    So my question to you is, do you feel comfortable that even 
though a nonscientific, partisan telephone survey found that, 
lo and behold, these seven trauma centers were overcrowded on a 
given day, or emergency rooms, that those would be reasonably 
free-upable for the kind of catastrophic emergencies we might 
have in the case of a dirty bomb or some other terrorist 
attack?
    Secretary Chertoff. Well, I agree with Secretary Leavitt. 
My understanding--of course, the expertise really resides with 
his Department, but it certainly makes sense to me. My 
understanding is that, in a true emergency, people who are in 
the emergency room using it for primary care or for something 
less than an emergency would be asked to leave, and many of 
them would.
    I also agree with Secretary Levitt there is probably some 
point at which no emergency center, no matter how well-funded, 
is going to be able to handle what would be a truly mass event. 
And that is why we have these backup systems in place.
    There is no question that a catastrophic event is going to 
be bad. It is not going to be pleasant. But I think that we 
would expect the emergency room to clear out all but the 
priority cases in order to handle them.
    Mr. Issa. I certainly agree. And certainly there are 
doctors who have been serving in capacities other than urgent 
care whose experience in surgery and other areas would quickly 
be brought in post-triage to do it.
    Governor Leavitt, you know, the title of this hearing today 
I think is significant, because it starts off and it says, 
``The Lack of Hospital Emergency Surge Capacity: Will the 
Administration Medicare Regulations Make It Worse?''
    Yesterday, or the day before yesterday, I asked the panel--
who all felt that overcrowding was a problem and so on but 
differed on whether they could handle emergencies. Virginia 
said, ``We did handle emergencies. We believe we are well-
organized, even here in the District,'' while other areas did 
not.
    One of the interesting things was, I said, ``Here is a 
billion dollars. How would you spend it? Would you spend it on 
training and preparation for an emergency, or how else would 
you spend it?'' To a person, the panel said, ``I would spend it 
on day-to-day, routine costs. I would simply absorb a billion 
dollars.''
    Governor, certainly you have the background to understand 
that $1 billion is a lot of money. But the cost of injuries in 
America today is estimated to be $300 billion in medical costs. 
A billion, $2 billion, $3 billion, if it is not used for 
preparation training, emergency facilities and planning, even 
$3 billion or $4 billion added into the system, will it in fact 
increase surge capacity if it is simply spent on a daily basis?
    Secretary Leavitt. Our significant concern with moneys that 
we give to States is that they are focused on increasing surge 
capacity. We have put nearly $7 billion, through different 
departments other than Medicaid, into emergency preparedness 
and specifically into surge capacity. And I believe that if we 
were just to send Medicaid money, it would be absorbed into the 
hospital overhead.
    Mr. Issa. And, Governor, following up, because the time is 
limited, essentially aren't we dealing exactly with that here 
today? That if, in fact, we don't carefully make sure that 
these funds do not get diverted and do not cover up for 
problems, including illegal immigration, to quote the other 
Member, but all kinds of problems of the underinsured, aren't 
we, by definition, making ourselves less capable if we don't 
take action to ensure that it goes into planning and training 
and preparation, rather than absorbing what clearly appears to 
be an everyday problem in America that was neither created by 
September 11th nor would be rectified by a few billion more 
dollars here or there?
    Secretary Leavitt. Every community needs a plan, every 
community needs to train, every community needs to exercise. 
And that is what much of our money goes to, and should.
    Mr. Issa. Governor, my time is short, but you did deal with 
the problems of illegal immigration. You dealt with the problem 
of your emergency rooms and the impact of the underinsured.
    Isn't that a separate issue that we should concentrate on 
finding solutions for but not mix it with today's hearing on 
surge capacity directly related to 9/11-type events?
    Secretary Leavitt. We have dealt with three specific and 
different issues today: surge capacity, the effect of illegal 
immigration, and Medicaid regulations. All three are separate. 
All three are important issues.
    Mr. Issa. Thank you.
    Thank you, Mr. Chairman.
    Chairman Waxman. Secretary Leavitt, could you furnish for 
the record how that $7 billion you claimed is going to help the 
hospitals?
    Secretary Leavitt. What I said, Mr. Chairman, was we have 
spent nearly $7 billion on local and emergency preparedness, 
including surge capacity in hospitals. And, certainly, we can 
provide how that has been spent.
    Chairman Waxman. And how much of that has been surge 
capacity?
    Secretary Leavitt. That is not a figure I have.
    Chairman Waxman. If you could give it to us for the record, 
we would appreciate it.
    We now have Mr. Murphy.
    Mr. Murphy. Thank you very much, Mr. Chairman.
    Welcome, Secretary Leavitt and Secretary Chertoff.
    For the last 4 years, before I came to Congress, I was the 
chairman of Connecticut's Public Health Committee in our 
legislature charged with this very issue, making sure that we 
had appropriate surge capacity and everyday capacity in our 
hospitals.
    And, Mr. Leavitt, I was reading through your testimony, and 
it is dazzling, at some level, the amount of bureaucracy and 
commissions that we have created around this issue: ACD, NVSB, 
ECCC, ASPR, NRF. And I am sure these are worthy commissions; I 
am sure they are looking at important questions. But as 
somebody who is doing this on the ground floor, this is all new 
to me.
    As a State policymaker, we knew that Medicaid was not just 
about supporting people, it was about supporting institutions 
as well. They are one and the same. You can't help people 
unless you have institutions that are there and willing to do 
the work. So the distinction, I guess, is a little bit 
troubling to me.
    But we also didn't know too much about these grants that 
were coming to us, because we really knew that in order to keep 
these hospitals up and running, in order to keep capacity 
working, we needed Medicaid. We couldn't do it with grants 
alone.
    Mr. Leavitt and Mr. Chertoff, if the staff has it ready, I 
would like to just draw your attention to a chart. And this, I 
think, gets at Chairman Waxman's question about the amount of 
money that is going to hospital preparedness grants. This is, I 
think, a fair representation of, over the last several years, 
the amount of money that has been going into hospital 
preparedness grants, starting at $498 million in 2003, dropping 
now to a proposed $362 million in the proposed budget for the 
coming fiscal year--a pretty sharp decrease. And $362 million 
over 50 States spreads pretty thin.
    The real rub here is when you compare it to the Medicaid 
cuts, if we can put that chart up now. Now, this is the grant 
money that States are getting, $362 million proposed in the 
next year, compared to the impact of the Medicaid cuts.
    Now, this is the State Medicaid director's estimates. If 
you take the CBO estimates, you are still talking about five 
times the amount of Medicaid cuts as you are talking in grant 
money to hospitals. And I think every State appreciates that 
grant money, but it is a drop in the bucket compared to what 
hospitals are going to face with regard to these Medicaid cuts.
    I guess I ask this to you, Secretary Leavitt. Do you have 
concerns that these grants, dwindling year by year, are going 
to be dwarfed by the size of these cuts? And though those cuts 
are going to obviously see their way through the entirety of a 
hospital's operation, no doubt much of it is going to end up in 
the emergency room.
    Do you have a concern that these cuts, these Medicaid 
cuts--you say they are to support individuals; they inevitably 
have to support institutions in order to support the 
individuals--are going to dwarf those grants?
    Secretary Leavitt. Mr. Murphy, the distinction on 
institutions and people is not one that we have arbitrarily 
made. It is in the statute.
    Over time, States have inappropriately claimed Medicaid 
dollars in a number of categories, which had the direct 
impact--I know you know this as a State legislator--of crowding 
out all of the other activities, including the development of 
public health and emergency systems.
    Medicaid was not designed, nor is it intended, to support 
institutions. Money should be directed to people. We support 
people. We support poor people, pregnant mothers and the 
disabled. This is not intended to be a hospital entitlement.
    Now, I understand that they have come to rely on it, in 
some cases. That is precisely the reason that we are pushing 
back to the fee-based consultants who are driving this on the 
basis of their getting a piece of the action to push Medicaid 
into every area of State government. It is not just emergency 
preparedness. It is in schools. It is in child welfare. It is 
in all the places that the States are not adequately funding, 
they are trying to get a garden hose into the Medicaid fund.
    Mr. Murphy. But we are not talking about those places 
today. We are talking about institutions that are indisputably 
linked to health care, which are hospitals.
    And the fact is you say it is about supporting individuals, 
but the money doesn't go to individuals. It goes to 
institutions. It goes to doctors. It goes to hospitals. It goes 
to outpatient clinics. Because we know we need those places up 
and running.
    So let me just shift to a related question, and this is 
building off of Mr. Sarbanes's questions.
    You talk about the fact that ultimately this isn't going to 
happen in emergency rooms. If something enormous happens, you 
are going to have to build something outside of the emergency 
room. But doesn't that capacity, whether it exists in the 
physical confines of the emergency room or not, rely on the 
assets that exist right now in those emergency rooms?
    If we are gutting the capacity of hospital emergency 
delivery systems, in terms of equipment, in terms of personnel, 
in terms of expertise, it seems to me, Mr. Leavitt and Mr. 
Chertoff, that this directly impacts your ability to then move 
that capacity offsite, even if it isn't onsite at the hospital 
grounds.
    Secretary Leavitt. Again, this is a very important point, 
Mr. Murphy. We are bringing capacity in. In the first 24 hours 
of an emergency, we are dependent upon local assets. And that 
is where you clear out the emergency room, you take anyone who 
is nonessential out of the hospital. You make capacity.
    Within 24 hours, we have the NDMS system there. We have as 
many as 6,000 beds we can bring from all over the country. We 
then go to another phase where we start taking patients into 
capacity. At any given moment, we know how many hospital beds 
are available in the area.
    We are not dependent upon the hospital facilities, except 
for that 24-hour period. And that is why we exercise and train 
for all of the other aspects on surge capacity.
    Mr. Murphy. And I appreciate that. I know enough about how 
these things work to know that they still do draw upon local 
resources, they still do draw upon other hospitals, upon other 
capacity in the system. And, as Mr. Sarbanes and others have 
suggested here today, we have maxed out both the emergency and 
nonemergency capacity of our health-care systems to the point 
that extra capacity, even in the 48 and 72-hour window, simply 
doesn't exist.
    Now, you can fly it from in from all over the country, but 
I think this problem exists across the board. Our medical 
technicians, our emergency medical personnel, are working 24/7 
just to handle existing capacity right now, never mind being 
able to move over to an emergency when it does happen.
    My time has expired, Mr. Chairman.
    Chairman Waxman. Thank you, Mr. Murphy.
    Mr. Duncan.
    Mr. Duncan. Thank you, Mr. Chairman.
    Secretary Leavitt, I have to be very quick because they 
have a vote going on. But a few days ago, we were given figures 
that, in the 10 years leading up to 2006, Medicaid payments to 
Tennessee hospitals went up from $245 million to $607 million.
    I am sure that you have no idea of what those exact figures 
are, but do you think that every State has received similar-
type increases, more than doubling over the last 10 years?
    Secretary Leavitt. Well, States have clearly seen dramatic 
increases. We have seen a dramatic increase in the overall 
program. Tennessee may have been somewhat unique because of 
TennCare.
    Mr. Duncan. And would it be fair, then, to say that, in 
those 10 years, inflation has averaged around 3 percent a year, 
so those payments to hospitals have gone up several times above 
the rate of inflation? Do you think that is fair?
    Secretary Leavitt. Medicaid is growing at two to three 
times inflation.
    Mr. Duncan. Two to three times the rate of inflation. So 
payments to the hospitals have gone way up over the past 10 
years?
    Secretary Leavitt. The Medicaid money going to hospitals 
has dramatically increased over the past decade.
    Mr. Duncan. All right. Thank you very much.
    Chairman Waxman. Mr. Tierney.
    Mr. Tierney. Thank you, Mr. Chairman.
    Thank you, gentlemen, for being here today.
    Secretary Chertoff, I want to ask you a little bit about 
your role or your involvement in these Medicaid rules that were 
issued. In your testimony, you said that, ``Medical surge 
capacity is a critical element of our local, State and national 
resiliency.''
    But I don't see any evidence, I don't think we have been 
able to find any evidence of your Department expressing any 
concern about these Medicaid rules to anybody, and particularly 
with respect to the impact they might have on emergency rooms 
or the ability to respond to an attack or a natural disaster.
    Did you consult with Secretary Leavitt about these rules 
before they were issued?
    Secretary Chertoff. No, because I don't think that these 
Medicaid rules are particularly closely connected to the 
question of whether there is surge capacity necessary to meet 
an emergency.
    Mr. Tierney. So you were aware of them but just chose not 
to get involved, or you weren't even aware that they were being 
considered?
    Secretary Chertoff. I don't think I was particularly aware 
of it, nor would I have expected to be made aware of it.
    Mr. Tierney. The staff interviewed Dr. Runge from your 
staff, your Chief Medical Officer. It is his role, apparently, 
to coordinate between the Department of Health and Human 
Services, to make sure that hospitals and the medical system 
are prepared for a disaster or for an incident.
    They asked Dr. Runge if he had reviewed or commented on the 
regulations, and he also said he had no communications with 
anyone at HHS about it. And he said that there was no 
discussion within the Department of Homeland Security about the 
rules.
    That is pretty consistent with your testimony, as well, on 
that?
    Secretary Chertoff. It is.
    Mr. Tierney. If he supposed to be the point person for 
medical preparedness, I just don't understand how he completely 
ignores rules which are certainly going to have some impact? Or 
is it your position they are absolutely going to have no impact 
at all on emergency rooms?
    Secretary Chertoff. Here is where I think we are having 
some disagreement. Everything has impact on everything. So, in 
some sense, the economic health of the country has an impact on 
homeland security. But if I used that logic, I would be 
involved also in the subprime mortgage crisis, because that 
affects State budgets; I would be involved in gas tax and 
gasoline prices, because that has an impact. Even for a 
Department which has sometimes been accused of having too broad 
mandate, that goes several bridges too far.
    Our focus, with respect to working with HHS, is to assure 
that there is a planning effort under way, that we are 
identifying gaps, and that we are coming up with specific 
measures that will plug the gaps.
    And I have to say I agree with Secretary Leavitt; I don't 
think that Medicaid funding and reimbursement rules have 
anything more than a very indirect connection with this issue. 
And if I took the position that every indirect impact on 
homeland security made it my business, we would become the 
Office of Management and Budget instead of the Department of 
Homeland Security.
    Mr. Tierney. I do think there is a disconnect between what 
we are talking about here. I have a difficult time thinking 
that you don't see a more direct relationship between the 
status of our hospitals' capacity and emergency rooms' capacity 
to deal with these things than a mortgage. That is a bit of a 
difference there between the two, and I would hope you would 
get that distinction.
    Secretary Chertoff. No, I don't say that I don't think 
emergency care and the health-care system isn't more connected. 
I think that Medicaid reimbursement, which is not specifically 
targeted to putting money away for emergencies, is, I think, 
several degrees of separation from the kinds of much more 
specific issues that we are focused on, in terms of getting 
ready for emergencies.
    Mr. Tierney. But I find it interesting that your Department 
didn't even look at the prospect that reducing Medicaid funding 
might have an impact on hospitals' overall operations, 
including the impact on emergency rooms and capacity in case of 
a surge incident. I would think that is the type of thing that 
you are assigned to do and Dr. Runge is assigned to do, to at 
least raise the issue and think about it and move on from 
there.
    The staff asked Dr. Runge how he justified this lack of 
communication with HHS about the rule. What he said was, ``We 
are focused on threats that can kill hundreds of thousands, not 
hundreds.'' A little insensitive, I would think, to----
    Secretary Chertoff. Well, I wasn't there for the interview; 
I can't read his mind. But I think what he was trying to draw a 
distinction between is the very real issue of day-to-day 
capability of the medical system to deal with day-to-day kinds 
of issues, which is a perfectly important and significant 
matter but not one that falls within the purview of my 
Department, as compared to dealing with the issues that do rise 
to the level or do specifically involve homeland security, like 
a pandemic flu or a major catastrophe, where we do focus on the 
issue of surge.
    But our main focus is on those matters that have a direct 
relationship. Are we stockpiling enough? Do we have a plan? Do 
we have a delivery mechanism? Do the localities have a plan? 
And there we do interface with HHS, not only Dr. Runge, but I 
personally talk to Secretary Leavitt about these issues. But 
much more tightly related to the specific need to have an 
emergency preparedness capability than Medicaid funding, which 
has to do with the overall economic health of the medical 
system, which is, frankly, a much broader issue than my 
Department's focus.
    Mr. Tierney. Well, I guess it could be seen that way, but 
it could be narrowed down to when there is a serious, severe 
cut in financing, it will affect the operations of a hospital, 
including those that you are directly concerned with. I would 
like to think your Department gets involved at that capacity. 
That is not indirect; that is pretty direct.
    My time is up, and I yield back. Thank you.
    Chairman Waxman. The gentleman's time has expired.
    Ms. Norton.
    Ms. Norton. Thank you, Mr. Chairman.
    I want to thank both these witnesses for being here.
    I am particularly grateful for this hearing, because I am 
afraid I am more deeply implicated than some because of my 
representation of the District of Columbia. I have worked 
closely, of course, in my work on the Homeland Security 
Committee with Secretary Chertoff.
    Secretary Leavitt, I worked with your predecessor on 
something called ER-1. I am particularly concerned about this 
place, not only because I represent 600,000 people here, but 
because all of official Washington is here, 200,000 Federal 
workers, and because this is a prime target for terrorism.
    This discussion about trying to separate out Medicaid from 
other money is important because we want money used for what it 
is intended. But you certainly can't treat a hospital as if it 
were not an organism with core functions that treat private and 
poor patients alike, as if you could collapse the part that 
treats Medicaid patients. And I think that is what some of us 
have been trying to get at.
    I want to ask you about the hospitals here. We have three 
trauma centers here. Two of them were surveyed in this survey, 
and they were extensively above capacity. No available 
treatment spaces in the hospital. Only six had intensive care 
unit beds. One could not participate in the survey because it 
was so overcrowded that it had to stop taking, accepting new 
patients at all.
    My good friends on the other side of this dais cite the 
Washington Hospital Center emergency room as a model for the 
country. It is a very good emergency room. That is what I 
worked with on so-called ER-1. I will get to that in a minute.
    But since they cite the Washington Hospital Center, I went 
to the head of the emergency room, Dr. Mark Smith, and Dr. 
Smith confirmed the findings of the survey and, in addition, 
said he had twice as many patients as he did treatment spaces. 
They are putting them in the corridors and administrative 
offices. They are putting them in waiting rooms. And he said he 
had a major problem with preparedness.
    Now, I understand triage. I also hope we are not ever in 
the position of what I would believe would be chaotic triage, 
if everybody surged in one place. For that reason, here in the 
Nation's Capital, I have been working with the administration--
actually we have almost gotten it through several times--on at 
least one hospital that would have surge capacity, so that 
everybody would know in advance, don't put all these Federal 
workers close to the nearest hospital. This is the one that is 
prepared. It has huge capacity--it would have a huge capacity. 
A lot of private money would go into this, some Federal money.
    Now, my question is this: If you cut billions of dollars of 
what amounts to safety-net funding from hospitals, you are also 
including these trauma centers here in the Nation's Capital. 
Can you assure this committee that, even with such very severe 
Medicaid cuts, the hospitals in the Nation's Capital are 
prepared for a mass event here and to accept patients in the 
event of a mass event here?
    I would further ask Secretary Leavitt if he supports ER-1.
    First, I want to know, are you saying to this committee, in 
the face of a survey that you are aware of, that in the event 
of a major or mass event here, that the hospitals, even with 
the cuts that are on the table, could, in fact, manage that 
event?
    Secretary Leavitt. Ms. Norton, I will tell you that the 
Washington, DC, area engages in regular planning exercises I 
think as well as any place in the country. I want to restate: 
Am I saying that surge capacity is acceptable everywhere in the 
country? No.
    Ms. Norton. I am not asking about that. I am asking about 
the place where Members of Congress, the President of the 
United States, where members of the Cabinet, where 600,000 
residents are here, where 200,000 workers are here, three 
traumas centers--I am being very specific. I am not focusing on 
elsewhere. I am focusing on target No. 1.
    Can you say you are prepared?
    Secretary Leavitt. I am not the person to answer that. The 
person in my Department would be Rear Admiral Vanderwagen, who 
was not invited to the hearing today. And I am sure he would be 
happy to meet with you and give you his reaction to the 
preparedness.
    Ms. Norton. I have to indicate that, as the Secretary, I 
would think you would know whether or not the Nation's Capital 
is prepared for a mass event.
    Secretary Leavitt. I live here, just like you do, and I am 
anxious for that to be the case.
    Ms. Norton. And that troubles me, both as a member of the 
Homeland Security Committee and as a member of this committee, 
that you cannot answer that question.
    Do you support ER-1 surge capacity?
    Secretary Leavitt. Is the project at George Washington?
    Ms. Norton. It is the project at Washington Medical Center.
    Secretary Leavitt. I am aware of the project by title. I do 
not know enough about it to respond at this hearing. If you 
would like, I would be pleased to respond in writing.
    Ms. Norton. I very much appreciate it.
    And thank you, Mr. Chairman.
    Chairman Waxman. Thank you, Ms. Norton.
    Mr. Cummings.
    Mr. Cummings. Thank you very much, Mr. Chairman.
    Secretary Leavitt, perhaps the thing that most confuses me 
about your actions is why you did not consider the impact of 
your Medicaid regulations on emergency preparedness.
    Last June, the committee had a hearing on the state of 
emergency medical care in the United States. At the hearing, 
concerns were raised about the effect of the Medicaid 
regulations on hospital emergency rooms. As a result, the 
committee wrote to the Centers for Medicare and Medicaid 
Services to ask whether CMS, which issued the rules, had 
consulted with the Assistant Secretary for Preparedness, who is 
the official in your Department in charge of emergency 
response.
    Astonishingly and unbelievably, CMS responded that it, 
``did not specifically request input from the Office of the 
Assistant Secretary for Preparedness because that office is not 
likely to have expertise in Medicaid financing.''
    The committee wrote you again in November. In this letter 
the committee specifically requested, ``all documents relating 
to the potential impact of the Medicaid regulations on 
emergency care and trama services.'' In February, the 
Department responded to the committee's request. I want to read 
to you from this letter. And it says, ``The Department has not 
found responsive documents.''
    According to this letter, your staff searched for 
responsive documents in five different parts of the Department: 
the Office of the Secretary, the Office of the Assistant 
Secretary for Preparedness, the Health Resources and Services 
Administration, the Centers for Disease Control, and CMS. Yet 
not one of those offices had done any analysis of the impact of 
the regulations on emergency care.
    Secretary Leavitt, how can you possibly explain this? 
Hospitals across the Nation are telling us that your 
regulations will devastate their emergency rooms, yet you did 
not even consider this issue, according to what I just read.
    Secretary Leavitt. The rule change we are proposing is not 
about surge capacity or hospital health. It is about States who 
have been claiming inappropriately funds that they are using to 
recirculate to pay their fair share with Federal funds.
    Medicaid is not a program to support hospitals. Medicaid is 
a program to support people who are poor, people who are 
pregnant and people who are disabled. It was not intended nor 
is its purpose, nor should it be managed, to be the source of 
funds for surge capacity.
    Mr. Cummings. Let me just go a little bit further. You were 
specifically asked to consider the impacts of your rules on 
trauma centers and emergency rooms. Over a year ago, Chairman 
Waxman and over 150 other Members of Congress wrote to you to 
urge you to consider these issues.
    Let me read to you from our letter: ``We are writing to 
request that you withdraw the proposed rule. The proposal would 
threaten the capacity of safety-net hospitals to deliver 
critical but unprofitable services, such as trauma centers, 
burn units and emergency departments.''
    Yet, still, you prepared no analysis. This appears to be a 
case of willful blindness. Perhaps it would be better stated if 
I said it appears to be ``eyes wide shut.'' It seems that you 
are deliberately ignoring the impacts that your rules will have 
on emergency care and preparedness in our Nation. That is 
irresponsible, and, to be frank with you, it is quite 
dangerous.
    Secretary Leavitt, the preamble to the proposed Medicaid 
regulations read, ``With respect to clinical care, we 
anticipate this rule's effect on actual patient services to be 
minimal. While States may need to change reimbursement or 
financing methods, we do not anticipate that the services 
delivered by governmentally operated providers or private 
providers will change.''
    In response to these regulations, your Department received 
over 400 written comments, all of which expressed opposition to 
the rule or to portions of the rule. And I would like to read 
just a sample of one of those. It is from the Society of 
Academic Emergency Medicine.
    And it says, ``This proposal will jeopardize the viability 
of public and other safety-net hospitals. It will also 
jeopardize the viability of our emergency medicine teaching 
programs, which has long-reaching downstream effects on the 
quality of emergency care in this country. We believe that 
Medicaid cuts of this magnitude projected under this proposed 
rule will adversely affect access and the viability of our 
Nation's safety-net providers.''
    So I am just wondering, do you have a comment on that?
    Secretary Leavitt. Yes, I do. This rule is about States not 
paying their fair share, and it is a dispute between partners. 
We are mutually committed. If States will step up and do their 
share, we will ours. But this is about paying for people, not 
for institutions.
    We are following the law. We are trying to push back where 
people or States and other programs within State governments 
are trying to make up for deficiencies that have occurred in 
State governments by tapping Medicaid funds. And someone needs 
to do it, because the Medicaid program is unsustainable in its 
current course; I made the point earlier.
    Many of the programs in States are being crowded out by 
Medicaid. And it is being crowded out because we continue to 
use it for virtually every aspect of State government. Anyone 
in State government who thinks they can find some connection to 
Medicaid is attempting it. And we have to do this in a way to 
keep the integrity of the fund, so that we know we are paying 
for health care for people, not for institutions, and we are 
not making up for States who aren't doing their share.
    Mr. Cummings. I see my time is up.
    Chairman Waxman. Secretary Leavitt, with all due respect, I 
think you are ignoring reality. You are saying that you want to 
cut back on a system that is getting Federal dollars 
inappropriately, and they should make up the money at the State 
and local level. They are not going to be able to make up that 
money in a recession. The income is not coming into the States.
    And you never asked your partners, the States, what the 
impact would be to make these kinds of withdrawals of the 
Federal share of the Medicaid funds that go to the 
institutions, especially public hospitals that are funded 
exclusive by the taxpayers. At the minimum, I would have 
thought that you would have wanted to ask the question of what 
the impact would be, so you would know.
    You insist that is not going to have this kind of impact. 
Yet, when you put our rules, the Society for Academic Emergency 
Medicine said, ``This proposal will jeopardize the viability of 
public and other safety-net hospitals. It will jeopardize the 
viability of our emergency medicine teaching programs.''
    Parkland Hospital in Texas said they received Medicaid 
payments of $90 million annually and that, without this 
funding, Parkland may be forced to drastically scale back their 
services in the Trauma I center, the level Trauma I center.
    You have all these others--the president of the University 
of California, the University of California academic medical 
centers. You have all these comments. And we looked at the 
rulemaking record; the fact is you ignored these comments. You 
didn't adjust the policy in response to these comments in the 
final rule, and you did prepare an analysis to the effect of 
the Medicaid regulations would be minimal impact on care being 
provided by the States.
    How can that be? Isn't that irresponsible?
    Secretary Leavitt. Mr. Chairman, it is responsible for me 
to follow the law and assure that the States are doing their 
job. Otherwise, we are not being a wise steward of limited 
Medicaid funds.
    This is a dispute between partners, between the Federal 
Government and the States. And the Federal Government is 
saying, you can't take money we have given you extra for these 
hospitals, put them back into your general fund, and then use 
them to pay your share. Just give us real money, give us value, 
give us--for real patients.
    This is not about surge capacity. It is about a 
relationship between the States and the national Government----
    Chairman Waxman. The consequences will be the institutions 
that provide the safety net to the very poor in our society 
will not be able to continue to function and provide those 
services.
    It just seems to me you are judging your actions on an 
ideology without having established the record. You didn't come 
to Congress and ask for those changes. You are trying to put 
them into effect on your own.
    Fifty Governors have asked us to at least put a halt on 
this so they can be studied, which they should have been 
studied before they were put into place. An overwhelming 
majority of the House of Representatives has put a hold on 
these regs until we can look at them further.
    I think that you ought to withdraw these regulations and 
let's see what the impact will be. Let's know that we are not 
doing any harm to the ability for hospitals around the country 
to deal with the problems that they may face, not just day to 
day, but in a terrorist attack.
    Secretary Leavitt. It is not surprising to me that you can 
unite 50 Governors around the proposition that the Federal 
Government should pay their share. And that is essentially what 
this amounts to.
    Many States have improperly used money that has come from 
the Federal Government for the purpose of supporting the 
hospitals we are talking about, have taken it off the table, 
and then used it to pay their share.
    This is about States not paying their fair share. And I 
would think we would all be united in saying, if we are going 
to have a partnership, then everyone out to pay real dollars 
for real value for real patients.
    Chairman Waxman. Did you consult with Secretary Chertoff to 
tell him that there may be some impact around the country on 
the ability to deal with a terrorist attack?
    Secretary Leavitt. This is a dispute between the Federal 
Government and the States on Medicaid financing.
    Chairman Waxman. You didn't inform Secretary Chertoff of 
that?
    Secretary Leavitt. We regularly consult on the larger 
strategic issues related to our joint mission. This is not one 
of them.
    Chairman Waxman. Did you do an evaluation to know what the 
impact would be on these hospitals if these regs went into 
place?
    Secretary Leavitt. Medicaid is not intended to support 
institutions. It is intended to support people.
    Chairman Waxman. But it does support these institutions, 
because people without insurance go to these hospitals. People 
who are injured go to these hospitals. If you withdraw the 
money from the hospitals because you have a theory that the 
States ought to come up with more money, it means, as we were 
told by Dr. Roger Lewis, who is an emergency room physician at 
UCLA, a nationally recognized expert in hospital emergency 
preparedness, he said, ``Those of us who work on the front 
lines of the medical care system believe it is irrational that 
an emergency care system that is already overwhelmed by the 
day-to-day volume of acutely ill patients would be able to 
expand its capacity on short notice in response to a terrorist 
attack.'' He said, ``If a bomb went off in Los Angeles and 
injured hundreds or thousands, LA would not have the emergency 
room capacity to care for the wounded.''
    In your statement to the Congress, you emphasize the 
support the Federal Government is giving States and localities 
to improve this emergency preparedness. And we asked Dr. Lewis, 
and he said they were getting $433,000 in a preparedness grant, 
and he was very grateful for it, but the cost of these Medicaid 
changes would mean they would go without $50 million. He said 
that is 100 times more than the Medicaid cuts they would get on 
these preparedness grants, and they are going to be in very, 
very sad shape.
    Do you take what he had to say seriously? Do you think he 
is just fronting for the States because they want to rejigger 
their money around?
    Secretary Leavitt. Mr. Chairman, over the course of the 
last 3 years, I have been in virtually every State and met with 
the emergency community, and the record is replete with my 
statements of concern about surge capacity. It is not at the 
level we want it to be. We have many areas in which we can 
improve. But Medicaid is not the source of funds to do that.
    If the Congress of the United States views that there is a 
need for more dollars, we have ways in which we can funnel 
directly to the hospital funds that are necessary to improve 
their surge capacity.
    Medicaid was intended to be for people, not for 
institutions. And every institution I know would like to drag a 
garden hose over into the Medicaid fund and be able to tap it, 
because their fund isn't what they would like it to be.
    We need to be disciplined. We need to ensure that these 
disputes are resolved between the States and the Federal 
Government so that we have a true partnership, not just one 
that relies entirely on the Federal Government.
    Chairman Waxman. Well, I must say, with all due respect, 
your actions make absolutely no sense. The tiny grants you are 
giving to hospitals can't possibly offset the impact of cutting 
billions of dollars from those programs.
    I must say, as we conclude this hearing, I find it very 
discouraging. We know the Nation's emergency rooms are already 
at the breaking point. We know a terrorist bombing is a 
predictable surprise. We know that local emergency room 
capacity is critical to saving lives in that golden hour 
following an attack. We know that public and teaching hospitals 
operate many of our Nation's most critical emergency rooms and 
trauma centers.
    We know that the Medicaid regulations will reduce funding 
to these institutions by hundreds of millions of dollars each 
year. We know that these cuts will further undermine the 
ability of these hospitals to respond to a terrorist bombing. 
We know that these regulations will go into effect in 3 short 
weeks.
    And yet the Secretaries that are in the position to avoid 
this harm will not take any action. I think it is regrettable.
    I must say, this is not just a disagreement. I think it is 
a substantial breach in what I think is our mutual 
responsibility to make sure that we can deal with a homeland 
security attack, which could amount to a tragedy.
    I thank you both for being here. We hear the bells; there 
is a vote on the House floor.
    I do want to ask unanimous consent that the record be held 
open for Members to ask further questions and get responses in 
writing.
    We stand adjourned.
    [Whereupon, at 11:15 a.m., the committee was adjourned.]

                                 
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