[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]





                   FULL COMMITTEE HEARING ON THE
                 CHALLENGES OF THE 2009-H1N1 INFLUENZA
                   AND ITS POTENTIAL IMPACT ON SMALL
                  BUSINESSES AND HEALTHCARE PROVIDERS

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

                                HEARING

                               before the


                      COMMITTEE ON SMALL BUSINESS
                             UNITED STATES
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED ELEVENTH CONGRESS

                             FIRST SESSION

                               __________

                              HEARING HELD
                           SEPTEMBER 9, 2009

                               __________

      [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


            Small Business Committee Document Number 111-044
Available via the GPO Website: http://www.access.gpo.gov/congress/house







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                   HOUSE COMMITTEE ON SMALL BUSINESS

                NYDIA M. VELAZQUEZ, New York, Chairwoman

                          DENNIS MOORE, Kansas

                      HEATH SHULER, North Carolina

                     KATHY DAHLKEMPER, Pennsylvania

                         KURT SCHRADER, Oregon

                        ANN KIRKPATRICK, Arizona

                          GLENN NYE, Virginia

                          MICHL MICHAUD, Maine

                         MELISSA BEAN, Illinois

                         DAN LIPINSKI, Illinois

                      JASON ALTMIRE, Pennsylvania

                        YVETTE CLARKE, New York

                        BRAD ELLSWORTH, Indiana

                        JOE SESTAK, Pennsylvania

                         BOBBY BRIGHT, Alabama

                        PARKER GRIFFITH, Alabama

                      DEBORAH HALVORSON, Illinois

                  SAM GRAVES, Missouri, Ranking Member

                      ROSCOE G. BARTLETT, Maryland

                         W. TODD AKIN, Missouri

                            STEVE KING, Iowa

                     LYNN A. WESTMORELAND, Georgia

                          LOUIE GOHMERT, Texas

                         MARY FALLIN, Oklahoma

                         VERN BUCHANAN, Florida

                      BLAINE LUETKEMEYER, Missouri

                         AARON SCHOCK, Illinois

                      GLENN THOMPSON, Pennsylvania

                         MIKE COFFMAN, Colorado

                   Michl Day, Majority Staff Director

                 Adam Minehardt, Deputy Staff Director

                      Tim Slattery, Chief Counsel

                  Karen Haas, Minority Staff Director

        .........................................................

                                  (ii)


                         STANDING SUBCOMMITTEES

                                 ______

               Subcommittee on Contracting and Technology

                     GLENN NYE, Virginia, Chairman


YVETTE CLARKE, New York              AARON SCHOCK, Illinois, Ranking
BRAD ELLSWORTH, Indiana              ROSCOE BARTLETT, Maryland
KURT SCHRADER, Oregon                W. TODD AKIN, Missouri
DEBORAH HALVORSON, Illinois          MARY FALLIN, Oklahoma
MELISSA BEAN, Illinois               GLENN THOMPSON, Pennsylvania
JOE SESTAK, Pennsylvania
PARKER GRIFFITH, Alabama

                                 ______

                    Subcommittee on Finance and Tax

                    KURT SCHRADER, Oregon, Chairman


DENNIS MOORE, Kansas                 VERN BUCHANAN, Florida, Ranking
ANN KIRKPATRICK, Arizona             STEVE KING, Iowa
MELISSA BEAN, Illinois               W. TODD AKIN, Missouri
JOE SESTAK, Pennsylvania             BLAINE LUETKEMEYER, Missouri
DEBORAH HALVORSON, Illinois          MIKE COFFMAN, Colorado
GLENN NYE, Virginia
MICHL MICHAUD, Maine

                                 ______

              Subcommittee on Investigations and Oversight

                 JASON ALTMIRE, Pennsylvania, Chairman


HEATH SHULER, North Carolina         MARY FALLIN, Oklahoma, Ranking
BRAD ELLSWORTH, Indiana              LOUIE GOHMERT, Texas
PARKER GRIFFITH, Alabama

                                 (iii)



               Subcommittee on Regulations and Healthcare

               KATHY DAHLKEMPER, Pennsylvania, Chairwoman


DAN LIPINSKI, Illinois               LYNN WESTMORELAND, Georgia, 
PARKER GRIFFITH, Alabama             Ranking
MELISSA BEAN, Illinois               STEVE KING, Iowa
JASON ALTMIRE, Pennsylvania          VERN BUCHANAN, Florida
JOE SESTAK, Pennsylvania             GLENN THOMPSON, Pennsylvania
BOBBY BRIGHT, Alabama                MIKE COFFMAN, Colorado

                                 ______

     Subcommittee on Rural Development, Entrepreneurship and Trade

                 HEATH SHULER, North Carolina, Chairman


MICHL MICHAUD, Maine                 BLAINE LUETKEMEYER, Missouri, 
BOBBY BRIGHT, Alabama                Ranking
KATHY DAHLKEMPER, Pennsylvania       STEVE KING, Iowa
ANN KIRKPATRICK, Arizona             AARON SCHOCK, Illinois
YVETTE CLARKE, New York              GLENN THOMPSON, Pennsylvania

                                  (iv)




                            C O N T E N T S

                              ----------                              

                           OPENING STATEMENTS

                                                                   Page

Velazquez, Hon. Nydia M..........................................     1
Graves, Hon. Sam.................................................     2

                               WITNESSES

Blank, Ph.D., Hon. Rebecca M., Under Secretary of Commerce for 
  Economic Affairs, U.S. Department of Commerce..................     3
Schuchat, M.D., USPHS, Rear Admiral Anne, Assistant Surgeon 
  General, United States Public Health Service, Director, 
  National Center for Immunization and Respiratory Diseases 
  (NCIRD), Centers For Disease Control and Prevention, Department 
  of Health And Human Services...................................     4
Mcgaw, Mr. Bridger Acting Assistant Secretary for the Private 
  Sector, Office of Policy/Office of Private Sector, Department 
  of Homeland Security...........................................     6
Demangone, Mr. Anthony, Director of Regulatory Compliance, Senior 
  Compliance Counsel, National Association of Federal Credit 
  Unions.........................................................    21
King, Md, Dr. Jim, Chair of Board of Directors, Selmer, 
  Tennessee, American Academy Of Family Physicians...............    23
Jackson, Mr. Harold, President and CEO, Buffalo Supply, Inc., 
  Lafayette, CO. On Behalf of The U.S. Chamber of Commerce.......    24
Tayloe, Jr. Md, Dr. David T., President Goldsboro, NC, American 
  Academy of Pediatrics..........................................    26
Thatcher, Ms. Mary Kay, Director of Public Policy, American Farm 
  Bureau Federation..............................................    28

                                  (v)




                                APPENDIX


                                     Prepared Statements:
Velazquez, Hon. Nydia M..........................................    36
Graves, Hon. Sam.................................................    38
Blank, Ph.D., Hon. Rebecca M., Under Secretary of Commerce for 
  Economic Affairs, U.S. Department of Commerce..................    40
Schuchat, M.D., USPHS, Rear Admiral Anne, Assistant Surgeon 
  General, United States Public Health Service, Director, 
  National Center for Immunization and Respiratory Diseases 
  (NCIRD), Centers For Disease Control and Prevention, Department 
  of Health And Human Services...................................    44
Mcgaw, Mr. Bridger Acting Assistant Secretary for the Private 
  Sector, Office of Policy/Office of Private Sector, Department 
  of Homeland Security...........................................    51
Demangone, Mr. Anthony, Director of Regulatory Compliance, Senior 
  Compliance Counsel, National Association of Federal Credit 
  Unions.........................................................    57
King, Md, Dr. Jim, Chair of Board of Directors, Selmer, 
  Tennessee, American Academy Of Family Physicians...............    68
Jackson, Mr. Harold, President and CEO, Buffalo Supply, Inc., 
  Lafayette, CO. On Behalf of The U.S. Chamber of Commerce.......    72
Tayloe, Jr. Md, Dr. David T., President Goldsboro, NC, American 
  Academy of Pediatrics..........................................    81
Thatcher, Ms. Mary Kay, Director of Public Policy, American Farm 
  Bureau Federation..............................................    93

                                     Statements for the Record:
American Farm Bureau Federation..................................    99
National Pork Producers Council..................................   101
American Hotel & Lodging Association.............................   108

                                  (vi)

  

 
                     FULL COMMITTEE HEARING ON THE
                 CHALLENGES OF THE 2009-H1N1 INFLUENZA
                   AND ITS POTENTIAL IMPACT ON SMALL
                  BUSINESSES AND HEALTHCARE PROVIDERS

                              ----------                              


                      Wednesday, September 9, 2009

                     U.S. House of Representatives,
                               Committee on Small Business,
                                                    Washington, DC.
    The Committee met, pursuant to call, at 1:08 p.m., in Room 
2360, Rayburn House Office Building, Hon. Nydia M. Velazquez 
[Chair of the Committee] Presiding.
    Present: Representatives Velazquez, Moore, Dahlkemper, 
Schrader, Ellsworth, Luetkemeyer and Thompson.
    Chairwoman Velazquez. I call this hearing of the Committee 
to order.
    Every flu season we encourage Americans to take precautions 
like getting vaccinated and washing their hands. However, this 
year's flu season is different. Because of H1N1, our Nation can 
expect a new set of public health issues. For those in the 
small business community, the 2009 H1N1 flu season will mean 
new challenges.
    The World Health Organization and the CDC announced the 
outbreak of H1N1 in March. By July, the number of confirmed 
cases have reached 100,000. While it is too early to tell how 
fast the virus will spread, it is almost certain that a 
pandemic will mean significant economic consequences. The CBO 
has suggested a full-blown pandemic could draw $700 billion out 
of our economy at a time when we cannot afford any economic 
setbacks.
    The administration recently released its plan for employers 
to respond to and prepare for H1N1. This week we expect to see 
a similar plan that is specifically tailored for small 
businesses' needs. Today's hearing will look at these 
recommendations and the issues facing small firms.
    For small companies this year's flu season raises many 
questions. How should small businesses handle leave policy? One 
of the best ways to combat the spread of H1N1 is to encourage 
employees to stay home if they are ill. Clearly, limiting 
exposure is important for fighting the spread of flu; however, 
sending too many workers home can also impede small firms' 
operations.
    While most small business owners want to be responsible and 
protect their employees' health, we also want to ensure that 
they do not needlessly slow down their operations. Big 
companies usually have enough employees to continue operating 
even when part of their workforce grows ill. That isn't always 
the case for small businesses. So we cannot assume that 
solutions that work for big firms will work for small ones.
    We also need to think about how disruptions to small 
businesses will impact the flow of commerce. Entrepreneurs rely 
on other firms to provide them materials, but they also supply 
products to other businesses. If H1N1 interrupts the supply 
chain, there are questions about how the overall flow of goods 
and services will be affected.
    We need to examine these problems and think about solutions 
for minimizing this economic ripple effect. Perhaps, most of 
all, we must look at what tools are available to help small 
businesses as we head into flu season and consider whether 
those tools are sufficient.
    Just as small employers are taking steps to slow the spread 
of H1N1, entrepreneurs will be critical to helping our Nation 
overcome this pandemic. Some of the most promising research is 
conducted by small companies. As we race to develop effective 
vaccines, these companies will be instrumental. Small health-
care providers have always been the core of our medical system. 
Eighty percent of doctor office visits take place in a small 
practice. These providers will be vital in distributing 
vaccinations and treating Americans who fall sick.
    Clearly all types of small businesses will be on the front 
line this flu season. As employers, as health-care providers, 
and as a source of medical innovation, entrepreneurs will be an 
important part of how our Nation responds to this public health 
problem.
    At this stage numerous questions remain unanswered. All of 
us hope that infection rates are moderate, but regardless, the 
wisest course of action is for all of us to be--the most 
important thing is to be prepared.
    Today's hearing will explore how small businesses can help 
us through this year's flu season, the challenges they face, 
and what we did do to support their efforts.
    With that, I thank our witnesses for being here and yield 
to Ranking Member Mr. Thompson for an opening statement.
    Mr. Thompson. Madam Chairwoman, thank you for calling this 
hearing on a very important issue, the H1N1 influenza virus and 
its effects on small businesses and family farms and health-
care providers, and thank you to all the witnesses who are 
testifying today.
    The H1N1 flu virus appeared in the United States in late 
April of 2008. Since that time the World Health Organization 
and the Centers for Disease Control have said that there is no 
evidence that H1N1 is spread by the consumption of food. 
Nevertheless, pork consumption is down, and exports of pork and 
pork products have declined, and farmers, owners of the related 
industries and their communities are feeling the negative 
ripple effects.
    Now, this comes at a time when small companies are already 
struggling in a difficult economy. Small businesses of all 
kinds have been affected by H1N1, and this hearing will provide 
an opportunity for us to examine the many related issues that 
center around this.
    Madam Chairwoman, I look forward to hearing from our 
witnesses, and I yield back the balance of my time.
    Chairwoman Velazquez. And now I want to welcome the 
Honorable Rebecca Blank. Ms. Blank is the Under Secretary for 
Economic Affairs at the U.S. Department of Commerce. She has 
been confirmed by the Senate and was sworn in on June 9. In 
this position Dr. Blank's principal responsibilities include 
economic forecasting, consultation with the private sector, and 
policy analysis. Welcome.

                 STATEMENT OF REBECCA M. BLANK

    Ms. Blank. Madam Chairwoman, Representative Thompson, and 
other members of the Committee, thank you very much for 
inviting me to be here this afternoon. I appreciate the 
opportunity to appear and discuss the efforts of the Department 
of Commerce to educate businesses, including small businesses, 
on how to minimize the negative economic impacts of the H1N1 
virus.
    I commend the Committee's focus on this topic. We don't 
know the specific course that the H1N1 flu will follow over the 
next few months, but we do know there are actions that can be 
taken to minimize its impact. The Obama administration has 
developed preparedness guidance and is working with State and 
local governments and the private sector to promote awareness 
of these steps.
    It is predicted that the arrival of the H1N1 flu, in 
conjunction with the regular seasonal flu, will bring more 
illness. The more severe the flu outbreak, the greater the 
impact on the economy. We don't know precisely what these 
impacts will be, but it is likely that businesses will be 
confronted with greater absenteeism as their employees or 
family members become ill, which will in turn affect 
productivity.
    In a more severe outbreak, concern about the flu can lead 
people to avoid public places. This will reduce consumer 
spending and means that some industries, such as travel and 
tourism, retail sales, and service-oriented businesses will 
experience greater economic impact than others.
    Just recently Secretary Locke participated in several 
outreach calls to CEOs in the retail, travel, tourism, and 
technology sectors. The response to that outreach has been very 
positive. The Department will remain in contact with the 
business community on this matter through an outreach plan that 
will provide regular opportunities to share information, 
promote preparedness, and monitor responses should H1N1 occur 
this fall.
    Let me emphasize that all businesses, including small 
business, should develop plans in advance to respond flexibly 
to either the current level of severity or a more severe flu 
outbreak. The coming influenza season is likely to prove 
challenging, especially to small businesses, as they can easily 
be affected by the absence of just a few key employees. Small 
businesses may have fewer resources available to cope with 
unexpected events. That is all the more reason for them to 
prepare now for how they would handle future problems.
    Whatever the magnitude of the flu outbreak, there are steps 
that can and should be taken to mitigate the impact of the 
upcoming flu season on productivity and to better protect 
workers and their families.
    The Interagency Committee Guide has recommended that 
businesses establish an influenza plan and involve employees in 
development and review. This may be particularly important for 
small businesses where there is more need for employees to take 
over responsibilities when other employees become absent.
    Understand the organization's normal seasonal absenteeism 
rates so that businesses can monitor any unusual increases and 
know if they are being affected. Engage with local health 
authorities to confirm channels of communication to know if the 
local outbreak is becoming more severe; share best practices 
with other similar businesses; and implement sick-leave 
policies that are flexible and consistent with public health 
guidance so sick employees may remain home.
    Unfortunately, it is possible that the flu outbreak in the 
coming season could be worse than what we experienced in early 
2009. In this case there may be a need to implement plans that 
would allow more workers to telecommute or temporarily limit 
noncritical activities.
    Businesses should follow updates on the course of the flu 
to be aware of changes in occurrence and severity in their 
local area. The most up-to-date information on this will be 
available on the www.flu.gov Web site. I have been told by my 
staff to repeat that Web site as often as possible. It is the 
most authoritative source of information for people.
    We cannot stop the flu season, but with adequate 
preparation and planning, we can minimize its impact on people, 
businesses, and the economy.
    Thank you for the opportunity to testify on the activities 
of the Department of Commerce. We look forward to continuing 
our collaboration between the Department and the agencies 
represented here today, as well as other Federal agencies and 
the business community. I look forward to your questions.
    Chairwoman Velazquez. Thank you, Dr. Blank.
    [The statement of Ms. Blank is included in the appendix.]
    Chairwoman Velazquez. And now it is my pleasure to welcome 
Rear Admiral Anne Schuchat. She is the Assistant Surgeon 
General for the United States Public Health Service. She is 
also the Director of the National Center for Immunization and 
Respiratory Diseases. Dr. Schuchat has played a leadership role 
in the Health and Human Services response to the 2009 H1N1 
influenza virus.
    Welcome.

            STATEMENT OF REAR ADMIRAL ANNE SCHUCHAT

    Admiral Schuchat. Good afternoon. Thank you, Chairwoman 
Velazquez and distinguished Committee members. I am Dr. Anne 
Schuchat, the Director of the National Center for Immunization 
and Respiratory Diseases, and delighted to be able to update 
you on the H1N1 situation.
    Increased disease from the 2009 H1N1 virus has already 
begun in the Southeastern States, and we expect in the coming 
months more and more communities around the country to 
experience increases of influenza, including this new virus. 
Communities may be more severely affected, reflecting wider 
transmission and potentially greater impact. Seasonal influenza 
viruses may continue to circulate at the same time as the H1N1 
virus this fall and winter. It is also difficult for us to 
predict the severity that these outbreaks will have, the number 
of hospitalizations, the deaths that will occur due to either 
the H1N1 virus or seasonal flu.
    Small businesses play a vital role in community functioning 
during influenza pandemics. They form the critical backbone of 
supply chains for larger businesses and are central to the 
strength of local economies. Many health-care providers are 
also small businesses, and they are critical to caring for 
patients, to delivering vaccine, and to managing and informing 
influenza decisionmaking in their communities, yet small 
businesses also suffer disproportionately during disasters, and 
they are especially susceptible to the negative economic 
impacts of an influenza pandemic.
    The CDC and Health and Human Services work closely with the 
Department of Homeland Security, the Department of Labor, 
Department of Commerce, and the Small Business Administration 
to help small businesses address issues they may face during an 
influenza pandemic. In response to our expected spread of the 
2009 H1N1, CDC has updated our recommendations to assist 
businesses and other employers of all sizes, and, in fact, we 
are now working on updating guidance that will address the 
small business community in particular.
    The guidance for small businesses will recommend that small 
businesses should plan for and respond to two possible 
scenarios: One where the severity of illness is similar to what 
we saw in the spring and summer, and a second scenario where 
the severity might be worse.
    Even if the severity of this virus doesn't change, though, 
small businesses should expect that there will be more illness 
this fall and winter, and that this may significantly raise the 
levels of absenteeism and could have an impact on their 
business operations.
    That second scenario of greater severity involves more 
people becoming ill with severe illness, more hospitalizations, 
and even more deaths, an even greater escalation of 
absenteeism. Businesses need to be ready to implement 
strategies to protect their workforce while ensuring continuity 
of operations.
    During an influenza pandemic, all sick people should stay 
home and away from the workplace. Hand washing and covering 
your cough continues to be important, and routine cleaning of 
commonly touched surfaces is also important.
    Employers of all sizes should consider plans to implement 
flexible sick-leave policies. CDC recommends that employees 
with influenza illness stay home until at least 24 hours after 
their fever is gone. Sick employees would be out for about 3 to 
5 days in general, even if antiviral medications are used. 
Businesses should also not require a doctor's note for workers 
who are ill with influenzalike illness to validate their 
illness or to return to work. A doctor's visit might strain the 
health system and isn't needed for most people with 
influenzalike illness.
    Businesses should also inform employees that some people 
are at higher risk of complications from influenza. People at 
higher risk should check with their health-care providers if 
they become ill. Early treatment with antiviral medicines is 
important for people at high risk because it can help prevent 
hospitalizations and death.
    CDC also recommends businesses encourage employees who are 
recommended for the seasonal flu vaccine and for the 2009 H1N1 
vaccines get vaccinated as soon as those vaccines are available 
in their communities.
    Small businesses should consider developing other flexible 
leave policies to allow workers to stay home to care for sick 
family members or for children if schools dismiss students of 
child-care programs or if child-care programs close.
    It may be helpful to consider ways to cross-train workers 
to perform essential functions so the workplace is able to 
operate even when key staff are absent. To maintain critical 
operations, small businesses should be prepared to change 
business practices as needed during an outbreak. Small 
businesses should prepare to identify alternative suppliers, 
for instance, or prioritize customers, or temporarily suspend 
some operations if that is needed.
    So I want to end with stressing four points that small 
businesses can take. Plan now to prepare for the impact of flu 
this fall and winter; take into account two planning scenarios: 
similar severity and greater severity; protect your workforce 
by encouraging people to stay home if they are sick; and take 
steps to maintain continuity of operations even during high 
levels of absenteeism.
    We are working across government to try to develop 
practical, clear guidance and tools that small business can use 
to protect their workforce and maintain operations during what 
I think is going to be a challenging flu season.
    Our Nation's current preparedness is at the greatest stage 
it has ever been, but we all need to work together going 
forward, and I look forward to working with the Congress in 
answering your questions.
    Chairwoman Velazquez. Thank you, Dr. Schuchat.
    [The statement of Admiral Schuchat is included in the 
appendix.]
    Chairwoman Velazquez. And now I welcome Mr. Bridger McGaw. 
He is the Assistant Secretary for the Private Sector in the 
Office of Policy in the Department of Homeland Security. The 
Private Sector Office engages businesses, trade associations, 
and other nongovernmental organizations to foster a dialog 
between DHS and the private sector.

                   STATEMENT OF BRIDGER McGAW

    Mr. McGaw. Chairwoman Velazquez, Ranking Member Thompson, 
and members of the Committee, thank you for the opportunity to 
discuss the Department of Homeland Security's effort to prepare 
small businesses for the upcoming flu season.
    I am Bridger McGaw, the Acting Assistant Secretary for the 
Private Sector Office, and I have held this position since 
March of this year. As Homeland Security Presidential Directive 
5 states, the DHS's role in a pandemic is to act as the 
principal Federal official for domestic incident management.
    In anticipation of this year's flu season, DHS has worked 
extensively with our interagency partners to provide H1N1 flu 
guidance for schools, universities, and businesses. This 
includes the development of a guide for small businesses. By 
providing this guidance, DHS is promoting tools that 
individuals and businesses can use to mitigate the impact of 
H1N1 and help minimize disruptions in society and the economy.
    Preparedness is a shared responsibility of the public and 
private sector as well as every household and business of every 
size. As this spring's outbreak developed, Secretary Napolitano 
stressed the importance of getting timely information out to 
the public, including the private sector, about the extent of 
the outbreak, the government's response efforts, and guidance 
on what the public could do to stay healthy.
    We found that businesses of all sizes generally had very 
similar information needs. They want to know what was happening 
from a medical perspective and what they should do to mitigate 
the potential impact of the outbreak. DHS employed several 
strategies to get this information out to the broadest base 
possible. We held press conferences and phone briefings, sent 
out e-mail updates, met with various stakeholders, and held a 
flu summit in July. In each case, we coordinated with HHS and 
CDC and our partners in the Federal agencies.
    The private sector responded very positively to these 
outreach efforts. For example, the American Hotel and Lodging 
Association, which estimates that half of their 11,000 members 
are small businesses, applauded DHS's updates, using the 
information to inform their membership.
    When the spring outbreak transitioned to a steady state, 
DHS worked with the interagency to take advantage of these 
summer months before the fall flu season to update our planning 
resources for businesses, schools, and universities. As a 
result the Federal Government has released guidance for all 
three of those elements.
    In conjunction with the business guidance, DHS also created 
a short, user-friendly guidebook on H1N1 preparedness aimed at 
small businesses. This guide highlights how to make a plan to 
ensure their continued operations, steps businesses can take to 
protect their environment, and steps that employees can take to 
protect themselves from H1N1. The small business guide is in 
the final stages of review and will be available at flu.gov 
soon.
    To reach America's 30 million businesses, 99 percent of 
which are small businesses, my office partners with umbrella 
organizations that can disseminate updates and guidance 
throughout their networks. For example, we work with the U.S. 
Chamber of Commerce, the National Association of Manufacturers, 
the National Retail Federation, all of which represent small 
businesses.
    My office also regularly works with local Chambers of 
Commerce, which are typically comprised of small and local 
businesses. For example, the Business Council of Fairfield 
County, Connecticut, recently distributed our e-mail update to 
their 300 members and posted links to flu.gov on their Web 
site.
    This hearing is especially timely, given that September is 
National Preparedness Month. This month we all need to check in 
with our family, our workplace, and our community to make sure 
we have a plan to stay safe in an emergency. Good emergency 
planning will continue to yield returns for small businesses 
beyond this fall. By preparing for the flu season, small 
businesses will also be likely to be prepared for other hazards 
or threats they may face.
    DHS's site Ready.gov is another resource for individual and 
business preparedness information. In particular, Ready 
Business has a mentoring initiative designed to help small to 
medium-size businesses prepare for emergencies.
    Materials for small businesses include a sample emergency 
plan, worksheets to help inventory assets and equipment, and 
information on dealing with employee concerns, facility 
management, and more. There are also materials to help business 
and community leaders lead preparedness workshops and training 
sessions.
    My Senator, the late Ted Kennedy, once said, We do not have 
to compel citizens to serve their country. All we have to do is 
ask and provide the opportunity.
    This month we are asking all Americans to help us build a 
more resilient Nation. The opportunity is here. We have 
provided guidance and planning tools for individuals and 
businesses to build actionable emergency plans. Now each 
business and community needs to act on this information.
    I would like to also use this opportunity to ask all of you 
to help us get the word out. As advocates for small businesses 
and leaders in your communities, we want to work with you to 
get this information linked on your Web sites to get you the 
tools you need so you can encourage your constituents to take 
action now.
    The lines of communication to DHS are open, and we remain 
committed to an ongoing dialog with the private sector and this 
Committee on how can we can build a more resilient and prepared 
Nation moving forward.
    Chairwoman Velazquez, Ranking Member Thompson, and members 
of the Committee, thank you for this opportunity to testify. I 
look forward to your questions.
    Chairwoman Velazquez. Thank you, Mr. McGaw.
    [The statement of Mr. McGaw is included in the appendix.]
    Chairwoman Velazquez. Admiral Schuchat, a severe influenza 
pandemic could overwhelm the capacity of our health-care 
system. Can you envision some of the difficult choices we may 
be forced to make about care, and what strain will it place on 
the practice of medicine?
    Admiral Schuchat. The challenges of a busy influenza season 
are great, and we are working actively with the medical 
community, the health-care system, as well as the private 
sector to anticipate the kind of challenges that will be out 
there and to be ready for them. We are trying to develop better 
tools for providers and for the public to know when they need 
to see the doctor or nurse and when they don't so that we can 
relieve some of the pressure on the outpatient offices and 
avoid those long lines in the emergency department.
    For instance, we have testing recommendations that we 
really don't need to get a test for everyone. The testing for 
influenza this year really ought to be focused on hospitalized 
patients.
    We are also working with training to make sure that we have 
intensive care unit capacity and people who know how to work 
with ventilators and so forth.
    So there are a lot of challenges on the health-care system, 
both the outpatient and inpatient part of it, some of which we 
can address with training and coordination.
    Chairwoman Velazquez. What about choices or who gets care 
and who doesn't?
    Admiral Schuchat. At this point what we are tying to do is 
use the best scientific evidence to understand what kind of 
care makes the most sense in different circumstances. We also 
have learned a lot from the Southern Hemisphere about what to 
expect, and they didn't really have to make those difficult 
choices of who gets a ventilator and who didn't. They were able 
to make it through in terms of their intensive care unit 
capacity.
    But we know that there are some communities that are 
vulnerable, and that is why we have some of the Federal assets 
available for particular special needs. So at this point we are 
really trying to use the science of what is going on to make 
clinical recommendations of who should get what kind of 
treatment. So we are not really looking at a rationing.
    Chairwoman Velazquez. Let us talk about resources. Given 
the existing shortage of physicians, what strategy is the 
agency employing to improve the capacity of the physician 
community to provide care during a pandemic? What does this say 
about this Nation's need to address its shortage of physicians 
as part of health-care reform?
    Admiral Schuchat. Scarce resources in terms of providers is 
a large problem in many of our communities. For a pandemic we 
really can't expect to have enough assetseverywhere. In terms 
of a hurricane, for instance, we can send people from one part 
of the country to another part of the country, but with a 
pandemic, everyone may be affected.
    We are taking steps to try to broaden the provider 
community, trying to enroll the Medical Reserve Corps as 
something we can tap into, for instance, and also understanding 
when health care professionals are needed or when home care is 
enough.
    So I think that this pandemic hasn't come at a good time in 
terms of our health-care system's capacity, and what we are 
trying to do is get as much support ready for the fall as 
possible.
    Chairwoman Velazquez. Do you have a sense as to where are 
the most vulnerable communities?
    Admiral Schuchat. There has been an effort to work with 
States and cities to understand their gaps. They have been 
submitting reports to us at CDC and at HHS about their 
readiness, both their health-sector readiness and their public-
health readiness, and at this point I think it is fair to say 
that everyone is going to have a challenge this fall with 
managing the kind of health-care challenges we expect, as well 
as a large vaccination program.
    What we are trying to do is work across the board with 
everyone to share best practices and to get resources out to 
the States and cities, because we know they can't really handle 
this without those extra resources.
    Chairwoman Velazquez. Thank you.
    Dr. Blank, developing general preparedness guidance seems 
key to survival of any small business operation during a 
pandemic, but unlike large firms, the resources of small 
businesses are much more limited. How do you expect a small 
business to prepare for a pandemic without placing serious 
financial strain on itself, particularly in today's financial 
climate?
    Ms. Blank. It is a very important question. Of course, the 
answer has to be particular to the specific small business, and 
will vary by type of business. Cross-training of employees in 
important, which small businesses do naturally because more 
employees often cover more functions. Businesses might want to 
expand that to really think about what would happen if one or 
two key employees were out, who would take over, and how they 
could use remaining employees.
    Telecommuting in some places where you are not doing 
customer service may be more possible. They may want to 
coordinate and communicate with other small businesses in the 
area so that, say, if you are a small health-care practice, 
that you could actually work jointly to cover your patients in 
a way that you wouldn't in normal times.
    Chairwoman Velazquez. I hear you, and I know that is the 
right proactive way to plan for a pandemic, but given the 
constraint on financial challenges that small businesses are 
going through, it is quite difficult for them to think 
proactively.
    Ms. Blank. I agree with that. I think it is one reason why 
we all here are trying to get the word out to both large and 
small businesses about the need to do some advanced planning, 
because if this comes, it could come quite quickly to your 
local area. If you haven't thought about it ahead of time, you 
will be in worse shape.
    As you pointed out in your opening statement, small 
businesses will be more negatively impacted because they don't 
have the same flexibility.
    Chairwoman Velazquez. Mr. McGaw, in light of the recent 
avian flu scare a few years ago, significant strides have been 
made to prepare businesses for an H1N1 emergency. What kind of 
support should small businesses expect from State and local 
governments during a pandemic, and who will coordinate those 
efforts?
    Mr. McGaw. Thank you. It is a great question. One of the 
things that we have been really relying on is the fact that 
this is a true partnership between the intergovernmental actors 
at the Federal, State and local level. We are also recognizing 
that, as we saw in the spring, H1N1 presented itself around the 
country in different ways at different times and different 
places, so what that resulted in was an effort to make sure 
that each of those areas had the right information, and that 
they were interacting with their local health officials to make 
informed decisions based on the impact they were seeing 
locally.
    What we were trying to do and continue to do is to inform 
the decisionmakers, and our Intergovernmental Affairs Office, 
for instance, works with all the State homeland security 
advisors and emergency managers to make sure that they are 
informed with the information that we have. So we work through 
our intergovernmental processes at DHS.
    The key here is that the same information is available from 
any actor. So you are going to hear the message from the 
Intergovernmental Affairs Office to the homeland security 
advisors; you are going to hear it from my office working with 
our infrastructure protection community and making sure the 
business community is hearing that; and then you are hearing 
the same information and guidance coming from the CDC and the 
health community.
    So I think what you saw in the planning for 2006, 2007, was 
an example of all of listening to each other and working in a 
more collaborative manner to make sure everyone has the 
information to make more informed decisions.
    Chairwoman Velazquez. Well, I am concerned about the fact 
that the General Accountability Office report, they heard from 
the private sector the fact that it is unclear for small 
businesses and businesses about the respective role and 
responsibility of the Federal and State governments during a 
pandemic emergency. My question is: Do you feel that there is a 
coordinated effort between State and Federal Governments in 
working together for a strategy in terms of preparedness?
    Mr. McGaw. From the Department of Homeland Security side 
and then maybe from the public health side, I would say very 
much so; we are coordinating on the governmental level. The 
shared-responsibility model approach that we have taken is to 
make sure that State actors have what we know when we know it. 
We are trying to be very open and transparent with the 
information that we have based on the science, but also using 
the updated guidance and making sure that people are kept 
abreast. In my office we send out a weekly e-mail with any 
updates we have.
    Chairwoman Velazquez. I hear you when you talk about 
providing information. My question is coordination. So if any 
of the others--
    Admiral Schuchat. I think that the public really expects, 
appropriately, that we have a seamless coordination at the 
public-health level between cities, counties, States, an the 
Federal level, and very much a part of our planning process 
this summer as we are readying the government for an increase 
in influenza has been this city-county-State-Federal 
partnership. So our Vaccine Task Force that is trying to figure 
out how we implement this large-scale, voluntary vaccination 
program has a steering committee composed of people from 
several different levels of public-health government. And so 
from the strategy to the planning to the evaluation and 
feedback, we are really trying to work seamlessly.
    I think most of what happens with influenza happens at the 
local level, and if we don't have strong local implementers, we 
will fail. And so we are trying to incorporate that local 
perspective and the State leadership into the Federal planning 
at every step.
    Chairwoman Velazquez. Thank you.
    Mr. Thompson.
    Mr. Thompson. Thank you, Madam Chairwoman.
    Once again, thanks to the panel for your service and for 
being here on this important topic. I want to keep going down 
that line of inquiry that the Chairwoman had.
    In terms of collaboration, we have three very important 
departments represented here that are three or probably even 
more that would be impacted if this pandemic would become a 
reality. Can you give me specific examples of communications 
and collaborations between your three departments on this 
particular issue?
    Mr. McGaw. Starting in April, all of my communications from 
the Private Sector Office have been linked to the CDC. So in 
all of our outreach efforts we are working to include the CDC, 
and we talk about what we are going to say, how we are going to 
say it, and who we are going to say it to. And those 
communications have been--we have had--back in April we had 
private-sector calls on almost a weekly basis that went out to 
about 1,100 trade associations and other organizations and 
their leadership as we briefed them out, and each of those 
calls had representatives of the different agencies. As we 
learned what kind of questions people wanted, we brought in 
more subject-matter experts.
    We continued that operational tempo through the summer, 
through our business planning guidance, through our K-through-
12 guidance, through our higher ed guidance, making sure our 
agencies were working together. Those are three examples. I 
have a half dozen others.
    Ms. Blank. Obviously, the medical leadership here has come 
from outside of Commerce, but Secretary Locke and other senior 
staff have been quite involved in communicating about the 
guidance. We really see ourself in the role ofinterfacing 
between the CDC and DHS and the guidance it is giving, and the 
business community. We have the connections into the business 
community to try to be the coordinating agency that gets this 
message out as fully as possible, and in turn sends information 
back from what the business community is saying about what is 
helpful or what they still need.
    Mr. Thompson. All right. Secretary Blank, you talked the 
outreach to the business community, obviously, which is 
extremely important, from both perspectives, workforce issues, 
which annually with the flu is always a difficult time, 
especially in small businesses that have a very small workforce 
and a lot of folk wearing a lot of hats in terms of duty and 
responsibilities, but also on the customer side, and especially 
what could be very devastating to commerce is people tend not 
to go out into public areas as much, and the economic impact of 
that.
    How is the Commerce Department or, working your other 
partners, getting that message out to small businesses? I have 
heard some great resources and great strategies in terms of 
managing flu symptoms and minimizing exposure and Web sites and 
all that. How are you getting that message to the small 
businesses?
    Ms. Blank. Of course, some of this gets out simply through 
the general media. At colleges or places that have come back 
into session, there has been news about this. This raises 
awareness, and people start looking for resources. You need 
supply and demand. People have to be looking for this help and 
this information before they hear it.
    Secretary Locke has been on a number of phone conferences 
with various representatives of the business community. He has 
particularly been focusing on talking with travel, toursism and 
retail businesses, those particular sectors that are likely to 
be most affected if consumers start staying home and not going 
out into public places. And I know that there is a plan to 
continue those sorts of phone calls and outreach as we move 
into the season with various sectors and groups within the 
economy.
    Mr. Thompson. Great.
    Has there been discussions of thoughts of what the 
potential economic impact could be with this projection of--and 
especially with small businesses as it impacts our cash flow, 
even for a number of weeks in the economy that we have been in, 
could be absolutely critical for small businesses.
    Ms. Blank. The effects obviously are going to depend very 
heavily upon how severe this flu season is, and where it hits, 
and whether it is regional, or whether it becomes more national 
or global as well, because international trade and travel will 
be heavily affected.
    I know that there is a report coming out sometime later 
this month from the Department of Homeland Security done by 
their National Infrastructure Simulation and Analysis Center 
that is going to look at various scenarios of what the impact 
on the economy could be.
    We do have estimates from past flu incidents. So in 2006, 
the Congressional Budget Office, for instance, estimated that a 
moderate bird flu pandemic would reduce GDP by around 1 
percent, where a severe one would reduce it be 4 percent. Those 
are big, but my understanding is that the duration and the 
severity of an H1N1 flu is likely to be less than a bird flu. 
So those would be absolutely maximal effects.
    Mr. Thompson. One last question. Mr. McGaw, this past week 
I had the privilege of being present when the USDA presented a 
grant and a loan to an ambulance company. I was impressed with 
this, as an old EMT, the new technology, some of this 
technology that had ultraviolet lights in the back of the 
ambulance specifically to address the viruses and keeping a 
sterile environment.
    Is the Department reaching to the local level with local 
paid and volunteer emergency medical services who, frankly, if 
the flulike symptoms escalate to a point where people need more 
professional care, that they are going to be involved with 
that.
    Mr. McGaw. I don't know of particular targeted outreach to 
the volunteer companies of EMTs and firefighters around the 
country. The same information--we can probably do that, and I 
will look into it.
    I think the importance is we are pushing out this really at 
the State homeland security level and making sure the State 
homeland security advisor has all of the information they need 
to push down to their first-response community. That can be 
pushed via the FEMA avenues as well, the key being all the 
things that we are talking about right now can be accessed by 
those local fire companies and EMTs. But it is going to be a 
pull probably from their local emergency coordinators. I can 
look into it.
    Mr. Thompson. Thank you.
    Mr. McGaw. You are welcome.
    Chairwoman Velazquez. Mr. Schrader.
    Mr. Schrader. Thank you, Madam Chair. Dr. Schuchat, I guess 
I was curious as to how has this particular flu been spreading, 
and what has been its morbidity and mortality in the United 
States compared to past flus we have had?
    Admiral Schuchat. The H1N1 influenza virus has been what we 
are calling a moderate severity. This is not like 1918, what we 
saw in the spring anyway, and the Southern Hemisphere this 
summer does not have the enormity of the 1918 pandemic, which 
was, of course, really absolutely devastating. But what we 
don't know is exactly how bad things will be this fall and 
winter. We have been trying to learn from the Southern 
Hemisphere's flu season. Their winter was our summer. So many 
of the Southern Hemisphere countries have just been through a 
season where the new H1N1 did dominate. It caused most of the 
illness in a number of these places. There were some places 
where the health-care capacity was really somewhat strained, 
but in most of the places it was a severe year, but not their 
worst ever. So that gave us a sense of what to expect.
    Mr. Schrader. Is that actually true? I assume their 
sanitation, health-care opportunities are not quite what we 
might have in the Northern Hemisphere. Is that factored into 
your calculus when you are looking at what to extrapolate?
    Admiral Schuchat. The comparisons I am making are with 
places like Australia and New Zealand that are a little closer 
to our health system capacity. But, importantly, even in some 
of those countries there were hard-hit communities and hard-hit 
populations. We are concerned in a couple of places we have 
heard of indigenous populations having a higher morbidity and 
mortality: Aboriginal populations in Australia; in Manitoba, 
some of the Native Americans there.
    So I think that we need to be ready to be flexible and as 
prepared as possible. We may have this H1N1 on top of the 
regular seasonal strains, we may have sort of two seasons, or 
almost three.
    Mr. Schrader. To that point I guess my next question would 
be how do we gauge of the flow as we get into the fall-winter 
flu season here in America how we are doing compared to our 
normal in terms of the values, and will the CDC and others 
continue to be slightly alarmist, which may be viewed as your 
job. But as a small businessman, I would like to get some 
pretty good, solid information as to how we are compared with 
trends we have seen in the past.
    Admiral Schuchat. We have enhanced our surveillance to have 
more timely information that is helpful to people and also to 
get information that is more useful locally. We are already 
seeing increases in flu, but it is only in some parts of the 
country; the Southeastern States, but not the rest of the 
country in general.
    The State and local governments are going to try to share 
the information they have so that you will know in your 
community what is going on. And I think we have learned a lot 
from the spring about interventions. We have learned it was a 
new virus. We took it very seriously. We imposed some 
interventions to be on the safe side. And we have been able to 
take the knowledge of what the experience really was like to 
sort of temper those interventions to have a good balance 
between protecting health and safety and not in untowardly 
disrupting the economy.
    Mr. Schrader. I just would hope as we go forward we have 
accurate, timely, somewhat authoritative, as much as you can be 
with a disease, information to guide the small business 
community going forward.
    Ms. Blank, what are we doing to protect the agricultural 
industry from the misnomer about the flu and the porcine 
population being the big cause of this? What actions do you see 
the government or Department of Commerce or Chambers or the 
farm organizations doing to make sure Americans get good 
information here?
    Ms. Blank. It is extremely unfortunate that this flu has 
gotten an animal name, which by all accounts is not a very 
accurate title at all.
    Mr. Schrader. Keep emphasizing that, please.
    Ms. Blank. I have cousins who are pork farmers who are 
quite upset about this. Obviously the government has tried very 
hard to use the right nomenclature here, and continues to do 
that. I think the information on the CDC Web site, on the 
www.flu.gov site, emphasizes this does not relate to eating 
particular This is a flu that is transmissible the way that 
other flus are, and one should think of it in those terms.
    It is hard to counter a name once it gets out there, and I 
think we just have to all keep making sure we use the right 
language and we keep saying the right things and hope that gets 
through.
    Mr. Schrader. Thank you. I would yield back.
    Chairwoman Velazquez. Thank you.
    Mr. Leutkemeyer.
    Mr. Leutkemeyer. I would like to follow up on a couple of 
Congressman Schrader's remarks and questions, just to kind of 
nail down the effect of the flu versus the bird flu.
    Dr. Schuchat, can you give me just how many people were 
affected with the bird flu, and you said this is going to be 
less than the bird flu?
    Admiral Schuchat. There are two principal differences 
between the avian bird flu that we have been talking about for 
the past few years and the 2009 H1N1. One difference is that 
the bird flu strain, H5N1, was very lethal. Abouttwo-thirds of 
people who got that infection died from it. That is just 
extraordinarily lethal. The H1N1 2009 strain is not of anywhere 
near that magnitude lethality.
    On the other hand, the H5N1 bird flu strain did not acquire 
the ability to spread easily person to person. Almost all of 
the cases that we have, the several hundred cases that we have 
had since 2003, have been animal to human, bird to human; very, 
very few, probably a couple, that were human to human; whereas 
virtually everything we are seeing with the 2009 H1N1 is 
extremely efficient person-to-person spread.
    So that bird flu strain, fortunately, has not become 
pandemic, but it is very, very severe. The H1N1 strain has 
become pandemic. It is very easily spread person to person, 
spreading around the world. Fortunately, it doesn't have that 
severity or lethality that the bird flu strain had or that the 
1918 strain had. That is really good news right now because we 
think we can manage this with prompt treatment of people who 
are at risk with antivirals, and we are close to having a 
vaccine to prevent and mitigate disease.
    So the lethality and transmission are the two big 
differences there.
    Mr. Leutkemeyer. Mr. McGaw, with regards to Homeland 
Security, are you monitoring other countries where this is 
popping up? Obviously, some folks have testified with regard to 
the southern part of the hemisphere, much more prevalent. Are 
you monitoring that? If so, are you going to restrict travel 
between those countries if you see a problem with it being 
exported to our country?
    Admiral Schuchat. I can speak to the monitoring, and he can 
probably do the travel issues.
    We have been intensively monitoring the virus and the 
disease it causes around the world, including Southern 
Hemisphere countries. So far the virus is the same. It hasn't 
mutated. It is the same as what we have and what we had last 
spring.
    Mr. Leutkemeyer. Could you name a couple of those 
countries?
    Admiral Schuchat. Yes. Australia, New Zealand, South 
Africa, Argentina, Chile, those are countries where there has 
been a lot of information. Peru. I may be forgetting a few. So 
we actually have people and partnerships in a number of 
countries. And at flu.gov, HHS has released a report on the 
Southern Hemisphere that describes the assessment of what we 
saw there and how that can help us anticipate what we are going 
to have this fall, knowing that the health systems might be 
different.
    Mr. Leutkemeyer. My question is if you see that it is a 
pandemic level there, are you going to restrict travel? Is that 
an option?
    Admiral Schuchat. There is not a plan for any travel 
restrictions. At this point the U.S. has as much or more 
disease than anyone else does. We are strongly encouraging 
others not to restrict travel of Americans, and we are not 
intending to restrict travel elsewhere. We think it is so 
important for people who are sick to stay home and not spread 
their illness, but we don't think that one country is a riskier 
place than another right now. Unfortunately, the virus is all 
over the world.
    Mr. Leutkemeyer. Okay. Thank you.
    Secretary Blank, very quickly. I am running out of time 
here. I also want to follow up to Congressman Schrader's 
remarks with regard to getting a better handle on the name of 
the flu. Are you working with the national media to see if 
those folks would try and not use other words other than 
"H1N1"? Are you briefing those people, and are you keeping 
track of their lack of doing that?
    Ms. Blank. I think CDC is involved with this quite closely.
    Admiral Schuchat. We have been working intensely with the 
media to try to ready them to help with the falloutbreaks. We 
have had workshops and tabletops and so forth. We have 
discussed the name issue. I think their view is the name has 
stuck, and many of them are trying to use the H1N1 term that we 
are using consistently, but I don't think we will be able to 
convince the headline writers.
    Mr. Leutkemeyer. How do you think we ought to address that 
problem, because this is significantly impacting the pork 
industry. Just to say, Well, they are doing their best; is that 
good enough?
    Admiral Schuchat. One thing we are doing is monitoring 
understanding. There have been several polls to understand are 
people not eating pork, or are some of those factors happening. 
We think we are actually winning with the American public's 
understanding. So I think that is probably going to be more 
helpful. I do think it is important to look at all the economic 
consequences.
    Mr. Leutkemeyer. Don't you think it wold be wise you have a 
meeting once a week, once a month, with the national media and 
say, hey, in your articles following up on this disease, we 
noticed a number of times that you were incorrectly using the 
name of--the slang name for this flu.
    Mr. McGaw. It is an important point and one that we should 
continue to emphasize. So I will make sure our public affairs 
offices are aware and continue to push. We are all coordinated 
in our use of the H1N1 moniker and away from other names, and 
so we will continue to push on that.
    Chairwoman Velazquez. Will the gentleman yield?
    Mr. Leutkemeyer. Yes.
    Chairwoman Velazquez. Dr. Schuchat, on this point of the 
name issue, for the record, is there a direct correlation 
between swine farms and the H1N1 pandemic?
    Admiral Schuchat. This virus is spreading person to person. 
We have no information that this virus is spreading through 
swine farms. Right now this is a human-to-human problem, and 
that is how we are addressing it.
    Chairwoman Velazquez. Mr. Moore.
    Mr. Moore. Thank you, Madam Chair.
    Dr. Schuchat, I believe you testified--and I don't have a 
direct quote--but persons should stay home and not spread the 
disease by going to work. You said something to that effect.
    I think probably all of us agree with that. My concern is 
for hourly employees who may not have paid sick leave. What, if 
anything, do you think we can do to encourage employers to work 
with people in that situation? And I am asking you. Then I want 
to ask the other witnesses if they have any thoughts about it, 
too.
    To me, this is something that we have to consider, because 
we could--by having that situation, people could 
inadvertently--not intentionally, but inadvertently--spread the 
flu to others. Any thoughts?
    Admiral Schuchat. This is one of the mostheartbreaking 
parts of this, because we need people to stay home and not 
spread their infection and take care of themselves and get 
better, and we need the workplaces to support them. It is a 
really difficult time in our economy. Leadership has sent 
letters out. We are working with the Chambers of Commerce. We 
are trying to get the word out that this is better for 
everyone, but when it is your paycheck, it is really hard to 
understand.
    Ms. Blank. I do think that there is really a role here for 
public leadership by saying exactly what you have said as often 
and as publicly as possible; to say to employers this is an 
unusual time, and we need to support workers and what they 
should be doing to keep us all healthy.
    Mr. Moore. Mr. McGaw, any thoughts?
    Mr. McGaw. The more that employers understand the severity 
of the disease and how it is going to impact our workforce, the 
more they will understand that the workers aren't going to be 
gone for long. And so the more that we can communicate just 
what exactly they need to understand about the severity of H1N1 
and the concrete steps they can take, and then actually have 
the conversation with their employees about understanding 
expectations, the more there is a dialogue about this, the 
better off I think the employees and the employers will feel 
about the decisions about letting them stay home.
    Mr. Moore. Thank you very much. I yield back, Madam Chair.
    Chairwoman Velazquez. Mr. Ellsworth.
    Mr. Ellsworth. Thank you, Madam Chair.
    Thank you all for your hard work that you are about to 
undertake, and have. I know one of you talked about seamless 
coordination. I think that is very difficult, especially when 
that many layers of government, and then to the people and 
private industry.
    I would like to take a little different line. Has there 
been any discussion of doing absolutely nothing, of staying out 
of it and letting it handle itself? May not be that bad, may 
not come here. There will be a few cases, and we let it handle 
itself.
    Let me ask you, Mr. McGaw, you said you talked to NAM and 
the Chambers. Have they said, Don't worry about us, we will 
take care of ourselves?
    Mr. McGaw. No. They have been a true partner from the 
beginning. The dialogue that the Department has had with those 
organizations across a spectrum of challenges in thehomeland 
arena really paid dividends, and all the planning that went on 
during the avian flu discussions of 2006 and 2007, that paid 
dividends as well.
    In April, when this first arose, those were some of the 
first conversations we had were with those organizations, 
because the reality in trying to reach out to the millions of 
businesses and people that are potentially impacted requires 
media coordination and communication, and organizations like 
NAM, the Chamber, the National Federation of Independent 
Businesses, they can immediately put solid information in the 
hands of decisionmakers broadly. And we saw a substantial 
amount of open rates on e-mails. So the media communication 
between our organizations was pretty significant.
    I have an op-tempo of we went from 100 participants to 518 
to 1,100 participants on conference calls over 4 days. So just 
us using our standard incident command structure, we were able 
to get information immediately out to those businesses. So 
standing by and doing nothing was never part of the 
calculation.
    Mr. Ellsworth. We read the Constitution quite a bit. I am 
sure you all have the pocket Constitutions and page through 
those. I have never seen H1N1 mentioned in any of the articles 
or any of the text of the Constitution, and yet do you think 
that the American people expect the government to do something 
in this and not just stay out of it? Would you say that that is 
an expectation the American people have, that government is 
prepared to do something to prepare for H1N1?
    Admiral Schuchat. I think the administration's view is 
protecting the safety and health of the American public is 
extremely important. We this summer did public engagements in 
10 cities or towns around the country to talk to Americans 
about what was important to them from the government on this 
particular threat, knowing that we don't know everything; that 
we don't know if it will be worse in the spring, if it will 
affect their own communities. What we heard was an expectation 
that protecting health was important to people, and that this 
was something where government had an important role.
    I think that there is a strong feeling that this is 
something that is really important. It will be wonderful if we 
work really, really hard and seamlessly and it is not a bad 
year, but I think we can hope for that.
    Mr. Ellsworth. I am making my comments tongue in cheek. I 
hope you realize that at this point. We heard a lot over the 
last 30 days about government keeping its nose out of people's 
business, let the market handle it, let people do their own 
thing, we should stay out and things would be much better.
    If we did nothing, what do you expect--you know, I am 
hearing about GDP, percentage of GDP of the economy, all the 
things that if this turns sour, which it very well may, if we 
did nothing, do you anticipate that the American people would 
then turn on government the other way and say, You fumbled 
this, and you weren't prepared, and this is something why we 
want our government to get involved.
    Mr. Ellsworth. What would happen if we just let it go?
    Admiral Schuchat. I think that there is our actively doing 
nothing, is very hypothetical, but the reality is that, without 
applying the science of what we have learned to the problem, I 
think we would have worse problems from the disease than what 
the disease would cause on its own.
    You know, we saw in the spring a lot of fear, a lot of 
altered behavior, not all of it constructive. And by learning 
what this virus was doing and what was effective in intervening 
and what wasn't effective, we could direct people to effective 
interventions. We could make a vaccine. We could learn how 
better to intervene in schools in a way that was sustainable 
for our communities and healthier for families.
    So I think that if government weren't there, there would be 
a lot of activity and disease and bad impact, but there would 
also probably be a lot of unintended consequences of people 
reacting to the problem.
    Chairwoman Velazquez. Time is expired.
    Mr. Ellsworth. Madam Chair, can I just close the comment?
    I agree 100 percent. I commend you for your hard work. As 
somebody formally in emergency services, there are a lot of 
things we prepared for, hoped we never had to use, tornados, 
natural disasters, floods, that people were glad we were there 
when the bad things hit.
    Thank you very much.
    Chairwoman Velazquez. Mrs. Dahlkemper.
    Mrs. Dahlkemper. Thank you, Chairwoman Velazquez, for 
holding this important hearing today.
    And I thank those on the panel for coming and telling us 
how you are preparing our country for this pandemic and any 
future ones that we may face.
    I did want to ask, as you are looking forward and as you 
have been preparing for this, do you see a need for us in terms 
of public health infrastructure and what we currently have and 
whether we need to invest more for the future? And I will just 
open it up to each one of you.
    Admiral Schuchat. I think that the last several years, 
there have been investments in preparedness, in vaccine 
development and so forth. But our public health infrastructure 
is really weak right now, and there are gaps at many local and 
State levels that are hard hit by the economic realities.
    So I know that for surveillance and prevention and 
communication, there is a lot of strengthening that would put 
us in better shape for dealing with this kind of problem and 
then the kind of problems that are every day, that aren't just 
every 20 or 40 years.
    Mrs. Dahlkemper. Where do you see the biggest gaps? If you 
had to ask us as Members of Congress to do something soon, what 
would be the key thing you would say we need to do to improve 
our public health infrastructure?
    Admiral Schuchat. I think that the workforce is a big 
challenge right now in terms of enough workforce and a pipeline 
of folks. And it is very economically driven right now.
    Mrs. Dahlkemper. Workforce on a more local level, State 
level?
    Admiral Schuchat. Yes, I think local is the most vulnerable 
right now, and after that, the State.
    Mrs. Dahlkemper. Mr. McGaw, did you want to add to that at 
all?
    Mr. McGaw. I think we would all agree that public health 
infrastructure serves a dual purpose and can be used in 
emergencies, and it is also used on a daily basis. So the 
investment, pays dividends constantly, whether we are concerned 
about public health crises or normal public health activities.
    Mrs. Dahlkemper. And I have just one further question, 
having just sent two children off to college, and you saw in 
the news the quarantined dormitory areas. Have we learned 
anything from what has happened in the last few weeks as we 
sent our children off to school?
    Admiral Schuchat. The American College Health Association 
is tracking illness in colleges and in interventions, and the 
news so far is pretty good, that the colleges are following 
this guidance that was issued and trying to keep ill kids 
separate from others. And they are not overreacting. They are 
appropriately reacting. And I think that it has been heartening 
to see them being able to apply practical information. And the 
professors are understanding when the students aren't turning 
in their homework and encouraging them to stay home and get 
better.
    We aren't seeing a different pattern of illness yet. We 
are--we believe that the interventions we have recommended are 
sensible and practical and can work, but it is still too soon 
to know what will be happening around the country.
    A reminder, though, that people from the ages of 6 months 
to 24 months--or to 24 years, including those college students, 
are recommended to receive the H1N1 vaccine when it becomes 
available, and we know that a lot of universities are planning 
on ways to be able to offer it.
    Mrs. Dahlkemper. Thank you.
    I yield back, Madam Chair.
    Chairwoman Velazquez. Any Member that wishes to make any 
other question?
    Well, let me take this opportunity again to thank all of 
you for your participation and your service and you are all 
dismissed.
    And I would ask the members of the second panel to be ready 
to take your seat.



    Chairwoman Velazquez. I would like to introduce Mr. Anthony 
Demangone. He is the director of regulatory compliance and 
senior compliance counsel for the National Association of 
Federal Credit Unions. The National Association of Federal 
Credit Unions was founded in 1967 to directly shape the laws 
and regulations under which Federal credit unions operate.
    Mr. Demangone, you are welcome and have 5 minutes to make 
your opening remarks.

                 STATEMENT OF ANTHONY DEMANGONE

    Mr. Demangone. Good afternoon, Chair Velazquez, Ranking 
Member Graves and members of this committee. I am Anthony 
Demangone, NAFCU's director of regulatory compliance and its 
senior compliance counsel.
    I am here today on behalf of the National Association of 
Federal Credit Unions. In my role, I represent NAFCU before the 
Financial Services Sector Coordinating Council. This is an 
organization that champions the protection of America's 
financial critical infrastructure. I am a member of FSSCC's 
Infectious Disease Forum, and I was a member of the 2007 
Financial Services Pandemic Exercise Control Team, which helped 
to manage a financial services industrywide tabletop exercise 
on pandemic preparations.
    While the subject of today's hearing focuses on a very 
unpleasant topic, the unsettling specter of an influenza 
pandemic, I want to commend the leadership of the Small 
Business Committee for holding this hearing to address 
readiness and preparation within America's small businesses.
    NAFCU has been working with financial regulators on this 
important issue, and we have educated our member credit unions 
to help them prepare for a pandemic.
    I want to recognize the work of the Treasury Department and 
the FSSCC, of which NAFCU is a member, for its diligence in 
helping financial institutions identify and address the complex 
issues surrounding pandemic business continuity planning.
    Credit unions have been preparing for a pandemic for more 
than 3 years. The National Credit Union Administration provided 
important guidance to credit unions in the first quarter of 
2006 to increase awareness concerning the potential threat of a 
pandemic.
    More recently, financial regulators have been providing 
guidance concerning the current H1N1 pandemic. The NCUA 
reiterated key elements for credit unions in a letter addressed 
to them just this past June. In its letter, NCUA directed 
Federally-insured credit unions to review their disaster 
preparedness response plans to ensure that their pandemic plan 
is appropriate and provided a series of issues credit unions 
must consider in their pandemic planning.
    Credit unions have listened to this guidance and have 
created plans that address the following: Pandemic-related 
communications to employees, members, and their communities; 
policies to implement social distancing, proper hygiene and 
other preventative measures; cross-training of appropriate 
staff to maintain operations during a pandemic; and the review 
of operations and facility management to ensure a proper 
response to pandemics.
    Many credit unions have formally tested their pandemic plan 
in a national tabletop exercise. The Treasury Department, in 
conjunction with the FSSCC and others, sponsored an 
industrywide pandemic flu exercise in 2007. The results 
demonstrated that even businesses that had pandemic plans in 
place found a global flu outbreak posed complex issues in areas 
where more preparation was needed.
    While financial institutions have been preparing, some 
questions remain unanswered. The following issues clarified by 
Congress and the Federal Government would help America's credit 
unions better prepare for future pandemics and handle this one 
right now.
    First, the financial services sector needs accurate, and 
timely information about any developments concerning the 
current pandemic and what steps that Federal, State and local 
governments are taking in response. In addition, information on 
important infrastructure is vital. For example, will mail 
service, public transportation and telecommunications 
infrastructure be available for credit unions and their 
employees?
    Second, with credit unions facing increased levels of 
absenteeism during a pandemic, it may be difficult for them to 
comply with certain regulatory requirements. Staff trained to 
comply with the Bank Secrecy Act or that works with the SBA may 
be at home sick for long periods of time. If we have this 
flexibility plan in place beforehand, financial regulators will 
not have to answer repeated questions during a pandemic, 
especially when the regulators themselves may have high 
absenteeism.
    Third, many credit unions continue to ask questions 
concerning who will be responsible in a given area for pandemic 
related issues. Will the Federal, State or local governments 
decide if a quarantine or a closing of a business is necessary, 
or will this be a private decision made by each business one at 
a time? On the flip side is the question, who will give the 
all-clear signal once a pandemic has passed?
    Fourth, the impact of Hurricane Katrina demonstrated the 
need to have cash available to meet liquidity needs. Current 
economic crisis has demonstrated the importance of liquidity 
for financial institutions. Should the current pandemic develop 
more deeply into a health-care crisis, it will surely strain 
the liquidity and put more challenges on financial institutions 
already facing a tough environment.
    Thank you for the opportunity to provide our views on this 
timely topic. Again, I commend the Small Business Committee for 
its commitment to address concerns relating to pandemics. And I 
will be pleased to respond to any questions that the committee 
members may have.
    [The statement of Mr. Demangone is included in the 
appendix.]
    Chairwoman Velazquez. Thank you, Mr. Demangone.
    Our next witness is Dr. Jim King. He is a family physician 
in Selmer, Tennessee, and currently serves as the board Chair 
of the American Academy of Family Physicians. The American 
Academy of Family Physicians is one of the largest national 
medical organizations representing family doctors with more 
than 94,000 members.
    Welcome back to the committee.

                   STATEMENT OF JIM KING, MD

    Dr. King. Thank you, Chairwoman Velazquez.
    And thank you for having me, Ranking Member Graves and 
other members of the committee.
    I am one of approximately 95,000 family physicians who are 
located across this country in almost every county. We are in 
solo and small group practices, and I am happy to be here to 
talk to you about H1N1 virus and the economic health of the 
Nation on small businesses because we are small businesses. I 
am a small business.
    The last patient I saw--because it was mentioned earlier in 
the southeast, and I am from Tennessee--was a 10-year-old with 
H1N1 flu before I flew up here. Driving here in the car on the 
radio, the first death in Memphis is a high school football 
player who died in the hospital with H1N1 flu. So we are seeing 
it already. It is a very important issue.
    Family physicians are affected with outbreaks of diseases 
like H1N1 in two very important ways. First, we are the 
frontline of diagnosis and treatment of the disease. Patients 
who begin to experience H1N1 symptoms often go to their 
personal physician. Frequently it is the primary care physician 
who begins to see the pattern of infection.
    Once the outbreak is determined, the primary care physician 
will need to provide health care services to both the infected 
patient and the worried well, the patients who need to be 
reassured and educated.
    Secondly, small group practices like myself may be affected 
significantly ourselves in doing business. A family physician's 
practice, especially in rural areas and underserved city areas, 
often consist of only one or two physicians in a small clinical 
and administrative staff. When one staff member begins to show 
H1N1 symptoms, it is vital that they stay away from the 
practice and office so that patients do not become ill.
    As a result, if the influenza outbreak infects just a few 
members of a practice, that practice may have to close 
temporarily. Unfortunately, this is likely to be a considerable 
length of time. We talked about this when being a little mild, 
3 to 5 days, but you wouldn't want a sick person in that office 
if you were coming in for maybe even longer.
    Last, an outbreak of H1N1 will expose two major 
deficiencies in our health care system: the lack of 
coordination, and workforce shortages. For example, patients 
can get vaccinations at multiple sites, retail health clinics, 
work-site clinics, health fairs, pharmacies, school-based 
clinics. While these sites make immunization convenient, they 
lead to fragmentation of patient care; especially it makes it 
very difficult for a practice to ensure that all of the 
patients have received the necessary shots.
    The Academy along with other primary care groups, including 
the American Academy of Pediatrics, have recommended 
implementing a patient center and medical home to address the 
lack of coordinated care. The patient center and medical home 
also would connect primary and public health, especially in 
areas in which the medical home and public health functions are 
more tightly integrated.
    Second, even before H1N1 becomes a pandemic emergency, 
family physician practices will pay the price for our Nation's 
shortage for primary care physicians. As the number of 
infections increase, family physicians in small and solo 
practices will be overwhelmed by the number of patients simply 
because there is nowhere else to go. These practices who 
usually serve rural and inner city populations will not have 
all of the resources to handle a growing number of infected 
patients.
    That is why Congress must address education and training of 
primary care providers in health reform legislation. The 
Academy has recommended that Congress increase medical graduate 
education payment for primary care residency slots. This would 
provide incentives for the Nation's teaching hospitals to 
invest in primary care residencies.
    Family physicians and the Academy are taking the threat of 
the H1N1 outbreak very seriously and are engaged in extensive 
preparation. We see it as a fundamental responsibility to 
provide patients with the right information at the earliest 
possible time.
    However, they and their patients will feel the blunt of the 
deficiencies in the Nation's fragmented health care system. We 
will need a better investment in primary care to meet these 
challenges and look to Congress to make this happen.
    Thank you for the opportunity to testify, and I will be 
happy to answer any questions.
    [The statement of Dr. King is included in the appendix.]
    Chairwoman Velazquez. Thank you, Dr. King.
    Our next witness is Mr. Harold Jackson. He is the president 
and CEO of Buffalo Supply, Inc., located in Lafayette, 
Colorado. Buffalo Supply has been providing medical and 
surgical equipment and supplies to the Federal Government since 
1983. Mr. Jackson is testifying on behalf of the U.S. Chamber 
of Commerce, which is the world's largest business federation 
representing 3 million businesses.
    Welcome.

                  STATEMENT OF HAROLD JACKSON

    Mr. Jackson. Thank you.
    Good afternoon, Chairwoman Velazquez And Ranking Member 
Graves and members of the committee.
    Thank you for inviting me to testify before the committee 
today. My name is Harold Jackson. I am the president and CEO of 
Buffalo Supply, a 15-employee woman-owned small business 
specializing in the sale and distribution of medical surgical 
equipment.
    I am pleased to be able to appear today on behalf of the 
United States Chamber of Commerce. I commend the committee for 
holding this hearing to discuss the challenges of the 2009 H1N1 
influenza and its potential impact on small businesses. The 
committee has my prepared statement, and I will give the 
following summary.
    If I leave the committee with a single point, it is that 
absenteeism will likely be the central issue that businesses 
wrestle with during this pandemic. Businesses should focus on 
keeping the workplace healthy, including encouraging sick 
employees to stay home to avoid infecting coworkers and 
maintaining business continuity.
    We are all in this together. H1N1 preparedness is 
everyone's problem, from households to schools to businesses to 
government. To put it into perspective, according to CDC, in 
communities where the H1N1 flu circulated this past spring, the 
infection rate was about 6 to 8 percent of the population over 
a 3 to 4 week period. During the winter season, infection rates 
could be two to three times as high as both the H1N1 flu and 
the seasonal flu circulate and sicken people simultaneously. 
Each winter in the United States, the seasonal flu kills 
approximately 36,000 people and hospitalizes more than 200,000. 
The cost to the U.S. economy is more than $10 billion in lost 
productivity and direct medical expenses.
    Predicting what influenza might do this flu season is 
challenging, and so is predicting the absenteeism. 
Nevertheless, business owners and managers should prepare by 
taking a number of actions to protect the health of their 
employees and maintain business operations. Running a small 
business leaves little time for planning for a disaster. Yet a 
major incident could force a business to close its doors 
permanently.
    Buffalo Supply has taken the following actions to keep our 
employees healthy and to maintain business operations. We are 
communicating with employees about H1N1 to increase awareness 
and education. We are cleaning keyboards, desks, file cabinets 
and other equipment regularly with disinfectants. We have 
installed hand sanitation stations much like they are in 
various buildings on Capitol Hill. We are having a visiting 
nurse give free seasonal flu shots to all employees, and we are 
requesting H1N1 shots when they become available. We have 
purchased additional copies of software that will allow some 
employees to work from home instead of coming to the office.
    Buffalo Supply is taking these and other actions because we 
want our employees healthy and our doors open. Few industries 
will be insulated from the economic effects resulting from 
absenteeism in the workplace.
    The United States Chamber and the Trust For America's 
Health have teamed up to produce a guide titled, "It is Not Flu 
As Usual," to provide businesses with practical recommendations 
on how individuals and organizations can prepare for the next 
wave of H1N1 flu. This guide includes a list of Internet sites 
that can provide businesses with a wealth of detailed 
information on topics like vaccines, anti-virals, face masks 
and respirators. It will be released in a few weeks on the U.S. 
Chamber Web site, and hard copies can be obtained from the 
National Security and Emergency Preparedness Department.
    The U.S. Chamber believes that the Obama Administration 
deserves praise for the attention it has paid towards planning, 
preparing and responding to a potentially severe H1N1 flu wave. 
Since the spring outbreak, the administration has captured the 
right mix of communicating concern and encouraging the public 
to be prepared. Last week, President Obama said, "I do not want 
anyone to be alarmed, but I do want everyone to be prepared."
    In conclusion, preparing for a potentially severe flu 
pandemic is everyone's problem. It is a shared responsibility. 
To be prepared, government health agencies encourage 
individuals, businesses and communities to talk with their 
local public health officials and health care providers, adapt 
business practices encouraging sick employees to stay home, and 
take steps to stop the spread of germs, and stay informed.
    I appreciate this opportunity to testify, and I would be 
happy to answer any questions.
    [The statement of Mr. Jackson is included in the appendix.]
    Chairwoman Velazquez. Thank you, Mr. Jackson.
    Our next witness is Dr. David T. Tayloe. He is the 
president of the American Academy of Pediatrics. Dr. Tayloe is 
also a full-time pediatrician in Goldsboro, North Carolina. The 
AAP is the leading medical association representing the 
interests of over 60,000 pediatrician members.
    Welcome.

             STATEMENT OF DAVID T. TAYLOE, JR., MD

    Dr. Tayloe. Thank you.
    And good afternoon, Chairwoman Velazquez and members of the 
committee.
    I am Dave Tayloe, Jr., President of the American Academy of 
Pediatrics. I have been a pediatrician in rural private 
practice where the cash flow of the practice is two-thirds 
Medicaid and SCHIP in Goldsboro, North Carolina, for over 32 
years. I appreciate this opportunity to testify today before 
you regarding the impact of a novel influenza H1N1 virus on 
American small businesses.
    On August 24th, the President's Council of Advisors on 
Science and Technology estimated that the novel H1N1 flu strain 
could result in the hospitalization of up to 1.8 million people 
and cause as many as 90,000 deaths, a number that is roughly 
double the death toll from a normal flu season. If these 
projections prove accurate, this flu epidemic will tax every 
aspect of our Nation's health care system, emergency 
departments and hospital wards to private practices and public 
health departments.
    Of special concern to the American Academy of Pediatrics is 
the fact that this flu strain is impacting children 
disproportionately. Based on infection rates to date, the 
Centers for Disease Control and Prevention calculate that 
infection risk in the 0 to 24 age group is 4 to 5 times greater 
than for those in the 25 to 49 age group and 20 times greater 
than for those over age 65. If the virus sickens half of U.S. 
children this season, the number of ill children would exceed 
37 million. Infection rates could ultimately be even higher.
    The President's Council of Advisors on Science and 
Technology warn that of the 30,000 to 90,000 deaths 
anticipated, most would be concentrated among children and 
young adults, and we are already seeing that in our State. 
Pediatric medical practices and other medical providers who 
serve children face a special challenge from the H1N1 virus. 
The AAP anticipates that our membership will face a double 
whammy of business interruption due to staff absence and 
illness combined with much higher workloads from sick children 
and families seeking vaccination.
    Over 95 percent of office-based pediatricians practice in 
settings defined as small businesses. Many practices operate 
with very small staffs, meaning that one absent nurse or 
receptionist can all but cripple the office's ability to 
function. Most small pediatric practices are also facing 
serious challenges in remaining financially viable due to the 
economic downturn and employers' quests to decrease health 
insurance expenses.
    AAP membership report that practices have seen increases in 
families with Medicaid, high deductible plans, or no insurance. 
Also the payment differential between private pay and Medicaid 
is so severe that there are significant downstream impacts on 
pediatric practices' ability to keep their doors open. For 
example, Medicaid and most private insurers pay approximately 
$20 for vaccination administration of adults. State Medicaid 
program payment to pediatricians ranges from $2 to $17.85 for 
the same service with 38 States paying less than $10 for 
vaccine administration. Nationwide, Medicaid pays an average of 
72 percent of what Medicare pays for the same services and only 
64 percent of average commercial payment.
    We are the public health infrastructure for this problem. 
We understand the vaccine is coming from the Federal Government 
to the States to the health departments, and then our office 
has a contract with the health department to deliver the 
vaccine. The Academy has a real ethical dilemma. Do we ask our 
members to fully participate in a program that is going to 
cause them to take business losses because of the poor Medicaid 
reimbursement that hasn't been fixed since 1965?
    So this crisis in public health is shining a bright light 
on the problem with the State's failure to pay adequately for 
physicians to participate in Medicaid. As a result, the more 
Medicaid patients are seen by pediatrician, the greater the 
financial challenge to the practice of the small business. Due 
to servere strains in the states as well as decreased tax 
revenue, pediatricianse have seen cuts in Medicaid payment 
rates. We took a 3 percent cut this year and will take a 3 
percent cut next year in North Carolina.
    From a clinical perspective, pediatric practices must also 
plan for greater workloads. The Academy and the CDC recommend 
all children ages 6 months to 18 years receive the seasonal 
influenza vaccine, adding 30 million children who need to be 
vaccinated for seasonal flu only. Then, because the H1N1 strain 
is different, it is going to be a separate vaccine. Children 
have virtually no immunity, and we anticipate the CDC will 
instruct us, the pediatricians, to give each child two doses of 
H1N1. So that is three office visits for each child. Parents 
may therefore need to make all these trips, taking time off 
work, to cover seasonal flu and the H1N1.
    The AAP encourages vaccination of children in the medical 
home, and pediatricians want to do whatever they can. And we 
recognize that schools and other nontraditional locations may 
be utilized as vaccination sites in some states. Children, in 
particular those who are 6 months to 5 years, still need access 
to H1N1 influenza vaccine through their medical home.
    Chairwoman Velazquez. Dr. Tayloe, time has expired, and we 
are going to have four votes. But, during the question-and-
answer period, you will be able to expand on those points that 
you were not--
    Dr. Tayloe. Fine. Thank you.
    [The statement of Dr. Tayloe is included in the appendix.]
    Chairwoman Velazquez. And the Chair recognizes the ranking 
member, Mr. Graves, for the purposes of introducing our next 
witness.
    Mr. Graves. Thank you, Madam Chair.
    Madam Chair, I am very pleased to introduce Mary Kay 
Thatcher, who is the director of public policy for the American 
Farm Bureau Federation. The Farm Bureau is an independent 
nonpartisan organization representing farm and ranch families. 
They are the voice of agriculture. The Farm Bureau is local, 
county, state and national and international in scope.
    Ms. Thatcher, thank you for being here, and I appreciate 
you coming in and look forward to hearing your testimony.

                 STATEMENT OF MARY KAY THATCHER

    Ms. Thatcher. Thanks very much for allowing us to come 
forward and share the concerns of agriculture as it relates to 
the H1N1 virus.
    Madam Chairwoman, we had many, many pork producers who 
would have relished the opportunity to come in today and talk 
and testify about their personal experience, how H1N1 has 
impacted the bottom line for pork producers.
    Influenza has indeed impacted many family farmers. Many 
have been forced to make serious changes to their operations. 
When it hit, they had already been struggling through about 18 
months of losses due to increased expenses, many of those 
expenses beyond their control, and they were looking forward to 
a summer that might bring indeed them out of the negatives.
    The futures market indicates that we are going to have very 
little chance of profit in the pork industry for at least the 
next 9 months. And we anticipate the credit markets will 
continue to be a problem for pork producers and that many of 
them will be forced to sell off a sizeable portion of their 
inventory to reduce herd size.
    This isn't going to affect just pork producers but 
obviously the employees who work for them. And those folks will 
not only be without income but also likely without any type of 
health insurance.
    The impact on our rural communities is also going to be 
tremendous. The impact of decisions forced on pork producers, 
partly by H1N1, does not stop at the farm gate but also greatly 
impacts businesses in town. If herd sizes are further 
downsized, farmers will purchase fewer supplies from local 
businesses, such as the fuel station, propane supplier and 
veterinarians. Rural communities are already struggling to 
maintain businesses, and the credit issues currently facing 
both the pork and dairy sectors are very likely to further 
erode the viability of many rural communities.
    I want to emphasize the importance of agriculture to the 
recovery of our economy. While fewer than 1 percent of 
Americans are engaged directly in agriculture, the sector has a 
huge impact on our economy. According to USDA, ag and food 
account for about 13 percent of U.S. gross domestic product. 
Agriculture withstood the downturn in the economy longer than 
most sectors, but the downturn has now caught up with the ag 
sector in general and our livestock producers specifically.
    The recently sales price received for hogs is down $25 per 
head in only the last 4 months. If the December Chicago 
Mercantile Exchange lean hog futures price is an accurate 
forecast of where hogs will be priced at year end, producers 
will be losing $50 per head. Even the futures price for April 
of 2010 indicates a $25-per-head loss.
    We believe Congress and the administration could do several 
things that would be helpful to the pork sector specifically 
and would also impact the livestock industry in general.
    The H1N1 influenza strain cannot be transmitted by eating 
pork. It is a food-safety issue, not a food-borne illness. We 
have talked a lot today about the fact that the virus doesn't 
spread to meat. Pork is safe to eat. We applaud the 
administration for what they have tried to do to get that 
message out. But we need Congress and the administration alike 
to keep reminding consumers of this fact and use every means 
possible to ensure that some in the media quit referring to it 
by other names than H1N1.
    We also applaud USDA and the United states Trade 
Representative. We think they worked diligently with our 
trading partners to ensure that they know that U.S. pork and 
pork products are safe, and there is no basis for restricting 
imports. Yet in China, the world's largest pork export market, 
64 percent of its consumers stopped eating pork in the early 
stages of the H1N1 influenza outbreak. More than one in five 
consumers in China still believe that eating pork can result in 
catching the flu virus. This is according to a survey 
commissioned by the U.S. Meat Export Federation; 54 percent of 
those also said in the survey they fear the connection between 
pork and the flu virus and say it is because the virus has been 
labeled swine flu.
    In the U.S., we have had market access issues in two of our 
top six pork export markets, China and Russia. We believe this 
is a large part of why, during the first 6 months of 2009, U.S. 
pork exports have dropped 18 percent from the levels in the 
same 6-month period during 2008.
    Also just before the August recess, the House and Senate 
passed legislation that provides $1.85 billion in funding for 
the Public Health and Social Services Emergency Fund to prepare 
for and respond to an influenza pandemic. The conference report 
on that legislation states that funds appropriated and not 
specifically designated may be transferred to and merged with 
other appropriation accounts of the Department of Health and 
Human Services and other Federal agencies as determined by the 
Secretary of HHS.
    The Senate version of the language actually specifically 
called for the transfer of $100 million to USDA under the 
heading, "Ag Programs, Production, Processing, and Marketing." 
We have asked the administration to transfer at least $100 
million of the $1.85 billion for use in additional government 
purchases of pork. Without question, part of today's decrease 
in pork prices is due to the media's misuse of the term swine 
flu rather than the H1N1 virus.
    Pork producers are facing dire circumstances and need the 
government to step up to purchase more pork products. Any 
assistance that this committee could provide in encouraging the 
administration to make such a transfer of funds would be 
greatly appreciated.
    We are very concerned about the many farm families around 
the U.S., and we want to make sure that they continue to raise 
pork and that they are able to sell it here and around the 
world. We must all continue to work with our trading partners 
to assure them we are open for business and U.S. pork is safe. 
There are many hardworking families whose livelihoods depend on 
us conveying this message of safety. We must also use whatever 
means possible to encourage additional purchases of pork in the 
near future.
    [The statement of Ms. Thatcher is included in the 
appendix.]
    Chairwoman Velazquez. Thank you, Ms. Thatcher.
    And the committee stands in recess subject to the call of 
the Chair.
    [Recess.]
    Chairwoman Velazquez. Okay. So I don't think we are going 
to have any more votes.
    Mr. Demangone, when the H5N1 virus surfaced as a possible 
agent of the next pandemic, many small businesses pushed for 
information. They prioritized job functions, worked to educate 
employees, and stockpiled personal protective equipment. For 
many, the initial pandemic scare seriously drained some of the 
firms' resources. Among small businesses, what challenges do 
you see with pandemic preparedness?
    Mr. Demangone. Thank you for that question. I agree that 
there was a little bit of pandemic planning fatigue that had 
taken place. The H5N1 virus--and there is only so many times 
you can hear about that. Some of the challenges, though, have 
been abated by the fact that the H1N1 virus has materialized 
and actually has led to fatalities here and in other regions of 
the world. For that reason, some of the stockpiles of the 
preventative personal protective equipment, masks, hand 
sanitizers, will still be okay.
    And a lot of that planning, I would actually say the fact 
that we were planning for H5N1 actually was a hidden blessing 
because, at that time, no one was to know whether that was 
going to lead to the pandemic. And it was ironic, just 2 years 
ago, there was an industrywide exercise, and then 2 years 
later, those lessons could be used for this particular 
pandemic.
    But the challenges, of course, are, for Federal credit 
unions as well as other financial firms, budgets are a little 
tighter this year, and there is some strain. It is still 
finding the ability to procure resources to use them 
effectively to protect not only your employee but your 
membership in the community.
    Chairwoman Velazquez. Thank you.
    Dr. Tayloe, if a pandemic emergency would compromise the 
ability of local and regional health care systems to deliver 
basic health services to children, if the H1N1 outbreak is 
severe, how would pediatric practices be affected and what will 
providers need to do to maintain existing levels of care? I 
know that you touched on that, but if you could be more 
specific.
    Dr. Tayloe. It will depend directly upon the size of the 
practice. In other words, if you have got three physicians and 
seven staff, and half your staff is sick and one of your 
physicians is sick, it is going to cripple you.
    Our office is 14 pediatricians and 8 nurse practitioners, 
physician assistants. And we operate four offices, kind of a 
health care system and since, as Dr. King said, this looks like 
a relatively mild flu that doesn't last quite as long as the 
seasonal flu, large practices will be able to shift people 
around and survive. We will probably end up doing a lot of 
telephone medicine, and there are triage protocols that have 
already been on the Internet as to how you talk with families 
about this problem.
    So I think it will just depend on the size of the practice. 
But we will be trying really hard to do things right. We have 
really perfected the medical home concept, particularly in our 
North Carolina Medicaid program, where I think we will be okay. 
But it is going to be a rough--it has already started. It is a 
rough season.
    Chairwoman Velazquez. Do you see foresee some part of the 
country more vulnerable than others in terms of the resources 
that are available?
    Dr. Tayloe. Well, you would have to say, what will happen 
in rural areas--I note during an H1N1 flare in northern Canada 
this past year, they had so much sickness, they ran out of 
respirators, and they were flying sick patients in to other 
parts of Canada and the United States. So I think the further 
you are from a tertiary hospital with those metropolitan 
resources, the more trouble you are going to have.
    Chairwoman Velazquez. Let me ask you. On payment for child 
vaccination, do you see a difference in payment?
    Dr. Tayloe. Most assuredly. And again, I am sorry I ran out 
of time on my testimony. But when Congress established Vaccines 
For Children in 1993, the Federal Government recommended 
vaccine administration fees for each State based on Medicare 
economics, that kind of thing. Only about five States followed 
that recommendation, and those fees have never been upgraded by 
CMS.
    Several years ago, Medicare established vaccine 
administration fees. And so where the average fee for 
pediatricians to give a vaccine is less than $10 from Medicaid, 
which is Vaccines For Children, Medicare pays $21. So our 
members feel like it is much more difficult to do our 
immunizations. We have to convince the parent to let the child 
receive the vaccine. That takes forever with all the autism 
hype. Then you have to hold a screaming child and give the 
vaccine. And then children just have more fears and things 
after vaccines. So the fact that we get less than half the 
money to do this makes my members tell me, you need to tell 
Congress that if pediatricians are going to bear the brunt of 
this vaccination program, our vaccine administration fees need 
to be at least equal to those of Medicare because we have got 
to value our children. And this is seen as just not valuing our 
children.
    Chairwoman Velazquez. Mr. Jackson, how has your business 
prepared to protect staff and maintain operations if a moderate 
to severe pandemic outbreak was to present itself?
    Mr. Jackson. Obviously that is a significant concern. 
Buffalo Supply, as many other small businesses, is operating 
alone very slim staff if everything goes well. So we take the 
steps that we mentioned in here in trying to keep people 
healthy, offering the flu shots and clean stations and all 
those sorts of things. As a small business, we have always 
stressed cross-training of employees, but we have stressed it 
even more recently, and what it probably means is some of the 
people that travel stay home and do the job of the day-to-day 
office until we can get the operation and all the people back 
from being sick.
    Chairwoman Velazquez. And I would like Mr. Jackson to 
answer this question, but also I would like any other member of 
the panel to answer as well. Have you offered any sort of 
flexible leave policies for any of your employees, particularly 
those with children that are part of the most at-risk 
population?
    Mr. Jackson. Yes, we do. We treat our employees like they 
are family. A lot of them are family in a small business. But 
we try to work with each individual that has an issue to come 
up with a resolution. I would rather do that than writing a 
policy that kind of ties our hands in the future. But we have 
flex time that we offer. We allow people to take a day off if 
it is to take care of a sick child or if they are not feeling 
well themselves. Interestingly enough, we offer the flu shots 
at no cost to the employees, but I give a stipulation. If you 
decline to take the flu shot, I don't pay you for your time 
off. If you take it, I will pay you for your time off.
    Chairwoman Velazquez. Any other member wish--Dr. King.
    Dr. King. Well, of course, in the practice, you have got to 
take into consideration, flu season is our busiest season. So 
we have more people that want to come in and be seen, and they 
have more problems. So giving time off, flex time--we think 
"patient first" naturally. So we want to expand our hours so 
patients can get in, those things can be done.
    But we do, of course, offer flu shots to all of our 
employees. But you have got to understand, that is one of the 
things that makes this particular flu epidemic different from 
the seasonal flu epidemics we have; we don't have a vaccine 
yet. So all the health care providers that are seeing patients 
now that have the flu have not been vaccinated. In years past, 
we always get our vaccine in ample time, and we get taken care 
of. That is the reason there is a greater risk of health care 
providers getting this type of flu.
    And even though they are going to have the vaccine 
available in the middle of October, realize it is going to take 
time to get it distributed, out to the State, get it out to the 
practices, and then you have got two weeks before you develop 
any type of immunity from that vaccine, it is going to be well 
into November before anyone has really got any immunity to 
begin with.
    Chairwoman Velazquez. Ms. Thatcher, we discussed that there 
is no correlation between swine and pork and the H1N1. And 
since the declaration of four intergovernmental agencies, 
organizations and the Federal Government that stated that H1N1 
virus cannot be contracted from consuming pork product, have 
you seen--has your business continued to decline?
    Ms. Thatcher. We believe that we have made progress 
domestically and that the vast majority of people in the U.S. 
now understand it. I wouldn't say we are back to exactly where 
we were in sales, but we still believe our biggest problem is 
in the export markets. And it is always hard to ascertain--we 
think that the survey that meat export folks did that shows 
that one out of five people in China are concerned is very bad 
news. But we also know that countries like China tend to use 
whatever they can as a trade barrier against us. So there may 
be some of that playing into the situation, too.
    Chairwoman Velazquez. Mr. Graves? Thank you.
    Mr. Graves. Thanks, Madam Chairwoman.
    Ms. Thatcher, how much pushback are you getting from the 
business community, or health care providers, in trying to 
change the paradigm between the term swine flu and the fact 
that it doesn't have anything to do with H1N1?
    Ms. Thatcher. Mr. Graves, I don't know that we are getting 
pushback; I am just not sure we are getting as much help. And 
you know, it is easy for all of us to slip and call it the 
other name instead of H1N1. And so we have worked with those 
folks, and again, I applaud what this administration has done. 
It is just that we have to keep it up because we have too many 
people I think in the business community who say, well, if I 
call it H1N1, people won't know what it is; but if I call it 
swine flu, they get it. So it is a real change in mindset that 
we have to continue to--
    Mr. Graves. Okay.
    Chairwoman Velazquez. Mr. Luetkemeyer.
    Mr. Luetkemeyer. Thank you, Madam Chair. Just to follow up 
again with Ms. Thatcher and Congressman Grave's comment here.
    Did you hear that--Mr. McGaw's comment a while ago when I 
was discussing it with him, to the effect that they were going 
to monitor the media and how they represented the H1N1, and 
while that is fine, to monitor is fine, but I think you need to 
act on what you find, and I didn't hear him making a 
commitment. Are you working with the Homeland Security folks, 
so if they do have--they do find that there is a continued 
misnaming of this flu, that there is going to be some follow-
up?
    Ms. Thatcher. We have done more working through USDA 
especially and somewhat through USTR in trying to get them to 
help us carry their message at very high levels and have it 
done that way. But certainly we have worked with every 
department we can think of so far.
    Mr. Luetkemeyer. Okay. Well, I was just thinking if there 
needs to be some interaction there and some cooperation and 
some oversight to make sure that there is some pressure, and I 
realize we can't do a whole lot perhaps with the folks from 
other countries, but I would think we should be able to sort of 
minimize the effect here in this country once the information 
gets out of what is really going on here.
    Very quickly, Dr. King and Dr. Tayloe, depending on which 
one wants to answer, maybe both, what is the effectiveness of 
the vaccine? I know we are talking about the shots here. What 
is the effectiveness? Is it as effective as most other 
vaccines, or is it less effective, because it is being 
promoted?
    Dr. King. It is being studied. Like I said, we don't get 
the flu vaccine out until--we don't know numbers yet for this 
particular vaccine that I know of.
    Dr. Tayloe. They began the trials in--around the first of 
August. I know Duke has a site--
    Mr. Luetkemeyer. So we are all--
    Dr. Tayloe. They haven't published any data yet that we 
could go on because we are hoping the immunity will be good 
enough that we can get by with just one injection. But with the 
traditional flu vaccine, we have had to give two the first year 
to all children under the age of 9 years. And that is going to 
create more of a problem. And then the question is, will they 
have a nasal vaccine, too? It is rumored that one of the 
companies will have a nasal vaccine, which will make much 
easier to do this.
    Mr. Luetkemeyer. My follow up to that, maybe you won't be 
able to answer it, have you seen any reactions to the shot, any 
negative things that come out with people who have taken it? 
You alluded to autism a while ago. I don't think this is a 
problem with this particular thing, but is there some other 
sort of side effects or some other negatives that come with 
this shot that we need to be aware of or people need to be 
informed of?
    Dr. Tayloe. I am not aware of any new developments in the 
way of the downside to receiving the flu vaccine. The flu 
vaccine will contain thimerosal, the mercury preservative--
ethyl mercury preservative that got so much press in the late 
1990s, that was removed from most vaccines by going to single 
dose viles. But this vaccine is going to come in multiple dose 
viles, so it will have thimerosal in it as a preservative. So 
it does not bother us because we are not aware of any problems 
with human beings as far as the trace amounts of the thimerosal 
that is used as preservative in these vaccines. But the 
patients that come in the office all want to talk about it. So 
the media has just done a number on the public health system 
here, and it is a shame. And anything you can do to help us--
    Mr. Luetkemeyer. You have got a forum right now. Let it 
rip.
    Dr. Tayloe. Help us educate the general public about the 
really good, solid safety system we have in place for vaccines, 
the fact that it takes forever for a vaccine to make it through 
the FDA to come to market as a rule. This is a special 
situation where this vaccine is made like other flu vaccines 
and it will be treated like other flu vaccines and not treated 
as a brand new vaccine. But as a rule, it takes forever to get 
to market. Then it goes into hundreds of thousands of patients 
as a tracking population by the CDC through the Vaccine Data 
Link System, and that is how we pulled a couple of vaccines 
that looked okay in the thousands of people it was tried on 
before release, but as soon as it got out to hundreds of 
thousands of people, we knew there was a problem and was 
pulled.
    So I think our system is a very good system, and I 
personally am in a practice where we do over 100,000 counters a 
year, and our practice is a really big practice; we have never 
referred a single child to the Vaccine Injury Compensation 
Program for any chronic or permanent injury from a childhood 
vaccine. So I think it is extremely rare. We have a 
compensation system in place. And we need the help of the 
government in getting the right message to the public.
    Mr. Luetkemeyer. Thank you, Madam Chair.
    Chairwoman Velazquez. Mr. Graves, another question?
    Well, let me take this opportunity to thank all of you for 
being here and providing the important information, and we will 
continue to work with the Federal Government and the respective 
agencies to make sure that there is not only a coordinated 
effort but a proactive effort and that we keep in mind that if 
we deal with a pandemic, the impact that it could have in the 
economy, but particularly on small businesses.
    So, with that, I ask unanimous consent that members will 
have 5 days to submit a statement and supporting materials for 
the record. Without objection, so ordered.
    This hearing is now adjourned.
    [Whereupon, at 3:41 p.m., the committee was adjourned.]

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