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




                               before the

                         COMMITTEE ON OVERSIGHT
                         AND GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES


                             FIRST SESSION


                            DECEMBER 3, 2009


                           Serial No. 111-64


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                   EDOLPHUS TOWNS, New York, Chairman
PAUL E. KANJORSKI, Pennsylvania      DARRELL E. ISSA, California
CAROLYN B. MALONEY, New York         DAN BURTON, Indiana
ELIJAH E. CUMMINGS, Maryland         JOHN L. MICA, Florida
DENNIS J. KUCINICH, Ohio             MARK E. SOUDER, Indiana
JOHN F. TIERNEY, Massachusetts       JOHN J. DUNCAN, Jr., Tennessee
WM. LACY CLAY, Missouri              MICHAEL R. TURNER, Ohio
DIANE E. WATSON, California          LYNN A. WESTMORELAND, Georgia
STEPHEN F. LYNCH, Massachusetts      PATRICK T. McHENRY, North Carolina
JIM COOPER, Tennessee                BRIAN P. BILBRAY, California
GERALD E. CONNOLLY, Virginia         JIM JORDAN, Ohio
MIKE QUIGLEY, Illinoia               JEFF FLAKE, Arizona
MARCY KAPTUR, Ohio                   JEFF FORTENBERRY, Nebraska
    Columbia                         AARON SCHOCK, Illinois
DANNY K. DAVIS, Illinois             ANH ``JOSEPH'' CAO, Louisiana
PAUL W. HODES, New Hampshire
JUDY CHU, California

                      Ron Stroman, Staff Director
                Michael McCarthy, Deputy Staff Director
                      Carla Hultberg, Chief Clerk
                  Larry Brady, Minority Staff Director

                            C O N T E N T S

Hearing held on December 3, 2009.................................     1
Statement of:
    Brand, Marcia K., Ph.D., Deputy Administrator, Health 
      Resources and Services Administration, U.S. Department of 
      Health and Human Services; Alan Levine, secretary, 
      Louisiana Department of Health and Hospitals; Joia Crear-
      Perry, M.D., FACOG, director of clinical services, Health 
      Department, city of New Orleans; and Clayton Williams, MPH, 
      director, Louisiana Public Health Institute................   120
        Brand, Marcia K.,........................................   120
        Crear-Perry, Joia........................................   145
        Levine, Alan.............................................   131
        Williams, Clayton........................................   159
    DeSalvo, Karen B., M.D., MPH, MSC, executive director, Tulane 
      University Community Health Centers; Cynthia A. Bascetta, 
      Director, Health Care, U.S. Government Accountability 
      Office; Diane Rowland, executive vice president, the Henry 
      J. Kaiser Family Foundation; Donald T. Erwin, M.D., 
      president and chief executive officer, nephrology, St. 
      Thomas Community Health Center; Michael G. Griffin, 
      president and chief executive officer, Daughters of Charity 
      Services of New Orleans; Alice Craft-Kerney, executive 
      director, Lower Ninth Ward Health Clinic; and Roxane A. 
      Townsend, assistant vice president, health systems, 
      University Hospital, Louisiana State University System.....     8
        Bascetta, Cynthia A......................................    24
        Craft-Kerney, Alice......................................    43
        DeSalvo, Karen B.........................................     8
        Erwin, Donald T., M.D....................................    49
        Griffin, Michael G.......................................    55
        Rowland, Diane...........................................    74
        Townsend, Roxane A.......................................    63
Letters, statements, etc., submitted for the record by:
    Bascetta, Cynthia A., Director, Health Care, U.S. Government 
      Accountability Office, prepared statement of...............    26
    Brand, Marcia K., Ph.D., Deputy Administrator, Health 
      Resources and Services Administration, U.S. Department of 
      Health and Human Services, prepared statement of...........   123
    Craft-Kerney, Alice, executive director, Lower Ninth Ward 
      Health Clinic, prepared statement of.......................    45
    Crear-Perry, Joia, M.D., FACOG, director of clinical 
      services, Health Department, city of New Orleans, prepared 
      statement of...............................................   148
    DeSalvo, Karen B., M.D., MPH, MSC, executive director, Tulane 
      University Community Health Centers, prepared statement of.    12
    Erwin, Donald T., M.D., president and chief executive 
      officer, nephrology, St. Thomas Community Health Center, 
      prepared statement of......................................    51
    Griffin, Michael G., president and chief executive officer, 
      Daughters of Charity Services of New Orleans, prepared 
      statement of...............................................    57
    Issa, Hon. Darrell E., a Representative in Congress from the 
      State of California, prepared statement of.................     7
    Kucinich, Hon. Dennis J., a Representative in Congress from 
      the State of Ohio, prepared statement of...................   107
    Levine, Alan, secretary, Louisiana Department of Health and 
      Hospitals, prepared statement of...........................   134
    Rowland, Diane, executive vice president, the Henry J. Kaiser 
      Family Foundation, prepared statement of...................    76
    Towns, Chairman Edolphus, a Representative in Congress from 
      the State of New York:
        Letter dated December 2, 2009............................   118
        Prepared statement of....................................     3
    Townsend, Roxane A., assistant vice president, health 
      systems, University Hospital, Louisiana State University 
      System, prepared statement of..............................    65
    Watson, Hon. Diane E., a Representative in Congress from the 
      State of California, prepared statement of.................   182
    Williams, Clayton, MPH, director, Louisiana Public Health 
      Institute, prepared statement of...........................   162



                       THURSDAY, DECEMBER 3, 2009

                          House of Representatives,
              Committee on Oversight and Government Reform,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 2 p.m., in room 
2247, Rayburn House Office Building, Hon. Edolphus Towns 
(chairman of the committee) presiding.
    Present: Representatives Towns, Cummings, Kucinich, 
Tierney, Watson, Connolly, Quigley, Kaptur, Kennedy, Lee, Issa, 
Bilbray, Jordan, Flake, Chaffetz, Luetkemeyer, and Cao.
    Staff present: John Arlington, chief counsel--
investigations; Jean Gosa, clerk; Adam Hodge, deputy press 
secretary; Carla Hultberg, chief clerk; Chris Knauer, senior 
investigator/professional staff member; Phyllis Love, Ryshelle 
McCadney, and Christopher Sanders, professional staff members; 
Mike McCarthy, deputy staff director; Leah Perry, senior 
counsel; Ophelia Rivas, assistant clerk; Jenny Rosenberg, 
director of communications; Leneal Scott, IT specialist; Ron 
Stroman, staff director; Gerri Willis, special assistant; 
Lawrence Brady, minority staff director; John Cuaderes, 
minority deputy staff director; Rob Borden, minority general 
counsel; Jennifer Safavian, minority chief counsel for 
oversight and investigations; Frederick Hill, minority director 
of communications; Adam Fromm, minority chief clerk and Member 
liaison; Kurt Bardella, minority press secretary; Ashley 
Callan, minority counsel; and Molly Boyl, minority professional 
staff member.
    Chairman Towns. The committee will come to order.
    It has been nearly 4 years since Hurricane Katrina 
devastated the New Orleans region. Since then, the area has 
struggled to regain its footing and slowly rebuild its 
neighborhoods, businesses, and critical services. One area 
particularly hard-hit by the storm was the region's health care 
infrastructure. When Katrina flooded the city and surrounding 
parishes, many important hospitals and outpatient clinics were 
severely damaged and destroyed.
    Before the storm, the low-income population of the region 
often relied on hospital emergency rooms and outpatient 
clinics, mostly hospital-based, as its main source of primary 
care. Charity Hospital, which was the major public hospital and 
the source of many of these services, particularly for the 
working poor and uninsured, was flooded and essentially 
destroyed. It remains shuttered today.
    Because this and other critical health care facilities were 
destroyed, many of the region's residents struggled to obtain 
health care after the storm. Those facilities that remain open, 
particularly those willing to take the uninsured or poor, had 
limited capacity and significant waiting times. While 
eventually some organizations were able to open some clinics, 
major health care delivery gaps remained for months and even 
years after Hurricane Katrina.
    In July 2007, the Department of Health and Human Services, 
with money granted from Congress to restore the Gulf Coast 
region, provided a $100 million grant to the State of 
Louisiana. This funding, called the Primary Care Access and 
Stabilization Grant, was designed to restore and expand 
critical and primary care services to the region without regard 
to a patient's ability to pay. The grant was also intended to 
reduce costly reliance on emergency room use for primary care 
services for patients who were uninsured, underinsured, or 
covered by Medicaid.
    The good news is that an impressive network of health 
clinics has emerged which are now providing critical health 
care services. As of June 22, 2009, over $80 million of the 
$100 million Federal grant had been distributed and these 
clinics are now collectively providing care for over 160,000 
individuals in the Katrina-affected region, nearly half of whom 
are uninsured. However, because the region does not have a 
clear plan on when it will begin breaking ground on a 
replacement for Charity Hospital, and because there are no 
clear plans on how to financially sustain these clinics, part 
of the region's population faces an uncertain future.
    I am particularly interested in understanding what needs to 
be done to ensure that we preserve the critical health services 
these clinics are currently providing. In addition, it has now 
been more than 4 years since Hurricane Katrina destroyed 
Charity Hospital. While a temporary facility is providing 
critical care to the region, we will hear today that this 
interim hospital is reaching capacity. Four years is long 
enough for a plan for a replacement facility to sit in limbo, 
and I look forward to hearing how and when we can expect a new 
hospital will be built.
    Let me conclude by thanking our witnesses today, 
particularly those who have traveled from the New Orleans 
region to be with us today. We really appreciate your being 
here. Many of you were in the trenches in the hours and days 
following this storm and provided critical care to those who 
otherwise would have gone without, and we thank you for that. 
Your story is an important one and needs to be heard. I applaud 
your efforts and I am sure all my colleagues remain committed 
to helping you rebuild the New Orleans region. Today's hearing 
is one more step toward that end.
    I will now recognize the ranking member, Mr. Darrell Issa 
of California, for his opening statement.
    [The prepared statement of Chairman Edolphus Towns 




    Mr. Issa. Thank you, Mr. Chairman, and thank you for 
holding this important hearing.
    Although the devastation of Hurricane Katrina occurred over 
4 years ago, its effects on the New Orleans region is still 
being felt by its residents today. The health care 
infrastructure was hit especially hard and has not fully 
bounced back. The picture of health care in the New Orleans 
area is still very bleak. Hospitals remain shuttered, 
physicians are short in supply, and many residents, as you 
said, nearly half, are uninsured.
    A key number of hospitals that served the uninsured 
population prior to Hurricane Katrina remain closed. As a 
result of these closures, many New Orleans residents now go to 
outpatient clinics for care. This change and the causes 
necessary are our focus here today, and in fact, how to get to 
a healthier community with a permanent hospital remains a 
vexing problem that we will hear about.
    Receiving early care and proper treatments will reduce 
overall costs, and certainly reduce the strain on emergency 
rooms. A primary care focus can reduce overall health care 
spending by eliminating emergency room costs, room cost 
shifting. Unfortunately, many clinics are filled to capacity in 
the region. And as you said, Mr. Chairman, the economic 
conditions in New Orleans continue to prevent the rebounding of 
the robust economy that could in fact fund new hospital 
maintenance on a permanent basis.
    The Federal Government has limited resources. It is clear 
that we have to work together to find a way for the region to 
be self-sustaining when possible. But today we will hear that 
is not possible today. Certainly we will also hear that a 
leading factor in the nationwide physician shortage is the high 
cost of medical liability insurance and malpractice insurance. 
As a result, broader health care reform is needed here in 
Congress. We need to look seriously at tort reform and bring 
health care costs that make delivery systems so expensive and 
inefficient down.
    Additionally, as the chairman knows, public hospitals today 
have certain limited immunity from tort. Bills being considered 
in the Congress here today would strip that immunity, thus 
raising the cost of public health and their liability 
    So I hope in addition to dealing with the devastation of 
Hurricane Katrina that lingers on in New Orleans, we will 
recognize that there is not unlimited amounts of money to pay 
for health care unless health care can be delivered in an 
efficient and effective fashion. Today we will look at whether 
or not we can restore New Orleans' ability to have primary 
health care delivered in a way that is sustainable, cost-
effective, and will prevent the citizens from having either 
poor health or excessive trips to the emergency room.
    Mr. Chairman, I thank you for holding this hearing, and I 
yield back.
    [The prepared statement of Hon. Darrell E. Issa follows:]

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    Chairman Towns. Thank you very much for your statement and 
also your involvement in this issue over the years.
    I would like to introduce our first panel of witnesses that 
will be testifying today: Ms. Cynthia Bascetta, Director of 
Health Care, U.S. Government Accountability Office; Dr. Karen 
B. DeSalvo, vice dean for community affairs and health policy 
and C. Thorpe Ray Chair in internal medicine at Tulane 
University School of Medicine. I would also like to introduce 
Ms. Alice Craft-Kerney, executive director of the Lower Ninth 
Ward Health Clinic in New Orleans; Dr. Donald T. Erwin, 
president and CEO of the Saint Thomas Community Health Center 
in New Orleans; Dr. Michael G. Griffin, president and CEO of 
Daughters of Charity Services of New Orleans; Dr. Roxane A. 
Townsend, assistant vice president for health systems for 
Louisiana State University; and, Dr. Diane Rowland, executive 
vice president of the Henry J. Kaiser Family Foundation.
    Ladies and gentlemen, it is a longstanding policy that all 
of our witnesses are sworn in. So if you would stand and raise 
your right hands.
    [Witnesses sworn.]
    Chairman Towns. Let the record reflect that all the 
witnesses have answered in the affirmative.
    Dr. DeSalvo, why don't we start with you. And thank you 
again for coming.

                       UNIVERSITY SYSTEM

                 STATEMENT OF KAREN B. DeSALVO

    Dr. DeSalvo. Good morning, Mr. Chairman and members of the 
    My name is Dr. Karen DeSalvo, and I am a practicing primary 
care physician in New Orleans. I also serve as the director of 
the Tulane University Community Health Centers.
    Thank you for the opportunity to speak on behalf of my team 
and our patients, and to update you on the progress of health 
sector recovery in New Orleans, the challenges ahead for 
sustainability of the community health network, and describe 
strategies that may help us sustain these gains.
    In a now too-familiar story, the failure of the Federal 
levees in August 2005 resulted in the devastation of the 
greater New Orleans community, including our health sector. In 
the face of this crisis, the community realized we had a chance 
not just to rebuild our city but to re-make it into one worthy 
of our historic importance to our Nation, one that could be a 
model for others. This vision extended to redesigning our 
health sector into one that would provide all our citizens with 
access to high quality, affordable health care.
    The rationale for re-making our health sector was simple. 
For decades it had performed amongst the worst in quality, 
cost, and disparities. Any discussion of a redesigned New 
Orleans health care sector has to include consideration of the 
role of the public hospital. The Medical Center of Louisiana at 
New Orleans, formerly known as Charity Hospital, served as the 
principal source of care for hundreds of thousands of uninsured 
and underinsured persons in the region. Yet in spite of good 
intentions, at the time of the storm the system was overwhelmed 
and under-funded. Primary care services offered limited hours 
that reflected the schedules of medical student trainees and 
other doctors rather than patients. They generally did not see 
the same doctor on a concurrent visit, and if they missed an 
appointment, it was a 12-month wait until the next available 
    Most of the uninsured received their care through emergency 
rooms as a result, and there was also not an alternative 
network of community care to pick up the slack. When Charity 
closed because of Katrina-related flooding, its patients lost 
access to the chief source of care available to them. Into the 
vacuum created by this closure, a grassroots, largely volunteer 
effort emerged to provide care. Tulane's part in this was 
initially led by a handful of our medical residents who set up 
six urgent care stations on the streets of New Orleans while 
the city was still under mandatory evacuation and partially 
    These trainees realized that people would need care, 
particularly the low-income and marginalized populations that 
Tulane had cared for at Charity for the past 170 years. One of 
these makeshift first aid stations evolved into a permanent 
primary care site, Covenant House. When the dust had settled, 
stakeholders set to work to define a vision for our rebuilt 
health system. We envisioned one founded upon community health 
care marked by quality and efficiency, because the evidence is 
clear that this kind of framework leads to better health and it 
also leads to lower costs. The public hospital needs to be a 
part of this new model, but it should not be the sole source of 
the primary care safety net.
    In the spring of 2007, I testified, along with others, 
about the challenges in health care recovery in post-Katrina 
New Orleans. We were less than 2 years from the disaster at 
that point, and had much work to do to rebuild. The community 
was unified in asking for assistance to shore up what had 
become our new paradigm of health care in our recovering city--
community health. The result of that hearing was the awarding 
of the Primary Care Access and Stabilization Grant [PCASG], a 
reflection of the bipartisan support for the community-based 
model of care.
    Tulane has used these PCASG funds to expand access to 
thousands by increasing the capacity at our main site, Covenant 
House. That once makeshift first-aid station has grown into a 
robust, comprehensive NCQA-recognized patient-centered medical 
home. Our team is proud to have built a program that offers 
primary care for all ages. We have onsite integrated mental 
health and resiliency programs. We offer social work and legal 
aid services. We use an electronic health record. And we have 
active quality improvement and evidence-based medicine 
    We are engaged in work force training for physicians, 
nurses, social workers, public health students, and 
pharmacists, all in partnership with local universities. We 
also partner actively with community organizations and members 
to empower them to become physically, mentally, and 
economically healthier. Demand for our services has been so 
high we have outgrown our space and will soon move to a new 
location in the same neighborhood. Our new site will be a 
renovated building that has been blighted since Katrina and 
will serve as a cornerstone of economic development for that 
    Tulane has also expanded beyond Covenant House due in large 
part to PCASG funding. We provide high quality, culturally 
competent care throughout the city from mobile units, school-
based health centers, and a new primary care site in 
collaboration with the Mary Queen of Vietnam Development Corp. 
in New Orleans East.
    The people we serve are mostly the working poor. Their 
employers do not offer health insurance and they are not poor 
enough to be eligible for Medicaid. Others have recently lost 
their insurance when they lost their jobs, like a man I saw 
recently in New Orleans East. He had been laid off and was 
newly uninsured. He developed a new problem that caused him to 
visit the emergency room the night before he had been diagnosed 
with painful gout. This was a genetic condition he suffers 
through no fault of his own, and was exacerbated by his 
compliance with his blood pressure medications. The emergency 
room knew of our services, sent him to us and now he is 
integrated into our medical home and has a medical team that 
will help him manage his care, and he will not need to rely on 
emergency rooms in the future.
    I am quite proud of what we have accomplished as an 
individual organization, but perhaps more proud of the 
collective efforts. I believe our experience is a model program 
for other areas. However, my enthusiasm is tempered by the 
knowledge that in the fall of 2010, the funding comes to an 
abrupt halt. The quality network of care for our population of 
largely uninsured working poor will need to be scaled down 
dramatically, perhaps as much as 40 percent, leaving some 
50,000 citizens or so without access to primary community and 
community health.
    We will lose our gains from this investment and tens of 
thousands of citizens will have to revert to the old option of 
using expensive emergency rooms, which the taxpayers ultimately 
bear the burden of cost. Tulane community health programs will 
not be immune from these cutbacks.
    To prevent the loss of gains from this investment, a set of 
strategies are needed, and none alone are likely to be 
sufficient. Some are within the control of the community health 
providers themselves.
    Chairman Towns. Dr. DeSalvo, would you wrap up, please? 
Because you're beyond your 5 minutes.
    Dr. DeSalvo. Yes, sir. These include improving efficiency 
and business practices at the center, which we have undertaken. 
Other actions are beyond our control and include options such 
as working with HRSA for community health center programs and 
creating ongoing funding for uncompensated care, much the same 
way hospitals are supported in the DSH programs.
    We look forward to working with you on the ways in which we 
can sustain this vital component of New Orleans' recovery. 
Thank you.
    [The prepared statement of Dr. DeSalvo follows:]

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    Chairman Towns. Thank you very much. To the other 
witnesses, because we have so many witnesses today, we want to 
try to stay within the 5-minutes. We have your written 
statements. If there are things that you need to add, you can 
possibly add them during the question and answer period.
    Thank you very much.
    Ms. Bascetta.


    Ms. Bascetta. Thank you, Mr. Chairman and members of the 
committee. We appreciate the opportunity to be brought together 
this morning to discuss the important issues involved in 
restoring health care services in New Orleans.
    The pre-Katrina health care infrastructure was hospital-
based, very expensive, and yielded generally poor outcomes. As 
you know, many low-income and uninsured people traveled 
downtown to get their care at emergency rooms and clinics at 
Charity Hospital. A better system would be built on a solid 
foundation of primary care that would be located closer to 
people's homes and would be accessible as their health care 
needs arise, that would provide continuity of care over the 
long term and that would coordinate care for people with 
chronic or more serious conditions who need to see specialists.
    Health services research indicates that primary care also 
yields better health outcomes at lower costs. So building 
primary care in New Orleans became a key priority in the wake 
of Katrina, especially for those on Medicaid or without 
adequate insurance. My testimony today is based largely on our 
July 2009 report on the use of Federal funds to support primary 
care in the area. The lion's share of the money, as you know, 
is the $100 million PCASG grant. Lesser amounts of Federal 
funds were provided through the Social Services Block Grant and 
the Professional Workforce Supply Grant, as well as more recent 
American Recovery and Reinvestment Act Funds for enhanced 
Medicaid payments and additional federally qualified health 
    The PCASG was intended to restore and expand access to 
primary care, including mental and dental services, as well as 
referral to specialty care and ancillary services like 
transportation. In addition, the organizations must have had 
the intent to be sustainable, that is, to be able to continue 
providing primary care after the grant ends in September 2010. 
So far, the 25 funded health care organizations have provided 
more than 1 million health encounters to over 250,000 patients.
    After the storm, provider shortages were a major reason for 
disruption in health services. We found that the grant 
organizations used the funds to hire and retain physicians, 
nurses, and other providers. They told us that this allowed 
them to increase access by cutting waiting times and expanding 
their hours.
    Mental health services were especially hard hit. HRSA's 
area resource file documented a 21 percent decrease in the 
number of psychiatrists in greater New Orleans between 2004 and 
2006, compared to a 3 percent increase in counties nationwide. 
Ten of the PCASG organizations hired both medical and mental 
health providers to alleviate service gaps, and 15 of 18 we 
interviewed for our report on mental health services for 
children identified the lack of providers as a significant 
    Other funds were used to renovate or relocate physical 
space so that providers could expand capacity through 
additional examination rooms and the purchase of new equipment. 
Despite the progress made, PCASG organizations face challenges 
in establishing a full continuum of care with referrals to 
specialists and they are concerned about their long-term 
sustainability. Most continue to have difficulties hiring and 
retaining staff due to persistent problems with housing, 
schools, and the overall community infrastructure in the 
greater New Orleans area. In fact, HRSA has designated all four 
parishes as a health professional shortage area for mental 
health, a designation that none had before Katrina, and most of 
the parishes as shortage areas for primary care and dental 
    In addition, financing poses serious challenges. Although 
Medicaid billing has increased and some are able to bill 
private insurance, at more than half of the organizations, most 
of the patient population and sometimes 70 percent are 
uninsured. This is a daunting demographic, given that nearly 
all the funding is temporary. Many reported that they intended 
to use health center program funding to improve their 
sustainability, but with only 16 percent of applicants awarded 
grants nationwide in fiscal year 2008, it is unlikely they 
would all be successful in obtaining a grant.
    LPHI provided a sustainability strategy guide to help them 
address a possible $30 million annual shortfall in revenues. 
Recipients have completed and planned actions to be 
sustainable, but it is not clear which ones will be successful 
and how many patients they will be able to serve after the 
funds are no longer available. With less than 10 months 
remaining, quickly implementing ways to pay for the large 
number of uninsured patients will be necessary to prevent 
disruptions in these vital services and to prevent the erosion 
of gains made in delivering primary care through this grant.
    [The prepared statement of Ms. Bascetta follows:]

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    Chairman Towns. Thank you very much.
    Ms. Craft-Kerney.


    Ms. Craft-Kerney. Good morning Chairman Towns and members 
of the committee. I am Alice Craft-Kerney, and I am the 
executive director of the Lower Ninth Ward Health Clinic in New 
Orleans, LA. I appreciate the opportunity to be here to discuss 
the successful partnership of government and community to 
deliver health care services to the citizens of the New Orleans 
    I want to first express my appreciation for the Primary 
Care Access and Stabilization Grant, which has been a lifeline 
for the uninsured and under-insured residents of the greater 
New Orleans area. The grant has enabled the Lower Ninth Ward 
Health Clinic, as well as other health clinics, to employ 
medical staff and provide health care services in New Orleans 
which has been designated, as we said, as a medically under-
served area. It is my hope that Congress will recognize the 
critical need for our health clinics and take action to 
continue this fruitful collaboration which contributed 
significantly to the recovery of the greater New Orleans 
    Before Hurricane Katrina, I worked as a nursing supervisor 
at Charity Hospital in the trauma surgery wards. During that 
time, I observed many patients that were not insured. And the 
reason why they were there is that they did not have access to 
primary health care services. These were unnecessary 
hospitalizations. But to understand fully what is going on, you 
have to understand that community, which was most impacted by 
Katrina. You have to understand that this population was very 
vulnerable and they had poor health outcomes because there were 
large numbers of New Orleans residents living at the poverty 
level. There was low education levels and high illiteracy 
rates. There was a high dependence on the public sector for 
health care needs. There were high rates of chronic illnesses, 
high numbers of, as I said, uninsured residents. And the use of 
the emergency room was substituted for primary health care.
    And there was an inadequate emergency preparedness. And on 
August 29, 2005, these factors collided with the worst natural 
and man-made disaster in the history of the United States, 
creating a public health crisis of enormous proportions.
    Ms. Patricia Berryhill, a registered nurse, and my 
colleague, and I decided to confront the crisis head-on by 
opening the Lower Ninth Ward Health Clinic on February 27, 
2007. This was a humanitarian mission that we have undertaken 
at the Lower Ninth Ward Health Clinic and it is informed by the 
United Nations Guiding Principles of Internally Displaced 
People, a standard of care that is supported by the U.S. 
Government to ensure the recovery of people around the world 
who have become displaced by a disaster.
    Principle 19 of the Guiding Principles calls for 
comprehensive medical care and special attention to the health 
needs of displaced persons. For displaced New Orleaneans, these 
health needs involved the traumatic experience of the disaster 
and being uprooted from homes, as well as the physical impacts 
of not having access to life-sustaining medications and 
treatment. As time passed, no one came to the Lower Ninth Ward, 
a community separated from the rest of the city by a waterway 
called the Industrial Canal, and historically the Lower Ninth 
Ward was the last to obtain any services.
    With that knowledge, we opened the Lower Ninth Ward Health 
Clinic in order to improve medical care needed by internally 
displaced people returning to New Orleans, many of whom have a 
history of inadequate medical attention.
    Initially, the clinic was staffed by volunteer medical 
providers at a time when many medical professionals who lived 
in the city were physically displaced by the disaster. It was 
largely through the Primary Care Access and Stabilization Grant 
that we were able to access the funds to employ and stabilize 
the medical staff, purchase medications, medical equipment and 
supplies, and contract services for laboratory tests. The grant 
also provided us with the capacity to raise funds from other 
    Today, the Lower Ninth Ward Health Clinic is proud to 
report that it employs two part-time physicians with 
significant medical experience, two medical assistants, one 
clinical director, and one executive director. We serve more 
than 2,200 patients on an ongoing basis and over 5,000 patients 
through initial medical visits. We are grateful to provide a 
service that has not only contributed to the medical progress 
and positive health outcomes of our patients, but also to their 
recovery and to the recovery of New Orleans.
    While we have made incremental progress, there is still 
much work to be done in the areas of quality improvement and 
disparity reduction. With the adversity of this disaster, there 
was also an opportunity to discard ineffective treatments and 
try new and innovative therapies to improve quality of care and 
reduce disparities. The positive health care outcomes to date 
have been realized in large part because of the funding of the 
Primary Care Access and Stabilization Grant.
    We are eternally grateful to all Members of Congress and 
commend past Secretary of Health and Human Services Michael 
Leavitt for his service and his leadership as well as his 
insightful actions, which aided the New Orleans region in 
receiving much-needed funding for health care services. We are 
looking forward with great anticipation to future public-
private collaborations which enhance and sustain the health 
care status of citizens of our region.
    We are at a pivotal moment in the evolution of providing 
excellent health care services. We must not forget we have an 
opportunity to change the trajectory of internally displaced 
people. We are now positioned to do phenomenal things to 
improve the health and welfare of the people of New Orleans and 
the Gulf Coast region.
    Thank you.
    [The prepared statement of Ms. Craft-Kerney follows:]

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    Chairman Towns. Thank you very much for your statement.
    Dr. Erwin.


    Dr. Erwin. Good morning. I would like to thank the chairman 
and members of the committee for their continued interest in 
the health care situation of post-Katrina New Orleans and for 
the opportunity to appear here today.
    I am Don Erwin, CEO of St. Thomas Clinic, which is No. 54 
on the map that you have. It was started in 1987 as a 
community-based clinic in one of the country's oldest housing 
developments. Prior to Hurricane Katrina, the focus was its 
neighborhood and our programs were defined by the availability 
of public and private grants. The budgets were small, services 
were limited. After Hurricane Katrina, through the generosity 
of many, the clinic reopened to provide health care for 
returning citizens and has since become one of the community's 
largest and most comprehensive primary care centers.
    With the PCASG funds, St. Thomas has gone from 2.4 FTE 
providers to 8 primary care and mental health care providers. 
We now have a staff of 45 people and an annual operating budget 
of $4.5 million. We have a patient base of 14,000 patients and 
provide over 22,000 patient visits per year. Although we use an 
open access appointment model, we are still not able to meet 
the need. Prior to Katrina, we saw patients from three to five 
local zip codes. Last year, we saw patients from 251 zip codes 
in three States.
    In addition to primary care, collaborations have been made 
to provide our patients with specialty care in seven major 
medical specialties. This specialty care, offered in a primary 
care setting, provides coordinated patient-centered care in a 
cost-effective way. We are also a training site for medical 
students, residents, and nurse practitioners.
    As part of a CDC-sponsored national breast and cervical 
early detection program, administered by the LSU School of 
Public Health, St. Thomas provides breast cancer early 
detection with digital mammography and ultrasound. For over a 
year after Katrina, we were the only mammography site for 
uninsured women and we continue to be one of only two in the 
region. Through a unique collaboration with Ochsner Clinic 
Foundation and the Association of Black Cardiologists, St. 
Thomas offers interventional cardiovascular care for the 
prevention of heart attacks, stroke, and sudden death. For 
uninsured patients, this cardiovascular care is generally 
unavailable or delayed for months.
    Included in my written testimony is a copy of a cardiac 
tracing that shows an implantable defibrillator operating to 
serve the life of a 52-year-old working man who has a wife and 
two children. He was at work when he had an episode of silent 
ventricular fibrillation and the defibrillator saved his life.
    Although these defibrillators cost $50,000 each, we have 
installed 14 of them in uninsured patients, with both the 
defibrillators and the cardiologists' time being donated to St. 
Thomas. I would like for you to understand that this man is 
just one of the many thousands of lives that have been saved by 
this grant and the services provided.
    All of the specialty services that we have available at St. 
Thomas are offered to any patient of any of the safety net 
clinics in the New Orleans community. As a result of the 
infrastructure made possible by the Primary Care Access and 
Stabilization Grants, St. Thomas has become a federally 
qualified health center and also a level 3 patient-centered 
medical home, recognized by the National Committee for Quality 
    We were recently notified that St. Thomas would be honored 
by the National College of Physicians, the second largest 
physician group in the United States, which is this year 
awarding St. Thomas its Rosenthal Award for the original 
approach to the delivery of health care in a way which will 
increase its clinical and/or economic effectiveness.
    Although St. Thomas has become a federally qualified 
center, the annual FQHC grant of $650,000 makes up only 14 
percent of our annual $4.5 million budget. We are unable to 
take full advantage of the augmented FQHC Medicaid rates, since 
only 14 percent of our patients have Medicaid; 72 percent of 
our patients remain uninsured. Although the percentage of 
Medicaid-eligible patients will increase in the future, we 
think this will take at least 2 years.
    Without the funds provided through the Primary Care Access 
and Stabilization Grant, it is difficult to project continued 
viability for St. Thomas. Although we are steadily moving 
toward sustainability, with 72 percent uninsured patients, we 
do not expect to have replacement revenue to support our 
operations until there is expanded Medicaid eligibility. 
Certainly an early consequence will be the loss of the 
infrastructure necessary to support the policy and procedure 
requirements to remain a federally qualified health center and 
a patient-centered medical home.
    In our business plan, for 3 years, we project that in the 
beginning of year three, we could replace the revenues lost by 
the Primary Care Access and Stabilization Grant. In the 
intervening 2 years, however, we cannot identify any source of 
adequate support, nor do we see any other safety net site in 
our region which would absorb our patients. As you have heard, 
Hurricane Katrina created a new population of uninsured 
patients when the storm took people's homes, jobs and health 
insurance. The PCASG has enabled us to begin the restructuring 
of the delivery system in our State.
    We are optimistic about the sustainability of clinics like 
St. Thomas, if we are given another 2 or 3 years for the 
recovery to continue. But for the present, if there is no 
bridge funding, we anticipate that our patients will find 
themselves in the same situation they found themselves 
immediately post-Katrina, where the only source of primary care 
was the crowded emergency rooms.
    Thank you very much for the opportunity to speak with you 
this morning and for your continued support of our community.
    [The prepared statement of Dr. Erwin follows:]

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    Chairman Towns. Thank you very much for your statement.
    Mr. Griffin.


    Mr. Griffin. Good morning Chairman Towns, Congressman Cao, 
and other distinguished members of the Committee on Oversight 
and Government Reform. I would like to thank you for allowing 
me to offer testimony in this public formum on ongoing health 
care concerns and challenges facing the New Orleans region 
post-Hurricane Katrina.
    My name is Michael Griffin. I am the chief executive 
officer of Daughters of Charity Services of New Orleans, a 
primary health care provider whose organization has roots in 
New Orleans for 175 years, with services to the poor and 
vulnerable. The Daughters of Charity Services of New Orleans 
[DCSNO], is sponsored by Ascension Health. Ascension Health was 
founded in 1999 with the Daughters of Charity and the Sisters 
of St. Joseph joining their health ministries into one 
    DCSNO's mission is to improve the health and well-being of 
our community. We are dedicated to providing primary and 
preventive health care services which address the needs of the 
total individual--body, mind and spirit. I welcome this 
opportunity to inform you on how the Primary Care Access and 
Stabilization Grant program has assisted us in restoring and 
improving the health delivery system in New Orleans and what 
challenges are still before us.
    When Hurricane Katrina struck the city of New Orleans on 
August 29, 2005, it severely impaired the health care delivery 
system. Medical and other support personnel were displaced and 
the city lost several hospitals and numerous primary care 
providers. DCSNO was not sheltered from the impact of Hurricane 
Katrina. We lost our one and only health center site to 
flooding in the aftermath of the storm. Yet as our history 
demonstrates, the DCSNO board and Ascension Health would remain 
steadfast and committed to serving the poor and vulnerable in 
New Orleans. Within 45 days after the storm, we opened a new 
health center in the Metairie area, next door to the Department 
of Health. However, the diminished capacity of the overall 
health care infrastructure in new Orleans severely compromised 
continuity of care for low-income and minority populations who 
were attempting to remain or return to the area.
    Katrina resulted in the loss of five hospitals, one of 
which served the vast majority of the medically under-served 
and poor. The aftermath of Hurricane Katrina was the litmus 
test which challenged DCSNO to improve access to health care 
services at additional locations throughout the metropolitan 
area with the goal of meeting the primary care needs of the 
community at large. It was because of the Primary Care Access 
and Stabilization Grant awarded by the U.S. Department of 
Health and Human Services and authorized by Congress that DCSNO 
was able to rapidly expand from one to three primary health 
care centers in the area. Today, these health care centers are 
current in providing primary care services to the under-served 
populations in the Carrollton area, the Upper Ninth Ward, and 
    As a direct result of PCASG funding, DCSNO has been able 
this past year to provide affordable or free care to 20,034 
patients, totaling 65,509 patient visits. Seventy-two percent 
of those patients are uninsured. Let me repeat that: 72 percent 
of the 20,000 patients are uninsured. Fifteen percent are on 
Medicaid, 5 percent are on Medicare, 7 percent are on other 
insurance. DCSNO has experienced unanticipated growth in this 
last year of a 49 percent increase in our patient population 
since last July.
    The Primary Care Access Stabilization grant funding allowed 
us to retain and hire new doctors. We are offering free 
pharmacy services and have expanded access to mental health 
providers for both children and adults. We have plans to expand 
dental care and optometry. In addition, we have leveraged the 
PCASG funding to encourage partners like the Unity Foundation 
and the March of Dimes to help fund mobile primary care units, 
two of which are mobile prenatal units and the other is one 
that treats the homeless, and to restore our Seton Resource 
Center for Adolescent and Mental Health Development that offers 
behavioral health and counseling services at 10 public and 
parochial schools.
    Let me quickly tell you this story. An uninsured mother, 
who didn't have a regular physician, recently attended a health 
fair staffed by DCSNO's mobile unit. She had a history of 
hypertension, cholesterol, and glucose issues. While having her 
testing done, the woman expressed concerns to her medical 
provider about her daughter complaining of not feeling well. 
She was constantly drinking water and going to the rest room. 
She wondered if we could just take a quick look at her 
daughter. We gave the 9-year-old a glucose test and found that 
the glucose level was above 300, which was extremely dangerous. 
Our clinician recommended that the mother immediately take her 
child to Children's Hospital for further treatment. The child 
was in fact admitted to Children's Hospital, where the 
emergency room doctors informed the mother that any prolonged 
high blood sugar could have resulted in a stroke, coma or even 
    I tell this story because it demonstrates the type of 
community that we are doing at Daughters of Charity Services of 
New Orleans to help those who do not have health insurance and/
or a family physician to call when a child gets sick.
    I thank you, Chairman Towns, for this opportunity to 
testify before Congress, and thank you for your support of New 
    [The prepared statement of Mr. Griffin follows:]

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    Chairman Towns. Thank you very much, Mr. Griffin.
    Dr. Townsend.


    Dr. Townsend. Thank you Mr. Chairman and members of the 
committee for the opportunity to address you today regarding 
the status of health care in New Orleans on behalf of the 
Louisiana State University health system.
    In addition to my role at the health system, I also have 
the privilege right now of serving as the interim CEO to the 
public hospital in New Orleans.
    When Hurricane Katrina forced the closure of the Medical 
Center of Louisiana at New Orleans, we did lose critical 
infrastructure for health care. We lost 550 inpatient beds. At 
that time, we were doing 23,000 patient admissions a year, we 
had 120,000 emergency department visits. But something that is 
not often recognized and is really important, we did more than 
260,000 outpatient clinic visits in our hospital-based clinics. 
That included primary care as well as specialty care.
    We had over 640 medical residents and fellows from 
Louisiana State University and Tulane University training at 
that hospital, along with thousands of other students, dental, 
nursing, and allied health, and pharmacy. It was a critical 
area for teaching for Louisiana, for the work force, for the 
future. We lost all of that in Katrina. And when you look at 
that, the role of that facility, it wasn't simply for the New 
Orleans region. It was a Statewide resource, where people who 
were uninsured could go to get specialty care. Oftentimes the 
specialty care isn't available to these folks, even if they 
have a Medicaid card in the rest of the State. We lost all of 
that from Katrina.
    Knowing the important role that this facility played, I 
consider these people who stayed there during the storm and 
reconstituted services after as really true heroes. They went 
from constructing tents in a parking lot where they continued 
to provide services; they moved those tents into the convention 
center because it didn't flood. So they at least had a roof 
over their head.
    Then they moved those tents into a former department store 
in a mall adjacent to the Superdome once the flooding subsided. 
And we continue to do specialty care and primary care clinics 
there today, because it wasn't until November 2006 that the 
former University Hospital campus was able to be transformed 
and reconstituted into an inpatient facility. That was through 
the work and collaboration of FEMA and LSU, as well as 
Louisiana's Office of Facility Planning and Control. Today we 
are operating 275 beds, about half of what we had before the 
storm. With that, we are running close to 85 percent occupancy. 
If you look at hospitals across the country, 85 percent 
occupancy is full. In our ICU, we have 36 beds. They stay full 
all the time. We have 38 inpatient acute psychiatric beds for 
adults. They are always full.
    We also provide the only Level I trauma center in 
Louisiana, serving a nine-parish area. We have 11 operating 
rooms, less than half of what we had before the storm. One of 
those always has to be on standby for trauma, since we are 
Level I. So we are cramming all of our operating room cases 
into 10 operating rooms in that facility.
    And as a well-respected physician in the community, someone 
who was there during the storm and after the storm said, we 
really are gaining stability but we are still pretty fragile. 
We are probably one big bus wreck away from just crippling the 
entire system down there. So we still have a way to go.
    One of the really exciting things that did happen was 
through the generous funding of Congress we got the Primary 
Care Access and Stabilization Grant. So we were able to bring 
six community clinics up after the storm associated with in the 
interim hospital. And this was different from before the storm 
where everything was pretty well located on campus. Now these 
six clinics are allowing quality patient care to happen close 
to where people live. And the quality is evidenced by the NCQA 
actually giving us recognition status as patient-centered 
medical homes in those community clinics.
    The grant funding was flexible enough that we were also 
able to provide some specialty care services. As we look at 
this funding coming to a close, we recognize that our role as 
an academic medical center is to support these primary care 
clinics. So we are looking at consolidating some of those 
clinics into bricks and mortar, rather than the temporary 
buildings that they are in now. But we see that access to the 
specialty care and inpatient care is extremely important. So we 
are trying to partner with the community clinics that are still 
there that will hopefully survive after the primary care grant 
goes away, so that we can give important services to those 
folks. We don't just treat, we also educate. And we have to do 
both of those together.
    So I thank you for the opportunity to address the committee 
    [The prepared statement of Dr. Townsend follows:]

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    Chairman Towns. Thank you very much.
    Dr. Rowland.


    Ms. Rowland. Thank you Mr. Chairman and members of the 
committee. I am Diane Rowland, executive vice president of the 
Kaiser Family Foundation, and since Hurricane Katrina I have 
helped lead the Foundation's efforts to document the needs and 
monitor the progress in New Orleans through two city-wide 
surveys of New Orleans residents in 2006 and again in 2008. We 
are also planning our third survey in 2010, just to be able to 
assess how the progress has been going.
    All of our work underscores the importance of building a 
strong health care system to meet the needs of all the 
residents of New Orleans as part of making New Orleans again a 
vital and dynamic system. You have heard from all of our 
witnesses of the fact that New Orleans did not have a fully 
operating system even before Katrina. And you have heard about 
the devastation that Katrina wrought on the city and on its 
health care system.
    But the devastation was so widespread that it also brought 
an opportunity to establish and design a better system, with 
community-based services and integrated services for the poor 
and uninsured, instead of a system based on a hospital and 
disproportionate share Medicare payments to help sustain it. 
The public returning to New Orleans had many of the same 
problems of the public that left New Orleans. Many were poor 
and uninsured and many with chronic health problems. So Katrina 
did not wipe away the problems of the residents of New Orleans.
    Adequate medical care, rebuilding medical capacity, and the 
Charity Hospital system establishing care in clinics and 
neighborhoods were high priorities of the residents that we 
surveyed, and came in next after rebuilding the levees which as 
you might imagine would have been their major concern. And as 
we look at a redesigned health care system we need to look at 
the major elements that need to be put in place. First and 
foremost, health care coverage provides the means for people to 
access health care services and the financing to support a 
health care system. For children in New Orleans, there is a 
success story. Today, only 8 percent of New Orleans' children 
are uninsured, lower than the national average. This is due 
largely to the expansion of coverage through Medicaid and the 
LaCHIP program. Today in the city of New Orleans, over half of 
the children have Medicaid as their source of coverage, which 
helps account for the lack of a large uninsured population.
    But for adults in New Orleans, the story is very different. 
Louisiana, among the poorest States in our Nation, one in four 
living in poverty, has one of the most meager programs in terms 
of eligibility for adults. In fact, a working parent cannot 
qualify for the Medicaid program if their income is over $5,513 
a year, or 25 percent of the Federal poverty level. No coverage 
is available for childless adults and those who are in the city 
now. We account that 29 percent of non-elderly adults are 
uninsured. These are the same levels of lack of insurance for 
adults as before Katrina, and these are the very individuals 
who are now seeking care through the community clinics that 
have been developed, and will need care in an ongoing manner 
until insurance coverage is made available. Attempts to improve 
coverage have been stymied, leaving these developing health 
systems to care for the largely uninsured adult population. 
Seventy-two percent uninsured is an unsustainable level of care 
to be delivered in even a grant-supported clinic.
    And the good news, though, is that the community-based 
system of clinics for primary care has been able to at least 
develop with the support of the Federal grant funds. It is 
decentralized, it is in the neighborhoods where people live. A 
forthcoming Commonwealth Fund study that is evaluating these 
clinics has found that the patient experiences show very 
promising results on quality, on access and on efficiency for 
these clinics. The investment in these clinics has helped to 
move a new model of care to the city of New Orleans, and 
appears to be bringing much-needed care to the city's still 
substantial uninsured population.
    But the bad news is that the future sustainability of these 
clinics is in jeopardy, largely due to the lack of coverage. 
And while we all talk today about national health insurance and 
universal coverage as part of the health reform efforts, those 
efforts are still not going to be phased in if enacted until 
2013 or 2014, leaving a huge gap right now for these clinics to 
be able to continue. In order to provide them with the support 
they need, coverage needs to be expanded, many need to be able 
to become federally qualified health centers, and there needs 
to be continued support for the uncompensated care that they 
provide to individuals who are uninsured.
    Even in the models of community health centers around the 
country, we see that the mix of revenues that support them is 
grant funding from the Federal Government combined with the 
payments for their insured patients through the Medicaid 
program. And finally, a fully integrated health care system 
requires specialty care and tertiary care capacity, as you have 
just heard. So reestablishing a teaching hospital with multi-
specialty care to back up the clinics is equally essential.
    Without improved coverage of adults, combined with 
financial coverage for the uninsured, the neighborhood primary 
care model will falter, not in the care it delivers, but in its 
ability to sustain operations. Yet this is a critical building 
block for the future of New Orleans' health care and a critical 
building block as we look toward national reform. I hope this 
hearing will help to shed light on the needs of these clinics 
and the ability to provide services to the uninsured and the 
low-income population of New Orleans.
    Thank you for this opportunity.
    [The prepared statement of Ms. Rowland follows:]

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    Chairman Towns. Thank you very, very much. Let me thank all 
of you for your testimony. You have been very helpful.
    Now we are going to the question and answer period. I will 
start by first asking you, Ms. Bascetta and Dr. Rowland, what 
would it mean toward the region's overall recovery to lose 
these services that have been described so eloquently here this 
    Ms. Bascetta. I think that most importantly, the threat of 
backsliding on the progress that has been made so far in the 
primary care foundation is something that we would not want to 
see. These clinics now and this primary care foundation that 
has been built is in an expanding mode. It is in a growth mode. 
And reverting back to a less effective system where people 
would have to seek care in an emergency room would be more 
expensive and would yield poorer outcomes, as you have heard.
    In addition, like emergency rooms throughout the country, 
they are already at capacity. So it would be very dire to lose 
these primary care clinics.
    Chairman Towns. Dr. Rowland.
    Ms. Rowland. Mr. Chairman, I know your concern is for the 
people of New Orleans. I think what these clinics have 
demonstrated is that they need access to care. There are severe 
gaps in their ability to get the care they need. We know that 
uninsured people get less care than those with insurance and 
that they live sicker and die quicker. So I think it is an 
investment not only in the clinics themselves but especially in 
improving the health care of the people of New Orleans. And 
many of the low-income population there suffer from multiple 
chronic conditions that are not readily available to emergency 
room care. So I think you really need to have in place a good 
primary care network and to sustain it.
    Chairman Towns. Right. Thank you very much.
    Let me raise this question with you, Dr. DeSalvo, Ms. 
Craft-Kerney, Dr. Erwin, and of course, Mr. Griffin. As you 
know, the grant ends next year. What Federal assistance are you 
now seeking to be able to keep it going, just sort of run down 
the line real fast as to what you're doing to keep this alive. 
What are you doing?
    Dr. DeSalvo. What we have done is work toward improving 
efficiency, quality, so that we are providers of choice for 
communities, irrespective of ability to pay. We work 
collaboratively with organizations like 504 Health Net to 
ensure that we are sharing best practices, billing when 
appropriate, etc. So we are doing our best to be efficient 
    The reality is, as you heard, that can only go so far, 
including when patients contribute to their care, which they 
do. We charge sliding scale fees at these sites. And so the gap 
will need to be filled in much the ways that hospitals have a 
gap filled for uncompensated care. It is just the DSH program 
doesn't support primary care federally in the way that it 
supports the hospital systems.
    So in terms of gap, it may be additional appropriation, it 
may also be just thinking about ways that we can use existing 
funds that we have, for example, CDBG funds that we got for 
recovery are now at the LRA to, that are for urban renewal, 
principally for housing, but thinking about the fact that 
without health care, it doesn't make a lot of sense to just 
build housing, you have to have the fabric. So that is one 
opportunity for bridge funding, and then to think about whether 
we want to use a waiver for disproportionate share money to 
support the clinics going forward, until it is not needed, 
because there is coverage for everyone.
    Chairman Towns. And right down the line.
    Ms. Craft-Kerney. The Lower Ninth Ward Health Clinic is 
moving toward sustainability by first, making sure that we are 
Medicaid providers, Medicare providers, and private insurance 
providers. We came up a little bit differently, because we came 
up post-Katrina, truly a grassroots effort. So we are putting 
those different things in place, so that we can become more 
sustainable. Also, we are looking to the philanthropic 
community to assist us.
    Chairman Towns. Dr. Erwin.
    Dr. Erwin. St. Thomas is a federally qualified health 
center, and as such, get Federal funds from that. As I 
mentioned in my testimony, the financial base that is required 
to maintain the infrastructure, so that you can comply with the 
policies and procedures and the 24 hour coverage and that sort 
of thing, we are working hard to try to maintain it.
    We have a sliding scale, we have increased our patient 
revenue money, funds from patient revenue, from zero 2 years 
ago, 3 years ago, to an estimated $420,000 this year. The mayor 
of New Orleans has also granted us $850,000 for CDBG funds. But 
this is a one time only thing.
    We have a $2 million allocation from the State, but that is 
for capital improvements only. So we have to stay viable in 
order to be able to capitalize on that. Our staff meets weekly 
and we go over ways that we can improve our sustainability, not 
only with grants but by watching our costs as carefully as we 
can. And we have unfortunately with the 72 percent uninsured 
population, it is just very hard for us to find any kind of 
viable revenue that could replace this money until there is 
some expansion of Medicaid.
    We are told that there will be a substantial increase in 
patients eligible for Medicaid, but this will likely take 2 
years. That is why in our sustainability projections we 
estimate that beginning year three, should this occur, the 
beginning of year three St. Thomas will actually be able to 
replace the $3 million that we would lose from the Primary Care 
Access and Stabilization Grant.
    We expect to be self-sufficient in year three on the 
business plan. As I say, we charge everyone that can pay. There 
is a sliding scale and we ask the patients to take 
responsibility for helping us be viable. But when we are 
dealing with a demographic of 72 percent uninsured, it is 
really hard.
    Chairman Towns. Right. Mr. Griffin, briefly, because my 
time has expired.
    Mr. Griffin. Daughters of Charity is focused on the growing 
uninsured population, as we are 72 percent uninsured. Since 
Katrina, we have blindly accepted all who come. And that has 
been majority adults who do not qualify for Medicaid or 
uninsured. So we are 72 percent uninsured, we are focused on 
growing our Medicaid, Medicare, and insured populations. We 
also are evaluating our expenses and looking at our care 
management model, which is pretty comprehensive, seeing how we 
could be more efficient. And also looking at fundraising.
    Chairman Towns. Thank you very much. My time is expired. I 
now yield 5 minutes to the ranking member, Congressman Issa, 
from the great State of California.
    Mr. Issa. Thank you, Mr. Chairman. The great State of 
California is $140 billion or whatever, upside down at any 
given time, actually it is $47 billion right now, they have 
narrowed it. We are a State that taxes at a rate more than 25 
percent higher than Louisiana, and we have overspent. We 
provide a lot more public health assistance in California in 
many areas than Louisiana does. And I guess, Mr. Cao, who of 
course is one of your representatives, will probably look more 
specifically into a lot of what can be done and what can be 
delivered from the Federal Government. But my questions are 
going to have to be a little more tough love, not just because 
I am personally a conservative, but because I have an 
obligation to California, in addition to the Constitution.
    Louisiana's top tax rate is 8.4 percent, California is 10.4 
percent. You have a 4 percent sales tax, we have an 8.25 
percent sales tax. I know you are all health care 
professionals. But in spite of this, is everyone so poor in 
Louisiana that in fact the State cannot do more for you? Are 
you going to be a permanent ward of the Federal Government? 
Because when I hear sustainability counting on Medicaid 
increases, when I hear Mr. Griffin saying, ``well, we take 
everyone, including those who are not poor enough to qualify 
for Medicaid,'' then I am extending Medicaid past what we 
define as the poor.
    So let me ask you much more the other part that I didn't 
hear. What is your State, and we will have a second panel from 
your State, but what is your State doing to bring all the 
powers to be of the State, including finding funding sources 
for you besides simply the Federal Government? Because 
obviously the direct effects of the levees breaking, even if we 
put them all on the Federal Government, at some point that is 
paid out. Then we ask the question of what is going to make you 
a sovereign State, meeting your own obligations.
    And Dr. DeSalvo, only because I can see that you are 
saying, how is this guy asking a doctor this question, would 
you help me with this? Because I know that all of you look to 
all sources of revenue. You are doing a lot to build better 
doctors and better health care. But I have to ask in the long 
run, what are you doing besides coming to us? And don't get me 
wrong, Mr. Cao is absolutely dedicated to making sure we do 
everything we can do. But if I could ask each of you that same 
question, it is really my only question for the panel. Because 
I see all of you as doing the right things within the structure 
that exists. You are getting money from all revenue that you 
can find, you are building great solutions for people who come 
to you. And I don't have any quibble with that. I totally see 
    But I will start with Dr. DeSalvo, because this is a 
question that a California Member has an obligation to ask, in 
addition to a Louisiana Member, who is obviously going to say, 
we have to do more. Please.
    Dr. DeSalvo. Thank you for the question. I will begin with 
the concept that, when the Federal levees failed and our city 
was destroyed we began very early to work together to think 
about how we would rebuild this. And in education, for example, 
there has been creative thinking, just like there has been in 
health care.
    We did not as a community of stakeholders and health care 
providers think that there was going to be some manna from 
heaven that was going to fall to make it happen. And indeed, as 
Alice describes, and I tried to as well, and others, it is very 
grassroots, this clinic system.
    Mr. Issa. I am totally supporting that.
    Dr. DeSalvo. I am going to get there.
    Mr. Issa. Where is Louisiana coming in and how are they 
going to help New Orleans? Because you are a State first. 
Cities are not actually directly recognized by the Federal 
Government. We recognize States. We are the United States of 
America, and in a sense, only States come to us. And when the 
next panel is up, I am going to be asking them that same series 
of tough questions, what is the State doing to be equal in its 
support of its people to other States.
    Dr. DeSalvo. Yes, sir. So I will skip the tax policy, 
because I really cannot answer the question. But what I wanted 
to tell you is that the past 4 years, the community has come 
together at policy tables, Democrats, Republicans, maybe 
Independents, who knows, to think about ways that we could 
finance this kind of system. We have developed at least three 
discrete plans: one, the redesigned collaborative that was a 
mix of private coverage; another which was an affordable health 
insurance plan through private coverage solely, called COLA; 
and another one that was a waiver that went in about a year ago 
to the Feds to use disproportionate share to recover to shift 
the funds. Money we already get, but use it in a different way 
that requires Federal support.
    So I will just say that we have been working incredibly 
hard in Louisiana, across party lines, through two Governors, 
and have always come up with the same idea as a State: this is 
what we want to see happen. We need to figure out how to 
finance it. At this point, I can't speak on behalf of the 
State, but there are some things that do need to happen 
federally to allow us to move forward as a State, i.e., waivers 
for how we use disproportionate share money, how we might use 
the existing recovery authority money that we got for urban 
renewal that might require some congressional action to allow 
it to be for urban rebuilding.
    Mr. Issa. Anyone else that can answer as to just what you 
see your State doing? Because Bobby Jindal was a colleague of 
ours, a friend of mine, and I want this committee and all the 
committees to work hand-in-hand with your Governor, to enable 
those things. But we are going to have to ask them the same 
tough question I am asking you. So if any of you have an answer 
to that narrow question of how Louisiana is working to meet 
this sustainability requirement that you all talked about. Yes, 
Dr. Townsend.
    Dr. Townsend. I obviously can't answer for the State, I 
don't sit in that role. But I think when you look at how health 
care is funded, there are really only three pots of money. And 
perhaps it is only two. I mean, there is Federal money, there 
is State money, or there is private sector money. So I think 
one of the things that the State is trying to do is economic 
development. Because if you have an employer who offers an 
insurance plan, then you have access to insurance that the 
Federal Government doesn't really have to participate in, nor 
does the State. So I think that is one of the ways. We have to 
improve our education, we have to improve our employment, so 
that people have access to health care programs that don't 
necessarily have to be funded by tax dollars. So I think that 
is one of the things that is happening.
    And then I think Dr. DeSalvo talked very eloquently about 
the other kinds of waivers and ideas for current funding, not 
to increase it but to have more flexibility in current funding.
    Mr. Issa. And I know we would like to do that. Mr. 
Chairman, I thank you for your indulgence. I am sorry we can't 
continue this, but I assure you, we will be trying to work 
together with Mr. Cao to make those waivers happen as your 
State sees fit. Thank you.
    Chairman Towns. I now call on a very active member of this 
committee, of course, Mr. Cummings from the great State of 
    Mr. Cummings. Thank you very much, Mr. Chairman, and I want 
to thank all of you for what you do every day to address the 
needs of so many people. You don't have to say it, I will say 
it, I have listened to your testimony, these folks have been 
left behind. Let's not kid ourselves. You all are doing the 
best you can with what you have. And in answer to Mr. Issa's 
inquiry about tough love, you can have tough love and die. And 
you have not provided the testimony yet, but we have just spent 
a lot of time in the House addressing this issue of health care 
overall. And the statistics show, and the research shows, that 
some 45,000 Americans die every year because they don't have 
insurance. Other research has shown that 1,000 children die 
every year because of no insurance.
    So the question is, where does the tough love, how far do 
you go with the tough love if people are dead? So let me ask 
you this. This committee, Mr. Chairman, we had some testimony a 
while back, and the Members will remember this, where we were 
talking about formaldehyde in trailers, where folks were living 
in trailers getting sick, big time. And this was a while back. 
This committee pushed hard to get the folks out of trailers.
    I just wondered if any of you all can comment on that. 
Where is that? Because a lot of your work would be made even 
harder. When they told us about the ailments that resulted from 
folks breathing those fumes, it was quite devastating and we 
were very upset. I just wonder, where does that stand? Can one 
person just tell me about that? Just one. Somebody please, my 
time is running out.
    Dr. Erwin. I will just take a stab at it. We still see 
patients who are living in trailers, and we still see patients 
who are exposed to formaldehyde. The problem as we perceive it 
is there is just not adequate housing for them to get out of 
the trailers.
    Mr. Cummings. So housing is still not adequate, is that 
what you are saying?
    Dr. Erwin. No, sir, it is not.
    Mr. Cummings. And I think going back to what you said, Dr. 
Townsend, you were talking about, when you were answering Mr. 
Issa's question, you talked about the whole issue of people 
living, being able to have jobs and so forth and so on. What I 
said from the beginning was a lot of people have been left 
behind. I don't know how many people on this panel have visited 
the Ninth Ward, probably all of us, and visited New Orleans to 
see even to this day areas that have not seemingly been touched 
that were destroyed.
    And I am just wondering, you all talked about the three 
different areas that funds could come from. First of all, do 
you think that you are doing the best that you can with the 
funds that you have? Dr. Townsend, don't be shy.
    Dr. Townsend. Yes, sir, thank you. I do think that everyone 
is making a concerted effort to wisely use these dollars to 
make sure that we provide the best care for the most people in 
the most efficient way. I think that is happening right now.
    Mr. Cummings. And you said something about you have one 
half of the beds but 85 percent capacity, is that what you 
    Dr. Townsend. No, sir. I have about 50 percent of the beds, 
but capacity----
    Mr. Cummings. Fifty percent of the beds that you had before 
    Dr. Townsend. That we had before the storm. But we are 
providing about 60 percent of the inpatient services. So even 
in the inpatient setting, we have become more efficient and 
cost-effective. And in the outpatient setting, we are about 80 
percent of the outpatient capacity that we were before the 
storm. We are doing about 80 percent of the visits that we were 
doing before the storm.
    Mr. Cummings. An area that I am very interested in is 
dental care for children. We had a little boy in my State who 
died, Deomonte Driver. He was on Medicaid, but he died at 12 
years old because the tooth infection that would have cost $80 
to repair went to his brain and he died at 12. I am wondering, 
Ms. Rowland, you talked about children, only 8 percent of 
children are uninsured, but how are we handling our children 
with regard to dental care? What is going on there?
    Ms. Rowland. Well, as you know from the case in Maryland, 
dental care is very limited, even under the Medicaid program. 
It is a covered benefit, but very few dentists participate. So 
I think that is one of the areas that really has to be 
supplemented and helped in all the States, as well as 
    Mr. Cummings. How are we doing in your State? That is what 
I want to know?
    Ms. Rowland. I think that dental care speaks to the broader 
issue of how this community of health providers is working 
together to cover the territory. So for example, some of the 
dental care is provided in mobile medical units by some of the 
organizations in this. They have created a Web site with a map 
and a grid that will tell providers where people can go for 
dental care on any given day. Charity Hospital has reopened its 
dental care services. Daughters of Charity will have dental 
care services.
    But we are not going to replicate that if we are just a 
couple of miles apart. We are trying to be very responsible 
with the funding to make sure that there is access to services.
    Mr. Cummings. Thank you very much, Mr. Chairman. I see my 
time has run out.
    Chairman Towns. Thank you very much.
    I now call on the gentleman from Louisiana, Congressman 
    Mr. Cao. Thank you, Mr. Chairman, for this extremely 
important hearing. I know fully the health care needs of the 
district. But before I begin addressing those questions, I 
would like to ask Ms. Bascetta, do you see any instances of 
waste, abuse, or fraud from the Federal money that was 
channeled down to the area for rebuilding purposes, especially 
in regard to the health care system?
    Ms. Bascetta. We have not specifically scoped our work to 
look at fraud, waste, and abuse. But in the course of our work, 
we did not see any of that ourselves and we didn't hear about 
that from any other organizations, the IG, or anyone else.
    Mr. Cao. So based on the information that you have received 
so far, they have used the money responsibly?
    Ms. Bascetta. That is right.
    Mr. Cao. Dr. DeSalvo, I know that you are in charge of 
Tulane community-based health clinics. How have you seen the 
increase in clinics help address the issue of the uninsured, 
and whether or not this is a model that we should be looking at 
as a Nation in order to cut down the health care costs that we 
are struggling with, trying to address?
    Dr. DeSalvo. The goal is to get people to go to the right 
place at the right time for the right care, because that is not 
only better quality, but it is more cost-effective. And primary 
care is usually the best place for people to go. Clearly, 
emergency rooms and hospitals are a necessary part of the 
continuum. But all things considered, like the man I described 
in my testimony, he is better suited, with his high blood 
pressure and his gout, to be treated in primary care where it 
is about a quarter of the cost than the emergency room.
    And there is a fair number of people in Louisiana who fall 
into this gap. They would not qualify for Medicaid, even being 
quite poor. If they don't have children, they wouldn't qualify. 
But most insurers in Louisiana don't offer health insurance 
that is not affordable. So this is an interesting model, PCASG, 
where we have actually taken funds and though they are still 
distributed institutionally, we are paid not based on some sort 
of, it is a given, we are going to give you the funds, we are 
actually paid as organizations to take care of a set 
population. There is a high expectation that we are going to be 
available for those patients, provide quality care, do it in a 
very cost-effective way. We are mystery-shopped, we have 
satisfaction surveys, so there is pretty intensive oversight of 
our programs.
    But I think the PCASG is a really interesting bridge model 
for urban markets, in particular that want to move away from 
hospital-based funding of care for the uninsured. There is a 
gap until there can be universal coverage. But you want to make 
sure that you have distributed the funds so that all of your 
money is not in one financially consolidated institution or 
    What we have also learned is that if you pay providers for 
quality and value and you give us the opportunity to take care 
of populations instead of just paying us for volume, it 
naturally leads to team-based care and opportunities for 
innovation that I have never experienced before in 20 years of 
health care.
    Mr. Cao. Dr. DeSalvo and also Dr. Townsend, do you have a 
system where patients who show up in your emergency rooms, to 
direct them to community-based health clinics?
    Dr. Townsend. Yes, we do. At the interim LSU public 
hospital, when patients arrive at the emergency room, whether 
the care is actually emergency room appropriate or not, if they 
are not assigned to a primary care clinic and particularly if 
they are uninsured, then we are able to direct them to a 
primary care provider in one of the community clinics where 
they can access care. We work with them to try to make sure 
that they understand how to appropriately access the clinic and 
the emergency room when necessary.
    Dr. DeSalvo. Tulane Hospital has been touched in a fashion, 
of course, by us because we have clinics in the system, but 
touched by the leadership of PCASG meaning very specifically 
going out and targeting and talking to the emergency room 
leadership, the hospital leadership to be certain they are 
aware of the program. We update them with flyers and 
information about availability. And there is a Web site they 
can go to, which I think you have information on, G&O 
Community, which will tell you in a zip code what is available, 
what the hours are, what languages they speak, and what 
services they offer. We have been really aggressive about 
trying to get people directed from emergency rooms, when 
appropriate, into medical homes so that they don't continue 
using that other system.
    Mr. Cao. How many more medical community-based clinics do 
you see that we will need in the future, in order to address 
the needs of the people of the Second District? Another 
question to you here is, how, what steps do we need to take 
when the Primary Care Access Stability Grants end? What plans 
do we have to continue these community-based clinics and to 
provide primary care to those who are uninsured?
    Dr. DeSalvo. In terms of the number of providers, types and 
sites, I think that is a really great technical question that 
HRSA can help us with. They have been thinking about that with 
some of the providers already. The 91 access points that we 
have are really varied in scope and size. Some of them are 
small, school-based clinics or mobile units. I certainly don't 
want the committee to walk away thinking we have 91 community 
health care centers, because we are not there yet. And I don't 
know if that is the right number. But it is an important 
planning issue we do have to decide. The community certainly 
wants to work together to right-size it.
    Mr. Cao. What plan do you have in order to continue these 
projects once the Primary Care Access grant runs out or ends?
    Dr. Townsend. I think what you have heard today is that as 
long as about 72 percent of the patients who have to access 
those community clinics remain uninsured, then the 
sustainability of those clinics I think is really impossible 
without an alternate funding source identified. Like I said, 
there are really essentially two pots of money. There are tax 
dollars and then there is private sector. Other than grants and 
philanthropy and things like that, I am not really sure that 
anyone is able to identify how we are going to keep this going.
    Chairman Towns. The gentleman's time has expired. Now we 
will yield, as you know, we have just been called for votes. So 
we will try to get at least two more in.
    Congressman Tierney from Massachusetts.
    Mr. Tierney. Thank you very much. I just want to ask one 
particular question. We know that sending children to school in 
a healthy State is a good thing. Have you had any examples of 
creative use of the educational funds and system, and 
cooperation or coordination with the health care system that 
have helped you at all?
    Mr. Griffin. There have been discussions and work that has 
been done. As I mentioned in my presentation, we actually do 
behavioral health in 10 schools. We are actively having 
discussions with a school system about expanding that. There 
also have been numerous efforts and expansion in school-based 
health centers throughout the State as well as in the New 
Orleans area. That is a more comprehensive provider model that 
has medical behavorial health and other services included in 
those locations.
    So there are, I think approximately nine school-based 
health centers in New Orleans and several more in the 
metropolitan area. So those efforts are ongoing in 
collaborating and coordinating with the school systems.
    Mr. Tierney. Thank you. Ms. Bascetta.
    Ms. Bascetta. We had a companion report in July of this 
year that we issued on the mental health needs of children in 
New Orleans. We noted in that report, which I can provide for 
the record, that school-based health centers were an important 
model in the area.
    Mr. Tierney. Thank you. If nobody else wants to comment on 
that, I'd like to yield to Mr. Kennedy, who I know has some 
pertinent questions he would like to ask.
    Mr. Kennedy. Thank you, I thank the gentleman from 
    I would like to ask, for those of you who would answer, 
what percentage of those coming into the emergency rooms 
exhibit mental health issues and addiction issues? And to what 
extent do you attribute any of the PTSD, obviously to the 
natural disaster? And if you could, address the issue of the 
trauma that was exhibited as a result of the hurricane and to 
what extent there was a lack of proper mental health services 
available to address the needs of folks. From what I 
understand, clearly, trying to get people's mental health needs 
met has been an endemic problem. Clearly, the enormous crime 
rate in the area now, I kind of feel like our criminal justice 
system is a substitute in kind of the last sense for our mental 
health system that isn't there.
    So I would ask you to comment on the lack of a mental 
health system and also what you see as the consequences of that 
today in terms of the number of people showing up with mental 
health issues in our health care system as a primary source of 
issues, and whether you can reimburse for that, given the 
exclusion that many insurers have, if people come in with an 
accident, that you can't reimburse for it if they have 
alcoholism; if they have been drinking alcohol or ingested, as 
a result of drugs, that many insurers say they won't insure, 
because that is ``a deliberate thing'' and they won't allow you 
to get reimbursement for it. If you could comment on any of 
those issues.
    Ms. Craft-Kerney. Mr. Kennedy, at the Lower Ninth Ward 
Health Clinic, we have seen many come in with mental health 
problems. We had a young man who was known to us who said, ``I 
just want to slit my wrists.'' We had to get him some help 
immediately. But we just want you to know that many of the 
mental health problems that are taking place, what is happening 
is because there was a lack of services initially, and there is 
still ongoing problems with the mental health piece, we are at 
a point where we are actually diverting and sending people to 
the correct places. But initially, there was a big impact and 
people are suffering from depression, this underlying 
depression. I might be OK today, but tomorrow I might not be.
    So you are seeing people who are just very, very fragile. 
And we don't know what is going to be the breaking point for 
them. So there is ongoing assessment of that depression.
    And what I did want to say is that the criminal justice 
system comes into place because many times people are below the 
radar. I am OK today, but you don't know what is going to 
happen tomorrow. So what happens is they become entangled with 
the criminal justice system, and what happens is right now our 
biggest provider of mental health services, inpatient, is the 
Orleans Parish Prison, unfortunately.
    Ms. Rowland. Mr. Kennedy, in our surveys of the residents 
of New Orleans in 2006 and 2008, the need for mental health 
services was quite apparent. But one of the striking things we 
found was in 2006, 1 year after the hurricane, people reported 
that their mental health status was fairly good, I think 
because so much was going on in their lives they didn't really 
focus on it. But by the time we came back in 2008, we saw much 
higher contact with the health care system, much more 
frustration over inability to get the medications they needed, 
and today saw that 15 percent of those in New Orleans reported 
that they had a severe mental illness, such as depression or 
other things. So I think you are pointing out an area where the 
population has severe needs. We will be going back in 2010, and 
hopefully find better access than we did in 2008.
    Mr. Kennedy. Are you integrating mental health to the 
``white coat docs?''
    Dr. Erwin. I would like to address that, if I could, 
Representative. One of the other recipients of the PCASG money 
is the Metropolitan Human Service District in New Orleans, 
which is the public entity responsible for most of the mental 
health funds. Working with the State, Secretary Levine, 
Governor Jindal, they address the fact that immediately 
afterwards about the only place for mental health service was 
    So we have put into place forensic assertive community 
teams, adolescent community teams. I think there has been a 
remarkable improvement in the coordination of care with the 
Metropolitan Human Service District, which had some problems 
prior to Katrina. It has a new executive director, a new 
medical director, and is implementing, last week actually, a 
very coordinated call center where if a patient shows up either 
in a hospital or jail, something like that, then it is very, 
very close to being coordinated, so that the case manager will 
know that the next day and they can followup on that.
    Also ways of following up when people don't get their 
prescriptions filled where they should. So I think that they 
are not represented here except for me, I am on the board. It 
does represent a real success for the Primary Care Access and 
Stabilization Grant. I am really happy to get a chance to help 
you understand that has made a huge difference in a very 
dysfunctional problem that we had.
    Dr. DeSalvo. In answer to your question, we have integrated 
at almost all of the sites mental health services into primary 
care. One of the benefits of this program is we can have warm 
handoffs, if I identify somebody who seems depressed or 
anxious, I have services right onsite. I don't have to send 
them home or refer them out. The flexibility in funding has 
allowed that through this program.
    Chairman Towns. The gentleman's time has expired. We have 
four votes, so we will reconvene at 12:30. Of course, I would 
like to ask unanimous consent that Representative Barbara Lee, 
the Chairperson of the Congressional Black Caucus, be allowed 
to sit and be allowed to ask questions. Without objection, so 
    We will reconvene at 12:30. The vote is on now and we have 
4 minutes left on the vote.
    Chairman Towns. The committee will reconvene.
    The gentlewoman from California will be recognized for 5 
    Ms. Watson. I want to thank our chairman for holding this 
most necessary hearing. I want to commend all of our special 
guests on the panel for coming today. I have been on special 
delegations to New Orleans, and I was appalled at the promises 
that were made and unkept. There were too many pieces of vacant 
property, there were too many trailers with formaldehyde. I am 
a victim of formaldehyde, too, and I know how you can suffer.
    There were too few medical institutions. Catholic 
Charities, I must give them credit, came in and they set up 
temporary facilities to serve. But so many of our schools were 
destroyed, so many of our universities were destroyed. My 
grandmother was born in Louisiana, so I have a very personal, 
personal affection for Louisiana. She was in a convent for 18 
years. Obviously she came out. [Laughter.]
    So I am very much a part of that particular State and the 
French Quarter.
    You are not to blame. We failed you, and we watched while 
you were being failed. I was getting a call from the stadium 
about how the buses were passing up the people and wouldn't 
stop to pick them up. I had 14 relatives that we could not 
find. We dispatched someone from my capitol, Sacramento, to go 
to Baton Rouge. We finally saw one of the relatives hoisted up 
and taken to a hospital. So I was very much a part of that.
    So I say all that to say, I want to commend you for what 
you have done, I want you to tell me now what we need to do in 
health care reform, how we can plug up the holes. And this was 
the biggest natural and national disaster we have ever had, and 
the world viewed it. When the dikes broke and that water flowed 
in like would flow into a bowl, we were all so tearful. So I 
know what you went through. And I want you to tell us what we 
need to do in health care reform that will plug up those holes, 
and what we need to do in our system so never again will we 
have to go through those levels.
    I was not one to support Homeland Security to come and take 
all the agencies. Because I thought FEMA should be separate and 
apart so it could move on a dime. So in terms of health 
delivery, what can we do, Dr. Townsend, Dr. Rowland, all of 
you? Give us the input. Because we want to, before the end of 
the year, come out with a bill that will cover all Americans 
the right way, affordable, sustainable, accessible and with all 
pre-existing conditions.
    I just really appreciate Congressman Kennedy, who put a 
particular emphasis on health care. I had a family in my home 
whose son had a breakdown when he went back home and found out 
they didn't have insurance, they lost everything. And so I know 
the need for mental health services.
    So let's just go down the line, starting with Dr. DeSalvo. 
Why don't you give me the input on how we can make sure that 
health delivery is sustainable and what we should do?
    Dr. DeSalvo. Well, Congresswoman, thank you for remembering 
and recognizing all that pain. We really do appreciate it.
    Ms. Watson. I shared it.
    Dr. DeSalvo. I just wanted to thank you. And what can we 
do? We have done a lot with very little. And we are not asking 
for much. I think what----
    Ms. Watson. By the way, I am from California, the largest 
State in the Union and the first State to be a majority of 
minorities. So don't think that every Californian feels the way 
I do, but you know how I feel. Go ahead.
    Dr. DeSalvo. I think what we have built is really valuable. 
It is an investment by the taxpayers, post-Katrina. It is 
helping recover our city. It is building jobs. It is building 
work force development, new opportunity for people. It is not 
just about health care.
    To continue it, the gap is somewhere in the neighborhood of 
$30 million a year. It means that we can continue this until 
there are other options, until finding special mechanisms to 
pay for the uninsured aren't really needed because there are no 
uninsured. And it would be really a shame to disassemble this 
investment, which is really what we are facing in the fall.
    So finding those funds could be really as straightforward 
as allowing the Louisiana Recovery Authority [LRA] perhaps to 
use some CDBG funds they have in a more urban renewal fashion 
instead of just for housing. We don't want to not give people 
housing. But if we think that we have access and we can give 
them the fabric of community around their house, i.e., health 
care, that would be helpful.
    And there are some other opportunities, perhaps, with the 
disproportionate share funds, to redirect it from using it only 
for hospital-based care but also for community-based care.
    Ms. Watson. Thank you.
    Ms. Craft-Kerney. Thank you Congresswoman, and I appreciate 
the feeling of just knowing that you care. So many people 
showed that to us, and it just means so much.
    I am not a policy person. I am a person who sees people on 
the front lines. I am at ground zero in the Lower Ninth Ward. 
But I can tell you what the impact should feel like. It should 
feel like a person should be able to come to the clinic and not 
worry about whether I can pay for it or not. It should feel 
like, I can get the services that I need, whether it is primary 
health care or specialty services. And I just want to say that 
this has been a wonderful collaboration, because of the Primary 
Care Access and Stabilization Grant, we have been able to work 
together, something that I don't think we really did prior to 
Katrina as much, but we were forced to. Necessity is the mother 
of invention they say. And I am telling you, we definitely 
forged a lot of friendships, invaluable friendships and 
relationships, so that we could give the care to the people 
that so desperately needed it.
    And when we move forward, when the next catastrophe should 
happen, we should definitely keep the people who have been on 
the ground, who have built what we have today. They should be 
the ones really to give you guidance. It shouldn't come from 
the top down. It should come from the bottom up. Because we 
have already shown that we have been very, very effective in 
what we have been able to do. And with meager, meager 
resources, we have given a lot of care. I have to commend all 
of the people who are at this table who have a commitment and 
who have been mission-driven to bring about these great results 
that we have seen today. And that partnership with government 
has been invaluable. We wouldn't have been able to do it 
without you guys.
    But the people who have been doing the work need to guide 
the work. Thank you.
    Dr. Erwin. Thank you very much, Congresswoman. I would like 
to reinforce what has already been said. I think first and 
foremost, we would like to maintain what we have accomplished 
and maintain what we have. We all, I think most of us at this 
table, realize that health insurance for everyone is a must. 
When we are dealing with 72 percent uninsured, we see the 
ravages of that.
    But I would really like to make sure that we understand 
that we, and other cities in California and everywhere else, 
are having financial plights. That is very clear. What we would 
like to encourage you to think about is that with the PCASG 
money, you took a blank slate and you helped us build a health 
care delivery system that has a good start. It doesn't take 
massive amounts of money now to nudge it on to where we really 
could become sustainable and we could become permanent and we 
could grow. Because as you already heard, we are coordinating 
mental health and primary care in ways that we had not been 
able to do before.
    So we really feel like that, we understand what it must 
look like for us to be asking for money for just one particular 
part of the country. But you have really helped, with the PCASG 
money, you have really helped rebuild a health care system 
better than it was before. Without a little bit of money now, I 
think, relatively speaking, we will slip back. We will go back 
to where there isn't the primary care, there are not the 
community clinics, there are not the alternatives to the 
emergency room care.
    So we really do, first, I think, and foremost, want you to 
understand the money you have spent has really made a 
difference. You have really saved a lot of lives. We have 
really built, starting with the Governor, Secretary Levine, we 
have all worked together to build a better health care system. 
I have been there for 30 years and this is the first time I 
have seen the kind of collaboration and the input that we have 
had both at the city and the State level and the community 
    Ms. Watson. Doctor, can I just request of the Chair 3 more 
minutes, so that we can finish up your panel?
    Chairman Towns. Well, I would love to do that, but we sort 
    Ms. Watson. A minute and a half?
    Chairman Towns. A minute and a half.
    Ms. Watson. Thank you. Mr. Griffin. You use the half, and 
then we'll have the other two ladies split the minute.
    Mr. Griffin. Thank you for the question. I think 100 
percent access and 100 percent coverage should be, you asked 
about reform, that is hopefully where everything is going. And 
as it relates to the PCASG grant and what has been accomplished 
in New Orleans, I do think there has been a tremendous 
accomplishment of changing a system from hospital to primary 
care. And when you talk about coverage, excuse me, when you 
talk about access, nationally there will be a need for more 
access to primary care. You could be looking at a model that 
could be replicated nationally.
    The vehicle for primary care development through the 
Federal Government in the past has been through federally 
qualified health centers. Most of the people sitting at these 
table, only one of these entities qualifies as a federally 
qualified health center. So this has expanded the opportunity 
for, through this crisis, other entities to actually have more 
dollars going to primary care and having more primary care 
delivered in a community. We are changing the lifestyle and the 
behavior of our population in New Orleans, which in the long 
run will reduce costs to the health care system.
    Dr. Townsend. I will echo a lot of what you have heard, and 
that is, we have the beginnings of a network of care, which I 
think is part of the answer for health care reform in the 
future. And the other piece that is extremely important in 
health care reform is going to be coverage. And we don't have 
that piece yet. So I think what you are hearing is we would 
like to see a bridge of funding, whether it is flexibility in 
the Community Development Block Grant funds, or whether it is a 
waiver for the disproportionate share hospital funding, to help 
support these clinics that are an integral part of a network of 
    Dr. Rowland. I would just echo those comments that the 
coverage promised in the health care reform legislation passed 
by the House would, of course, help many of these clinics to be 
sustainable. But the implementation date there is 2013, maybe 
2014, depending on the Senate action. And you really do need to 
think about how to bridge us from where we are today to where 
we would want to have these clinics be and the peoples' 
coverage be in 2013. I think that involves both phasing in 
better coverage for some of the low-income people, as well as 
providing for support to these clinics during the bridge or 
transition period, and recognizing that maybe one of the best 
steps would be to try and develop a plan for how to turn the 
clinics from freestanding clinics into those that can 
participate in the federally qualified health center program, 
which undoubtedly will have to remain a strong part of our 
health reform efforts for medically under-served areas.
    Chairman Towns. The gentlewoman's time has long expired.
    Ms. Watson. Thank you, Mr. Chairman.
    Chairman Towns. But I really felt that the information that 
we were getting was just so important that we could not 
interrupt. I think the timing of it means so much to us right 
now here in Washington. So thank you very, very much.
    I now yield 5 minutes to the gentleman from Ohio, 
Congressman Kucinich.
    Mr. Kucinich. Thank you, Mr. Chairman, for holding this 
important hearing on the state of health care in the New 
Orleans region.
    One thing is clear, we must ensure that the clinics and 
public hospitals in the area remain as strong as possible. The 
need is unusually great there. As someone who believes that 
health care is a human right, I think the people deserve help 
from the Federal Government that will help them to fulfill that 
    In the short term, we must shore up the Primary Care Access 
and Stabilization Grant funds before they run out. And we must 
build a new public hospital that is financially sustainable, 
attracts world class providers, researchers, and students. If 
such a hospital provides a little competition for more 
profitable hospitals with a lower charity care patient mix, 
then we should embrace that.
    But this situation needs long-term fixes. A strong public 
hospital and set of clinics in affected areas are part of that. 
But New Orleans has for-profit hospitals, Mr. Chairman, around 
the periphery of the city, who collectively take less than 15 
percent of the charity care, leaving the rest to go to public 
hospitals. It is called cherry-picking. It is not profitable to 
provide health care to those who need it the most.
    So the for-profit health care industry goes out of their 
way to avoid it. The result is we are constantly fighting to 
provide adequate publicly funded health care for the 
disadvantaged. Now, if we are going to provide sustainable 
health care for New Orleans, we need to make sure the hospitals 
that are making big profits are pulling their weight. The 
failure of profitable hospitals to provide adequate levels of 
charity care is not simply a New Orleans problem. Indeed, in 
Cleveland, Metro Hospital has a steadily growing patient mix of 
charity care cases, which presents a growing financial burden 
that strains their budget, the budget of the county and, of 
course, the budget of patients and providers.
    So I look forward to working with this committee to address 
the role of private hospitals and clinics in bringing health 
care to New Orleans and affected communities all over the 
Nation. I have read the testimony of the witnesses. And I have 
heard comments by my colleagues. I have heard one of my 
colleagues refer to New Orleans as a ward of the Federal 
Government. It is interesting, Mr. Chairman, this discussion 
occurs 2 days after the President announced an escalation of a 
war. We have money for war here, we don't have money for health 
care. We have money for war and Wall Street, we don't have 
money for health care.
    You have a $100 million grant, as though you are supposed 
to stretch that into the next year, you are running out of 
money, to maintain a health infrastructure that was weak before 
the storm hit. New Orleans was already in dire economic straits 
before the storm hit. If there has been a hearing that puts in 
bold relief more clearly about the distorted priorities of 
America, I would like to know what it is, other than this one. 
We are trying to keep alive a health infrastructure to assist 
people, and we are getting ready to spend $160 billion next 
year on a stupid war in Afghanistan. Billions.
    I read the Kaiser report here which spells out the 
statistics, the great health care problems that still exist, 
the infant mortality that was high even before Katrina, the 
number of AIDS cases, diabetes mortality, comparing Louisiana 
to the rest of the United States. If we can't see that New 
Orleans is still suffering, if we can't see that New Orleans 
has a health care infrastructure that is not adequate to meet 
the needs of people who are still recovering from this 
hurricane, if New Orleans has to come here with a tin cup to 
beg for money for clinics to--you have to fight FEMA to try to 
get the money that you should have gotten, they are going to 
arbitration, Mr. Chairman. The new hospital is going to cost 
over $1 billion, and FEMA is nickel and diming New Orleans in 
an arbitration as to whether they are going to get $100 
million, $150 million, or the $492 million that New Orleans 
    This is a disgrace, really. It is good that you are here to 
remind us. But really, our country is falling apart. And what 
is happening in New Orleans is a signal condition of where 
America's priorities are totally fouled up. You should not be 
here begging, essentially, for recognition.
    Thank you, Mr. Chairman, for holding this. But I will tell 
you, the more I hear the drum beats for war and we are going to 
go bomb poor people in Afghanistan and put a war into Pakistan, 
we can't even take care of our own people here at home, how 
    Thank you for being here. You have supporters in the 
Congress who understand that the fate of America is going to be 
linked to how we are able to take care of communities like New 
Orleans that are still struggling to survive. And just know 
that there are people right here who are standing right with 
you on it. Thank you.
    [The prepared statement of Hon. Dennis J. Kucinich 


    Chairman Towns. Thank you very much. I would like to thank 
the gentleman from Ohio for his statement.
    Congressman Luetkemeyer from the State of Missouri.
    Mr. Luetkemeyer. Thank you, Mr. Chairman.
    Because of the specificity of the issue that we are dealing 
with here today and its importance to Representative Cao, I 
would, Mr. Chairman, yield my time to Mr. Cao. I feel he has 
more direct impact and probably has more knowledge and a lot 
more concerns about this issue than what I would have. But I 
would certainly be supportive of him using all my time.
    Thank you, Mr. Chairman.
    Chairman Towns. The gentleman from Louisiana.
    Mr. Cao. Thank you, Mr. Chairman.
    I would like to thank Mr. Luetkemeyer for yielding me time. 
First of all, I would like to thank Congressman Kucinich for 
his passion and for his understanding of the situation in New 
Orleans. I believe that he is clear on point with respect to 
the needs of our people down there. We have been struggling for 
4 years to rebuild the Lower Ninth Ward. New Orleans East, 
right now there is a population of approximately 80,000 people 
in New Orleans East and no hospitals to address the needs of 
people there. So the needs are tremendous. And we will continue 
to require Federal assistance to help us move forward in our 
recovery. And in talking about recovery, I note that the new 
Charity LSU VA system, or at least the hospitals that we are 
planning to build will serve as an economic center for the 
city. Dr. Townsend, if you don't mind, could you please 
elaborate more on the plans for the VA LSU hospitals and where 
are we with respect to that particular project?
    Dr. Townsend. Certainly, Congressman, thank you.
    We are in the process of doing the planning for the new 
academic medical center. But I think it is important to note 
that we recognize that the Charity model is not the model of 
the future. It is not what we want to see going into health 
care reform. It is not the best way to take care of patients.
    So what we are building is a new academic medical center. 
So LSU, in partnership with Tulane, can train our residents and 
fellows and other health care professionals in that setting. 
And as someone said, we can attract world class physicians, 
researchers, do things there like you see in the Birminghams 
and the Houstons, where many people in New Orleans go for care 
today. We are exporting patients for health care, when we 
should be able to provide that at home.
    So what we are doing is, we are staying on track with the 
planning process. We are waiting for a resolution from FEMA and 
once we get that, we are going to move forward into this new 
model. We are on track today to be in that new facility in the 
beginning of 2014.
    So at this point, without knowing the FEMA number, we are 
still on track. We have not lost any time. But we have an 
exciting project that we are hoping to move forward on.
    Mr. Cao. Thank you, Dr. Townsend. Mr. Chairman, the issue 
with FEMA is an issue that we have been battling for 4 years 
now and Congressman Kucinich is absolutely right, the cherry 
system is so integral for New Orleans. And FEMA is still nickel 
and diming the city in order for us to get the system back 
    I would really appreciate if we could have a hearing in 
which we could invite FEMA to explain their position and to see 
how we can try to overcome some of this impasse that we are 
experiencing down there in the district. But I know that the 
numbers between the State and the city, there is a difference 
of around $300 million. Can you please tell the committee, how 
important is it that we should receive the full $492 million to 
rebuild the system?
    Dr. Townsend. Someone mentioned the price tag for the 
project. The hospital itself is about a $441 million 
construction. But the entire complex, so it includes a clinic 
building so that you can do outpatient, particularly specialty 
services there on campus. So that $1.2 billion price tag, the 
State has already committed $300 million to that project. And 
the remainder of the $1.2 billion will have to be financed. And 
a new entity is being created that will manage that new 
academic medical center.
    So they are going to be responsible for some sort of bond 
issuance or some way to raise that money. So the difference 
between raising $800 million or $400 million is significant. So 
yes, we are hopeful that through the arbitration process that 
is going on right now, that the State will get a favorable 
declaration from FEMA and the number that the State has 
submitted reimbursement for is $492.
    Mr. Cao. Thank you very much. I see that my time has 
    Chairman Towns. Yes, thank you very much. Let me say that 
we really tried to have this hearing in New Orleans. But the 
schedule just got so messed up that we could not do that. And 
of course, I am sure if we had had it in New Orleans that we 
would have had others involved as well.
    But the point is that we felt it was just too important not 
to do it. And also, to commend you on the great work that you 
have done, we wanted to do that as well. We think that you have 
done an outstanding job in terms of and in spite of the 
difficult conditions and circumstances.
    Now I would like to yield to the gentlewoman from Ohio, 
Congresswoman Kaptur.
    Ms. Kaptur. Thank you, Mr. Chairman. I want to compliment 
you for holding this important hearing, and for your 
leadership. I know how much you care, as a health care expert 
yourself, about what needs to be done in New Orleans and 
Louisiana and many of the coastal areas that were so damaged by 
    I was fortunate to be able to travel to New Orleans and to 
Mississippi with the Majority Whip, Mr. Clyburn, and with our 
Speaker and others almost 2 years ago, now, I think it was. 
That was very, very instructive. I guess I wanted to say to all 
those who traveled here today from Louisiana, it is a gift of 
the Christmas season that we get to meet angels who are on this 
side of eternity and who are working and doing God's work. I 
just want to compliment you for, you could be doing many other 
things in your life and you have chosen to do this. The people 
of my region, I know, admire it and view it as a very noble 
effort. So let me compliment you for what you do and through my 
remarks help to give you strength to continue to help those who 
need it so much.
    My question, I have a question and then a comment. Ms. 
Bascetta, in your testimony you talk about an adequate 
sustainability strategy to help these clinics in the future. 
Hopefully, we will be able to get them additional funding. But 
we would be interested in your suggestions on sustainability. 
And Dr. Erwin, in your testimony you say if there is not 
funding to bridge the gap after the public clinic, primary 
clinic funding ends, many of your patients will revert 
essentially to the same situation they found themselves in 
immediately post-Katrina. I think it would be important for you 
to state for the record what that would be.
    Finally, before you answer, let me just say that when I was 
down there as a member of the Agriculture Committee, along with 
my other duties here, I was struck by the unmet opportunities 
to use additional space that is available in New Orleans. I am 
interested in having you submit for the record or comment here 
today on how the added strength of food power and nutrition in 
your region is being implemented. With all those open swaths of 
land, with the possibility that primary health care clinics 
could also become food stamp redemption sites for people who 
grow food in the area, I can tell you in the community that I 
represent, one of the eight poorest areas in the country now, 
we get over $100 million a year of food stamps in the region. I 
had a great epiphany a few years ago saying, ``hey, wait a 
minute, we can turn these into economic development dollars if 
we can get the people who live in these areas to actually 
produce the food and turn them into food stamp redemption 
sites.'' It is a no brainer. So we are about that task.
    And I am just curious about these efforts perhaps being 
made by your associates that could help your health clinics 
also become nutrition clinics, and to deal with some of the 
related health problems that you face. I am curious about your 
progress on those. But in terms of my first question, which is 
sustainability, Ms. Bascetta and Dr. Erwin, could you comment? 
And then if anyone wants to say anything on agriculture, I 
would be most grateful.
    Ms. Bascetta. I would be happy to. We have heard that where 
the rubber hits the road is the uninsurance problem. There 
simply aren't revenues by definition from that population. And 
it is a very large population in New Orleans, well above the 
national average.
    Ms. Kaptur. Could you pull your mic closer? I don't think I 
heard you properly.
    Ms. Bascetta. The uninsurance problem in New Orleans is 
much more severe than the national average. That is where the 
rubber hits the road in terms of sustainability. By definition, 
that population doesn't provide any revenues to the providers. 
They are uncompensated care. Historically, the only, the 
funding streams that have provided reimbursement for those 
people are either the DSH payments that we have heard about, 
which are typically to institutions, to hospitals, unless there 
is a way to redirect them through a waiver, and the HRSA health 
centers also provide funding for people who are, for health 
centers to take care of people who are uninsured.
    Our view is that CMS and HRSA have already made a 
significant investment in the area to try to do this model 
demonstration of doing health care the right way, primary care 
first, as the most important building block of the continuum. 
It really would be a shame to have erosion in the progress that 
has been made so far if the funds can't be made available to 
shore up these clinics at this point.
    And since the grant ends in September, we really don't have 
10 months. It is pretty urgent now, in January, to make sure 
that plans are in place. Because what happens if they are not, 
providers begin to worry about their job security, they need to 
know that there is going to be an infrastructure in place. 
Patients begin to become anxious about where they are going to 
get their care.
    So it is important to expeditiously make a decision about 
whether we are going to continue this investment that has made 
this progress so far.
    Ms. Kaptur. Thank you. Dr. Erwin.
    Dr. Erwin. Yes, thank you very much. I would like to make a 
comment about both the sustainability and the nutrition, if I 
could. As I mentioned earlier, we have tried in a very 
systematic way to deal with the issue of sustainability since 
the grant came out. That is part of it. We have appreciated 
    Our revenues, the patient care revenues that we generated 
the first year, were around $238,000. This year it is going to 
be right around $420,000. We have a pretty detailed process 
where we try to help, we have representatives in the community 
who work as our partners explaining to people that it is really 
important for everybody to pay what they can to help us be 
sustainable. And so we are dealing with the fact that almost 
everybody pays at least $20, but the fact is, with a 72 percent 
uninsured population, which is why we get out of bed every 
morning, we are not going to try to get private pay until we 
find some way for these patients to get their care met.
    We are very hopeful about the expanded eligibility that 
Secretary Levine can probably tell you about for Medicaid. But 
that will be 2 years away. In our budget, we are pretty 
conservatively working with our CPA. We really do think that by 
year three, if we get a nudge and can continue on, by year 
three we can be pretty well sustainable. We really do.
    If I could just make a comment about the nutrition, too. We 
have had, as part of our ``mental health program,'' an issue, a 
program for community health and resilience, to try to 
encourage healthy neighborhoods. We are a small clinic. We 
don't kid ourselves about how broad our impact is. But we have 
partnerships with one of the churches, the Sixth Baptist 
Church. And we have a coffee shop that is part of our clinic, 
that is run by the youth group at the church. There is 8 weeks 
training to begin working there, after the first 8 weeks, when 
they work in the coffee shop then they move to the kitchen, 
where they make pralines. We are beginning to sell them on the 
Internet. We have pepper sauce from a community garden that we 
are selling.
    So it is sort of a ``light a candle'' rather than ``curse 
the darkness.'' But it has created a really positive mind set 
with a lot of the youth, particularly. There are an awful lot 
of kids who have nothing else to do. And so we feel like that 
this type of thing is well worth our expenditure. We hope that 
it is the kind of thing that we can continue to do.
    Thank you very much.
    Dr. DeSalvo. I think what Don is speaking to is this 
concept that health is more than getting people to a doctor. 
And it is an underpinning for all of us and what we do. We 
think of our sites as centers, places where people can come not 
only to become empowered, to get regular medical care, to learn 
about their health, but almost all of us have programs that 
reach out into the community and engage and empower them to 
build economic opportunity, work force training, as Don is 
describing, to help develop community gardens, to make it part 
of the healthier foods in schools. The model here is really 
going beyond just the idea of a clinic delivering medical care. 
We feel an obligation to address the social determinants of 
health as well.
    Ms. Kaptur. Thank you, Mr. Chairman. Thank you all.
    Chairman Towns. I now yield to the gentleman from Utah, 
Congressman Chaffetz.
    Mr. Chaffetz. Thank you, Mr. Chairman, and thank you all 
for being here.
    I would actually like to yield the time to Mr. Cao from 
    Mr. Cao. I would like to thank the gentleman for yielding. 
I would like to ask this question to either members of the 
panel, maybe to Dr. Townsend, Dr. Erwin, Dr. DeSalvo. How does 
the lack of a flagship hospital affect recruitment? And how 
does this lack of recruitment affect the quality of care of the 
people, especially for the poor people in New Orleans?
    Dr. DeSalvo. I am happy to start. I think for the 
university's part, the Charity Hospital system has been a 
really important site for work force training for us for 
generations. And it is the reason I came to New Orleans to 
train at Charity. It is where I did my National Health Service 
Corps payback. It is part of the fabric of how we develop new 
physicians, nurses, etc. So there is the element of developing 
the new work force to work in the community and to stay there 
to take care of the population. That is important.
    We are also realizing that if you are going to train folks 
to work in community health centers or expect them to when they 
complete, they need to have that opportunity. I think that is 
really important, to shift that educational paradigm as well.
    For our patients, especially for those patients of ours who 
are uninsured, they are by necessity financially triaged. So 
the State hospital system has been really critical in providing 
specialty services and inpatient services for those folks. As 
has been described, it is probably beginning to bulge at the 
seams a little bit. So we need to think about how we improve 
efficiencies of referrals and communication between the system 
so we don't overwhelm them needlessly.
    Mr. Cao. Dr. Townsend.
    Dr. Townsend. I would say that actually, some of our 
recruitment has been very good post-Katrina. But it is because 
of the promise of a new academic medical center, a promise of 
new labs for research. So if you are going to have those kinds 
of, if those pieces of the infrastructure are going to be 
present and are going to stay, we are going to need that new 
medical center. We need a flagship hospital. As far as 
recruitment for residents, I think it becomes a little more 
difficult because we can't support the number of residents. 
Today, we are supporting about 200 Tulane residents and fellows 
at the hospital, because we just simply don't have the volume. 
The 640 that were there before, they have to be in different 
places. That education is not as attractive to residents and 
fellows. So it makes it a little more difficult to recruit. Our 
medical school recruitment is still going well.
    I am happy to say, for the dean of the medical school at 
LSU, his recruitment, like I said, with the promise of a new 
academic medical center, our NIH funding now is actually higher 
than it was before the storm. But that hospital is critical. 
And Dr. DeSalvo is right, we need the clinics. Because that is 
part of the training that is very important. But we have to 
have that flagship hospital, we have to have those tertiary and 
even quaternary care kinds of services that you simply can't 
get in the outpatient setting.
    Mr. Cao. Dr. Erwin.
    Dr. Erwin. Thank you. It is particular pertinent to me, 
because I have a son that is a medical student and we are 
trying to recruit him to stay in town. And certainly, the 
training that you have heard both of them describe that comes 
with a flagship hospital that has academic excellence as well 
as clinical care is critical. We also feel that one benefit 
from recruitment has been the altruism of the country. We have 
seen a lot of people come down who really want to help.
    But it is very important, we feel, for people who are going 
to work in community clinics, to train in community clinics. 
They don't get that training in the hospital. It is a different 
type of practice. So the residents, the students who come to 
town who come out to our clinics, they make a difference for 
us. They make a difference in the number of patients we can 
see, they make a difference in the quality of services that we 
offer. So that the higher quality that comes in, they don't 
come for us. They are lured by the flagship hospital. We 
benefit from it.
    Mr. Cao. Now, there are areas in the second district, as 
well as in Chairman Melancon's district, that lack hospital 
care. And the statement from Mr. Issa saying that, what the 
State is doing, in order to help those people there, my 
question to you here is, I have spoken with the State and there 
might be some issues with respect to how much the State can 
contribute. Can LSU and Tulane, can you all come together in 
order to address the hospital, maybe the acute care needs of 
the people in Northeast and St. Bernard, and how can the 
Federal Government assist you all in that endeavor?
    Dr. Townsend. I think today, with the hospital that we 
have, the public hospital that we have, for citizens in New 
Orleans East who are uninsured, I think we are serving them 
today. As far as being able to serve them in the area, I think 
it is really important to have primary care, a bigger presence 
there. And there are some conversations going on right now with 
the city of New Orleans about the ability to use the medical 
office building that was at the former Methodist Hospital to be 
able to expand primary care services that would be a natural 
link then into the inpatient care.
    As far as inpatient services, without the hospital in New 
Orleans East, obviously, I can't speak for Tulane, but I know 
that there are always contractual relationships that can be 
formed in order to have providers provide services at different 
hospitals. Because we do that today in the New Orleans region 
with other hospitals.
    Chairman Towns. The gentleman from Utah's time has expired.
    Mr. Cao. Thank you very much.
    Chairman Towns. I now yield to the gentleman from 
California who is the Chair of the Congressional Black Caucus, 
who has been very involved and supportive of getting resources 
into the Louisiana area, Congresswoman Barbara Lee.
    Ms. Lee. Thank you very much, Mr. Chairman.
    Let me thank you for your very consistent leadership on 
this committee, and just as a Member of Congress and as a human 
being with regard to your concern and commitment to ensure that 
those living in New Orleans actually benefit from what our 
Government has tried to do in the past. It is unfortunate that 
this natural disaster was turned into a human disaster. Your 
leadership and this committee's leadership makes us believe 
that we will be able to do the right thing. But we have to do 
it now. And I thank you again for inviting me to participate.
    As Chair of the Congressional Black Caucus, let me just 
welcome all of you, greet you and just say, thank you for being 
here. Most members of the CBC have been to New Orleans many, 
many, many times. And each time we go, we want to come back. We 
believe we are not doing enough yet and we have to do more. So 
this is an important step in the right direction.
    I hope, Mr. Chairman, that in the future, this committee 
could lead a delegation to visit New Orleans once again, but 
look specifically at the primary care clinics and community 
care clinics. If that request hasn't been made formally, I 
request that, because I think it is time we come back. And 
especially now during this health care reform debate, and part 
of what we have been insisting on in at least in the House bill 
was an expansion of community clinics. So some of us would like 
to see how that would work, post-Katrina. Because we think if 
it can work, if it is working in New Orleans, it can work 
anywhere because of all of the issues, the tough issue that you 
are dealing with.
    Let me ask you, a couple of things about medical records. 
On a couple of occasions, I visited and went to the hospitals 
and talked to some of the personnel and was concerned, they 
were concerned, like many of us, and I know you are, about the 
medical records and how you retrieve medical information from 
people who are coming back. Do you have medical records in 
terms of the computerization and the technology necessary for 
retaining, now, medical records, or how did all of that happen 
with regard to those who lost their homes and had to leave and 
are now coming back? How do you recapture medical histories?
    Mr. Griffin. I would like to respond to that. We have, I 
think since Katrina, developed a fairly robust system with 
electronic medical records. At Daughters of Charity Services of 
New Orleans, we have a paperless system for the most part. It 
is backed up out of town so that there is no jeopardy of losing 
the information. And our providers are able to access the 
records remotely. So that has been a, there are multiple 
vendors that entities are using. But it has been, of course, 
helped by this grant because of the operational assistance and 
infrastructure that this grant has provided. So that has been a 
true evolution and something that has worked very well.
    I would just like to thank you for all of your, from the 
Congressional Black Caucus' Chair, for all the work you have 
done and all you all have done to look at New Orleans and 
assist New Orleans. And also I would like to express your 
sentiment with the chairman. Mardi Gras is coming up, so you 
all can have a visit or come down in 2 months if you like for 
your site visit. [Laughter.]
    Ms. Lee. Thank you very much. And thank you for that 
    Dr. DeSalvo. I just want to add to what Mike's saying, that 
the opportunity from the loss of our paper records was to 
rebuild it better. We have done that. We felt as a group of 
community providers that we wanted to move toward a paperless 
system. We think it has better safety parameters. It is more 
accessible for providers, if it is after-hours calls that we 
take on patients, we have the information at our fingertips to 
help make care decisions, to let them decide whether the 
emergency room is the right place or the clinic.
    It has also really helped to advance our programs in 
quality and quality improvement and helped us to share 
information to think about how we are going to treat chronic 
disease like diabetes better.
    Ms. Lee. But I have to ask you though, for those who lost 
everything, and I say this as the daughter of an 85-year-old 
mother who walks around with a briefcase full of medical notes 
and records, because where she lives they still aren't 
computerized, and there is no technology. So to remember, for a 
person who left during the storm, came back, lost everything, 
how do you reconstruct a record? I can't remember everything 
that, for instance, every medication that my mother takes or 
every diagnosis. How did you do that and how do people put all 
that together again?
    Dr. DeSalvo. It is a lesson learned from this tragedy, 
really, because we didn't have a lot of that information. So we 
did not want to go back to that situation, if it were to ever 
happen again. And we think, for disaster and every day, it 
makes sense to have the information available, not just to 
providers, by the way. The step we are not at yet is the portal 
for patients. Because really, they own that information and 
should be able to see it any time that they need to have access 
to it.
    But what it took in the beginning was, honestly, we had 
records in the Charity system. That system, some of the 
dictator boards and labs were available, some of the hospitals 
had their inpatient electronic systems. So we pieced it 
together, painstakingly with folks. And it does take quite a 
long time when you are getting folks re-entry, over an hour or 
more, just to find out what happened to them in their lives and 
make sure it is not lost again.
    Ms. Lee. Yes, and what medications, for example, 
understanding the health disparities in the African American 
community, diabetes, hypertension, lung cancer, breast cancer. 
How do you reconstruct the medications?
    Dr. Townsend. One of the advantages that we had was that 
the collaboration through an HCAP grant, there was the PATH 
partners that many of these folks belong to, including us, we 
had developed a retrieval system for electronic information. 
And so that piece of information, that history was available 
electronically, even after the storm. In addition to that, the 
pharmacies across the Nation, if you use a retail pharmacy, you 
could retrieve that information of filled prescriptions. And 
then for our patients, most of them don't have a pharmacy 
benefit. So we access patient assistance programs and they get 
free medications. But there is an electronic system within the 
safety net that keeps track of what medications they have 
    That is important information. We were able to reconstitute 
that information very quickly.
    Ms. Lee. That is great. Let me ask you one more question, 
Mr. Chairman, to this panel, as it relates to HIV and AIDS. How 
are you faring, and how are the rates in New Orleans as it 
relates to HIV and AIDS, and are people able--I remember 
earlier, right after the storm, accessing medications and 
getting people back on their meds at the right time and what 
have you was a difficult task. Are the rates now leveled off in 
New Orleans, are they going up, going down? Do we need to look 
at New Orleans and see what we need to do and do it better? How 
are things going?
    Dr. Townsend. HIV care in New Orleans, the public 
hospitals, clinics, it is called the HOC clinic, the HIV 
Outpatient Clinic, that clinic has been reconstituted. People 
are back in care. They are able to receive medicines. We have 
always had a really high diagnosis rate in New Orleans. I 
actually am not sure what that is today. My guess is that 
perhaps because the population is down, the rates may not be as 
high as they were. Because we have diagnosed so many of those 
people. But there are still people who are not in care. And we 
are still trying to get those people to the appropriate level 
of care. This is one place where we have made such great 
strides that you can really manage that disease on an 
outpatient basis.
    Ms. Lee. Are you able to do testing initiatives, testing 
    Dr. DeSalvo. We are, and I think Diane can tell--I believe 
we have the second highest rate in the Nation of HIV after D.C. 
It is a major problem. There are programs in place for 
screening, education, identification, triaging people to care. 
One of the recipients of PCASG is the NO/AIDS Task Force, which 
has benefited and been able to grow its programs. So it is on 
the front of our minds. We know it is a major problem for the 
population and quite frankly, the community is very conscious 
of it. Of the things that we get requested as a health center 
to go do screenings on, it is HIV more than diabetes now.
    Chairman Towns. Thank you very much. Let me thank the panel 
for being here. We really appreciate your coming and sharing 
with us, because we see it as being very, very important. And 
of course, we want you to know that you do have a lot of 
support on this side. We just hope to be able to move some of 
these things a lot quicker. But again, your coming here has 
been extremely beneficial.
    Also I would like to just say that I also have a letter 
that is addressed to both Congressman Issa and myself from Mr. 
Melancon regarding this hearing. As you know, he represents 
several of the most affected regions recovering from Hurricane 
Katrina, including St. Bernard Parish, of course, and 
Plaquemines Parish as well, which are just east of the city and 
still recovering. He has been a leader on recovery, 
particularly in the areas of restoring and building the 
region's health care infrastructure. I would like to put this 
letter in the record.
    [The information referred to follows:]

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    Chairman Towns. Let me again thank you so much. Now we move 
to our second panel. I apologize for the delay because of 
votes. But in the meantime, we have to vote around here. If 
not, they talk about you. [Laughter.]
    So we will now move to our second panel.
    Will all the witnesses come forward, please.
    Let me just indicate before we start, we swear all of our 
witnesses in. What we will do is we will allow you to start, 
but we will have to have another break to go and vote. I really 
apologize. They make an issue of it if you don't vote around 
here. So please stand and raise your right hands.
    [Witnesses sworn.]
    Chairman Towns. Let the record reflect that the witnesses 
answered in the affirmative.
    Let us begin with you, Dr. Brand. Thank you so much for 
being here. I really appreciate your being here all day, too. 
Thank you so much.

                    PUBLIC HEALTH INSTITUTE

                  STATEMENT OF MARCIA K. BRAND

    Ms. Brand. Mr. Chairman, members of the committee, thank 
you for the opportunity to testify today on behalf of the 
Secretary of the Department of Health and Human Services [HHS] 
and the Administrator of the Health Resources and Services 
Administration [HRSA]. We appreciate your interest and support 
of primary care in New Orleans and welcome the opportunity to 
work with you to strengthen HHS and HRSA programs in the 
    I appreciate the remarks of the previous panel and I 
applaud their fine efforts to provide access to care for the 
people of New Orleans.
    HRSA also helps the most vulnerable Americans receive 
quality primary care without regard to their ability to pay. 
HRSA works to expand health care for millions of Americans, the 
uninsured, mothers and their children, those living with HIV 
and AIDS, and residents of rural areas. HRSA recognizes that 
people need access to primary health care and through its 
programs and activities, it seeks to meet those needs.
    My testimony will briefly describe the Centers for Medicare 
and Medicaid Services [CMS] Primary Care Access and 
Stabilization Grant and ways that HRSA is working with its 
partners to provide access to primary care services in 
Louisiana. In July 2007, CMS awarded Louisiana the Primary Care 
Access and Stabilization Grant, a 3-year grant of $100 million 
to assist public and not-for-profit clinics in the greater New 
Orleans area to expand access to primary care, including 
primary mental health care, to all residents, low-income and 
uninsured residents. The grant was designed to support the 
long-term sustainability of primary care in New Orleans. The 
grant required sustainability plans within the grant 
application and tapered funds over the life of the 3-year 
grant. The Louisiana Department of Health and Hospitals made 
provisions with the Louisiana Public Health Institute to help 
the State administer and oversee this grant's day-to-day 
    As we have heard from the previous panel, the organizations 
receiving PCASG operates 91 primary care and behavioral health 
clinic sites across the region, including fixed and mobile 
facilities. As of September 2009, these clinics have served 
approximately 252,000 patients. The Department is pleased with 
the improvements in primary care access that has resulted form 
this grant. HHS looks forward to continuing our close 
partnership with the State and local health care organizations 
to meet the primary care needs of residents in the Gulf Coast.
    HRSA's efforts to support primary care in post-Katrina New 
Orleans includes support for health centers, the primary care 
work force and infrastructure. Health centers are community-
based and consumer-driven organizations that serve populations 
with limited access to health care. These include low-income 
populations, the uninsured, those with limited English 
proficiency, individuals and families experiencing 
homelessness, and those living in public housing. These centers 
are designed to provide accessible, dignified, health services 
to low-income families.
    In 2004, prior to Hurricane Katrina, HRSA funded two health 
center grantees that supported 10 sites in New Orleans, serving 
17,500 people. Since 2006, HRSA has funded seven additional 
applications. HRSA provides grant support to five health center 
grantees in the greater New Orleans area. This includes four 
existing health center grantees that received $7.1 million in 
2009 to operate 18 sites and service 34,000 people.
    The fifth health center is a new grantee that received 
funding under the Recovery Act. New Orleans has additionally 
benefited from Recovery Act funding and has received 13 awards 
that support new health center access points, increased demand 
for services and capital improvement awards. The Recovery Act 
funding will allow these primary care providers to see an 
additional 35,000 patients at more than 20 clinics across the 
area over a 2-year period. Two of the health centers are using 
these funds to provide additional mental and behavioral health 
services, which we know from our discussions today are critical 
to this region.
    In addition to providing direct patient care, HRSA 
strengthens primary care by placing health care providers in 
communities where they are needed most. The National Health 
Service Corps, through scholarship and loan repayment programs, 
helps health professional shortage areas in the United States 
obtain primary care. And Dr. DeSalvo, who was on the previous 
panel, is an excellent example of the National Health Service 
Corps loan repayment program.
    In addition to supporting a National Health Service Corps, 
we directly support health professions programs that provide 
infrastructure for training and education. This includes the 
Southwest Area Health Education Grant.
    We also provide resources to address particular patient 
population challenges, including women and children. And as of 
this summer, we had another grant that would support care for 
people living with HIV and AIDS. HRSA provides Ryan White care 
funds to the New Orleans AIDS task force. And they provide 
comprehensive HIV care for about 800 people living with HIV and 
    We are extremely proud of our programs and look forward to 
continuing to work with you, Mr. Chairman, and members of the 
committee, to provide quality primary care for all. HHS has 
invested a great deal of time and resources in assisting the 
recovery of New Orleans, and there is much more work to be 
done. We are looking forward to collaborating with you in that 
    [The prepared statement of Ms. Brand follows:]

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    Chairman Towns. Thank you very much, Dr. Brand.
    Just before we start with Mr. Levine, we are going to break 
until 2:15. We hate to do this, but we have to make these 
votes. And then we will start again. And of course, hope that 
we won't have any more votes until we finish. Thank you, and we 
hope you understand. So we will actually recess until 2:15.
    Chairman Towns. The committee will reconvene.
    Mr. Levine, you may begin.

                    STATEMENT OF ALAN LEVINE

    Mr. Levine. Thank you, Mr. Chairman. It is an honor to be 
here today.
    I had prepared some comments, I am going to depart a little 
from my prepared comments and sort of get to the crux of what 
some of our financial challenges are going forward. You have 
heard good stories this morning about the good things that were 
done as a result of this grant. There were other grants as 
well. And Congress and the executive branch have done a lot for 
the State of Louisiana and New Orleans. For that, we are 
    We are also grateful for the selection of Craig Fugate to 
be the Administrator of FEMA. I worked with him during the 
eight hurricanes that Florida faced during 2004 and 2005, and I 
don't know a more capable person in the country to lead FEMA.
    I just want to get to some of the real financing challenges 
that we have that really trump all of this. Because all of this 
will become very difficult for us to sustain, if we can't solve 
these specific issues. First, our State faces the largest 
reduction in Federal match in Medicaid in the history of the 
Medicaid program. January 2011, our Federal match will decrease 
by 18 percentage points from an 81 percent match under the 
stimulus to 63 percent. That is an annualized loss of $900 
million per year that Louisiana will either have to, will have 
to reduce from the expenditures in the program. That is one-
sixth of our Medicaid program.
    On top of that, we face a reduction in our DSH program. You 
have heard a lot about the low eligibility, the 12 percent 
eligibility for adults in Louisiana. Part of the reason for 
that is we have historically used this public hospital system 
to provide access for people that were low income. You heard 
that nearly 95 percent of our children have insurance coverage 
and we have a very low eligibility for adults. That is true, 
because we have this public system.
    However, the funding for that public system is in jeopardy 
right now because beginning in July, we face what we estimate 
will be up to a $150 million reduction in our DSH program, a 20 
percent reduction that begins July 1st. So those two issues 
combined are more than a $1 billion reduction to our safety net 
programs this coming year. We also are facing obviously the 
loss in the Primary Care Access and Stabilization Grant 
    I just want to tell you a story. My first week on the job, 
there was a young police officer named Nikola Cotton who was 
murdered on the job. She was murdered by somebody who had been 
treated in our institutions, in our mental health institutions 
in New Orleans and had just been released from a mental health 
institution. We found that the mental health system in New 
Orleans and throughout the State of Louisiana has been 
neglected for 20 years.
    So the Governor and I set out, along with the legislature, 
and some of them are here today, to establish some major 
reforms in our mental health system. We passed several laws, 
one of them that we refer to as Nikola's law, that allows for 
involuntary outpatient treatment for people who don't take the 
medications when they are determined to be at harm or risk to 
themselves or others. We increased funding for mental health by 
$89 million. We implemented forensic assertive community teams, 
assertive community teams, multi-systemic therapy, functional 
therapy, services that had never been offered in New Orleans 
before that today are being offered.
    And because we are doing it and because we have tried to 
move the standard from institutional care to a community-based 
model, we are serving three times the number of people that 
have mental health needs.
    I want to say, there was a question earlier about what is 
Louisiana doing. Let me tell you some of the things that we are 
doing. First of all, I mentioned we have increased our funding 
for mental health by $89 million last year, even facing 
economic challenges that we are facing. The Department of 
Health and Human Services just put out a press release a couple 
of weeks ago, or put out a statement a couple of weeks ago, 
saying that Louisiana is one of the most efficiently operated 
Medicaid programs, and it is the model for how to retain 
coverage for children.
    We went from 44th in the Nation for child immunizations to 
just a month ago CDC announcing that we are now second in the 
Nation in child immunizations, pushing our overall health care 
rankings to 47th in the Nation. Still very low, but the highest 
we have ever had since the rankings have been done.
    So there is forward progress being made. But if we do not 
solve these challenges, these financial challenges, if the FMAP 
problem does not get resolved, the consequences will be 
extremely devastating for our State and many of the gains that 
you have seen, particularly the investments that have been made 
by the Federal Government will be, we think, in peril. To be 
clear, the reason that the Federal match is dropping in 
Medicaid is because of the very things you have done to help 
us. It is an ironic twist in the formula. The Medicaid matching 
formula was never designed for States that had major disasters. 
So what happens is, tremendous investments are made, billions 
of dollars of investment are made in our State, economic 
activity occurs, we have a temporary increase in our per capita 
income. Our per capita income went up 42 percent from 2005 to 
2007. But yet we still have the second highest rate of poverty 
and our Medicaid enrollment is the highest it has ever been.
    And yet, 3 years later, because of the Federal formula in 
law, our match in Medicaid drops as a direct correlation to the 
increase in the per capita income resulting from the recovery.
    Mr. Chairman, I know my time is up. I will say that this is 
something that only Congress can resolve. We literally are 
asking for Congress to take a good, hard look at this to help 
us with this financing challenge that no State in the history 
of our Union has faced in the Medicaid program's history.
    [The prepared statement of Mr. Levine follows:]

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    Chairman Towns. Thank you very much, Mr. Levine.
    Dr. Crear-Perry.


    Dr. Perry. Hello, thank you for having me. I am Dr. Joia 
Crear-Perry. I am the director of clinical services of the city 
of New Orleans Health Department and I am an OB-GYN. I would 
like to thank the House Committee on Oversight and Government 
Reform for giving the city of New Orleans an opportunity to 
speak today and for providing us funding for primary care 
access and stabilization.
    This vital funding helps support the city to re-establish a 
health system of care, along with providing critically needed 
medical and mental health services to the greater New Orleans 
community and areas post-Hurricane Katrina.
    The causes for our historical social health disparities as 
a State, and more specifically in New Orleans, are complex and 
far-reaching and not easily counteracted. When Katrina made 
landfall, 28 percent of New Orleans' citizens lived in poverty, 
25 percent had never finished high school, 50 percent lived in 
a single parent home and 25 percent had no health insurance. 
Hurricane Katrina has only exacerbated what was already a 
fragile health infrastructure and medical service delivery 
system. The current lack of access to both primary medical care 
and mental health services for such a large portion of our 
parish is perhaps the strongest correlation to our repeatedly 
poor health outcomes.
    The goal of the New Orleans Health Department is to provide 
direct medical care and services and help to build a 
sustainable and long-term infrastructure along with the 
opportunity for collaboration and coordination in creating an 
equitable and accessible health care system for all residents. 
Therefore, I would like to focus on five things: the lack of 
access to primary medical care services by our citizens most in 
need; the professional medical and mental health provider 
shortages; a profound lack of mental health services; health 
disparities; and the need for continued support to finish the 
rebuilding of the city's health infrastructure.
    Today, with the population of New Orleans having reached an 
estimated 350,000 people, close to 75 percent of its pre-
Katrina numbers, the services offered by the New Orleans Health 
Department are much less. The city operates only three primary 
care clinics: one homeless clinic, one fixed dental site, and 
two mobile dental sites. The geographic coverage is limited. 
One of the primary care clinics is located on the west bank, 
and we have the map up there. One is located in Central City 
and one is in New Orleans East, across the large Industrial 
Canal. If you look to the right of the map, where there only a 
couple little dots in the far right corner, that is New Orleans 
East, where our clinic is.
    There has been a significant decrease in the number of 
medical, mental health, and dental providers seen in Orleans 
Parish. According to a 2007 Blue Cross/Blue Shield report, only 
28 percent of their original medical professionals returned to 
practice in Orleans Parish. Last year, the Louisiana Department 
of Health and Hospitals reported that less than 25 percent of 
those providers accepted Medicaid patients.
    There has never been an adequate mental health 
infrastructure in New Orleans. And today, the need for care and 
treatment has only increased exponentially since Katrina made 
landfall. During the last 4 years, the availability of 
psychiatric beds has been dramatically reduced, combined with a 
large number of mental health care providers never returning, 
which has left the citizens most in need with the most 
obstacles in receiving care, needed care and treatment. And 
beyond that, being able to meet the mental health needs of our 
citizens, it has created a cross-cutting effect on families, 
communities, work sites, and the broader health care delivery 
system--from the hospital emergency rooms to the primary care 
physicians to the local jail facilities--which today houses the 
most psychiatric beds in the parish.
    Just as behaviors and lifestyle choices are the causes of 
most chronic and infectious diseases, access to primary, 
preventive, and treatment care is what improves health outcomes 
and decreases disparities gaps. What research has shown is that 
health disparities in Louisiana are often found in populations 
which are poor, minority, high school dropouts, low incomes, 
uninsured, and lack transportation.
    The New Orleans Health Department identified an extremely 
high need in under-served and under-staffed sites in New 
Orleans Parish and responded by establishing a clinic site with 
PCASG funding. As you can see on the map, it was New Orleans 
East. New Orleans East represented approximately 35 percent of 
total parish land area and 15 percent of overall population. 
Yet 4 years later, there is still no hospital. So I just wanted 
to put up my little Methodist picture. Can't have a New Orleans 
conversation without talking about Methodist Hospital.
    Yet separated by the large Industrial Canal, New Orleans 
East is considered a suburb of the city, with the fastest-
growing part of the parish in terms of population, business and 
industry, with a strong, increasing middle-upper class Black 
population and Vietnamese population. Like all of New Orleans, 
but particularly New Orleans East, data has shown a significant 
population shift. Each month that the New Orleans clinic has 
been open, we have seen a 15 percent increase in patient 
volume. We currently offer gynecologic, pediatric, adult 
primary care services, WIC and Healthy Start. We have 
collaborations with LSU and Tulane Schools of Medicine for 
specialty care, diagnostic procedures, and inpatient 
management. Sixty-five percent of our patients are uninsured. 
Our typical patient is a working mother who comes in for WIC 
services, brings in her children for pediatric services, 
participates in Healthy Start parenting classes, gets her PAP 
smear and birth control, and has her brother to come in for a 
blood pressure check. She can get all of this done at this one 
site in New Orleans East.
    For a growing population that is geographically isolated, 
the PCASG funding has allowed us to provide convenient, 
compassionate services, because even 4 years later, there is 
still very limited care in the area.
    Since Katrina, there has also been a severe shortage of 
dental services. The PCASG funding has allowed us to fill in 
the gap by staffing two mobile dental units. One goes to the 
senior centers, and one goes to the school-based health units. 
On these units we provided dental exams, prophys, deep 
scalings, amalgam, bonding, removable partial dentures, 
complete dentures, crowns, and bridges. We have an oral surgeon 
who can help with more difficult cases. We have begun oral 
health education programs with the schools as well. So you can 
see one of our vans we are very excited about.
    We are hopeful that the availability of services plus the 
student education will span out to beyond the schools and the 
senior centers in the future. Right now, it is filling a 
significant need.
    So in closing, I know I am over, below are a couple of 
recommendations from the city of New Orleans. No. 1, to 
increase Medicaid eligibility, to increase the number of 
individuals who qualify for coverage and are insured. Two, use 
flexibility within the Section 1115 waiver for Medicaid for 
expansion to support the PCASG funding; expand the number of 
federally Qualified Health centers in the region; and to 
alleviate the disparities in mental health reimbursement. That 
is it.
    [The prepared statement of Dr. Crear-Perry follows:]

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    Chairman Towns. Thank you very much.
    Mr. Williams.


    Mr. Williams. Mr. Chairman, thank you and members of the 
committee, thank you for the opportunity to address this 
important topic today.
    I am employed by the Louisiana Public Health Institute,a 
non-profit organization that works State-wide to improve health 
through public-private partnering. LPHI was chosen as the 
State's local partner in administering the Primary Care Access 
and Stabilization Grant. I serve as the director of that 
    Today my testimony will, in my 5 minutes, hopefully 
summarize how the grant has been used over the past year, 2 
years, toward the grant goals, and discuss the challenges we 
face in maintaining the gains we have achieved. The 
catastrophic flooding throughout the New Orleans region 
following Hurricane Katrina wiped out the health care safety 
net, as you have heard about today. There is a map showing the 
relative flood depths that you could look at in relation to the 
location of the clinics, which is overlapping.
    Also, as you have heard today, the clinic representatives 
here today were among those who spent the first couple of years 
after Katrina cobbling together resources and trying to get the 
growing health care needs met in the region. Then in July 2007, 
we received the $100 million Primary Care Access and 
Stabilization Grant from HHS to stabilize and expand the 
clinics that were on the brink of failure at that time. We want 
to thank you and HHS very much for making that possible and 
making it possible under terms that allowed for the use of 
those funds in a flexible way, so that we could be effective 
toward the goals of the grant.
    We strive for a health care system with a public-private 
network of primary care clinics as its foundation to facilitate 
access to the right care delivered in the right place at the 
right time. And four fundamental goals have guided our efforts 
to use this grant to advance toward this vision. No. 1, 
increase access to care on a population basis. No. 2, deliver 
high quality, evidence-based health care. No. 3, create an 
organized system of care. And No. 4, develop sustainable 
business entities: access, systemness and sustainability have 
been our mantra.
    Twenty-five public and non-profit organizations in the New 
Orleans region were eligible to participate in the grant 
program. The first award of $16.7 million was distributed to 
the organizations within 2 months after the issuance of the 
notice of grant award. Supplemental awards have been made every 
6 months since then to all 25 entities. And so far, $80,275,000 
has been distributed.
    The remaining grant funds will be distributed in December 
of this year, and the grant funds will be substantially 
exhausted by September 30th of next year. However, we expect a 
no-cost extension will be approved by CMS shortly to help the 
grantees stretch these dollars as far as possible. About 80 
percent of the funds have been spent on personnel and contracts 
for the provision of direct patient care services and the 
remainder on equipment and supplies, facility renovations, and 
other expenses that support care delivery.
    Now, I will summarize the status and progress made toward 
our priority goal, to increase access to care on a population 
basis. The outstanding performance of the 25 participating 
organizations in this priority goal area has led to an increase 
in the number of service delivery sites in the region from 67 
per-grant to 93 today. There is a map you have seen that shows 
the distribution of all those sites across the region. In 
addition, they have increased the size of the delivery system 
by almost 50 percent in 2 years in terms of patients served. 
You can look at the next exhibit, which is a graph that shows 
the increase in patient volume by a 6-month period since the 
beginning of the grant. It is a dramatic, dramatic growth in a 
system in such a short period of time.
    In the past year, they have provided primary and mental 
health care services to nearly 175,000 individuals and to a 
total of 250,000 since the grant began. In the past year, 42 
percent were uninsured, representing about half of the 
uninsured in the region, and 25 percent had Medicaid. More 
importantly, over 40 percent of the conditions cared for in the 
primary care clinics are conditions that would likely require 
expensive emergency room care if not effectively managed in the 
outpatient setting.
    Now on goal No. 2, which is to deliver high quality 
evidence-based health care, as a condition of receiving grant 
funds, all participating clinics met minimum quality 
improvement benchmarks, such as providing same day appointments 
for urgent care. In addition, $3.8 million was set aside for a 
voluntary quality improvement incentive program in partnership 
with the National Committee on Quality Assurance [NCQA]. This 
incentive program rewards clinics that achieve standards set by 
NCQA in their patient-centered medical home framework.
    Significantly, 40 of the clinics received NCQA recognition 
through the incentive program. This is the highest 
concentration of such recognized clinics anywhere in the 
country. And just 2 days ago, we heard that this impressive 
cross-sector quality improvement will receive a national award 
from NCQA in March of next year.
    I have 1 more minute here. I am going to skip down to goal 
No. 4, sustainability, which I think is the focus of the 
hearing here. Substantial improvements in billing practices 
among the participating organizations have been achieved. For 
example, 82 percent of the primary care organizations are now 
billing Medicaid, Medicare, and/or private insurance.
    Despite the progress that has been made in this goal area, 
we estimate the participating provider organizations would face 
a $30 million annual operating deficit if they were to maintain 
their current capacity without the help of this grant or some 
other such source. The projected deficit stems from their 
mission to serve people who are not covered by any insurance 
and hence from whom the clinics receive little or no revenue. 
Over half the participating organizations depend on grant funds 
for more than 50 percent of their operating expenses. And 
several rely on grant funds for more than 75 percent of their 
operating expenses.
    Organizations caring for the highest portions of uninsured 
individuals are most at risk, and some of the highest volume 
and highest quality clinics that you have heard from today have 
patient populations that include upwards of 70 percent 
uninsured individuals. This program was envisioned as a bridge 
to a more favorable policy environment. However, it is clear 
that those conditions are still years away. Unless we work 
together now to devise and implement solutions to span the gap, 
the progress that has been made will quickly erode, and the 
health system recovery in the New Orleans area will take a 
giant step backward, resulting in an estimated 30 to 40 percent 
reduction in services overall among these organizations.
    Most organizations will be forced to cut back severely. 
Several will likely fail altogether. Many people who currently 
rely on these clinics will go without care or end up in the 
emergency room. Meanwhile, if and when relief comes down the 
road in the form of coverage expansion, the expensive exercise 
of expanding the health care delivery system to handle the new 
demand will have to be repeated. Wouldn't it be more effective 
and efficient overall to keep this network intact than to let 
that happen?
    The desirable result of this hearing would be that all 
parties involved will redouble their efforts to immediately 
identify and implement a set of solutions to address these 
threats. These could include allocation of existing unobligated 
community block grant recovery funds for this purpose, granting 
permission for the State to use Medicaid disproportionate share 
funds for outpatient primary care and physician services, and 
exportation of additional sustainable options for funding.
    It has been an honor today to participate in the hearing, 
and thank you for your continued support of our efforts to 
rebuild a healthier, greater New Orleans. I would welcome your 
    [The prepared statement of Mr. Williams follows:]

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    Chairman Towns. Thank you very much. Let me thank all of 
you for your testimony.
    Let me begin with you, Dr. Crear-Perry. I am interested in 
that van. How does that work? Do you go to the same area once a 
week, twice a week? How does that work?
    Dr. Crear-Perry. We actually have an MOU with the school-
based health clinics. The one that you saw with the children on 
the van, that one goes to the schools. They make a schedule, so 
the school nurses at the schools will find out which kids need 
dental services. They send home a packet with all the kids and 
their parents fill it out. Then they make a schedule and they 
let us know that if we are going to have, say, 10 kids the next 
day, and we usually have a schedule for the week. We right now 
are rotating between two different schools. We go to one school 
1 week and then one school the next week.
    Each week, we get requests from other schools. Everybody 
wants it, because there is such a need for dental services in 
the city. So some of the hardest part is just getting through 
the bureaucracy to make sure that we can get it there and get 
the services to them. But the kids really do enjoy being able 
to get the services. Because a lot of times we have kids who 
haven't been to the dentist since the storm. And we have been 
able to take care of them on the dental units.
    Now, for the senior centers, it goes to four different 
senior centers in the city. It also has a schedule that it 
changes every day from one senior center to the other. So the 
senior centers are more consistent. They know their schedule. 
They come in, and so it is a lot easier to get the senior on 
the dental van than it is sometimes to get the children.
    Chairman Towns. Dr. Brand, and first of all, I want to 
thank you for staying all day and listening to the testimony 
earlier and then coming and testifying later. I want you to 
know that when I became Subcommittee Chair back some years ago, 
I was going to change the procedure, because I wanted agency 
people to hear in terms of what was being said. Because we 
always had the agency people first, and then after that we 
would bring others in. After the agency people would testify, 
everybody would get up and walk out. And then when the people 
that had the problems, when they testified, nobody from the 
agency was around to hear it.
    So I was the one who said, from now on, we have the people 
talk first and then have the agencies come in afterwards. But I 
want you to know that your being here all day today has made me 
sort of rethink this thing, because you have been here and you 
have listened to the testimony. I want to ask you, you have 
heard what was said. Do you think it is possible that maybe the 
agency would think about, let's look at sort of establishing or 
sort of group a task force, I don't like the word task force, 
but a group to work together to see in terms of how we might be 
able to move some of these efforts along? I know you might not 
be able to make the decision sitting at the table today. But 
can you take this back to request that we would like to 
establish a committee to explore ways to continue restoring 
health care services to the post-Katrina region?
    I think there is still a lot that needs to be done. I know 
you can't right away say. But the point is, if you could take 
that back and let us know if there is any real interest in 
this. There are many Members of Congress, along with the 
representatives from the area, that would like to see what more 
we might be able to do. Sometimes it is not money, it is just 
getting things coordinated. I want to get your views on it and 
recognize that it is not something you can bang the table and 
say you will do. But will you take that back and think about 
    Ms. Brand. Yes, sir. And it has been very helpful and 
interesting to have spent the day listening to my colleagues 
talk about New Orleans and access to primary health care as it 
is at this time, and how it has changed compared to immediately 
before and after Katrina.
    HRSA and the rest of the Department I think have worked 
collaboratively to address these challenges. CMS certainly is 
the part of the enterprise that looks at payment. But HRSA is 
concerned about access through health centers, work force. Our 
colleagues in SAHMSA would be very interested to hear the 
challenges that the city still faces in providing access to 
adequate mental health services. So certainly, sir, I will take 
your challenge and your charge back to the Department and see 
what we might do.
    We have been working together collaboratively. But this 
might be an opportunity to look at that and see what the next 
phase might most appropriately be.
    Chairman Towns. Thank you very much, Dr. Brand.
    Mr. Levine, can you give me a broad outline of your 
administration's plan to build a replacement facility for the 
now-shuttered Charity Hospital? When will construction begin? 
How will it be financed and what scope and size? Is there 
anything that the Congress can do to facilitate this?
    Mr. Levine. Thank you, Mr. Chairman. We have taken several 
steps to move the process along to the extent that we can. 
Obviously, the financing is the big piece of this that hasn't 
been resolved. We are still, unfortunately, in the arbitration 
phase with FEMA at the moment. We believe that the State has 
made adequate, has provided adequate evidence that the State is 
owed $492 million under the Stafford Act. FEMA's last offer was 
$150 million, up from the original offer of $26 million or so.
    We are in the process of acquiring the property. The 
architects are doing the design planning phase of the project. 
So all the things that can be done while we work out the 
financing piece of this is critical.
    The other thing that we have done is we have completely 
changed the model from the old Charity Public Hospital model. 
We have actually looked at what happened in Atlanta with Grady, 
we have looked at Tampa General, we looked at others--Shands 
Hospital in Gainesville with the University of Florida. We have 
looked at models of teaching hospitals that used to be public 
but have converted to the non-profit model. And that is what we 
have done. We entered a memorandum of understanding between 
Tulane, LSU, and the State that was signed about 2 or 3 months 
    So all of those pieces have been put in place. The one 
piece that has not been put in place is the FEMA piece of this, 
which is substantial. The way the financing is supposed to work 
is, the State has committed $300 million. We had estimated the 
$492 million from FEMA. And then the difference between that 
and the $1.1 billion and $1.2 billion was going to be financed 
through the debt markets. If FEMA doesn't come through with the 
significant amount of money, if the arbitration doesn't go our 
way, that could really imperil our ability to finance this 
hospital, given the situation. We would have to finance more 
than the estimated $400 million that we had planned on.
    So irrespective of whether somebody believes we should 
rebuild the old hospital or build a new one, it is all academic 
if we can't get the money from FEMA. So the question about what 
Congress can do, to the extent that FEMA falls short due to the 
arbitration process, if it doesn't go our way, certainly 
Congress can step in and provide funding that would bridge that 
gap. We aren't asking for that at this point. That is certainly 
in the purview of Congress. But we are trying to work within 
the scope that has been laid out by FEMA.
    Chairman Towns. On that note, I yield to the representative 
from the area.
    Mr. Cao. Thank you, Mr. Chairman. And Mr. Chairman, I am 
very glad to hear today from the GAO that we have been using 
the money responsibly. Because traditionally, we have had some 
negative images with respect to how money is being spent.
    With that being said, I was a little bit disappointed, Dr. 
Crear-Perry, to hear that there are $4 million for mental 
health that is left unspent by the city. And you come here to 
testify of mental health needs. Can you explain with respect to 
that discrepancy?
    Dr. Crear-Perry. We don't have money for mental health in 
the city.
    Mr. Cao. I am sorry?
    Dr. Crear-Perry. We don't have a mental health grant for 
the city.
    Mr. Cao. I received information from very secure sources 
that the city does have $4 million in mental health money left 
    Dr. Crear-Perry. I am not sure.
    Mr. Cao. Can you look into that, if you don't mind?
    Dr. Crear-Perry. Yes.
    Mr. Cao. And Mr. Williams, do you have any comments with 
respect to that?
    Mr. Williams. I believe it would be a strange coincidence 
if it wasn't the, if this wasn't the $4 million carve-out from 
the Primary Care Access and Stabilization Grant that was 
specifically earmarked for the city of New Orleans Health 
Department to address not just mental health, although that is 
an allowable expenditure of the primary care grant funds, but 
also to address health care needs in particularly under-served 
areas and to provide the dental services, which are up and 
running. They got off to a slow start spending that money, but 
they are well underway to make good use of it at this point, as 
far as I know today. We can get you more information on that.
    Mr. Cao. So of the $4 million, which portion of it was 
spent on mental health, which portion of it was spent on the 
dental trucks?
    Dr. Crear-Perry. When we applied, we didn't apply 
specifically for mental health. We could use it for dental and 
the New Orleans East Clinic. So we have spent it on dental and 
New Orleans East Clinic. So we are on track to spend all of our 
allocation by the end of the grant. We will have no money left.
    Mr. Cao. OK. Dr. Brand, I was looking at some of the grant 
allocations that HRSA has granted to the area. I have noticed 
that a large portion of it was concentrated in the downtown and 
uptown area, where, the areas around the fringes, the northeast 
areas, St. Bernard, those areas in Waggaman and Westwego, there 
have been very little being done for those areas. Can you 
address that, please?
    Ms. Brand. Certainly. I believe that Administrator 
Wakefield has begun talking, dialoguing with you and your staff 
about the fact that those areas do not have ready access to 
federally qualified health centers. We continue to work with 
the Primary Care Association to look at those areas where we 
might, should resources be made available to do a new expansion 
or provide a new access point. There will not be resources 
available for a cycle in 2010. We don't know what the situation 
will be for 2011, because that budget is still being developed. 
But certainly, we will work with folks in that community. We 
will work with the Primary Care Association to help, an 
organization that is ready to stand up and be prepared to 
either be an FQHC or lookalike, be prepared.
    The other opportunity, should resources be available, is 
something called a planning grant that helps a community 
organize and be prepared to apply, and perhaps be more 
successful in that application process.
    Mr. Cao. Mr. Levine, I know that the State has a terrible 
FMAP problem. Can you please explain to us how would the FMAP 
problem affect the issue of the poor in the district, and also 
I would like to know whether or not the State has an audit 
system with respect to how money is being spent by the city as 
it comes down from the State.
    Mr. Levine. Thank you, Congressman Cao. The FMAP problem is 
the single biggest problem our State faces right now, with 
financing for the poor. We can't sustain nearly a $1 billion a 
year reduction in our funding for Medicaid. It would trump 
everything, all the progress that has been made here. Whether 
we talk about the expansion, I know there is a potential 
expansion of Medicaid in the reforms. In the House bill, it was 
133 percent, in the Senate, it is 150 percent.
    For us to go from where we are today, where currently we 
have a $275 million deficit in our Medicaid program this year, 
into a situation next year where we face a $900 million 
shortfall, and then go into a period where we then have to do 
an expansion of Medicaid, it couldn't be done. The maintenance 
of effort requirements under the stimulus, and then in both of 
the House and Senate bills, would really put a lot of pressure 
on provider rates and really, I think effectively make our 
program insolvent.
    So we really need a solution to this FMAP problem. All of 
the good work that has been done, what we talked about earlier 
about potential solutions to the PCASG grant, for instance, 
allowing us to use CDBG money that is unspent, or applying for 
a DSH waiver that would allow us to use disproportionate share 
funding for community-based clinics, we can do those things. 
But we also have to provide State match.
    With the decrease in Federal match that we are facing, we 
are not capable of doing that. So I think that the fundamental 
problems here are: (a), fixing the FMAP problem, (b), 
acknowledging this DSH audit rule and the quarter of a billion 
dollar per-year impact it is going to have on our State, in 
addition to the FMAP problem, and then (c), the $30 million 
problem we are going to have when this grant runs out in less 
than a year. These are three converging factors that any one of 
which would be devastating. But all three of them are virtually 
impossible for the State to be able to overcome on our own.
    Mr. Cao. Does the State have an audit system to ensure that 
money is being spent by the city?
    Mr. Levine. As it relates to funds that come through the 
Department, we do. And we have an internal audit function. We 
also have the ability through our contract to review all such 
expenditures, as does the legislative auditor, I believe, have 
the authority to audit any grant funds that come through our 
    Mr. Cao. Could you provide us with a copy of the audit?
    Mr. Levine. Sure. I won't say that--have we done any audits 
at this point? Yes. The answer is yes.
    Mr. Cao. Mr. Chairman, if you will allow me one more 
    Chairman Towns. Sure. I will extend the gentleman's time 
for another minute.
    Mr. Cao. Thank you very much.
    I know Dr. Crear-Perry has addressed the issue of the New 
Orleans East and the lack of hospitals out there for New 
Orleans East and St. Bernard. Dr. Brand and Mr. Levine, is 
there any way both of you or both of your organizations can sit 
down and discuss the problem and come up with some kind of 
solution in connection with Tulane and LSU to see how we can 
address that particular need out there, for approximately 
120,000 people? 120,000 people right now do not have access to 
a hospital.
    I know, I live out there in New Orleans East. About 2 years 
ago, I had to drive my father close to 40 minutes to get him to 
the nearest emergency room. He is a diabetic and he has some 
complications. We had to fight traffic, drive over the high 
rise, which for the people of New Orleans East, almost serves 
as a psychological block for many of them. So if you could do 
that, I would really appreciate it.
    Ms. Brand. I think the administration stands ready to work 
with the Congress, the State, and the local partners to address 
all service gaps. Certainly we would be happy to meet with 
    Mr. Cao. Thank you very much. That is all I have, Mr. 
    Chairman Towns. Thank you very, very much. Let me thank all 
of you for your testimony. You have been very, very helpful and 
we look forward to working with you in the days and months 
ahead, and to move some of these things forward. I think under 
very difficult circumstances and conditions that you have been 
able to do some amazing things. I want you to know we really 
salute you for that.
    Again, thank you so much for your testimony. This hearing 
is adjourned.
    [Whereupon, at 3:20 p.m., the committee was adjourned.]
    [The prepared statement of Hon. Diane E. Watson follows:]

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