[Senate Report 106-229]
[From the U.S. Government Publishing Office]






-----------------------------------------------------------------------
106th Congress                                            Rept. 106-229
  2d Session                  SENATE                         Volume 2  
_______________________________________________________________________




                  DEVELOPMENTS IN AGING: 1997 AND 1998
                                VOLUME 2

                               ----------                              

                                A REPORT

                                 of the

                       SPECIAL COMMITTEE ON AGING
                          UNITED STATES SENATE

                              pursuant to

               S. RES. 54, SEC. 19(c), FEBRUARY 13, 1997

  Resolution Authorizing a Study of the Problems of the Aged and Aging

 


                February 7, 2000.--Ordered to be printed





-----------------------------------------------------------------------
106th Congress                                            Rept. 106-229
  2d Session                     SENATE                      Volume 2  
_______________________________________________________________________




                  DEVELOPMENTS IN AGING: 1997 AND 1998

                                VOLUME 2

                               __________

                                A REPORT

                                 of the

                       SPECIAL COMMITTEE ON AGING

                          UNITED STATES SENATE

                              pursuant to

               S. RES. 54, SEC. 19(c), FEBRUARY 13, 1997

  Resolution Authorizing a Study of the Problems of the Aged and Aging

 


                February 7, 2000.--Ordered to be printed

                                -------                                

                    U.S. GOVERNMENT PRINTING OFFICE
56-466                     WASHINGTON : 2000       





                       SPECIAL COMMITTEE ON AGING

                  CHARLES E. GRASSLEY, Iowa, Chairman

JAMES M. JEFFORDS, Vermont           JOHN B. BREAUX, Louisiana
LARRY CRAIG, Idaho                   HARRY REID, Nevada
CONRAD BURNS, Montana                HERB KOHL, Wisconsin
RICHARD SHELBY, Alabama              RUSSELL D. FEINGOLD, Wisconsin
RICK SANTORUM, Pennsylvania          RON WYDEN, Oregon
CHUCK HAGEL, Nebraska                JACK REED, Rhode Island
SUSAN COLLINS, Maine                 RICHARD H. BRYAN, Nevada
MIKE ENZI, Wyoming                   EVAN BAYH, Indiana
TIM HUTCHINSON, Arkansas             BLANCHE L. LINCOLN, Arkansas
JIM BUNNING, Kentucky

                   Theodore L. Totman, Staff Director
               Michelle Prejean, Minority Staff Director



                         LETTER OF TRANSMITTAL

                              ----------                              

                                       U.S. Senate,
                                 Special Committee on Aging
                                              Washington, DC, 2000.
Hon. Albert A. Gore, Jr.,
President, U.S. Senate,
Washington, DC.
    Dear Mr. President: Under authority of Senate Resolution 54 
agreed to February 13, 1997, I am submitting to you the annual 
report of the U.S. Senate Special Committee on Aging, 
Developments in Aging: 1997 and 1998, volume 2.
    Senate Resolution 4, the Committee Systems Reorganization 
Amendments of 1977, authorizes the Special Committee on Aging 
``to conduct a continuing study of any and all matters 
pertaining to problems and opportunities of older people, 
including but not limited to, problems and opportunities of 
maintaining health, of assuring adequate income, of finding 
employment, of engaging in productive and rewarding activity, 
of securing proper housing and, when necessary, of obtaining 
care and assistance.'' Senate Resolution 4 also requires that 
the results of these studies and recommendations be reported to 
the Senate annually.
    This report describes actions taken during 1997 and 1998 by 
the Congress, the administration, and the U.S. Senate Special 
Committee on Aging, which are significant to our Nation's older 
citizens. It also summarizes and analyzes the Federal policies 
and programs that are of the most continuing importance for 
older persons and their families.
    On behalf of the members of the committee and its staff, I 
am pleased to transmit this report to you.
            Sincerely,
                                     Charles E. Grassley, Chairman.



                            C O N T E N T S

                              ----------                              
                                                                   Page
Letter of Transmittal............................................   III
    Item 1. Department of Agriculture............................     1
        Agricultural Research Service............................     1
        Cooperative Extension System.............................     8
        Economic Research Service................................    16
        Food and Nutrition Service...............................    16
        Food Safety and Inspection Service.......................    19
        Marketing and Regulatory Programs........................    19
    Item 2. Department of Commerce...............................    20
    Item 3. Department of Defense................................    26
    Item 4. Department of Education..............................    28
    Item 5. Department of Energy.................................    60
    Item 6. Department of Health and Human Services..............    66
        Administration on Aging..................................    66
        Administration for Children and Families.................   458
        Office of the Assistant Secretary for Planning and 
          Evaluation.............................................   465
        Centers for Disease Control and Prevention...............   473
        Food and Drug Administration.............................   491
        Health Care Financing Administration.....................   519
        Health Resources and Services Administration.............   538
        Office of Inspector General..............................   548
        National Institutes of Health............................   551
    Item  7. Department of Housing and Urban Development.........   912
    Item  8. Department of the Interior..........................   922
    Item  9. Department of Justice...............................   934
    Item 10. Department of Labor.................................   945
    Item 11. Department of State.................................   954
    Item 12. Department of Transportation........................   955
    Item 13. Department of the Treasury..........................   965
    Item 14. Commission on Civil Rights..........................   980
    Item 15. Consumer Product Safety Commission..................   997
    Item 16. Corporation for National Service....................  1002
    Item 17. Environmental Protection Agency.....................  1017
    Item 18. Equal Employment Opportunity Commission.............  1106
    Item 19. Federal Communications Commission...................  1147
    Item 20. Federal Trade Commission............................  1154
    Item 21. General Accounting Office...........................  1189
    Item 22. Legal Services Corporation..........................  1269
    Item 23. National Endowment for the Arts.....................  1270
    Item 24. National Endowment for the Humanities...............  1278
    Item 25. National Science Foundation.........................  1279
    Item 26. Pension Benefit Guaranty Corporation................  1282
    Item 27. Postal Service......................................  1315
    Item 28. Railroad Retirement Board...........................  1322
    Item 29. Small Business Administration.......................  1328
    Item 30. Social Security Administration......................  1329
    Item 31. Veterans' Affairs...................................  1343




106th Congress                                            Rept. 106-229
                                 SENATE
  2d Session                                                   Volume 2

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




 
             DEVELOPMENTS IN AGING: 1997 AND 1998 VOLUME 2             

                                _______
                                

                February 7, 2000.--Ordered to be printed

                                _______
                                

   Mr. Grassley, from the Special Committee on Aging, submitted the 
                               following

                              R E P O R T

              Report from Federal Departments and Agencies

                   ITEM 1--DEPARTMENT OF AGRICULTURE

                              ----------                              


                  AGRICULTURAL RESEARCH SERVICE (ARS)

Title and purpose statement of each program or activity which affects 
        older Americans

    The Jean Mayer USDA Human Nutrition Research Center on 
Aging (HNRCA) at Tufts University was established by Congress 
through the Food and Agricultural Act of 1977 as one of five 
mission-oriented research centers designed to study the effect 
of human nutrition on health. HNRCA's creation was a major 
response of the federal government to the growing awareness of 
the need for improved nutrition recommendations for the 
American public throughout the life cycle. The overall mission 
of the HNRCA is to explore the relationship between nutrition 
and good health and to determine the nutritional and dietary 
requirements of the maturing and elderly population. The 
interaction between nutrition and the onset and progression of 
aging and associated degenerative conditions is of special 
concern. HNRCA scientists conduct cell and molecular biology, 
animal model, and human metabolic and field studies to further 
their understanding of the processes of nutrient utilization 
and metabolism to determine ways by which diet in combination 
with genetic and environmental factors may promote health and 
vigor over the lifespan.
    Antioxidants Research Laboratory. The mission of the 
Antioxidants Research Laboratory is (1) to understand the role 
of antioxidant nutrients and other environmental factors on 
free radical reactions and lipid peroxidation events during the 
aging process and (2) to elucidate the impact of these 
phenomenon age-related changes in nutrient requirements and 
chronic degenerative conditions. The lab pursues its mission by 
exploring the effects of specific nutrients, especially 
vitamins E and C, carotenoids, glutathione and polyunsaturated 
fatty acids as well as factors such as exercise and xenobiotics 
on free radical-mediated oxidative damage. Animal models, cell 
cultures, and human volunteers are employed in this research 
program.
    Body Composition Laboratory. The Body Composition 
Laboratory's mission is to evaluate the effect of nutrition on 
the dynamic interactions between the body's protein, water, 
fat, and bone and to study the relationship of these changes to 
the process of aging. The laboratory includes four principal 
facilities: Whole Body Counter; Partial Body and Small Animal 
Counter; Neutron Activation Facility; and Neutron Generator 
Facility for the in vivo measurement of fat.
    Calcium and Bone Metabolism Laboratory. The mission of the 
Calcium and Bone Metabolism Laboratory is to examine ways in 
which diet and nutritional status in combination with exercise 
and hormones, particularly estrogen and parathyroid hormone, 
influence age-related loss of bone density. To determine the 
extent to which increased calcium and vitamin D intake can 
mitigate bone loss and prevent the development of osteoporosis 
and spontaneous fractures in the elderly. This mission is 
pursued through clinical studies in which the effects of 
modifying the diet and/or activity level on calcium absorption 
and bone density are measured in healthy, elderly volunteers. 
In addition, the process of intestinal adaptation to altered 
calcium intake is being examined and compared in black and 
white women.
    Energy Metabolism Laboratory. The mission of the Energy 
Metabolism Laboratory is to examine how body weight is normally 
regulated and why many people tend to gain weight as they grow 
older. The importance of genetic and environmental factors in 
determining body composition and energy regulation, and 
quantifying optimal dietary energy requirements are under 
investigation. Research involves studies at the level of whole-
body physiology such as examining the importance of energy 
expenditure and energy intake in determining body fat gain 
during adult life. In addition, hormonal and cellular 
investigations are underway to identify the underlying 
metabolic cause of differences in body composition and energy 
regulation between people.
    Gastrointestinal Nutrition Laboratory. The Gastrointestinal 
Nutrition Laboratory's mission is to determine how aging and 
associated factors such as medication use affect the intestinal 
absorption and metabolism of micronutrients, including 
carotenoids. Experimental animal and cell culture models, and 
human volunteers are employed in studies to investigate whether 
changes in the Recommended Dietary Allowances (RDA) for niacin, 
vitamin A, vitamin B2, vitamin B6, vitamin B12 are warranted 
for the elderly. The chemopreventive effects of carotenoids 
against cancer are explored. In addition, research is conducted 
in elderly subjects with atrophic gastritis or hypochlorhydria, 
a significant sub-population of elderly at risk for impaired 
nutrient absorption and gastric cancer. Perfused intestinal 
segments and mesenteric lymph cannulae are also used in animal 
models characterizing the kinetics, energy requirements and 
age-associated changes in micronutrient uptake and clearance.
    Genetics Laboratory. The mission of the Genetics Laboratory 
is to examine the molecular mechanisms by which diet and 
development regulate metabolic pathways at the genetic level. 
The major focus is the absorption, storage and utilization of 
nutrient energy. This process constitutes a complex homeostatic 
system in mammals, balancing energy intake and expenditure 
while maintaining energy stores. Consequently, the nutrient 
regulation of gene expression is highly complex, involving 
numerous positive and negative stimuli. In vitro and in vivo 
molecular techniques are used to determine how individual 
nutrients activate and suppress transcription. Little is known 
about the genetic control of the process of lipogenesis which 
underlies the accumulation of body fat and synthesis of 
circulating fats. Molecular techniques are used to study the 
dietary and hormonal control of lipogenesis in the liver. The 
focus is to determine the DNA sequence elements that regulate 
lipogenic gene transcription in response to diet and hormones; 
to identify the critical transacting factors that interact with 
these elements and how they transduce dietary and hormonal 
signals; and to determine how altered transcription of 
lipogenic genes in diabetes and obesity affect lipogenesis and 
the response to nutritional stimuli.
    Laboratory or Nutrition and Vision Research. The Laboratory 
for Nutrition and Vision Research's mission is to determine the 
primary causes of eye lens cataract and degeneration of the 
macula and to apply that knowledge to extend the useful life of 
these organs. Current approaches involve defining adequate 
levels of nutrients during various life stages which will 
result in delayed accumulation of damaged proteins in lens and 
retina, as well as delayed lens opacification and age-related 
maculopathy. The laboratory pursues this mission principally 
using clinical/epidemiologic studies and laboratory tests, 
human and other mammalian lens tissue, animal models, whole 
lenses and lens epithelial cells in culture. Since the lens is 
primarily composed of protein, a significant effort is made to 
understand interrelationships between aging, regulation of lens 
protein metabolism, protease function and expression, and 
nutrition.
    Lipid Metabolism Laboratory. The Lipid Metabolism 
Laboratory's mission is to define the interrelationships 
between lipoprotein metabolism, nutrition and the aging process 
and to develop recommendations for older adults regarding 
dietary fat and cholesterol in an effort to minimize 
cardiovascular risk factors and atherosclerosis. Research 
focuses on defining the biochemical parameters which identify 
individuals at risk for premature coronary artery disease and 
optimal diets which minimize plasma lipoprotein abnormalities 
in the elderly; the short- and long-term regulation of plasma 
lipoproteins by diet; the nutritional regulation of lipoprotein 
synthesis and apolipoprotein gene expression in vitro and in 
vivo; the nutritional requirements for essential fatty acids 
with aging; and prevention of diet induced atherosclerosis. 
Methodologies established in the laboratory include lipoprotein 
isolation by ultracentrifugation, automated standardized 
enzymatic lipid analysis, gradient gel electrophoretic analysis 
of plasma lipoproteins, apolipoprotein isoelectric focusing, 
apolipoprotein quantitation by enzyme linked immunoassays, 
stable isotope kinetic studies, fatty acid analysis by gas 
liquid chromatography, cell culture studies, DNA isolation and 
genomic blotting analysis, specific mRNA quantitation, DNA 
amplification and gene cloning and sequencing.
    Mineral Bioavailability Laboratory. The Mineral 
Bioavailability Laboratory's mission is to examine the 
biochemical and physiologic basis for changes in absorption and 
utilization of minerals with aging and to determine the effects 
of aging on mineral requirements in the elderly. Research 
focuses specifically on calcium, magnesium and zinc metabolism, 
and the effects of nutrient and hormonal changes on the 
expression of genes which modulate mineral metabolism.
    Nutrition, Exercise Physiology and Sarcopenia Laboratory. 
The mission of the Nutrition, Exercise Physiology and 
Sarcopenia Laboratory is to explore the interaction between 
nutrition, exercise and aging and to understand how physical 
activity affects nutrient requirements and functional capacity 
in the elderly. The extent to which aging alters the adaptive 
responses to increased physical activity is largely unknown, 
particularly its effects on protein metabolism. The laboratory 
is focusing its activities on the metabolism and requirements 
of several macronutrients and how they change with age and 
activity. The laboratory makes use of stable isotope probes and 
the euglycemic glucose clamp technique to establish how energy 
expenditure, body composition and the turnover of whole body 
nitrogen and glucose vary in the population with increasing 
age, particularly with regard to changes in amount of physical 
activity. Through the use of these techniques, it can be 
established how these changes affect substrate requirements.
    Nutritional Immunology Laboratory. The Nutritional 
Immunology Laboratory investigates the role of dietary 
components and their interactions with other environmental 
factors in age-associated changes of the immune and 
inflammatory responses. Research looks to reverse and/or delay 
the onset of these immunologic and age-related changes by 
appropriate dietary modifications and to determine the 
molecular mechanisms by which antioxidant and prooxidant 
nutrients modulate immune cell functions. Methods are being 
developed to use the immune response as a biologically 
meaningful index in determining specific dietary requirements.
    Nutritional Epidemiology Program. The mission of the 
Nutritional Epidemiology Program is to identify the 
determinants of nutrition status in the elderly, to relate 
nutrition status to health and well-being, to define groups at 
special risk of nutritional problems, and to evaluate nutrition 
programs which service the elderly. Research addresses age-
associated changes in energy and nutrient intake; 
constitutional, psychosocial and environmental determinants of 
food choices; nutritional determinants of neurobehavioral 
function, and of age-related changes, such as lens 
opacification.
    Vitamin K Research Program. The mission of this program is 
to determine dietary needs for vitamin K, and the contribution 
that various forms of vitamin K make to general health and 
well-being during the aging process. Vitamin K is responsible 
for introducing unique calcium-binding sites (gamma-
carboxyglutamic acid residues) into vitamin K-dependent 
proteins. Prior to 1976, the only known proteins (prothrombin, 
Factors VII, IX, & X) thought to be vitamin K-dependent were 
involved in blood coagulation. Today other vitamin K-dependent 
proteins (Proteins C & S) involved as anticoagulants are known. 
Protein S, osteocalcin and matrix gla protein are vitamin K-
dependent proteins involved in bone biology. As new vitamin K-
dependent proteins continue to be discovered, it is apparent 
that vitamin K has roles outside of its well-established role 
in regulation of blood clotting. The goals of the program are 
to develop new methods for the biochemical, functional, and 
dietary assessment of vitamin K nutritional status, and to 
determine the nutritional sources, bioavailability and 
requirements of vitamin K in humans at different stages of the 
aging process. Epidemiologic studies are being undertaken to 
examine the relationship between vitamin K status and chronic 
diseases, such as cardiovascular disease and osteoporosis.
    Vitamin Metabolism Laboratory. The mission of the Vitamin 
Metabolism Laboratory is multifaceted. The Lab studies the 
bioavailability of water soluble vitamins in the aging 
population and determines the effect of aging on vitamin 
requirements; examines the basis for the absorption, 
utilization, and excretion of water soluble vitamins from food 
in the maturing and elderly population; assesses vitamin status 
and its relationships to drug intake and chronic diseases; 
studies the impact of subclinical vitamin deficiencies on the 
integrity and function of body physiology; studies the 
pathogenesis and pathophysiology of homocysteinemia; determines 
the relationship of vitamin status to chronic diseases; and, 
determines the relationship between folate status and 
dysplasia.

                  Brief description of accomplishments

    Elevated levels of blood vitamin C is associated with 
protection against eye disease. Scientists have determined the 
minimal vitamin C intake needed to provide maximum protection 
for eye tissue. Results indicate that in humans, elevated 
vitamin C intake is associated with markedly reduced risk for 
cataracts of the eye.
    Age associated changes in behavior may result from 
increased sensitivity to oxidative stress. Evidence indicates 
that abilities to mitigate the effects of oxidative stress and 
repair tissue damage due to oxidative stress show a decline as 
people grow older. Data indicate that one of the major sites of 
action of oxidative stress are the membrane of neurological 
cells. It is suggested that attempts to increase protection 
through diets rich in total antioxidant capacity from fruits 
and vegetables might prevent or reverse the deleterious 
oxidative-stress effects of neurological functions.
    Older people might reduce their risk of gaining weight by 
eating smaller, more frequent meals. These findings are from a 
study that was the first to measure fat oxidation after eating. 
It was aimed at revealing underlying causes behind an age-
related increase in body fat, which typically doubles between 
the ages of 20 and 50 to 60 years.
    Scientists conducted the first population-based study of 
vitamin D with 759 free-living volunteers. Findings suggest 
that inadequate vitamin D is an important public health problem 
in older Americans. Vitamin D is essential for healthy bones 
and teeth and helps prevent osteoporosis. Studies show that 
Vitamin D status is better for elderly men and women in the 
general population than for elderly hospital patients, 
confirming the importance of eating foods rich in vitamin D and 
exposing skin to sunlight.
    Findings have identified an instigator behind the age-
related decline in T cell function, which coordinates the 
body's response to an infectious agent or a would-be tumor. 
What's more, they were able to reduce the effects of this 
instigator in cultured cells. The finding brings science a 
little closer to defining how people can maintain a healthy 
immune system well into old age.
    Researchers have identified a negative role of high dietary 
calcium intakes on zinc homeostasis in the elderly. 
Specifically, a high calcium intake reduced zinc retention, a 
finding of substantial relevance to consumers who self-
prescribe calcium supplements and may thereby put them at risk 
of zinc deficiency.

Human Nutrition Research Center on Aging--Research Projects Related to 
Nutrition and the Elderly

                                                           Funding level
                                                             fiscal year
                                                                 dollars
Functional Capacity and Nutrient Needs of Aging--1/11/95-1/10/
    00. Objective: To examine the effects of increased 
    physical activity, body composition and diet on the 
    following: (1) peripheral insulin sensitivity and glucose 
    metabolism; (2) functional capacity and nutrition status 
    of the frail elderly; (3) whole body and skeletal muscle 
    protein metabolism; and (4) total energy expenditure and 
    its relationship to physical activity level and body 
    composition...............................................   940,560
Function and Metabolism of Vitamin K and Vitamin K Dependent 
    Proteins During Aging--1/11/95-1/10/00. Objective: 
    Molecular, biochemical and functional assays of vitamin K 
    nutritional status and dietary tools for the assessment of 
    vitamin K intakes will be developed and validated. In vivo 
    studies with rats will determine dietary sources of 
    vitamin K and requirements related to the synthesis of 
    matrix gla protein (MGP). The effects of aging and gender 
    on the expression of MGP will be studied in relationship 
    to dietary sources of vitamin K (phylloquinone and 
    menadione) and vitamin K antagonists......................   904,769
Absorption & Metabolism of Phytochemicals: Enhancement of 
    Antioxidant Defense Mechanisms in Aging--10/01/96-09/30/
    99. Objective: Determine (1) extent of absorption and 
    metabolism of flavonoids in fruits and vegetables high in 
    antioxidant activity, (2) usefulness of Oxygen Radical 
    Absorbing Capacity (ORAC) assay as an indicator of 
    antioxidant capacity of fruits and vegetables and status 
    in animal models exposed to increased oxidative stress, 
    and (3) possible health related outcomes..................   370,184
Dietary Antioxidants, Aging, and Oxidative Stress Status--11/
    01/94-10/31/99. Objective: To determine the effect of 
    enhancing antioxidant status, on oxidative status, immune 
    responsiveness, and other physiologic functions, 
    interactions between vitamin E, other dietary antioxidants 
    and/or polysaturated fatty acids, the effect of dietary 
    antioxidants on the generation of eicosanoid and cytokine 
    products and oxidated lipid, protein and nucleic acid 
    targets, the value of measures of antioxidants and 
    oxidative stress status as biomarkers of aging and health.   670,700
Gastrointestinal Function and Metabolism in Aging--11/01/94-
    10/31/99. Objective: To delineate the pathways of 
    intestinal carotene metabolism, and to determine if any 
    metabolic intermediate can transactivate nuclear 
    receptors; to determine if beta-carotene or cryptoxanthin 
    can prevent gastric cancer in the feffet/model; to 
    determine relative bioavailabilities of different 
    carotenoid compounds in the human. To determine niacin 
    requirements in elderly humans. To study the effect of 
    antioxidants in gut immunity in young and elderly adults.. 1,684,467
Nutrition, Aging and Immune Response--11/01/94-10/31/99. 
    Objective: Investigate the role of nutrients and their 
    interactions with other environmental factors in age-
    associated changes of the immune response, to reverse and/
    or delay the onset of these immunological changes by 
    dietary modification and to use the immune response as an 
    index in determining the specific dietary requirements for 
    older..................................................... 1,033,933
The Role of Aging in Energy and Substrate Regulation and Body 
    Composition--1/11/95-1/10/00. Objective: To examine the 
    extent and causes of changes in energy metabolism, energy 
    regulation and body composition with agin, and to 
    investigate optimal values for dietary energy intake and 
    expenditure in the aging population. In particular to 
    determine the (1) roles of genetic inheritance and 
    environment factors in determining fat content, (2) extent 
    to which changes in body fat and protein with aging are 
    inevitable, and (3) molecular regulation of proteins 
    involved in fat metabolism in adipocytes.................. 1,879,726
Regulation of Gene Expression in Nutrient Metabolism--01/11/
    95-01/10/00. Objective: The major areas being explored are 
    aimed at defining the molecular mechanisms which 
    contribute to metabolic dysfunction in diabetes and 
    obesity. Specifically, the role of oxidants in nutrient 
    and hormonal signal transduction and gene expression will 
    be examined. Secondly, how aging influences nutrient and 
    hormonal signaling and gene expression will be explored...   432,679
Mineral Bioavailability in the Elderly--01/11/95-01/10/00. 
    Objective: To define the dietary factors that influence 
    the Bioavailability, requirements, and status of minerals 
    especially, Ca, Mg, Fe and Zn in humans. To define the 
    relationship between restriction fragment length 
    polymorphisms in the vitamin D receptor gene and calcium 
    metabolism in humans. To define the mechanism of age-
    associated intestinal calcium malabsorption...............   610,334
Bioavailability of Nutrition in the Elderly--01/11/95-01/10/
    00. Objective: To study the bioavailability of water 
    soluble vitamins in the aging population and determine the 
    effect of aging on vitamin requirements. To examine the 
    basis for the absorption utilization and excretion of 
    water soluble vitamins from food in the maturing and 
    elderly population. To assess vitamin status and its 
    relationships to drug intake and chronic diseases. To 
    study the impact of subclinical vitamin deficiencies on 
    the integrity and function of body physiology.............   901,017
Dietary Assessment of Rural Older Persons--02/01/96-12/31/00. 
    Objective: (1) Test dietary assessment methodologies (24-
    hr phone recalls and written food records) in a rural 
    population of older persons. (2) Seek confirmation of 
    dietary findings using doubly-labeled water and indirect 
    calorimetric procedures. (3) Correlate dietary findings 
    with biomarkers of nutritional status (i.e., measures of 
    visceral protein, folate, B 12, pyridoxine, homocysteine 
    and iron). (4) Investigate nutrition knowledge and 
    practices (use of dietary supplements and reduced calorie 
    foods) of rural older persons.............................   186,857
Maintaining Bone Health in the Elderly--11/01/94-10/31/99. 
    Objective: Define the intake of calcium and vitamin D 
    above which skeletal mineral is maximally spared. This 
    requires an understanding of how hereditary, demographic, 
    endocrine, and physical factors (i.e., race, sex, age, 
    years since menopause, weight, and activity level) affect 
    the absorption and utilization of these nutrients. Race 
    differences in bone metabolism will be sought in an effort 
    to understand why blacks have less osteoporosis........... 1,100,401
Dietary Effects on Neurological Function--10/01/96-09/30/99. 
    Objective: Identify selected food components that affect 
    neurological function and determine their mechanism of 
    action....................................................   633,579
Lipoproteins, Nutrition and Aging--01/11/95-01/10/00. 
    Objective: To develop optimal diets in terms of fat and 
    cholesterol content which are effective in reducing LDL 
    cholesterol, as well as favorably affecting other heart 
    disease risk factors, to study nutritional regulation of 
    plasma lipoproteins in animals, and to study the 
    interrelationships between aging, nutrition, genetics, and 
    to examine ways to prevent diet-induced atherosclerosis, 
    lipoproteins, and heart disease risk in populations....... 1,285,299
Effect of Nutrition and Aging on Eye Lens--01/11/95-01/10/00. 
    Objective: One-half of the eye lens cataract operations 
    and savings of over $1 billion would be realized if 
    formation could be delayed by only 10 years. Enhancement 
    of dietary antioxidants, such as vitamin C, and other 
    nutrients, such as carotenoids or tocopherol, will be used 
    to delay damage to lens proteins and proteases and to 
    maintain visual function in elderly populations. This 
    should delay, cataract-like lesions in eye lens 
    preparations, cataracts in vivo, and age-related 
    maculopathy...............................................   958,286
Epidemiology Applied to Problems of Aging and Nutrition--01/
    11/95-01/10/00. Objective: To define diet and nutrition 
    needs of older Americans. To advance methods in 
    nutritional epidemiology. To develop indices which reflect 
    nutrient intake and which predict health or disease 
    outcomes in aging populations............................. 1,250,359

  COOPERATIVE STATE RESEARCH, EDUCATION, & EXTENSION SERVICE, (CSREES)


                      Programs and Accomplishments


Title and purpose statement of each program or activity which affects 
        older Americans

    The Cooperative State Research, Education, and Extension 
Service (CSREES) in its mission advances research, extension, 
and higher education in the agricultural, environmental, and 
human sciences to benefit people, communities, and the Nation. 
As a major research and education arm of USDA, CSREES through 
its Land-Grant institution network has conducted educational 
and research programs that have benefited older persons, their 
adult children, and caregivers. The vision is for older persons 
to maintain and continue a quality lifestyle while aging; have 
a greater opportunity to be financially secure; experience 
positive human relations; and to have the knowledge necessary 
to access health care options.
    CSREES and its state partner institutions collaborate with 
a variety of national, state, and local organizations and 
agencies such as the American Association of Retired Persons 
(AARP) including the AARP Grandparent Information Center, the 
National Association for Family and Community Education, the 
Hospice Foundation of America, the Administration on Aging, the 
Area Agencies on Aging, American Society on Aging, American 
Gerontological Society, the Brookdale Foundation Group, 
Grandparents United for Children's Rights, Family Support 
Education Program, Generations United, Health Care Financing 
Administration, and Federal/State/local departments of human/
family services and health. This collaboration provides more 
well-coordinated programs for consumers and extends the 
resources of each collaborator to better serve the clientele.
    As a component of the CSREES National Initiative on 
Children, Youth, and Families at Risk, human and electronic 
networks are addressing targeted issues identified by 
professionals and stakeholders throughout the system. One of 
those networks, the National Network for Family Resiliency 
(NNFR), provides leadership for acquisition, development, and 
analysis of resources that foster family resiliency. Family 
resiliency is defined as the family's ability to cultivate 
strengths to positively meet the challenges of life. The NNFR 
brings together educators, researchers, agency personnel, 
families, advocates for families, and practitioners who share 
an interest in strengthening families that face multiple risks 
to their resiliency. Collaborators from CSREES and more than 40 
Land-Grant institutions share leadership for maximizing 
expertise, bringing research to bear on significant family 
issues, and guiding research based on evaluation of programs 
and practices. The network provides access to resources through 
multiple avenues including electronic media, training and 
education, and community development. Within the network, a 
special interest group has formed to address intergenerational 
issues. The work group is composed of more than 35 multi-state 
and multi-institutional members. Currently their focus is on 
``grandparents raising grandchildren'' and ``relationships 
between generations.''
    An Internet web site was developed that highlights 
resources for grandparents/relatives as primary caregivers and 
promotion of positive intergenerational relationships for 
educators and the general public. A variety of topics are 
included in the web information. For example, information on 
elder abuse, family support, and families with special needs 
are included. An extensive collection of curriculum, research 
abstracts, and educational resources/materials can be found on 
the web site. The Internet address is .
    The Intergenerational Special Interest Work Group has 
planned a national video conference entitled, ``Grandparents 
Raising Grandchildren: Implications for Professionals and 
Agencies. The video conference will be held January 12, 1999. 
The University of Wisconsin-Extension Cooperative Extension 
Service and Purdue University Cooperative Extension Service are 
the lead institutions for this project.
    The video conference will provide training for 
professionals from a broad spectrum of family-serving 
organizations and agencies. Participants will explore the 
issues facing grandparents raising their grandchildren, examine 
the latest research, and learn about resources for clientele. 
The ultimate goal is more educational programs for the nearly 4 
million grandparents serving as primary caregivers for their 
grandchildren. This is a rapidly emerging social and 
educational concern and most professionals need more training 
to better serve this growing clientele group.
    A number of land-grant institutions have active programs 
designed to help relatives be more capable caregivers. For 
example, the University of Kentucky Extension Service teaches 
parenting techniques, use and access of community agencies, 
computer literacy, and mutual support techniques for caregiving 
grandparents. Grandparents participate in monthly support group 
meetings and receive a newsletter. In New Hampshire, the 
Cooperative Extension Service offers a series of classes 
through a community resource center to grandparents parenting 
their grandchildren. Cornell Cooperative Extension, North 
Carolina State University Cooperative Extension Service, and 
Purdue University Cooperative Extension provide similar 
programs to grandparents facing parenting again.
    A national program funded by the Brookdale Foundation Group 
of New York City provides supportive services for programs 
focusing on grandparents and other relatives who have assumed 
the responsibility of surrogate parenting. The initiative calls 
attention to state and local needs by supporting the 
establishment of statewide networks of local organizations and 
statewide task forces, relative support groups, and community-
based services to grandparents and other relatives raising 
grandchildren. The University of Wisconsin-Extension and 
Cornell University Extension Service received seed grants from 
the Foundation during 1998 to allow Cooperative Extension 
System personnel to expand their programming to address this 
growing societal issue.
    CSREES and the Cooperative Extension System launched 
another national initiative, Healthy People * * * Healthy 
Communities in June 1998. The goals of the initiative are to 
(1) Educate and empower individuals and families to adopt 
healthy behaviors and lifestyles, (2) Educate consumers to make 
informed health and health care decisions, and (3) Build 
community capacity to improve health. Target audiences include 
older citizens.
    Partnerships are being formed with the Centers for Disease 
Control and private corporations to address life cycle 
immunization education. Older citizens need to be able to make 
informed decisions about vaccinations.
    With enormous change taking place in the health care arena, 
the land-grant university system will be able to help consumers 
make informed decisions regarding health care choices. The 
initiative will marshal the extension, teaching, and research 
system and its stakeholders to address these and other health 
care issues of interest to older Americans.
    Through the Cooperative Extension System at Land-Grant 
institutions, administrators and specialists in such fields as 
aging/gerontology, housing, financial management, nutrition, 
health, human development, family life, community development, 
and the agricultural sciences; plus the county extension 
educators serving 3,150 counties have designed, implemented, 
and evaluated numerous programs in the field of aging/
gerontology. Below are highlights of these programs.

Brief description of accomplishments

                                GEORGIA

    The University of Georgia Cooperative Extension Service 
produces a quarterly newsletter entitled, ``Senior Sense 
Putting Knowledge to Work for Older Georgians.'' The newsletter 
is distributed to 2,700 persons and is also available on the 
College of Family and Consumer Sciences web page, where it is 
accessed and read worldwide. Topics covered in the newsletters 
include health issues, financial management, and care giving 
tips.

                                 IDAHO

    In Idaho, the rapid growth in the numbers of elderly 
citizens has produced the need for more people trained with an 
understanding of aging development and a wide variety of 
approaches to serving the elderly. An Idaho extension/research 
specialist joined forces with a teaching/research colleague to 
develop an interdisciplinary minor in aging in the School of 
Family and Consumer Sciences at the University of Idaho. A team 
of professionals from academic programs in psychology, 
sociology, architecture, family and consumer sciences, 
communications, and a representative from the library developed 
a proposal and submitted it to the Idaho Board of Education. 
The program has been approved. A minor in Aging will be an 
important career compliment to majors as the student develops 
expertise in a subject matter support area like aging.
    The University of Idaho Cooperative Extension Service (CES) 
and vocational education staff identified a need for additional 
trained home health aides by the year 2005. They discovered 
that 890 people were employed as aides in 1994 but by the year 
2005, 1244 would be needed to meet the demand. The CES and the 
Idaho Department of Vocational Education collaborated to plan a 
secondary and post-secondary program for Geriatric Home Care 
Aides. They compiled a curriculum to be used to train home care 
aides, piloted the program, established sites for student 
clinical experience and internships, and established a system 
for graduate placement. Upon completion of the program 
including the internship, the student will be eligible to take 
the examination for Certified Nurse Assistant certification. In 
Idaho, these positions command approximately $8.00 per hour and 
prepare people for a wide variety of career paths.
    In October 1998, the University of Idaho Cooperative 
Extension Service hosted their annual conference focused on 
issues of aging and health. The conference provided 
professional update and continuing education units for 175 
agency personnel who provide health care and services for the 
elderly.

                                MICHIGAN

    Michigan State University Cooperative Extension Service is 
in a partnership with Blue Cross and Blue Shield of Michigan, 
Kirtland Community College, Michigan Rural Aging Institute, 
Office of Services to the Aging, Michigan Department of 
Community Health, and the Michigan Family Independence Agency 
to provide caregiver training that will prepare caregivers to 
improve the care provided to older persons. Annually 4,000 
caregivers of older adults are trained on such topics as 
financial and legal issues of older adults, dementia, 
understanding difficult behaviors, working with the frail 
elderly, and financial abuse of the elderly. The training is 
provided statewide using distance learning technology. 
Caregivers obtain certification for completion of the training.

                               MINNESOTA

    A program for transferring non-titled property among family 
members after a death was created by the University of 
Minnesota Extension Service. ``Who Gets Grandma's Yellow Pie 
Plate?'' is an estate planning process through which 
individuals can plan to share with their family members their 
possessions and record the meanings associated with the 
property while they are living. This program has been widely 
replicated throughout the country.
    In preparation for the ``Minnesota Celebration of 
Community'' effort during the year 2000, school children listen 
to oral histories of elders; create songs, recitations, and art 
based on the personal stories of their elders. The program 
culminates in a community-wide celebration honoring older 
citizens.

                                MISSOURI

    The Center on Aging Without Walls is a unique way to bring 
information on age-related issues to the University Outreach 
and Extension network, to the older adults of the State of 
Missouri, and the many caregivers who provide care for older 
citizens. The Center is a web site made possible through a 
partnership between the Center on Aging Studies at the 
University of Missouri--Kansas City and the University of 
Missouri Outreach and Extension. Care giving issues have been 
addressed in this initial phase of the web site. Topics covered 
include burdens and rewards, care giver resources, ethics, 
health concerns, family relationships, and mental health. The 
web address is .
    ``Building Bridges'' is a collaborative program which 
provides opportunities for children and seniors to interact. 
The program targets the frail and home-bound elderly. Through 
the three components of the program--education, friendship, and 
caring--children learn from and develop positive images of the 
elderly and help older adults achieve a sense of fulfillment. 
In consideration of the needs of the elderly and the children, 
a variety of appropriate activities occur such as visits to 
nursing homes, tutorial assistance for children, interviewing, 
story telling, reading, and dancing.

                                NEW YORK

    A Cornell University program that has young people and 
senior citizens interacting in ongoing activities has become a 
national model. A detailed handbook for group leaders who want 
to replicate the program is available nationally. Geared for 
children ages 9 to 13, but easily adaptable for other ages, 
Project EASE--Exploring Aging through Shared Experiences--is 
ideal for groups of scouts, 4-H groups, religious youth groups, 
after-school programs and other youth organizations. It can 
also be utilized in the classroom. The project is based on 
current research on the effectiveness of intergenerational 
programs to develop activities and projects that youth and 
senior citizens can share for mutually satisfying, meaningful 
and goal oriented interaction. Three years in development, 
Project EASE has been field tested and evaluated by more than 
70 4-H clubs in New York, involving about 600 participants. The 
youth and seniors may plan a joint community service project in 
which children and elders work together on an activity that the 
community will value; shared group activity projects that both 
groups enjoy but are not community service; and one-on-one 
programs, in which each youth is paired with a senior in 
activities such as arts and crafts, sharing oral histories, 
grooming pets, playing board games, etc. This project is 
supported in part with grants from the Charles Stewart Mott 
Foundation, the Public Welfare Foundation, and the College of 
Human Ecology at Cornell.
    In another innovative program, Cornell University 
researchers, Coperative Extension Service faculty, and State/
local volunteers, and community agencies are addressing housing 
options for senior citizens. Twenty counties in New York have 
provided multi-faceted educational programs about community-
based housing options for the elderly for both professionals 
and the public. Professionals, housing and human service agency 
staff, municipal officials, and residents have new capacity to 
respond the population. As a result of this project, they are 
knowledgeable about low-cost community-based housing options 
such as shared housing, accessory apartments, and elder 
cottages. As a result of Cornell's research and extension 
outreach, state legislation was passed to provide capital 
funding for the creation of these new types of housing units. 
Municipal land-use and zoning regulations have been changed to 
permit the development of this housing in approximately 25 
communities. Technical assistance is provided to attorneys and 
community planners about zoning and land-use regulations. There 
are now 12 shared living residences in communities throughout 
the State. A not-for-profit organization has received $375,000 
from the State to develop and operate an elder cottage lease 
program for low-income elderly.

                             NORTH CAROLINA

    The North Carolina Aging with Gusto program has been 
adopted in more than half of the housing needs of an increasing 
older North Carolina's 100 counties. This program is believed 
to be unique nationally because it focuses on the positive 
aspects of aging in how to achieve optimum financial, physical, 
and mental well-being in later years. Older adults learn how to 
prepare for and cope with problems related to finances, legal 
issues, health, care giving, housing and self-care. Recent 
figures suggest that the program has reached more than 35,000 
people directly.
    North Carolina Cooperative Extension Service (CES) and the 
North Carolina Division of Aging have collaborated to pilot a 
new approach by distributing nutrition education materials with 
the Meals on Wheels food deliveries. This is one way to reach 
home-bound elderly that are especially difficult to reach and 
who are at greater risk of malnutrition and chronic disease. 
Sixteen different learn-at-home lessons have resulted in 
positive changes in the stages of change for fruit and 
vegetable consumption as evidenced in the pre- and post-test 
from 177 participants in five counties.
    To address another important issue for seniors, North 
Carolina CES and the North Carolina State Attorney General's 
Office worked together to educate older adults about consumer 
scams. In one county, 785 seniors were reached with 80 percent 
reporting they would be more cautious about telephone and mail 
solicitations and 77 percent stated that the program motivated 
them to change some of their consumer practices such as: avoid 
sharing credit card information on the telephone, making 
financial donations to known charities and organizations, and 
checking on offers that are ``too good to be true.''

                                 OREGON

    Oregon State University Cooperative Extension Service (CES) 
has a grant to study Behavioral Changes in Dementia Patients: 
Relationships to Caregiver Well-Being. Currently data is being 
collected on caregivers to Alzheimer's patients. The goal of 
the research is to expand the understanding of later life care 
giving to dementia patients and its consequences on caregivers' 
mental and physical health. Extension curricula will be 
developed as a result of this research.
    Dissemination of research-based information is the hallmark 
of the Cooperative Extension System. A network of professional 
educators provide such information in community-based settings. 
For example, Oregon State University is in a four university 
consortium to provide geriatric education with a special 
emphasis on reaching rural areas. A grant from the Geriatric 
Education Center Training Grant, Department of Health and Human 
Services, Public Health Services makes this program possible. A 
special focus is on reaching rural health care professionals to 
update and expand their knowledge of geriatric health issues. 
Oregon CES has disseminated 13 health guidelines for consumers 
relevant to older populations to 2,700 English and over 625 
Spanish consumers. In addition, Extension sponsored four 
teleconferences on a variety of women's health issues in later 
life with satellite downlinks in 27 sites throughout the State.

                              PENNSYLVANIA

    Pennsylvania State University Cooperative Extension Service 
(CES) has a preventive health program for people over age 75 
and their family caregivers. The program provides independent 
living through lifestyle changes, nutrition, and regular 
exercise. Developed in rural Pennsylvania in Tioga, Bradford, 
Sullivan, and Susquehanna counties, this program reaches an 
extremely high-risk population. Ninety percent of the 
participants had annual household incomes below $20,000, and 84 
percent had only a high school or less education. High 
percentages had nutrition risk, low levels of physical 
activity, and losses in daily living activities. This program 
will be expanded statewide.
    Pennsylvania CES has also provided a program entitled 
``Medicare Managed Care: What Does It Mean For You?'' More than 
190 senior citizens and health care professionals in Centre 
County, Pennsylvania, participated. The six sessions were 
organized by Penn State's College of Agricultural Sciences and 
the Pennsylvania Office of Rural Health, in collaboration with 
Centre County CES, American Association of Retired Persons, 
Centre County Office of Aging Apprise Program, and the 
Brookline Village.
    In Allegheny County the Extension Service assisted 
residents of Carnegie Towers public housing in Pittsburgh to 
organize and take leadership for a fledgling community. 
Originally built for low income elderly citizens, a 
predominantly young population now occupies the project. Most 
of the households are headed by single, low-income females. 
Intergenerational conflicts existed between elderly residents 
and children, partly because the housing area did not include 
recreational facilities for youth. After Extension leader 
training workshops were completed, residents organized and 
elected a tenant council of eight adults and one youth. Since 
organizing, the council has sponsored a Community Day 
Celebration, supported by various fund raising activities. They 
have established a computer room with computer training 
classes, an outdoor play area, Extension educational programs 
related to 4-H youth development and nutrition, and a program 
highlighting guest speakers who provide useful and practical 
information.
    ``Generation Celebration'' is designed to help students 
develop communication skills and to foster positive attitudes 
about older persons. This awareness program uses a variety of 
activities including family history, shared recreation, and 
visits to long-term care settings. In some communities, high 
school youth have adapted the program to include networking 
with the Area Agency on Aging to provide regular telephone 
reassurance to a vulnerable older person and in some instances 
developing communication skills that improve the functioning of 
dementia patients and family members in institutional care 
facilities.

                             SOUTH CAROLINA

    Clemson University Cooperative Extension Service (CES) 
specialist Katherine Carson has developed a program entitled, 
Learning, Innovation, Networking, and Celebration (LINC) 
nutrition program. LINC focuses on the elderly and preschool 
children, as well as pregnant and parenting adolescents. 
Changes in attitude, skills, knowledge, and behavior are 
documented. LINC has reached 2,407 elderly South Carolinians. 
LINC is a collaborative effort between the Clemson University 
CES, the South Carolina Department of Social Services, and the 
State Department of Health and Environmental Control Center for 
Health Promotion. South Carolina Governor David Beasley has 
recognized Carson for developing a nutrition program that 
reaches senior citizens by presenting her with the Governor's 
Health Promotion for Older South Carolinians Award. This 
program will be expanded with the assistance of a $759,000 
grant from USDA Food and Consumer Services. One phase of the 
expansion will include a Nutrition Education and Resource 
Center on the Internet for people who want information rapidly.

                                 TEXAS

    Project Y.E.S. promotes positive intergenerational 
relationships between youth and seniors by training 4-H and 
FHA-HERO youth to provide assisted-living services that enhance 
independent lifestyles for the elderly in rural communities. 
Youth provide housekeeping, personal services, lawn care, and 
home/auto repair for the elderly. In return, the elder 
recipients of the services share their time and talent with the 
youth. Youth learn more about the aging process, communicating 
among generations, and potential career options. The program 
sponsor, the Texas Agricultural Extension Service has developed 
a curriculum manual, a youth-service provider workbook, videos 
and recognition materials to support this program.

                               WISCONSIN

    University of Wisconsin-Extension has formed a statewide 
network to facilitate, link, inform, and advocate for 
intergenerational understanding and interdependence by making 
the best use of the skills of persons of all ages.

                    ECONOMIC RESEARCH SERVICE (ERS)

    The ERS analyzes data collected from the USDA's Continuing 
Surveys of Food Intakes by Individuals (CSFII) to understand 
food choices made by American elderly age 60 and above. The 
American elderly population represents 18 percent of the 
population and accounts for about 30 percent of all health care 
expenditures. Improved diets could prevent a significant 
proportion of the incidences of heart disease, stroke, cancer, 
diabetes, and osteoporosis-related hip fractures in this 
population. Therefore, a better understanding of food choice 
and nutrient intake by the elderly can improve their health and 
well-being and hence reduce both present and societal medical 
outlays.

Brief description of accomplishments:

    The following publications on the elderly have been 
prepared by our staff in 1998:
    Weimer, J. ``Factors Affecting Nutrient Intake of the 
Elderly.'' ERS AER No. 769, Oct. 1998.
    Lin, B.H. and E. Frazao. ``A Nutritional Quality of Foods 
At and Away from Home.'' Food Review, Vol. 20: 33-40. May-Aug. 
1997.
    Barefield, E. ``Osteoporosis-Related Hip Fractures Cost $13 
Billion to $18 Billion Yearly.'' Food Review, Vol. 19: 31-36. 
January-April 1996.

                    FOOD AND NUTRITION SERVICE (FNS)


Title and purpose statement of each program or activity which affects 
        older Americans

    The Food Stamp Program provides monthly benefits to help 
low-income families and individuals purchase a more nutritious 
diet. In fiscal year 1997, $20 billion in food stamps were 
provided to a monthly average of 23 million persons.
    Households with elderly members accounted for approximately 
18 percent of the total food stamp caseload. However, since 
these households were smaller on average and had relatively 
higher net income, they received only 7 percent of all benefits 
issued.

Brief description of accomplishments

    FNS continues to work closely with the Social Security 
Administration (SSA) in order to meet the legislative 
objectives of simplified application processing for 
Supplemental Security Income (SSI) households.
    In response to recommendations for joint processing 
improvements, FNS and SSA have stepped up efforts to ensure 
that SSI applicants are counseled on their potential 
eligibility to receive food stamps. Additionally, a joint 
Supplemental Security Income/Food Stamp processing 
demonstration--the South Carolina Combined Application Project 
(SCCAP)--was begun in the fall of 1995. Approximately 22,000 
SSI households in South Carolina receive food stamp benefits 
through this project. An independent evaluation of SCCAP is 
underway and is scheduled to be completed in 1999.

Title and purpose statement of each program or activity which affects 
        older Americans

    The Commodity Supplemental Food Program provides 
supplemental foods, in the form of commodities, and nutrition 
education to infants and children up to age 6, pregnant, 
postpartum or breastfeeding women, and the elderly (at least 60 
years of age) who have low incomes and reside in approved 
project areas.
    Service to the elderly began in 1982 with pilot projects. 
In 1985, legislation allowed the participation of older 
Americans outside the pilot sites if available resources exceed 
those needed to serve women, infants, and children. In fiscal 
year 1997, approximately $45 million was spent on the elderly 
component.

Brief description of accomplishments

    About 61 percent of total program spending provides 
supplemental food to approximately 243,000 elderly participants 
a month. Older Americans are served by 20 of the 20 eligible 
State agencies.

Title and purpose statement of each program or activity which affects 
        older Americans

    The Food Distribution Program on Indian Reservations 
(FDPIR) provides commodity packages to eligible households, 
including households with elderly persons, living on or near 
Indian reservations. Under this program, commodity assistance 
is provided in lieu of food stamps.
    Approximately $26 million of total costs went to households 
with at least one elderly person. (This figure was estimated 
using a 1990 study that found that approximately 39 percent of 
FDPIR households had at least one elderly individual.)

Brief description of accomplishments

    This program serves approximately 48,000 households with 
elderly participants per month.

Title and purpose statement of each program or activity which affects 
        older Americans

    The Child and Adult Care Food Program (CACFP) provides 
Federal funds to initiate and maintain nonprofit food service 
for children, the elderly, or impaired adults in nonresidential 
institutions which provide child or adult care as well as 
children in emergency shelters. The program enables child and 
adult care institutions to integrate a nutritious food service 
with organized care services.
    The adult day care component permits adult day care centers 
to receive reimbursement of meals and supplements served to 
functionally impaired adults and to persons 60 years or older. 
An adult day care center is any public or private nonprofit 
organization or any proprietary Title XIX or Title XX center 
licensed or approved by Federal, State, or local authorities to 
provide nonresidential adult day care services to functionally 
impaired adults and persons 60 years or older. In fiscal year 
1997, $29 million was spent on the adult day care component.

Brief discussion of accomplishments

    The adult day care component of CACFP served approximately 
26 million meals and supplements to over 50,000 participants a 
day in fiscal year 1997.
    In 1993, the National Study of the Adult Component of CACFP 
was completed. Some of the major findings of the study include: 
overall, about 31 percent of all adult day care centers 
participate in CACFP; about 43 percent of centers eligible for 
the program participate. CACFP adult day care clients have low 
incomes; 84 percent have incomes of less than 130 percent of 
poverty. Many participants consume more than one reimbursable 
meal daily; CACFP meals contribute just under 50 percent of a 
typical participant's total daily intake of most nutrients.

Title and purpose statement of each program or activity which affects 
        older Americans

    The Emergency Food Assistance Program (TEFAP) provides 
nutrition assistance in the form of commodities to emergency 
feeding organizations for distribution to low-income households 
for household consumption or for use in soup kitchens.
    Approximately $17 million in commodities were distributed 
to households including an elderly person. (This figure is 
estimated using a 1986 survey indicating that about 38 percent 
of TEFAP households have members 60 years of age or older.)

Brief description of accomplishments

    About 38 percent of the households receiving commodities 
under this program had at least one elderly individual.

Title and purpose statement of each program or activity which affects 
        older Americans

    The Nutrition Program for the Elderly provides cash and 
commodities to States for distribution to local organizations 
that prepare meals served to elderly persons in congregate 
settings or delivered to their homes. The program addresses 
dietary inadequacy and social isolation among older 
individuals. USDA currently supplements the Department of 
Health and Human Services' Administration on Aging with 
approximately $145 million worth of cash and commodities.

Brief description of accomplishments

    In fiscal year 1997, over 247 million meals were reimbursed 
at a cost of almost $150 million. On a average day, 
approximately 932,000 meals were provided.

               FOOD SAFETY AND INSPECTION SERVICE (FSIS)


Title and purpose statement of each program or activity which affects 
        older Americans

    FSIS provides older Americans with information about safe 
food handling through consumer education campaigns. Older 
Americans are an important audience for the agency's consumer 
education program because they face increased risks from 
foodborne illness. They are more likely to become ill from 
pathogens in food and, once ill, the health consequences can be 
more serious. The elderly, with more than 35 million people in 
their ranks, are the largest group facing increased risks from 
foodborne disease.

Brief description of accomplishments

    FSIS has developed several publications designed to address 
the special needs and interests of older Americans. ``Seniors 
Need Wisdom on Food Safety'' is a feature issued from the USDA 
Meat and Poultry Hotline and distributed to callers to the 
Hotline. The publication explains why older Americans face 
special risks from foodborne illness and how to handle food 
safely. Another publication, a large-print chart, provides 
information seniors frequently request about how long food can 
safely be stored in the refrigerator.
    Finally, the FSIS food safety education staff is developing 
a video called ``Healthy Choices, Healthy Lives: Food Safety 
for Seniors.'' When completed, this video will be distributed 
to 800 local area offices on aging and be used at senior 
centers throughout the country. The video project has been 
developed with cooperation and input from the Administration on 
Aging, the American Association of Retired Persons and the 
National Institutes on Aging.

                   MARKETING AND REGULATORY PROGRAMS

    The Agricultural Marketing Service purchases commodities 
for several federal feeding programs, with the school lunch 
program being by far the largest. However, a very small amount 
of our purchases goes to the Nutrition Program for the Elderly, 
which is administered by the Department of Health and Human 
Services. The Nutrition Program for the Elderly provides cash 
or commodity support to social centers for the elderly.

                     ITEM 2--DEPARTMENT OF COMMERCE

                              ----------                              


     UPDATES TO THE DEVELOPMENTS IN AGING REPORT FOR 1997 AND 1998

    This report provides short descriptions and listings of 
products that contain demographic and socioeconomic information 
on the elderly population, 65 years of age and older, here and 
abroad. All of the items included in this report were released 
by the Census Bureau during calendar years 1997 and 1998.
    The items listed are available to the public in a variety 
of formats including print, electronic data bases, 
microcomputer diskettes, and CD-ROM. Many of these products can 
be found on the Internet at the Census Bureau's Web site at: 
.
    1. Population, Housing, and International Reports.--Three 
of the Census Bureau's major report series (Current Population 
Reports, Current Housing Reports, and International Population 
Reports) are important sources of demographic information on a 
wide variety of population-related topics. This includes 
information on the United States' elderly population, ranging 
from their numbers in the total population to socioeconomic 
characteristics, such as income, health insurance coverage, 
need for assistance with activities of daily living, and 
housing situation. Additionally, data on the elderly around the 
world also are found in this series of reports.
    Much of the data used in Current Population Reports are 
derived from the Current Population Survey (CPS) and the Survey 
of Income and Program Participation (SIPP). The Current Housing 
Report series presents housing data primarily from the American 
Housing Survey, a biennial national survey of approximately 
55,000 housing units. The International Population Report 
series includes demographic and socioeconomic data reported by 
various national statistical offices, such as the National 
Institute on Aging, agencies of the United Nations, and the 
Organization for Economic Cooperation and Development.
    Additionally, the Census Bureau's population projection 
program and Special Studies Report series also contain 
information about the future estimated size of the elderly 
population and information pertaining to statistical methods, 
concepts, and specialized data.
    2. Decennial Products.--A large number of printed reports, 
computer tape files, CD-ROMs, and summary tape files are 
produced after each decennial census. Included in these is 
information and data on the numbers and characteristics of 
persons 65 years of age and over.
    3. Data Base on Aging/National Institute on Aging 
Products.--The data base provides a summary of analytical 
studies and other ongoing international aging projects. Reports 
are based on compilations of data obtained from individual 
country statistical offices, various international 
organizations, and estimates and projections prepared at the 
Census Bureau. This work is funded by the National Institute on 
Aging.
    4. Federal Interagency Forum on Aging-Related Statistics 
Summary.--The Forum, for which the Census Bureau is one of the 
lead agencies, encourages cooperation, analysis, and 
dissemination of data pertaining to the older population. A 
summary of the activities of the Forum lists a number of aging-
related statistics.
    5. Other Products.--In addition to the major products 
listed separately, we include a list of other data products 
that contain demographic and socioeconomic information on the 
elderly population.

           1. POPULATION, HOUSING, AND INTERNATIONAL REPORTS


                               Population

                                                           Report Number
Series P-20 (Population Characteristics):
    Regularly recurring reports in this series contain data from 
      the Current Population Survey. Topics include geographical 
      mobility, fertility, school enrollment, educational 
      attainment, marital status and living arrangements, 
      households and families, the Black and Asian and Pacific 
      Islander populations, persons of Hispanic origin, voter 
      registration and participation, and various other topics for 
      the general population, as well as the elderly population 65 
      years and older.
    Educational Attainment in the United States: March 1997.......   505
    Marital Status and Living Arrangements: March 1997............   506
    The Foreign-Born Population: 1997.............................   507
    The Black Population in the United States: March 1997.........   508
    Household and Family Characteristics: March 1997..............   509
    Geographical Mobility: March 1996 to March 1997...............   510
    The Hispanic Population in the United States: March 1997......   511
    The Asian and Pacific Islander Population in the United 
      States: March 1997..........................................   512
Series P-23 (Special Studies):
    Information pertaining to methods, concepts, or specialized 
      data is furnished in these publications. Reports in this 
      series contain data on mobility rates, home ownership rates, 
      and the Hispanic population for both the general and older 
      populations.
    How We're Changing: Demographic State of the Nation: 1997.....   193
    Population Profile of the United States: 1997.................   194
Series PPL (Population Paper Listings):
    This series of reports contains estimates of population and 
      projections of the population by age, sex, race, and origin. 
      Other topics appear as well some of which address issues 
      related to aging.
    Who is Minding Our Preschoolers: Fall 1994....................    81
    U.S. Population Estimates by Age, Sex, Race, and Hispanic 
      origin: 1990 to 1997........................................    91
    The Foreign-Born Population: 1997.............................    92
    Educational Attainment in the United States: March 1998.......    99
    Marital Status and Living Arrangements: March 1998............   100
    Household and Family Characteristics: March 1998..............   101
    The Hispanic Population in the United States: 1998............   105
    The Black Population in the United States: March 1997.........   106
    The Asian and Pacific Islander Population: March 1997.........   108
    Estimates of the Population of States by Age and Sex: 1990 and 
      1997........................................................   109
    Estimates of the Population of Counties by Broad Age Group: 
      July 1, 1990 to July 1, 1997................................   112
Technical Working Papers Series:
    This series contains papers of a technical nature on various 
      topics, which have been written by staff of the Population 
      Division of the Census Bureau. Evaluation of population 
      projections, estimates and 1990 Census results, examination 
      of immigration issues, race and ethnic considerations, and 
      fertility patterns are some of those topics.
    ``Trends in Marital Status of U.S. Women at First Birth: 1930 
      to 1994.'' Amara Bachu......................................    20
    ``How Well Does the Current Population Survey Measure the 
      Foreign-Born Population in the United States'' Diane 
      Schmidley and J. Gregory Robinson...........................    22
    ``Timing of First Births: 1930-34, 1990-94.'' Amara Bachu.....    25
    ``Co-Resident Grandparents and Grandchildren: Grandparent 
      Maintained Households'' Lynne Casper and Ken Bryson.........    26
Series SB/CENBR (Statistical Briefs):
    These are succinct reports that are issued occasionally and 
      provide timely data on specific issues of public policy. 
      Presented in narrative style with charts, the reports 
      summarize data from economic and demographic censuses and 
      surveys. In December 1996, the Statistical Brief series 
      format was revised and became known as Census Briefs.
    Disabilities Affect One-Fifth of All Americans................  97-5
Series PE (Population Electronic):
    This series comprises microcomputer diskettes or computer 
      tapes covering a variety of topics in the population field. 
      The majority of the information on diskette is available in 
      printed format.
    The Foreign-Born Population: March 1996.......................    54
    Estimates of Population for Counties and Components of Change: 
      1990 to 1996................................................    55
    Population of States by Single Years of Age and Sex for 
      States: 1990 to 1996........................................    56
    Estimates of the Population of States by Age, Sex, Race, and 
      Hispanic Origin: 1990 to 1996...............................    57
    Estimates of the Population of Counties by Age, Sex, Race, and 
      Hispanic Origin: 1990-1996..................................    58
    Estimates of Population of States, Counties, Places, and Minor 
      Civil Divisions: Annual Time Series, July 1, 1991 to July 1, 
      1996........................................................    59
    Estimates of the Population of Metropolitan Areas: April 1, 
      1990 to July 1, 1996........................................    60
    U.S. Population Estimates by Age, Sex, Race, and Hispanic 
      Origin: 1990 to 1997........................................    61
    Estimates of Population for Counties and Components of 
      Population Change: Annual Time Series, July 1, 1990 to July 
      1, 1997.....................................................    62
    Estimates of the Population of Counties by Age, Sex, Race, and 
      Hispanic Origin: 1990-1997..................................    64
    Estimates of the Population of States by Age, Sex, Race, and 
      Hispanic Origin: 1990-1997..................................    65
Series P-60 (Consumer Income):
    This series of reports presents data on the income, poverty 
      and health insurance status of households, families, and 
      persons in the United States.
    Money Income in the United States: 1996.......................   197
    Poverty in the United States: 1996............................   198
    Health Insurance Coverage: 1996...............................   199
    Money Income in the United States: 1997.......................   200
    Poverty in the United States: 1997............................   201
    Health Insurance Coverage: 1997...............................   202
    Measuring 50 Years of Economic Change-Using the March Current 
      Population Survey...........................................   203
Series P-70 (Household Economic Studies):
    These data are from the Survey of Income and Program 
      Participation (SIPP), a national survey conducted by the 
      Census Bureau. Its principal purpose is to provide better 
      estimates of the economic situation of families and 
      individuals. These reports include data on the elderly 
      population 65 years and older.
    Who's Minding Our Preschoolers? Fall 1994 Update..............    62
    Poverty, 1993-1994: Trap Door? Revolving Door? Or Both?.......    63
    Health Insurance, 1993 to 1995. Who Loses Coverage and for How 
      Long........................................................    64
    Income, 1993 to 1994, Moving Up and Down the Income Ladder....    65
    Seasonality of Moves and Duration of Residence................    66

                                Housing

These reports present data from the American Housing Survey. 
    Some characteristics shown in these reports include 
    socioeconomic status of household, physical condition of 
    the housing unit, and affordability of housing in relation 
    to income.
    Survey of Income and Program Participation, Who Can Afford to 
      Buy a House in 1993?........................................  97-1
    Current Population Survey, Moving to America-Moving to Home 
      Ownership...................................................  97-2
Series H-150 (Housing Vacancy):
    This book presents data on apartments; single-family homes; 
      mobile homes; vacant housing units; age, sex, and race of 
      householders; income; housing and neighborhood quality; 
      housing costs; equipment and fuels; and size of housing 
      units. The book also presents data on homeowner's repairs 
      and mortgages, rent control, rent subsidies, previous unit 
      of recent mover, and reasons for moving. A wall chart 
      accompanies this product.
    American Housing Survey for the United States in 1995.........  95RV
Series H-170 (American Housing Survey, Selected Metro Areas):
    This book presents data for selected metropolitan statistical 
      areas for the same characteristics shown above in Series H-
      150. Eleven metro areas per year are produced on a 4-year 
      rotation for a total of 44 metro areas.
    American Housing Survey for Selected Metropolitan Statistical 
      Areas in 1994, 1995 and 1996................................ 94-95

                             International

Series P-95 (International Population Reports):
    The reports in this series contain demographic and 
      socioeconomic data on the world's older population as 
      estimated or projected by the Census Bureau or published by 
      various national statistical offices, agencies of the United 
      Nations, and/or other international agencies such as the 
      Organization for Economic Cooperation and Development. In 
      1998, the Census Bureau's International Programs Center 
      began work on an update of its 1993 report entitled An Aging 
      World II. This report will examine demographic and 
      socioeconomic characteristics of the world's elderly and 
      will highlight projected trends into the 21st century. 
      Graphical and tabular presentations of comparable national 
      statistics are included. This work is supported by the 
      Office of the Demography on Aging, National Institute on 
      Aging.
        An Aging World 1999 Forthcoming Summer 1999
Series B (International Briefs):
    This series of short reports (4-8 pp.) covers a variety of 
      topics, some of which relate to aging. The reports may 
      present basic demographic and socioeconomic data on a single 
      country or take a cross national view of a particular topic.
    Population Trends: India 1997.................................  97-1
    Aging Trends: South Africa 1997...............................  97-2
    Gender and Aging: Demographic Dimensions 1997.................  97-3
    Population Trends: Bolivia 1998...............................  98-1
    Gender and Aging: Mortality and Health 1998...................  98-2
    Gender and Aging: Caregiving 1998.............................  98-3
Series WP (World Profiles):
    This series provides comprehensive demographic information for 
      all countries and regions of the world. The information is 
      maintained in a data base and is regularly updated. In 
      addition, each edition of the series focuses on a specific 
      topic of interest related to the world's population.
        World Population Profile: 1998. Forthcoming January 1999
Series WID (Women of the World):
    This series contains information on the world's women, 
      including elderly women. Demographic, educational, 
      employment, and political participation data are included.
    Women's Education in India 1998...............................  98-1

                         2. DECENNIAL PRODUCTS

    No new products were released in this area in 1997 or 1998. 
A report on the population aged 100 and over in 1990, entitled 
Centenarians in the United States, is forthcoming.

       3. DATA BASE ON AGING/NATIONAL INSTITUTE ON AGING PRODUCTS

    The following reports, articles, wall charts, and book 
chapters are based on information contained in the 
International Data Base on Aging and other related holdings of 
the International Programs Center, Population Division, Bureau 
of the Census. This work is carried out with the support of the 
National Institute on Aging and is intended to highlight the 
present and future worldwide dimensions of aging and portray 
the diversity among nations.
    ``Gender Stereotypes: Data Needs for Aging Research.'' 
Victoria Velkoff and Kevin Kinsella. Aging International, 
forthcoming, 1999.
    Aging in the Americas into the XXI Century. [Wall chart] 
U.S. Bureau of the Census, Pan American Health Organization and 
U.S. National Institute on Aging, 1998.
    Pension Management and Reform in Asia: An Overview. Loraine 
A. West and Kevin Kinsella. Executive Insight No. 11. National 
Bureau of Asian Research. May 1998.
    ``Aging Populations Signal a Demographic Sea Change.'' 
Kevin Kinsella and Victoria Velkoff. Common Health. Spring 
1998.
    Aging in the United States--Past, Present, and Future. 
[Wall chart] U.S. Bureau of the Census, 1997.
    ``The Demography of An Aging World.'' Kevin Kinsella. In 
The Cultural Context of Aging, Jay Sokolovsky, ed. Greenwood 
Press. 1997.

  4. THE FEDERAL INTERAGENCY FORUM ON AGING-RELATED STATISTICS SUMMARY

    The Census Bureau is one of the convening agencies in the 
Federal Interagency Forum on Aging-Related Statistics. The 
Forum, begun in the mid-1980s, was the first-of-its-kind effort 
to coordinate data and efforts of different government 
agencies. The Forum currently is being managed by staff of the 
National Center for Health Statistics, with the support of the 
National Institute on Aging.
    The Forum encourages cooperation among federal agencies in 
the development, collection, analysis, and dissemination of 
data pertaining to the older population. Through coordinated 
approaches, the Forum extends the use of limited resources 
among agencies through joint problem-solving, identification of 
data gaps, and improvement of statistical information bases on 
the older population that are used to set project priorities of 
individual agencies.
    The Forum goals include widening access to information on 
the older population, promoting communication between data 
producers and public policymakers, coordinating the development 
and use of statistical data bases among relevant federal 
agencies, identifying information gaps/data inconsistencies, 
and evaluating data quality. The work of the Forum facilitates 
the exchange of information about needs at the time new data 
are being developed or changes are being made in existing data 
systems. It also promotes communication between data producers 
and policymakers.
    As part of the Forum's work to improve access to data on 
the older population, the Census Bureau published in 1997 a 
report entitled Data Base News in Aging, which includes 
developments in data bases of interest to researchers and 
others in the field of aging. Much of the information comes 
from government-sponsored surveys and products. All federal 
agencies are invited to contribute to the report, which is 
produced in hard copy and is available on the Census Bureau's 
Internet site. A new edition is planned for release in 1999.

                           5. OTHER PRODUCTS


                        American Housing Survey

    Computer data tapes and CD-ROM are available for the 1997 
survey efforts. The survey is designed to provide information 
on the housing situation in the United States. Information is 
available by age.

                          CPS and SIPP Surveys

    Data for both surveys are available in electronic media.

Statistical Abstract of the United States: 1997 and 1998

    As the National Data Book, these annually released products 
contain an enormous collection of statistics on social and 
economic conditions in the United States. Selected 
international data also are included. The abstract appears in 
both print and CD-ROM versions.

International Data Base

    The International Data Base (IDB) is a computerized data 
bank containing statistical tables of demographic and 
socioeconomic data for all countries of the world. Most 
demographic information comes from country-specific estimates 
and projections made by the Census Bureau's International 
Programs Center. Country-specific data on social and economic 
characteristics are obtained from censuses and surveys or from 
administrative records. Country files are regularly updated as 
new information becomes available. Selected information from 
the IDB is highlighted in the Census Bureau's various 
international reports and publications mentioned previously.

                     ITEM 3--DEPARTMENT OF DEFENSE

                              ----------                              

    The Department of Defense has several ongoing initiatives 
in support of older Americans. They are detailed below.

                           Eldercare Support

    The Department's Family Centers reports that there is an 
increasing demand for information about eldercare. The Centers 
providing information workshops on eldercare issues describe 
them as well-attended and very useful. In addition to workshops 
and seminars on eldercare, the Centers access the national 1-
800 eldercare locator to assist family members with eldercare 
support services in other parts of the country. The Centers 
also have a number of useful pamphlets and handouts on 
eldercare that they provide to military family members seeking 
assistance for a particular eldercare issue.
    The Family Centers often work with the local Retired 
Affairs Offices across the country in sponsoring Retired 
Affairs Seminars that draw thousands of military retirees and 
their families. For these seminars, the staff brings in experts 
to discuss eldercare topics such as long-term care insurance, 
respite care, medical information, Social Security benefits, 
and eldercare legal issues. These seminars are an important 
vehicle to update the military retiree community on current 
eldercare issues.
    The Department of Defense recognizes that eldercare is a 
growing issue for military personnel and their family members 
and will continue to be responsive to the needs of the active 
duty and retired community in this regard.

                              Health Care

    The Department of Defense has implemented TRICARE, a 
regionally managed care program for members of the uniformed 
services and their families and survivors, and retired members 
and their families.
    TRICARE gives beneficiaries three choices for their health 
care delivery: TRICARE PRIME, TRICARE Extra, and TRICARE 
Standard. All active duty members will be enrolled in TRICARE 
Prime. Those CHAMPUS eligible beneficiaries whom elect not to 
enroll in TRICARE Prime and Medicare-eligible DoD beneficiaries 
will remain eligible for care in military medical facilities on 
a space-available basis.
    TRICARE Prime is a voluntary enrollment option that offers 
patients the advantage of managed health care, such as primary 
care management, and assistance in making specialty 
appointment. The PRIME option offers the coverage of CHAMPUS 
plus additional preventive and primary care services. Retirees 
who are eligible for CHAMPUS, i.e., those retirees under age 
65, may enroll in PRIME and are charged an enrollment fee. 
Enrollees in TRICARE Prime obtain most of their care within the 
integrated military and civilian network of TRICARE providers.
    TRICARE Extra allows CHAMPUS-eligible beneficiaries to 
receive an out-of-pocket discount when using preferred network 
providers. CHAMPUS beneficiaries who do not enroll in TRICARE 
Extra may participate in Extra on a case-by-case basis just by 
using network providers.
    TRICARE Standard: This option is the same as the standard 
CHAMPUS program.
    Under current law, military retirees and their families up 
to age 65 are eligible for CHAMPUS. Military retirees and their 
dependents over the age of 65 are not covered by CHAMPUS, but 
are eligible for care in military treatment facilities on a 
``space available'' basis. Military beneficiaries over the age 
of 65 have traditionally relied on a combination of ``space 
available'' care at military treatment facilities, Medicare 
coverage; and other benefits gained through non-military 
employment. With the post-Cold War drawdown in the military and 
the growing number of retired beneficiaries, space available 
care has been shrinking. The Department of Defense is seeking 
ways to enhance its services to its over-65 beneficiaries. 
Specifically, the Department is conducting demonstration 
programs to test alternatives to expand health care coverage to 
Medicare-eligible beneficiaries. These demonstrations include a 
program offering ``TRICARE Senior Prime'' at six demonstration 
sites. Under this program, the Department enrolls military 
Medicare-eligible beneficiaries and receives capitated payments 
from the Medicare TRUST Fund. The program operates similar to a 
Medicare at-risk health maintenance organization, through which 
enrollees in TRICARE Senior Prime agree to receive all their 
health care from designated primary care managers at the 
military treatment facilities. The TRICARE Senior Prime 
enrollees receive all their Medicare-covered services through 
the MTF and civilian provider network, and also receive 
benefits such as prescription drugs. This demonstration runs 
for three years, and the Department of Defense will report to 
the Congress on the results of the test program. The purpose of 
the program is to leverage Medicare dollars flowing into the 
military treatment facilities to expand access to Medicare-
eligible retirees.
    The Department is also conducting a demonstration program 
offering Medicare-eligible retirees enrollment in the Federal 
Employees Health Benefit Program, a program offering TRICARE 
benefits as a ``wraparound'' benefit to supplement Medicare 
coverage, and a pilot program to expand the national mail order 
pharmacy benefit to military retirees over the age of 65.

                    ITEM 4--DEPARTMENT OF EDUCATION

                              ----------                              


           Enforcement of the Age Discrimination Act of 1975

                        Calendar Years 1997-1998

   i. status of the department of education's implementing regulation

    The Department of Education's final regulation implementing 
the Age Discrimination Act of 1975 was published on July 27, 
1993. The effective date of implementation was August 26, 1993.
    The Department's regulation prohibiting age discrimination 
applies to all elementary and secondary schools, colleges and 
universities, public libraries, and vocational rehabilitation 
services. It covers age discrimination at these institutions 
except age discrimination in employment.
    The regulation describes the standards for determining age 
discrimination; the responsibilities of recipients; and 
procedures for enforcing the statute and regulation.

               ii. age discrimination act implementation

    The Department of Education's (ED) Office for Civil Rights 
(OCR) is responsible for enforcement of the Age Discrimination 
Act of 1975 (the Age Act), as it relates to discrimination on 
the basis of age in federally funded education programs or 
activities. The Age Act applies to discrimination at all age 
levels. The Age Act contains certain exceptions that permit, 
under limited circumstances, continued use of age distinctions 
or factors other than age that may have a disproportionate 
effect on the basis of age.
    The Age Act excludes from its coverage most employment 
practices, except in federally funded public service employment 
programs under the Workforce Investment Act of 1998 ( formerly 
the Job Training Partnership Act). The Equal Employment 
Opportunity Commission (EEOC) has jurisdiction under the Age 
Discrimination in Employment Act of 1967 to investigate 
complaints of employment discrimination on the basis of age. 
OCR generally refers employment complaints alleging age 
discrimination to the appropriate EEOC regional office. 
However, the EEOC does not have jurisdiction over cases 
alleging age discrimination against persons under 40 years of 
age. Rather than referring such a case to the EEOC, OCR closes 
the complaint and informs the complainant that neither OCR nor 
the EEOC has jurisdiction.
    The Department of Health and Human Services (HHS) published 
a general government-wide regulation on age discrimination. 
Each agency that provides Federal financial assistance must 
publish a final agency-specific regulation. On July 27, 1993, 
ED published in the Federal Register its final regulation 
implementing the Age Act.
    Under ED's final regulation, OCR forwards complaints 
alleging age discrimination to the Federal Mediation and 
Conciliation Service (FMCS) for attempted resolution through 
mediation. FMCS has 60 days after a complaint is filed with OCR 
in which to mediate the age-only complaints or the age portion 
of multiple-based complaints. ED's regulation provides that 
mediation ends if: (1) 60 days elapse from the time the 
complaint is received; (2) prior to the end of the 60-day 
period, an agreement is reached; or (3) prior to the end of the 
60-day period, the mediator determines that agreement cannot be 
reached.
    If FMCS is successful in mediating an age-only complaint or 
the age portion of a multiple-based complaint within 60 days, 
OCR closes the case or the age portion of the complaint. If 
mediation is unsuccessful, the mediator returns the unresolved 
complaint to ED for further case processing.
    OCR helps its working relationship with FMCS by designating 
enforcement office contact persons who coordinate directly with 
FMCS. OCR also accepts verbal or facsimile referrals from FMCS 
after unsuccessful attempts at mediation, and may grant FMCS 
extensions of up to 10 days beyond the 60 day mediation period 
on a case-by-case basis when mediated agreements appear to be 
forthcoming.
    The other statutes which OCR enforces are Title VI of the 
Civil Rights Act of 1964, which prohibits discrimination on the 
basis of race, color, and national origin; Title IX of the 
Education Amendments of 1972, which prohibits discrimination on 
the basis of sex; and Section 504 of the Rehabilitation Act of 
1973 and Title II of the Americans with Disabilities Act of 
1990, which prohibit discrimination on the basis of disability.

                            iii. complaints

(a) Receipts
    OCR received 391 age complaints in Calendar Years 1997-
1998. Of these, 124 were age-only complaints and 267 were 
multiple bases complaints. As shown on Table 1, 270 of the 391 
receipts were processed in OCR and 121 were referred to other 
Federal agencies for processing. The most frequently cited 
issues in complaint receipts involving students were 
``harassment,'' ``retaliation,'' ``student rights,'' 
``selection for enrollment,'' ``discipline,'' ``academic 
evaluation/grading,'' and ``admission to education program.'' 
The most frequently cited issues in complaint receipts 
involving employees were ``demotion/dismissal/disciplinary 
action'' and ``retaliation.''

     TABLE 1.--CALENDAR YEARS 1997-1998 AGE-BASED COMPLAINT RECEIPTS



Processed by OCR...........................................          270
Referred to FMCS...........................................           59
Referred to EEOC...........................................           54
Referred to Other Federal Agencies.........................            8
                                                            ------------
      Total Receipts.......................................          391


(b) Resolutions

    During Calendar Years 1997-1998, OCR resolved 402 age-based 
complaints, including 127 age-only complaints and 275 multiple-
based age complaints. The resolution of the complaints are 
shown in Table 2.

   TABLE 2.--CALENDAR YEARS 1997-1998 AGE-BASED COMPLAINT RESOLUTIONS



Inappropriate for OCR Action...............................          285
OCR Facilitated Change.....................................           33
No Changed Required........................................           84
                                                            ------------
      Total Resolutions....................................          402

                      Inappropriate for OCR Action

    Of the 402 complaint resolutions, 285 were resolved because 
they were ``Inappropriate for OCR Action.'' These would include 
a resolution achieved by (1) referral of a complaint to another 
federal agency; (2) lack of jurisdiction over recipient or 
allegation contained in a complaint; (3) complaint was not 
filed in a timely manner; (4) complaint did not contain 
sufficient information necessary to proceed; (5) complaint 
contained similar allegations repeatedly determined by OCR to 
be factually or legally insubstantial or were addressed in a 
recently closed OCR complaint or compliance review; (6) subject 
of a complaint was foreclosed by previous decisions by federal 
courts, Secretary of Education, Civil Rights Reviewing 
Authority, or OCR; (7) there was pending litigation raising the 
same allegations contained in a complaint; (8) allegations were 
being investigated by another federal or state agency or 
through a recipient's internal grievance procedures; (9) OCR 
treated the complaint as a compliance review; (10) 
allegation(s) was moot and there were no class implications; 
(11) complaint could not be investigated because of death of 
the complainant or injured party or their refusal to cooperate; 
and (12) complaint was investigated by another agency and the 
resolution met OCR standards.

                         OCR Facilitated Change

    There were 33 complaints resolved because ``OCR Facilitated 
Change.'' These would include a resolution achieved by (1) a 
recipient resolving the allegations contained in the complaint; 
(2) OCR facilitating resolution between the recipient and 
complainant through Resolution between the Parties; (3) OCR 
negotiating a corrective agreement resolving a complainant's 
allegations; and (4) settlement achieved after OCR issued a 
letter of findings.

                           No Change Required

    In 84 complaints, there was ``No Change Required.'' These 
would include a resolution achieved by (1) complainant 
withdrawing his or her complaint without benefit to the 
complainant; (2) OCR determining insufficient factual basis in 
support of complainant's allegations; (3) OCR determining 
insufficient evidence to support a finding of a violation; and 
(4) OCR issuing a no violation letter of findings.

                        Postsecondary Education

    The Office of Postsecondary Education administers programs 
designed to encourage participation in higher education by 
providing support services and financial assistance to 
students.
    In fiscal year 1998, $46 billion was made available to an 
estimated 8.2 million students through the student financial 
assistance programs authorized by Title IV of the Higher 
Education Act of 1965, as amended. There are no age 
restrictions for participation in the Title IV programs. An 
estimated 6.1 percent, or nearly 500,000 recipients, were over 
age 40.
    The Federal TRIO programs fund postsecondary education 
outreach and student support services that encourage 
individuals from disadvantaged backgrounds to enter and 
complete postsecondary education. Because age is not an 
eligibility criterion under most of these programs, data on the 
age of participants are not available.
    In addition to these programs, the Fund for the Improvement 
of Postsecondary Education supports innovative projects, 
including some designed to meet the needs of older Americans. 
In fiscal year 1998, FIPSE funded a program at the University 
of Findlay in Findlay, OH to develop an intergenerational, 
cross-disciplinary, two-year degree program to train students 
to work in multi-generational care settings.
    Because jobs in today's workplace require an increasingly 
higher level of knowledge and skills, it is essential that all 
Americans have the opportunity for further education. The 
Administration was successful in obtaining an authorization for 
the Learning Anytime Anywhere Partnership program in the Higher 
Education Amendments of 1998 that has great promise for 
assisting working Americans gain the knowledge and skills they 
need to remain competitive through lifelong learning.
    The Learning Anytime Anywhere Partnerships (LAAP) program 
authorizes a new grant competition to promote student access to 
high quality technology-mediated learning opportunities that 
are not limited by the constraints of time and place. For 
fiscal year 1999, the Congress has appropriated $10 million to 
fund partnerships among colleges, industry, community 
organizations, and others, whose projects will have a national 
or regional impact and will encourage innovative solutions to 
the biggest challenges facing technology-mediated learning. The 
LAAP program will expand access to all learners who seek 
undergraduate education, career-oriented lifelong learning, or 
who can benefit from the removal of time and place constraints.

                            Adult Education

    As America prepares for the 21st Century and a tremendous 
increase in the aging population, greater emphases have been 
placed on addressing issues that involve literacy skills for 
adults, 60 years old and older. A report from the 1990 Census 
data shows that, of the 41,399,000 adults 60 years of age and 
over in the United States, 8,900,000 have had 8 years of 
schooling or less.
    The U.S. Department of Education is authorized under the 
Adult Education Act (AEA), Public Law 100-297, as amended by 
the National Literacy Act of 1991 (P.L. 102-73), to provide 
funds to the States and outlying areas for educational programs 
and related support services benefiting all segments of the 
eligible adult population. The Division of Adult Education and 
Literacy (DAEL), in the Office of Vocational and Adult 
Education (OVAE), administers the Adult Education Act. The 
State-administered Basic Grant Program is the central program 
established by the AEA and is the major source of Federal 
support for basic skills programs. Basic Grants to States are 
allocated by a formula based on the number of adults, over age 
16, who have not completed high school in each State. States 
distribute funds to local providers through a competitive 
process based upon State-established funding criteria. Eligible 
providers of basic skills and literacy programs include: local 
educational agencies, community based organizations, 
correctional education agencies, postsecondary educational 
institutions, public or private nonprofit agencies, 
institutions or organizations which are part of a consortium 
that includes a public or private agency, organization or 
institution. This program will:
         Enable adults to acquire the basic educational 
        skills necessary for literate functioning;
         Provide sufficient basic education to enable 
        these adults to benefit from job training and 
        retraining and to obtain productive employment; and
         Enable adults to continue their education to 
        at least high school completion.
    In addition, amendments to the AEA State-administered Basic 
Grant Program include, in part:
         A requirement for States to develop a system 
        of indicators of program quality to be used to judge 
        the quality of State and local programs;
         A requirement in allocating Federal funds to 
        local programs, that each State consider: past program 
        effectiveness (especially with respect to recruitment, 
        retention and learning gains of program participants), 
        the degree of coordination with other community 
        literacy and social services, and the commitment to 
        serving those most in needs of literacy services;
         A requirement that each State Educational 
        agency receiving financial assistance under this 
        program provide assurance that local educational 
        agencies, public or private nonprofit agencies, 
        community-based organization, correctional education 
        agencies, postsecondary education institutions, 
        institutions which serve educationally disadvantaged 
        adults and any other institution that has the ability 
        to provide literacy services to adults and families 
        will be provided direct and equitable access to all 
        Federal funds provided under this program; and
         A requirement that States evaluate 20 percent 
        of grant recipients each year.
    In program year 1996-1997, over 4 million adult learners 
were served through the AEA program nationwide. Of these 
learners, approximately 209,486 were 60 years of age or older. 
Many of the emerging workforce participants, including a large 
number of older adults and nonnative speakers of English, lack 
the basic literacy skills necessary to meet the increased 
demands of rapid change and new technology. Therefore, 
employers are revisiting their workforce strategies in training 
and retraining to meet the demanding needs of older workers.
    The adult education program addresses the needs of older 
adults by emphasizing functional competency and grade level 
progression, from the lowest literacy level, to providing 
English as a second language instruction, through attaining the 
General Education Developmental Certificate. States operate 
special projects to expand programs and services for older 
adults through individualized instruction, use of print and 
audio-visual media, home-based instruction, and curricula 
relating basic educational skills to coping with daily problems 
in maintaining health, managing money, using community 
resources, understanding government, and participating in civic 
activities.
    Equally significant is the expanding delivery system, 
increased public awareness, as well as clearinghouses and 
satellite centers designed to overcome barriers to 
participation. Where needed, supportive services such as 
transportation are provided as are outreach activities adapting 
programs to the life situations and experiences of older 
persons. Individual learning preferences are recognized and 
assisted through the provision of information, guidance and 
study materials. To reach more people in the targeted age 
range, adult education programs often operate in conjunction 
with senior citizen centers, nutrition programs, nursing homes, 
and retirement and day care centers.
    Cooperation and collaboration among organizations, 
institutions and community groups are strongly encouraged at 
the national, State and local levels to meet the demanding 
needs of older adults.
    Note: After 30 years, the Adult Education Act has been 
repealed and the Federal investment in adult education and 
literacy has been authorized as part of the new comprehensive 
Workforce Investment Act of 1998, (Title II--Adult Education 
and Family Literacy Act). The Act incorporates a number of 
current federal statutes governing job training, adult 
education and literacy, and vocational rehabilitative services. 
This new Act emphasizes State and local flexibility, shared 
accountability, customer choice, and stronger coordination 
among service providers. This Act will take effect July 1, 
1999. Data will be available in the Winter of 2000.

 National Institute on Disability and Rehabilitation Research Projects 
                       That Relate to Aging--1998


                        (Prepared by S. Sweeney)

    The National Institute on Disability and Rehabilitation 
Research (NIDRR) authorized by Title II of the Rehabilitation 
Act, has specific responsibilities for promoting and 
coordinating research that relates directly to the 
rehabilitation of disabled persons.
    Grants and contracts are made to public and private 
agencies and organizations, including institutions of higher 
education, Indian Tribes and tribal organizations, for the 
purpose of planning and conducting research, demonstrations, 
and related activities which focus directly on the development 
of methods, procedures and devices which assist in the 
provision of rehabilitation services.
    The Institute is also responsible for facilitating the 
dissemination of information concerning developments in 
rehabilitation procedures, methods, and devices to 
rehabilitation professionals and to disabled persons to assist 
them in leading more independent lives.
    The Institute accomplishes its mission through the 
following programs:
          --Rehabilitation Research and Training Centers
          --Rehabilitation Engineering and Research Centers
          --Research and Demonstration Projects
          --Field-Initiated Projects
          --Utilization Projects
          --Career Development Projects which include:
                -- Fellowships
                -- Research Training
          --ADA Technical Assistance Programs
          --State Technology Assistance
          --Small Business Innovative Research

              REHABILITATION RESEARCH AND TRAINING CENTERS

    The primary goals of these centers are: (1) To conduct 
research targeted toward the production of new knowledge which 
will improve rehabilitation methodology and service delivery 
systems, alleviate or stabilize disabling conditions, and 
promote maximum social and economic independence; (2) To 
institute related teaching and training programs to disseminate 
and promote the utilization of research findings, thereby 
reducing the usual long intervening delay between the discovery 
of new knowledge and its wide application in practice.
    The three major activities, research, training, and service 
expected to be mutually supportive. Specifically, this synergy 
calls for research ideas to derive from service delivery 
problems, for research findings to be disseminated via 
training, and for new professionals to be attracted to research 
and service via training.

1. Rehabilitation Research and Training Center on Aging with a 
        Disability, Rancho Los Amigos Medical Center, Downey, CA

              (Principal Investigator: Bryan J. Kemp, PhD)

    Abstract: This project helps people who are aging with a 
disability by conducting a series of studies, using a sample of 
1,000 people, with a variety of disabilities represented. 
Studies include: (1) the natural course of aging with a 
disability, which investigates physical, function, and 
psychosocial aging with a disability over time; (2) a cross-
ethnic-group study focusing on assisting family caregivers of 
people aging with a disability, and comparing stress, support, 
coping preferences, and appraisals of caregiving for people 
aging with a disability and evaluating the effectiveness of a 
structured group intervention; (3) improving community 
integration and adjustment, focusing on depression and how it 
affects community integration and demonstrates effective 
treatment; (4) secondary complications such as diabetes and 
thyroid disorders, determining if providing feedback to 
patients' primary physicians regarding these illnesses results 
in appropriate treatment, and if functional impairment is 
related to these illnesses; (5) bone mass, focusing on whether 
a regimen of exercise and vitamins improves bone density; and 
(6) the effectiveness of assistive technology (A1) and 
environmental interventions (EI) in maintaining functional 
independence, evaluating differences between those receiving 
intensive AT and EI services and those receiving standard care. 
Training, dissemination, and technical assistance activities 
focus on students and professionals in the health care fields, 
researchers, community service providers, and people with 
disabilities and their families.

2. Rehabilitation Research and Training Center on Aging With Mental 
        Retardation, The University of Illinois at Chicago University 
        of Illinois UAP, 1640 West Roosevelt Road Chicago, IL

    (Principal Investigator: Tamar Heller, PhD; David Braddock, PhD)

    Abstract: This project promotes the independence, 
productivity, community inclusion, full citizenship, and self-
determination of older adults with mental retardation through a 
coordinated program of research, training, technical 
assistance, and dissemination activities. The research program 
is aimed at increasing knowledge about the changing needs of 
older adults with mental retardation and their families as they 
age and the effectiveness of innovative approaches, public 
policies, and program interventions that provide needed 
supports and that promote the successful aging of these adults 
and their families. It examines how age-related changes in 
physical and psychological health affect the ability to 
function in the community, including home, work, and leisure 
settings. The research program also identifies best practices 
and current public policies that seek to support these adults 
and their families. The primary goal is to translate the 
knowledge gained into practice through boardbased training, 
technical assistance, and dissemination to people with mental 
retardation, their families, service providers, administrators 
and policy makers, advocacy groups, and the general community. 
Dissemination vehicles include the Center's Clearinghouse, Web 
page, and newsletters.

3. Rehabilitation Research and Training Center on Enhancing Quality of 
        Life of Stroke Survivors, Rehabilitation Institute Research 
        Corporation, 345 East Superior, Chicago, IL

              (Principal Investigator: Elliot J. Roth, MD)

    Abstract: This project tests the effectiveness of several 
stroke rehabilitation strategies and tactics, trains stroke 
survivors and professionals, and disseminates knowledge 
relevant to stroke care. In order to extend the knowledge base 
of stroke rehabilitation, produce changes in clinical practice, 
and enhance the quality of life of stroke survivors and their 
families, the Center: (1) identifies, develops, and evaluates 
rehabilitation techniques in order to address coexisting and 
secondary conditions and improve outcomes for all stroke 
patients; (2) develops and evaluates standard aerobic exercise 
protocols; (3) identifies and evaluates methods to identify and 
treat depression and other psychological problems associated 
with stroke; (4) determines the effectiveness of stroke 
prevention education provided in a medical rehabilitation 
setting; (5) evaluates the impact of changes in diagnosis and 
medical treatment of stroke on rehabilitation needs; (6) 
evaluates long-range outcomes for stroke rehabilitation across 
different treatment settings; (7) evaluates the impact of 
stroke practice guidelines on delivery and outcomes of 
rehabilitation services; (8) provides training on new 
approaches, innovations, and the specialized principles and 
practices of rehabilitation care of individuals with stoke; (9) 
provides applied research experience and training in research 
principles and methods; (10) disseminates information of new 
developments in the area of stroke care and research to people 
with stroke and their families, rehabilitation professionals, 
and service providers; and (11) conducts a state-of-the-science 
conference. The Center has a large database of information 
regarding stroke rehabilitation patients and continues ongoing 
systems and activities to collect and analyze data concerning 
stroke impairment, disability, and social functioning.

4. Rehabilitation Research and Training Center Aging with Spinal Cord 
        Injury and Aging, Rancho Los Amigos Medical Center, Downey, CA

    (Principal Investigator: Bryan J. Kemp, PhD; Robert Waters, MD)

    Abstract: The Rehabilitation Research and Training Center 
(RRTC) on Aging with Spinal Cord Injury (SCI) is devoted to 
understanding the unique problems people with spinal cord 
injury experience as they age. Topics of research include: the 
course of aging with SCI, cardiovascular and pulmonary aspects 
of aging with SCI, bone loss across ethnic groups, activities 
of daily living, employment, depression, and formal and 
informal care systems for people aging with SCI. The RRTC has 
several goals for education, training, dissemination, and 
utilization: to train current and future health, allied health, 
and rehabilitation professionals about aging with SCI; to train 
and develop rehabilitation research professionals in the area 
of aging with SCI; to improve adoption and use of RRTC-
developed knowledge and treatment regimens by health and 
rehabilitation professionals; to disseminate information about 
aging with SCI to people with SCI and their families; and to 
train graduate students and medical students in advanced 
knowledge and techniques from studies about aging with SCI. 
Training and dissemination occurs through advanced and 
continuing education courses, local and national conferences, 
workshops, and the Internet.

5. Disability Statistics Rehabilitation Research and Training Center, 
        University of California, San Francisco, Institute for Health 
        and Aging, Box 0646, Laurel Heights, San Francisco, CA

          (Principal Investigator: Mitchell P. LaPlante, PhD)

    Abstract: The Center conducts research in the demography 
and epidemiology fields of disability and disability policy, 
including costs, employment statistics, health and long-term 
care statistics, statistical indicators, and congregate living 
statistics. Statistical information is disseminated through 
published statistical reports and abstracts, journals, 
professional presentations, and a publications mailing list. 
Training activities and resources (such as a predoctoral 
program) disseminate scientific methods, procedures, and 
results to both new and established researchers, policymakers, 
and other consumers, and assist them in interpreting 
statistical information. A National Disability Statistics and 
Policy Forum is conducted periodically to foster dialogue 
between people with disabilities and representative 
organizations, researchers, and policymakers.

6. Rehabilitation Research and Training Center in Secondary 
        Complications in Spinal Cord Injury, University of Alabama/
        Birmingham, Department of Physical Medicine and Rehabilitation, 
        Birmingham, AL

             (Principal Investigator: Amie B. Jackson, MD)

    The primary goal of this RRTC is to conduct high-quality 
basic and applied research that improves existing methods of 
care for people with spinal cord injury (SCI). Current RRTC 
research areas include urology, pressure ulcer healing, 
spasticity, psychosocial adjustment, obstetric/gynecologic 
complications, costs of rehospitalization, and pulmonary 
complications. The Center's training component disseminates 
RRTC research results to rehabilitation professionals and 
consumers with SCI in useable formats such as videotapes, 
audiotapes, written materials, journal articles, and short-term 
training programs.

7. Rehabilitation Research and Training Center in Neuromuscular 
        Diseases, University of California/Davis, MED: Physical 
        Medicine and Rehabilitation TB 191, Davis, CA

              (Principal Investigator: Craig McDonald, MD)

    Abstract: This project enhances the quality of life for 
people with neuromuscular diseases through multidisciplinary 
research and a comprehensive program of training and 
information services. The Center serves consumers, physicians, 
and health care workers. Program areas include: Interventions 
to preserve functional capacity including management of 
weakness and respiratory insufficiency due to muscle wasting, 
exercise interventions, treatment of exercise related fatigue, 
pain interventions, lower limb orthotic interventions, and 
dietary interventions; interventions to enhance community 
integration, including incorporating goal-based approaches to 
community integration, facilitation of healthy adaptation 
through development of stress management and coping skills, and 
resource training for acquisition of disability-related 
information through the Internet; genetic testing, information, 
and research; and training and information services. The 
centerpiece of the information services program is the National 
Clearinghouse Information on Neuromuscular Diseases, which 
provides access to findings on basic and applied research.

8. Research and Training Center on Personal Assistance Services (PAS), 
        World Institute on Disability, Oakland, CA

              (Principal Investigator: Deborah Kaplan, JD)

    Abstract: This project furthers the understanding that 
Personal Assistance Service (PAS) systems design can better 
promote the economic self-sufficiency, independent living, and 
full integration of people of all ages and disabilities into 
society. The project explores the models, policies, access to, 
and outcomes of, personal assistance services, through: (1) 
gathering perspectives of consumers, program administrators, 
policy makers, and personal assistants using a State of the 
States survey and database development; (2) a policy study on 
the impact of devolution; (3) a cost-effectiveness study; (4) a 
study of workplace PAS; and (5) a study on the supply of 
qualified PAS.

9. Managed Health Care for Individuals with Disabilities, Medlantic 
        Research Institute, National Rehabilitation Hospital Research 
        Center, 102 Irving Street Northwest, Washington, DC

                (Principal Investigator: Gerben DeJong)

    Abstract: This project provides national leadership on the 
major health service and health policy issues facing consumers 
with disabilities in managed health care arrangements. It: (1) 
conducts research; (2) prepares special policy analyses; (3) 
hosts forums for discussion; (4) presents expert testimony to 
Congress and governmental agencies; (5) publishes in the health 
policy, consumer, and trade literature; (6) trains graduate 
students with disabilities in health service research; and (7) 
disseminates findings to diverse consumer, provider, payer, 
academic, and policy-making audiences. On the state and 
national levels the project seeks to make managed care and the 
larger health care system more responsive to the needs of 
people with disabilities by acting as a catalyst for the 
development of new ideas. Program partners are the National 
Rehabilitation Hospital Research Center (NRH-RC) in Washington 
DC and the Independent Living Research Utilization (IL RU) 
center in Houston Texas.

10. Rehabilitation Research and Training Center on Blindness and Low 
        Vision, Mississippi State University,

             (Principal Investigator: J. Elton Moore, EdD)

    Abstract: The Center is conducting a series of research, 
training, and dissemination projects using a multidisciplinary 
strategy. The project works to investigate and document 
employment status, identify barriers to employment and 
techniques and reasonable accommodations to overcome these 
barriers, identify training needs in the Business Enterprise 
Program, and develop and deliver training programs. Training 
and dissemination activities include an information and 
referral center, national conferences, in-service training and 
technical assistance, advanced training for practitioners, 
advanced training in research, and publication and distribution 
of a variety of materials in accessible media.

11. Missouri Arthritis Rehabilitation Research and Training Center, 
        University of Missouri/Columbia, Multipurpose Arthritis Center, 
        DC 330.00, Columbia, MO

             (Principal Investigator: Jerry C. Parker, PhD)

    Abstract: MARRTC helps to prevent and manage disability in 
people with arthritis and related musculoskeletal disease by 
providing leadership at the national level, through three 
strategies: (1) MARRTC conducts state-of-the-art rehabilitation 
and health services research that addresses the needs of people 
with arthritis and related musculoskeletal diseases in the 
following areas: exercise and fitness, interventions for 
psychological well-being and pain, job accommodations and 
employment, and health and wellness, using participatory action 
research (PAR) strategies to emphasize the inclusion of 
consumers in all phases of the research process; (2) MARRTC 
provides training for physicians and other health care 
professionals in the rehabilitative aspects of rheumatologic 
practice, including university-based programs, national 
presentations, research capacity-building, and publications 
aimed at improving clinical skills; (3) MARRTC disseminates 
rehabilitation research and technology transfer for the 
empowerment of people with arthritis to help them to minimize 
disability, maintain employment, and improve functional status.

12. Rehabilitation Research and Training Center on Rural Rehabilitation 
        Services, University of Montana, Missoula, MT

               (Principal Investigator: Tom Seekins, PhD)

    Abstract: This RRTC has the following objectives for 
improving rural rehabilitation services: (1) identify the 
employment and vocational rehabilitation service needs of 
people with disabilities in rural areas; (2) develop 
interventions to improve employment outcomes; (3) demonstrate 
rural entrepreneurial models; (4) identify issues in rural 
independent living and develop interventions to improve 
transportation, health care, housing, and accessibility; (5) 
coordinate with rural independent living centers to identify or 
design and test alternative models of delivery of rural 
rehabilitation services; (6) provide training in rural 
rehabilitation research and practice; (7) conduct an annual 
interactive conference on disability issues in rural America; 
and (8) disseminate research findings to rehabilitation 
service-delivery personnel.

13. Rehabilitation Research and Training Center on Drugs and 
        Disability, Wright State University School of Medicine, 
        Substance Abuse Resources and Disability Issues, Dayton, OH

             (Principal Investigator: Dennis C. Moore, EdD)

    Abstract: This project conducts epidemiological and 
evaluative studies of substance abuse and substance abuse 
services for consumers of state vocational rehabilitation (VR) 
programs. Activities address substance abuse as it co-exists 
with other disabilities; all components of the RRTC are 
designed to interrelate and synergistically build on each 
other. The research components include longitudinal and 
multisite studies to address more advanced research questions, 
and quantitative/qualitative methods or secondary analysis to 
investigate vocational rehabilitation issues for people with 
HIV and the relationship of social benefits on VR outcomes. The 
training components use a variety of materials, venues, and 
trainers in order to address needs within pre- and inservice 
populations. Training and dissemination components also include 
extensive use of distance learning media, especially use of the 
Internet to provide professionals and consumers with timely and 
relevant information. Stakeholder concerns and interests are 
addressed by several mechanisms, including a formal subcontract 
with the National Association on Alcohol, Drugs, and 
Disability. Multiple collaborations are delineated with federal 
agencies, including the Substance Abuse and Mental Health 
Services Administration, as well as professional and consumer 
organizations, national clearinghouses, other RRTCs, and 
institutions of higher education.

14. Multiple Sclerosis Research and Training Center, University of 
        Washington, Department of Rehabilitation Medicine, Box 356490, 
        Seattle, WA

           (Principal Investigator: George H. Kraft, MD, MS)

    Abstract: This Center promotes health and wellness of 
people with Multiple Sclerosis (MS) and improves their 
functioning and employment status. Fundamental to the project 
is a health survey administered to people with MS throughout 
the Northwest region. Information from the survey is fed into 
six project components: (1) promoting wellness among people 
with MS through brief counseling methods; (2) improving the 
functioning of people with MS through three studies: improving 
psychological distress using pharmacological intervention, 
evaluating the combined effect of cooling and exercise on 
performance, and improving function through cognitive 
rehabilitation interventions; (3) exploring the employment 
status of people with MS; (4) designing practical interventions 
and workplace modifications; (5) studying the interaction 
between aging and MS; and (6) exploring the effects of gender, 
culture, stsocio-economic status, ethnicity, place of 
residence, and insurance coverage on people with MS, in regard 
to symptomology and response to treatments. Researchers develop 
and apply interventions and conduct follow-up surveys to 
evaluate the effectiveness of the intervention strategies. This 
Center collaborates with the RRTC on Substance Abuse, the 
Consortium of MS Centers, the National MS Society, and the MS 
Association of America.

            REHABILITATION ENGINEERING AND RESEARCH CENTERS

    This program provides support for the Rehabilitation 
Engineering Research Centers to conduct programs of advanced 
research of an engineering or technical nature in order to 
develop and test new engineering solutions to problems of 
disability. Each center is affiliated with a rehabilitation 
setting, which provides an environment for cooperative research 
and the transfer of rehabilitation technologies into 
rehabilitation practice. The centers' additional 
responsibilities include developing systems for the exchange of 
technical and engineering information and improving the 
distribution of technological devices and equipment to 
individuals with disabilities.

1. Rehabilitation Engineering Center: Assistive Technology and 
        Environmental Interventions for Older Persons with 
        Disabilities, New York University at Buffalo, Buffalo, NY

             (Principal Investigator: William C. Mann, PhD)

    Activities of the RERC focus on research, assistive device 
development, education, and information relating to assistive 
technology for older people in the home and beyond the home. 
The projects of the RERC fall into four major areas: (1) 
research: ten projects address assessments in the home and 
community, issues for minority elders, highly problematic 
device categories, clinical trials of effectiveness, and 
managed care work issues; (2) device development: six projects, 
including devices addressing automobiles, obesity, mobility, 
balance, stairs, and public seating; (3) education: four 
projects addressing professional students, graduate students, 
and rehabilitation and aging service professionals; and (4) 
information: ten project areas, including a ``Helpful 
Products'' series of videos and booklets, training manuals, 
resources for hotel and motel guests, product information, 
national conferences, newsletter inserts, a World Wide Web 
site, monograph series, resource sourcebook, and a resource 
phone line.

2. Smith-Kettlewell Rehabilitation Engineering Research Center, Smith-
        Kettlewell Eye Research Institute, 2232 Webster Street, San 
        Francisco, CA

             (Principal Investigator: John A. Brabyn, PhD)

    Abstract: This RERC develops and evaluates new technology 
and methods for infant vision screening, orientation and 
navigation, described video, access to products, displays and 
electronic information, deaf-blind communication, and other 
problems faced by people who are blind, have visual 
impairments, or have multisensory loss.

3. Rehabilitation Robotics to Enhance the Functioning of individuals 
        with Disabilities, Applied Science and Engineering 
        Laboratories, University of Delaware, Wilmington, DE

            (Principal Investigator: Richard A. Foulds, PhD)

    Abstract: This project focuses on interfaces, design and 
application, and motor control of rehabilitation robotics, as 
well as related information and dissemination. Within its 
research focus, the RERC conducts many interdisciplinary 
research and information projects. Research and information 
activities are constituent-oriented and include implementation 
of a Consumer Innovation Laboratory. This lab includes 
consumers in the engineering design and fabrication of robotic 
devices to aid people with disabilities.

4. Rehabilitation Engineering Research Center on Telerehabilitation, 
        Catholic University of America, Department of Biomedical 
        Engineering, Angborn Hall, Cardinal Station, Washington, DC 
        20064

              (Principal Investigator: Jack Winters, PhD)

    Abstract: This project experiments with various models of 
telerehabilitation for strategic populations, engages in 
development activities that exploit promising technologies, and 
focuses on all aspects of the human-technology interface in a 
broad range of activities that benefit people with 
disabilities. Structured to include national resources with a 
strong focus on outreach and dissemination activities and a 
broad-based set of research activities, the Center focuses on: 
(1) Tele-homecare: telesupport for stroke caregivers; (2) 
Telecoaching: enhancing job options; (3) Telemonitoring: 
passive sensing of functional performance and health parameters 
at home using unobtrusive instrumentation; (4) Teleassessment: 
remote evaluation of skin health and decubiti for people with 
SCI at rural hospitals and clinics using innovative 
technologies; (5) Telerehab Consumer Toolkit: outreach and 
development activities and products; (6) Home Telerehab: 
interactive systems for remote delivery of therapy, assessment, 
teaching and demonstration at home; (7) Telecounseling and 
Teleevaluation: remote psychological counseling and 
neuropsychological evaluation at rural clinics and homes; (8) 
Behavioral Virtual Reality: investigation and training of 
social and attending behaviors using virtual environment 
technology; (9) Teleplay: therapeutic play, including embedded 
teleassessment for children with disabilities; (10) Integrating 
Telerehabilitation in Today's Health Care Marketplace. The 
Center also establishes National Resources activities: (1) 
Homecare and Telerehabilitation Technology Center; (2) Homecare 
and Telerehab Education/Training Center; (3) Virtual Library 
and Dissemination Center; (4) Standards, Codes and Electronic 
Patient Records (EPR); (5) Telerehab Policy Information Center. 
The Center comprises three institutions: The Catholic 
University of America (CUA), the National Rehabilitation 
Hospital (NRH); and the Sister Kenny Institute (SKI).

5. Rehabilitation Engineering Research Center on Universal 
        Telecommunications Access, Gallaudet University, Washington, DC

(Principal Investigator: Judith Harkins, PhD (Gallaudet/UTA); Gregg C. 
         Vanderheiden, PhD (Trace/UTA); Betsy Bayha (WID/UTA))

    Abstract: This RERC conducts research and engineering 
activities with the overall goal of improving the accessibility 
of emerging telecommunications systems and products. The Center 
moves forward the available telecommunications knowledge base 
for access issues confronting people with all types of 
disabilities. The program areas of the RERC are: (1) systems 
engineering analyses; (2) telecommunications access research, 
focusing on needs assessment and development of design 
solutions; (3) universal design specification and review, aimed 
at developers of products and services; (4) telecommunications 
standards that include accessible features; (5) 
telecommunications applications for increased independence; and 
(6) knowledge utilization and dissemination. The RERC combines 
expertise from Gallaudet University, the Trace Research and 
Development Center at the University of Wisconsin, and the 
World Institute on Disability (WID) with the expertise of the 
telecommunications industry through the active involvement of 
two noted telecommunications consultants, Richard P. Brandt and 
Robert Mercer.

6. Rehabilitation Engineering Research Center on Prosthetics and 
        Orthotics,Northwestern University, Rehabilitation Engineering 
        Research Program and Prosthetics Research Laboratory, Chicago, 
        IL

           (Principal Investigator: Dudley S. Childress, PhD)

    Abstract: Activities of the Center include material science 
studies and applications in limb prosthesis and orthoses, 
biomechanical characterizations and functional design of 
prostheses and orthoses, state-of-the-art studies that 
delineate the status of the field and help organize and plan 
for the advancement of prosthetics and orthotic.s, and an 
information and education resource service.

7. Rehabilitation Engineering Research Center on Hearing Enhancement 
        and Assistive Devices,The Lexington Center for the Deaf 
        Research Division, 30th Avenue and 75th Street, Jackson 
        Heights, NY

      (Principal Investigator: Harry Levitt, PhD; Matt Bakke, PhD)

    Abstract: This RERC harnesses emerging technology to 
accommodate the needs of people with hearing loss, and 
disseminates related information in a form that is 
understandable to consumers, service providers, employers, and 
community leaders. These goals are accomplished by: (1) 
developing and evaluating improved, cost-effective 
technological aids for each of the target populations 
identified; (2) developing and evaluating instrumentation for 
detecting hearing loss at an early age; (3) providing improved 
access to modern telecommunications; (4) developing and 
evaluating specialized technology for community, home, and work 
environments; and (5) pursuing an active program of 
dissemination and training to ensure effective utilization of 
these technological aids.

8. Rehabilitation Engineering Research Center on Communication 
        Enhancement in the New Millennium, Duke University, Department 
        of Surgery, Division of Speech Pathology and Audiology, Durham, 
        NC

             (Principal Investigator: Frank DeRuyter, PhD)

    Abstract: This project uses innovative communications 
technologies to benefit researchers, engineers, rehabilitation 
service providers, developers, and users of AAC technologies. 
The project: (1) investigates attitudinal barriers toward 
technology use by elderly people with communication disorders, 
their listeners, and service providers; (2) studies the 
organizational strategies of adult AAC users to determine if 
preferences are predictive of performance using AAC; (3) 
studies how to improve AAC technologies for young children with 
significant communication disorders by evaluating learning 
demands and functional performance (also involves development 
of design specifications); (4) evaluates and enhances 
communication rate efficiency and effectiveness through the 
development of procedures and software technology that 
simulates and measures the performance of AAC technologies; (5) 
identifies barriers to employment, describes strategies to 
overcome them, documents design specifications for AAC 
technologies, and describes action plans to achieve successful 
employment outcomes; (6) increases employment opportunities for 
graduates of an employment and AAC program; and (7) develops a 
coordinated program that monitors and seeks out technology 
developments in both commercial form and prerelease development 
stages that affect the engineering and clinical AAC field.

9. Rehabilitation Engineering Research Center on Accessible and 
        Universal Design in Housing, North Carolina State University 
        School of Design, Raleigh, NC

            (Principal Investigator: Lawrence H. Trachtman)

    The RERC's mission is to: (1) conduct research in 
documenting problems in housing for people with disabilities; 
(2) identify or generate and test solutions to documented 
problems; (3) demonstrate the general utility of solutions to 
documented problems; and (4) conduct training to address skill 
acquisition, knowledge diffusion, and general awareness of 
issues related to housing for people with disabilities. The 
Center also provides information and referral services to 
address identified needs through development and dissemination 
of publications and other information materials and referral to 
other organizations and agencies who can assist with specific 
information requests. The Center's audience includes designers, 
contractors, developers, financial providers, consumer 
advocates, and users of residential environments.

10. Vermont Rehabilitation Engineering Research Center for Low Back 
        Pain, University of Vermont, Vermont Back Research Center, 
        Burlington, VT

              (Principal Investigator: Martin H. Krag, MD)

    The Vermont RERC improves the employability of people with 
back disorders and back disability by developing and testing 
assistive technology. Engineering projects include studies of 
lifting, posture, seating, vibration, and materials handling in 
connection with back pain and disability. Applied research 
projects include the testing of rehabilitation engineering 
products, evaluation of exercise programs, and the development 
of a statewide model program to hasten return to work of people 
with back injuries. The Center's Information Services Division 
provides toll-free assistance in locating research and 
rehabilitation programs, as well as bibliographic searching and 
fact finding. The Center also maintains an Electronic 
Discussion Group: BACKS-L (Send subscription request to 
[email protected]; body of message should read: subscribe 
backs-1 your name).

11. Rehabilitation Engineering Research Center on Information 
        Technology Access, University of Wisconsin/Madison, Trace 
        Research and Development Center, 5901 Research Park Boulevard, 
        Madison WI

          (Principal Investigator: Gregg C. Vanderheiden, PhD)

    Abstract: This RERC improves access by individuals with all 
types, degrees, and combinations of disabilities to a wide 
range of technologies, including computers, ATMs, kiosks, 
point-of-sale devices and smartcards, home and pocket 
information appliances, Internet technologies (XML, XSL, CSS, 
SMIL, etc.), intranets, and 3-D and immersive environments. As 
one component in a larger system of consumers, researchers, 
industry, and policy and public agencies, the Trace Center's 
program is designed to work within the existing structure, 
supporting other components and coordinating its efforts to 
address the functioning of the whole. The program identifies 
strategies that can be used by industry to broaden the user 
base for their standard products, so individuals with as broad 
a range of abilities as possible are able to use standard 
products directly. Further, the Center targets specific 
compatibility and interconnection standards work to ensure that 
people who cannot use products directly are able to operate 
them using assistive technologies. The Center focuses on the 
use of targeted projects and collaboration, both national and 
international, to carry out the research, development, 
information dissemination, training, and standard-setting 
activities required. The approach is intended to be flexible, 
forward-looking, and broad in scope, yet focused on key access 
issues as defined by its consumer constituency and its research 
programs.

                    FIELD INITIATED RESEARCH PROGRAM

    This program is designed to encourage eligible applicants 
to originate valuable ideas for research and demonstrations, 
development, or knowledge dissemination activities in areas 
which represent their own interests, yet are directly related 
to the rehabilitation of people with disabilities.

1. Aging and Adjustment after Spinal Cord Injury: A 20-Year 
        Longitudinal Study, Shepherd Center for Spinal Injuries, Inc., 
        2020 Peachtree Road, NW, Atlanta, GA

            (Principal Investigator: J. Stuart Krause, PhD)

    This fourth study phase will be the most extensive follow-
up yet performed and will use an expanded version of the same 
questionnaire that was used in each of the three previous 
followups (1973, 1984, 1988). Three types of research designs 
will be used for data analysis including: (1) traditional 
longitudinal analysis of 1973 to 1992 data from the original 
participant sample; (2) cross-sequential analysis of the 
repeated measures data from 1984 to 1992 for samples one and 
two; and (3) timesequential analysis of time-lagged data 
comparing the 1984 data for sample two with that of the new 
third sample.

2. Remote Signage Development to Address Current and Emerging Access 
        Problems for Blind Individuals, Smith-Kettlewell Eye Research 
        Institute, 2232 Webster Street, San Francisco, CA

(Principal Investigator: John A. Brabyn, PhD; William F. Crandall, PhD)

    Abstract: This project is developing new, practical 
enhancements of remote signage technology to solve a range of 
specific current and emerging accessibility problems faced by 
people who are blind and who have other print-reading 
disabilities. For users who are blind, access to any place or 
facility begins with the problem of knowing it exists; then the 
problem of finding it must be addressed. Specific solutions are 
being developed for safe usage of light-controlled pedestrian 
crossings, identification and onboard announcements of stops 
for buses, identifying route number and destination of oncoming 
buses, locating and accessing automated teller machines and 
other vending information terminals, and access to signage by 
people with cognitive impairments. These innovative solutions 
are being developed from the infrared Talking Signs(R) system 
of remotely readable signs for people who are blind, which was 
developed by Smith-Kettlewell. This system is gaining 
acceptance as an aid to orientation and navigation for those 
who cannot read the print signage that fully sighted people 
take for granted in navigating and accessing the world.

3. Spatial Hearing with Laboratory-Based Hearing Aids, Smith-Kettlewell 
        Eye Research Institute, 2232 Webster Street, San Francisco, CA 
        94115

             (Principal Investigator: Helen J. Simon, PhD)

    Abstract: Since conventional binaural hearing aids do not 
satisfactorily solve the problem of speech perception in noise, 
a long-term goal of the Smith-Kettlewell Eye Research Institute 
is to develop a better binaural hearing aid (HA). This 
project's hypothesis suggests that a binaural perceptual 
balance of Interaural Intensity Difference (IID) and Interaural 
Time Delay (ITD) across frequencies is required to restore 
optimum localization and speech intelligibility by eliminating 
or lessening exaggerated dominance consequent to asymmetric 
hearing loss. Aberrations of either or both IID and ITD at 
different frequencies would impair directional localization 
and, therefore, speech intelligibility in noise. Hearing Aids

4. Marketing Health Promotion, Wellness, and Risk Information to Spinal 
        Cord Injury Survivors in the Community, Craig Hospital, 3425 
        South Clarkson Street, Englewood, CO

             (Principal Investigator: Gale Whiteneck, PhD)

    Abstract: Building on experience gained from the RRTC in 
Aging with Spinal Cord Injury (SCI) at Craig Hospital, this 
project offers health promotion, wellness, and risk information 
to SCI survivors. Recent reports from survivors caregivers, and 
researchers are demonstrating that SCI is not the unchanging 
disability it was once thought to be; over time many survivors 
face medical complications, psychosocial concerns, and 
diminishing quality of life. Al-

though many of these adverse outcomes could be averted or 
lessened with active health maintenance and wellness 
strategies, SCI survivors in the community face a dearth of the 
information they need to make such positive lifestyle choices. 
This project creates: (1) a Wellness and Risk Assessment 
Profile that provides individualized SCI-specific health risk 
appraisals via the Internet; (2) regular health information 
columns in three widely-read consumer journals; (3) custom 
brochures targeting the prevention and health promotion needs 
of SCI survivors in the community; (4) a handbook offering 
information about making wise health and lifestyle choices for 
recently injured SCI survivors; (5) a handbook targeting 
caregivers of SCI survivors; and (6) a curriculum for people 
who teach and provide support to caregivers.

5. Toward a Risk Adjustment Methodology for People with Disabilities, 
        Medlantic Research Institute, National Rehabilitation Hospital 
        Research Center, Washington, DC

              (Principal Investigator: Gerben DeJong, PhD)

    The principle goal of this knowledge dissemination project 
is to provide its primary audiences, health care policy-makers 
and payers, with key information to advance the development of 
a risk adjustment system for working- and retirement-age people 
with disabilities. Risk adjustment reduces the incentive for 
risk selection and promotes access to needed health services. 
To achieve this goal, the project assembles a panel of leading 
experts on risk adjustment and disability to guide the 
development of a consensus report that: (1) details the state 
of science in risk adjustment, (2) evaluates the 
appropriateness of health care outcome indicators for people 
with physical and mental disabilities, and (3) provides a set 
of recommendations for modifying and implementing risk 
adjustment methodologies that enhance access to health services 
for people with disabilities enrolled in public and private 
sector health plans.

6. Relation of Rehabilitation Intervention to Functional Outcome in 
        Acute and Subacute Settings, Rehabilitation Institute Research 
        Corporation, Rehabilitation Services Evaluation Unit, 345 East 
        Superior Street, Chicago, IL

             (Principal Investigator: Allen Heinemann, PhD)

    Abstract: Seven rehabilitation facilities that provide 
acute medical rehabilitation are assessing rehabilitation 
outcomes and predictors of outcomes, using a method for 
assessing rehabilitation therapy goals, activities, and 
barriers to goal attainment. This project is extending that 
study. It uses the same methodology used by five sites that 
provide subacute rehabilitation. Being assessed are: (1) 
patient attributes at admission, such as impairment severity, 
comorbid conditions and complications, functional deficits, and 
demographic characteristics; (2) therapeutic interventions 
(type, quantity, duration, modality, and intensity) provided in 
acute and subacute settings; and (3) outcomes achieved 
(functional status, discharge destination, and patient 
satisfaction). The lead project, the NIDRR-funded RRTC on 
Functional Assessment and Evaluation of Rehabilitation 
Outcomes, was awarded to the State University of New York.

7. Enhancement of Upper Limb Functional Recovery in Stroke, Using a 
        Computer-Assisted Training Paradigm, Rehabilitation Institute 
        Research Corporation, Sensory Motor Performance Laboratory, 
        #1406, 345 East Superior Street, Chicago, IL

                 Principal Investigator: Julius Dewald

    Abstract: This study investigates use of a novel computer-
assisted isometric training regime to overcome abnormal 
movement synergies following hemiparetic stroke. These deficits 
in coordination are expressed in the form of abnormal muscle 
synergies and result in limited and stereotypic movement 
patterns that are functionally disabling and often 
debilitating, but that are not understood. Current 
neurotherapeutic approaches to the amelioration of these 
abnormal synergies have produced, at best, limited functional 
recovery. The effect of two training regimes on functional 
movement are being investigated in 40 hemiparetic stroke 
subjects. The first training regime uses a general, classical 
strengthening protocol to increase torque production in 
specific directions. The second, novel regime strengthens 
subjects using torque combinations that require the subject to 
deviate progressively from their abnormal torque synergies. 
Assessment of the effectiveness of these two regimes is based 
on quantitative comparisons of voluntary upper limb movements 
performed pre- and post-training.

8. Knowledge Dissemination for Vision Screeners, University of Kansas 
        Institute for Life Span Studies, Parsons, KS

           (Principal Investigator: Charles R. Spellman, EdD)

    This project is disseminating a CD-ROM to providers of 
vision screening and evaluation services, in order to increase 
the quantity and quality of vision services available 
nationally to infants, toddlers, preschoolers, and older people 
with disabilities. These populations are sometimes considered 
difficult to test, and as a consequence, often do not receive 
traditional vision screening services. The project addresses 
the training needs of a variety of personnel by providing an 
interactive CD-ROM program, modeled after the ``knowledge on 
demand'' technology used in industry, that can be readily 
delivered in a variety of settings. The program is providing a 
model for using CD-ROM to disseminate ``knowledge on demand.''

9. Development and Commercial Transfer of a Tactile Image Printer 
        (TIP), International Braille Research Center, 4424 Brookhaven 
        Avenue, Louisville, KY

              (Principal Investigator: T.V. Cranmer, PhD)

    Abstract: The project designs a product that allows 
students, educators, and other professionals who are blind to 
access a variety of graphic material such as computer screens, 
maps, schematics, geometry tables, organizational charts, flow 
charts, and line drawings. Researchers develop a device that 
produces sharper, better-defined tactile images and includes 
lines and filled-in areas of varying dimensions and textures. 
Colors can also be produced as needed or as appropriate. 
Developers include the inventor, engineers, educators, 
publishers, and grassroots advocacy organizations, with support 
from three Rehabilitation Research Engineering Centers, those 
on Information Access (Trace), Blindness and Visual Impairment 
(Smith-Kettlewell), and Technology Transfer (SUNY/Buffalo). The 
device should help people who are blind or who have visual 
impairments to become active participants in the new global 
economy. Phases of the project include firmware development, 
experimentation and testing, creation and testing of graphic 
material, and product and information dissemination.

10. Measuring Functional Communication: Multicultural and International 
        Applications, American Speech-Language-Hearinq Association, 
        10801 Rockville Pike, Rockville, MD

               (Principal Investigator: Diane Paul-Brown)

    Abstract: The long-term objective of this project is to 
improve the quality of life for adults with communication 
disabilities by expanding and validating an assessment tool for 
multicultural and international populations. Assessments can 
then be made regarding communication functions and needs, and 
rehabilitation can be individualized to optimize the person's 
ability to communicate in their natural environments. Reliable 
communication skills are a requisite for individuals to achieve 
their social, educational, and vocational potentials, and for 
patients to understand and participate in their care and 
recovery. Activities of this project include: (1) development 
of a supplemental measure of quality of communicative life; (2) 
validation of the extended American Speech-Language-Hearing 
Association Functional Assessment of Communication Skills for 
Adults with multicultural groups including African Americans, 
Asian Americans, Caucasian, Hispanic, and Native Americans; (3) 
validation with various populations with communication 
disorders such as those caused by brain injury, stroke, 
Alzheimer's disease and related dementias, and acquired 
neurological disorders; and (4) validation in other English-
speaking countries.

11. Closed Captioning and Audio Description: Development and Testing 
        for Access to Digital Television, WGBH Educational Foundation, 
        125 Western Avenue, Boston, MA

                (Principal Investigator: Larry Goldberg)

    Abstract: This project addresses the urgent, time-sensitive 
need to improve the effectiveness of Advanced Television (ATV) 
to deliver high-quality captioning and description services to 
people who are deaf, hard of hearing, who are blind, or who 
have visual impairments. Advanced Television (ATV) incorporates 
the technologies known as High-Definition Television (HDTV) and 
Standard Definition Television (SDTV), and is a complete 
redesign of North America's television service, featuring a 
digital signal, a sharper picture, an aspect ratio resembling 
that of a wide-screen movie, multiple CD-quality audio 
channels, and ancillary data services. This project uses 
knowledge and understanding gained from research and 
development previously undertaken by the WGBH Educational 
Foundation (among others) to design and develop prototype ATV 
captioning and description processes. Project objectives are: 
(1) to develop and disseminate a standard data file that tests 
ATV systems for quality and accuracy in handling ATV captions 
and descriptions as they are encoded, transmitted, and decoded 
in accordance with accepted standards and official minimum 
requirements; (2) to develop and disseminate an advanced-
features data file that tests ATV systems for quality and 
accuracy in handling ATV captions and descriptions as they are 
encoded, transmitted, and decoded in accordance with accepted 
standards and with a full range of advanced features; (3) to 
evaluate the effectiveness of ATV receivers in decoding ATV 
captions and descriptions and to measure implementation of 
advanced features.

12. Secondary Conditions, Assistance, and Health-Related Access Among 
        Independently Living Adults with Major Disabling Conditions, 
        Massachusetts Health Research Institute, Boston, MA

                 (Principal Investigator: Nancy Wilber)

    Participants in this study are affiliated with six 
Massachusetts independent living centers (ILCs). The cross-
disability sample includes people with a range of significant 
physical, mental, sensory, and developmental disabilities who 
require assistance with activities of daily living. Primary 
outcomes of interest are: (1) the frequency and severity of 
secondary conditions, including skin problems, seizures, 
chronic pain, spasms, falls, fatigue, respiratory tract 
infections, and urinary tract infections; and (2) reactions to 
medication, depression, anxiety, and injuries related to 
medical equipment. Mediating variables include: adequacy of 
personal assistance, assistive technology, access to health 
promotion and health care services, environmental barriers, 
transportation, employment, education, socioeconomic status, 
smoking, use of substances, and compliance with prescribed 
health care routines. The research study includes two annual 
cross-sectional surveys, each of 300 randomly-selected ILC 
consumers, to determine prevalence, distribution, frequency, 
and severity of secondary conditions. Focus groups of ILC 
consumers and others help interpret the data.

13. The Impact of Managed Care on Rehabilitation Services and Outcomes 
        for Persons With Spinal Cord Injury, Rehabilitation Institute 
        of Michigan, Research Department, 261 Mack Boulevard, Room 520, 
        Detroit, MI

             (Principal Investigator: Marcel Dijkers, PhD)

    Abstract: This project examines the impact of managed care 
on rehabilitation services and outcomes for people with SCI. 
The study analyzes demographic, medical, functional, community 
integration, life satisfaction, and service delivery data 
collected from Model Systems projects to determine how managed 
care is altering the acute and rehabilitative management of SCI 
and how it affects short- and long-term outcomes, such as 
functional status and community integration. Objectives 
include: (1) describing the pathways of newly injured people 
with SCI through the health care system, from injury to stable 
community residence: acute care, rehabilitation care (including 
inpatient-acute, subacute, day hospital and outpatient), home 
care, and readmissions for complications; (2) assessing the 
impact of managed care on these pathways: determining whether 
managed care patients differ from those with more traditional 
health insurance in terms of services received (providers, 
services, durations); and (3) assessing the effect of various 
pathways on the outcomes for this patient population at one and 
two years after injury in functional, medical, psychological, 
and health services utilization. The project team disseminates 
findings to consumers, managed care and other payer 
organizations, policy makers, and SCI professionals using a 
variety of mechanisms. Findings are expected to contribute to 
the redesign of the SCI Model Systems National Database to make 
it correspond optimally to the organization of health and 
rehabilitative services in the 21st century.

14. Effect of Motor Learning Procedures on Brain Reorganization in 
        Subjects With Stroke, University of Minnesota, Program in 
        Physical Therapy, Box 388 Mayo, Minneapolis, MN

                 (Principal Investigator: James Carey)

    Abstract: This project determines whether elements of motor 
learning can promote brain reorganization and recovery of 
function in individuals with stroke. Two interventions have 
been shown to be effective in helping people recover from 
stroke, ``forced use'' of the weak side and electrical 
stimulation. Investigators have hypothesized that these 
treatments may unmask dormant motor centers or improve synaptic 
effectiveness, but no evidence has been forthcoming. The 
project involves two experiments: (1) subjects with stroke 
receive 20 training sessions at a finger movement tracking task 
in which they are forced to process the perceptual motor 
information mentally and learn to respond accurately, and (2) 
different subjects with stroke receive 20 days of electrical 
stimulation to the weak forearm muscles. For both experiments, 
changes in finger function are measured with tracking and 
manual dexterity tests. Neuroplastic changes in the brain are 
measured with functional magnetic resonance imaging. This 
project may show for the first time that physical 
rehabilitation procedures may stimulate beneficial 
reorganization of the brain following stroke and invite further 
experiments to optimize treatments.

15. The Universal Bathroom, Research Foundation of State University of 
        New York, State University of New York (SUNY)/Buffalo, Amherst, 
        NY

        (Principal Investigator: Abir Mullick, Project Director)

    While the greatest potential benefactors of a universal 
bathroom are non-institutionalized people with disabilities who 
are living independently, the new bathroom's design will be 
created to be safe, accessible and usable by all people 
regardless of their age, sex, and disabling conditions. Its 
assumed modular, interchangeable components will include three 
primary units, for bathing/showering, toileting, and grooming. 
Since the bathroom of the user's choice can be custom built 
from a large range of component units, this will be a 
marketable, culturally responsive one with accepted layouts and 
levels of privacy. Additionally, the ``lifespan perspective'' 
of the bathroom's design will allow able-bodied care-providers 
such as parents of young children and those assisting older 
individuals to make layout changes and product alterations 
based on their current needs. Thus the bathroom's assistive 
qualities will reduce temporary dependence on others and 
increase safety by preventing accidents that lead to 
disability. It will empower independent users, dependent users, 
and care-providers equally--the young, the old, married 
couples, people with children, and families with ``live-in'' 
grandparents.

16. Promoting the Practice of Universal Design, North Carolina State 
        University School of Design, Center for Universal Design, 219 
        Oberlin Road, Raleigh, NC

                 (Principal Investigator: Molly Story)

    Abstract: This project promotes the practice of univeral 
design by developing and implementing a self-supporting product 
design evaluation and marketing program that responds to 
consumer and industry needs. Universal design is the design of 
products and environments that are usable, to the greatest 
extent possible, by everyone regardless of their age or 
ability. The critical next step toward increasing the practice 
of universal design is adoption and application of its 
principles both by consumers and by industry. The three 
objectives of this project are to improve consumers' ability to 
recognize universal design, to improve designers' ability to 
meet the needs of a diverse consumer base, and to recognize and 
support industry efforts to market universal design 
successfully. Ways these objectives are achieved through this 
project include: (1) developing a set of performance measures 
that reflect the Principles of Universal Design, (2) confirming 
the reliability of these measures and pilot testing the 
evaluation program, (3) developing a plan of self-support for 
the universal design evaluation program, and (4) disseminating 
the results to appropriate audiences. The project develops a 
sound universal design program based on information gathered 
directly from future users--consumers, designers, and 
marketers--as well as the universal design research community.

17. Women's Personal Assistance Services (PAS) Abuse Research Project, 
        Oregon Health Sciences University/Portland, Child Development 
        and Rehabilitation Center, P.O. Box 574, Portland, OR

              (Principal Investigator: Laurie Powers, PhD)

    Abstract: This project increases the identification, 
assessment, and response to abuse by formal and informal 
personal assistance service (PAS) providers of women with 
physical and physical and cognitive disabilities living 
independently in the community. The aims of the project: (1) 
develop culturally sensitive screening approaches to identify 
PAS abuse, (2) develop a culturally appropriate PAS abuse 
assessment protocol, and (3) develop culturally appropriate 
response strategies to prevent and manage PAS abuse. Culturally 
diverse participants assist in the development of these three 
aims. The study includes three phases, beginning with a focus 
group study of culturally diverse women with physical and 
cognitive disabilities. Phase II involves the use of findings 
from Phase I to develop and disseminate a survey of 260 
culturally diverse females with disabilities drawn from four 
national organizations. Phase III involves the development and 
field testing of the effectiveness of the screening, 
assessment, and support protocols, the final product being a 
comprehensive package of PAS abuse prevention materials. The 
project plans to disseminate these materials on a national 
basis.

18. A Pilot Study for the Clinical Evaluation of Pressure-Relieving 
        Seat Cushions for Elderly Stroke Patients, University of 
        Pittsburgh, Pittsburgh, PA

                (Principal Investigator: David Brienza)

    This project designs and tests the feasibility of a 
randomized clinical trial to determine the efficacy of 
pressure-relieving seat cushions for immobile, elderly stroke 
patients. Older people with disabilities who are immobile and, 
thus, spend their time either in bed or seated, are at risk for 
developing pressure ulcers. Commercial seat cushions intended 
to reduce the risk of sitting-induced pressure ulcers are 
available. The elderly population, however, is not customarily 
evaluated for seating and positioning needs or provided with 
the benefits of this technology. Reimbursement is not 
available, due in part to the fact that the effectiveness of 
this intervention has not been sufficiently demonstrated for 
this high-risk population, and these services and technology 
are not available. If these cushions are a successful 
intervention for increased comfort, improved quality of life, 
and pressure ulcer incidence rate reduction, the project plans 
to disseminate the findings and provide justification for third 
party funding. If successful, project plans to increase the 
availability of seating and positioning services and products 
to this deserving population.

Disability and Rehabilitation Research Projects (formerly Research and 
                        Demonstration Projects)

    These projects address rehabilitation priorities identified 
by NIDRR and published in the Federal Register. These 
priorities address a variety of problems encountered by people 
with disabilities. Projects are funded for up to 36 months.

1. Exercise and Recreation for Individuals with a Disability: 
        Assessment and Intervention, Rehabilitation Institute of 
        Chicago, Center for Health and Fitness, Chicago, IL

                (Principal Investigator: Jeffery Jones)

    This project demonstrates that participation in exercise 
and physical activities improves function, facilitates 
community reintegration, and enhances the quality of life of 
people with disabilities. The project: (1) investigates the 
long-term effects of an exercise fitness program on the 
physiology, metabolic performance, and quality of life of 
people with spinal cord injury, stroke, and cerebral palsy; (2) 
examines the role of self-efficacy in maintaining participation 
in an exercise fitness program; (3) describes the types and 
frequency of recreation and fitness activities among people who 
have had a stroke, people with spinal cord injury, and people 
with cerebral palsy; (4) examines the relationships between 
participation in recreation and exercise programs and the 
health status, life satisfaction, and depression in the above 
populations; and (5) delineates barriers and deterrents to 
participation in recreation and exercise programs that exist 
for a variety of disability groups.

2. The Center on Emergent Disability, University of Illinois/Chicago, 
        Institute on Disability and Human Development, 1640 West 
        Roosevelt Road, Chicago, IL

            (Principal Investigator: Glenn T. Fujiura, PhD)

    Abstract: This Center focuses on characterizing the impact 
of major health, social, and economic trends on the 
manifestation of disability in America, through a broadly 
conceived nationwide research effort across multiple 
disciplines and constituencies. Core activities include 
secondary analyses of major data sets, evaluation of public 
health surveillance systems, local needs assessment, policy 
analysis, and dissemination. This project is headquartered at 
the University of Illinois at Chicago with collaborating 
research groups at the University of Southern California 
Children's Hospital, Rancho Los Amigos Medical Center, 
Georgetown University Medical Center, Baylor College of 
Medicine, University of Minnesota, Northern Arizona University, 
and Vanderbilt University.

3. Reducing Risk Factors for Abuse Among Low-Income Minority Women with 
        Disabilities, Baylor College of Medicine, Department of 
        Physical Medicine and Rehabilitation, 3440 Richmond Avenue, 
        Suite B, Houston, TX

            (Principal Investigator: Margaret A. Nosek, PhD)

    Abstract: This project pursues strategies to reach women 
with disabilities at all stages of resolving abusive 
situations. To accomplish this purpose, the project has the 
following objectives: (1) identify risk factors for emotional, 
physical, and sexual abuse faced by women with disabilities; 
(2) assess the ability of rehabilitation and independent living 
counselors to identify women in abusive situations and refer 
them to appropriate community resources; (3) develop and test 
models for programs that reduce the risk of abuse for women 
with disabilities, particularly among women with disabilities 
from low-income, minority backgrounds where the incidence of 
abuse is highest; and (4) establish an agenda for future 
research on women with disabilities using a national advisory 
panel. The project works not only with programs that help 
battered women, but also with those in contact with women with 
disabilities in various community contexts.

4. Understanding and Increasing the Adoption of Universal Design in 
        Product Design, University of Wisconsin/Madison, Trace Research 
        and Development Center, Madison, WI

          (Principal Investigator: Gregg C. Vanderheiden, PhD)

    This project: (1) identifies the factors that cause 
industry to practice, or not to practice, universal design of 
products; and (2) identifies ways that people outside companies 
can encourage and facilitate the practice of universal design 
of products on a more widespread basis. The project brings 
together experts who have been active in universal design from 
across the technology spectrum to work with industry in 
addressing these questions. Areas of expertise include housing 
and architecture, computers and electronic products, media and 
materials, telecommunications, and educational software.

                          UTILIZATION PROJECTS

    This program supports activities that will ensure that 
rehabilitation knowledge generated from projects and centers 
funded by the Institute and other sources is fully utilized to 
improve the lives of individuals with disabilities.

1. Improving Access to Disability Data, InfoUse, Berkeley, CA

          (Principal Investigator: Susan Stoddard, PhD, AICP)

    InfoUse's Center on Access to Disability Data is the 
central source for disability statistics data and related 
technical reports in accessible, easy-to-understand, user-
friendly formats. The Center provides this information to 
businesses, the media, urban planners and policymakers, and the 
disability community. The first major product, the Chartbook on 
Disability in the United States, 1996, provided updated 
statistical information on a range of disability topics. 
Material for the Chartbook series and related fact sheets are 
available to the public in a variety of published and 
electronic formats, including print and electronic media. The 
Center's Web site serves as a source for electronic documents, 
includes guidelines for accessible Web publishing, and provides 
links to major national data sources including data sites 
developed by other NIDRR grantees and by major national 
disability data suppliers.

2. National Rehabilitation Information Center (NARIC), KRA Corporation, 
        Silver Spring, MD

                 (Principal Investigator: Mark X. Odum)

    The National Rehabilitation Information Center (NARIC) 
maintains a research library of more than 51,000 documents and 
responds to a wide range of information requests, providing 
facts and referral, database searches, and document delivery. 
Through telephone information referral and the Internet, NARIC 
disseminates information gathered from NIDRR-funded projects, 
other federal programs, and from journals, periodicals, 
newsletters, films, and videotapes, NARIC maintains REHABDATA, 
a bibliographic database on rehabilitation and disability 
issues, both in-house and on the Internet. Users are served by 
telephone, mail, electronic communications, or in person.

3. ABLEDATA Database Program, Macro International, Inc., Silver spring, 
        MD

                (Principal Investigator: Lynn Halverson)

    The project maintains and expands the ABLEDATA database, 
develops information and referral services that are responsive 
to the special technology product needs of consumers and 
professionals, and provides the data to major dissemination 
points to ensure wide distribution and availability of the 
information to all who need it. The ABLEDATA database contains 
information on more than 23,000 assistive devices, both 
commercially produced and custom made. Requests for information 
are answered via telephone, mail, electronic communications, or 
in person.

4. National Center for the Dissemination Of Disability Research 
        (NCDDR), Southwest Educational Development Laboratory, Austin, 
        TX

            (Principal Investigator: John D. Westbrook, PhD)

    This project provides information and technical assistance 
to NIDRR grantees in identifying and improving dissemination 
strategies designed to meet the needs of their target audience. 
The project also analyzes and reports on dissemination trends 
relevant to disability research. Task force and material 
development activities address multicultural factors that 
influence dissemination and utilization. This project conducts 
ongoing International networking through a variety of 
approaches, including an interactive world Wide Web site 
highlighting events and other information about specific NIDRR 
grantees, the production of quarterly issues of The Research 
Exchange, and in-person and online technical assistance 
support.

                        research training grants

    The purpose of this program is to expand capability in the 
field of rehabilitation research by supporting projects that 
provide advanced training in rehabilitation research. These 
projects provide research training and experience at an 
advanced level to individuals with doctoral or similar advanced 
degrees who have clinical or other relevant experience, 
including experience in management or basic science research, 
in fields pertinent to rehabilitation, in order to qualify 
those individuals to conduct independent research on problems 
related to disability and rehabilitation.

1. Advanced Rehabilitation Research Training Project in Rehabilitation 
        Services Research, Northwestern University, Rehabilitation 
        Institute Research Corporation, Rehabilitation Services 
        Evaluation Unit, Chicago, IL

           (Principal Investigator: Allen W. Heinemann, PhD)

    Abstract: This project develops a five-year fellowship 
program in rehabilitation service research at Northwestern 
University's Department of Physical Medicine and 
Rehabilitation. It uses available expertise and collaborators 
to train postdoctoral fellows in rehabilitation health services 
research. Over two years the program includes course work, a 
practicum, original research, and grant writing. Fellows new to 
health services research have six core courses, as well as the 
four-to-five additional courses for all fellows. The first year 
concentrates on beginning Masters in Public Health (MPH) 
courses. The second year includes intermediary MPH course work 
plus electives. Each fellow is expected to develop an 
individual research project by the end of the first training 
year and a publishable article by the end of the second year in 
addition to submitting at least one grant application related 
to the research activity.

                   small business innovative research

    New ideas and products useful to people with disabilities 
and the rehabilitation field are encouraged with small business 
innovative research grants. This three-phase program takes an 
idea from development to market readiness.

1. Webwise: A Specialized Web Browser Providing Independent Access to 
        the Internet to Individuals with Mental Retardation, Ablelink 
        Technologies, 2501 North Chelton Rd, Colorado Springs

               (Principal Investigator: Daniel K. Davies)

    Abstract: This project investigates the issues surrounding 
World Wide Web access for people with mental retardation and 
other cognitive disabilities, and builds a prototype browser 
called WebWise that improves their Web access. Researchers test 
the prototype to assess its effectiveness compared to existing 
Web browsers, and data is collected regarding educational and 
recreational benefits of the WebWise browser.

2. Automated PC-based Speech-to-Sign-Language Interpreter, Seamless 
        Solutions, Inc., 3504 Lake Lynda Drive, Suite 390, Orlando, FL

             (Principal Investigator: Edward M. Sims, PhD)

    Abstract: This project demonstrates the feasibility of 
real-time, PC-based, speech-to-sign-language interpretation, by 
integrating commercially available speech recognition and 
language modeling software with Seamless Solutions, Inc.'s PC-
based Signing Avatars(tm) 3D character animations of sign 
language communication. For example, a teacher could speak into 
a headmounted microphone, and the sentences would be translated 
into 3D sign language communication on the student's desktop 
PC; such a system could also facilitate sign language learning 
for hearing people.

(3. Visual Light Audio Information Transfer System (VLAITS), Talking 
        Lights Company, 28 Constitution Road, Boston, MA

                (Principal Investigator: George Hovorka)

    Abstract: This project develops an inexpensive 
communication system that uses currently installed visible 
lighting, such as fluo-

rescent or mercury vapor lighting, as a carrier medium for 
data. The system modulates light output from the lighting 
fixture and transmits the data fast enough that no visual 
flicker is perceptible. The data is received by a personal 
audio receiver (PAR) and is converted into audio information 
for the PAR wearer, who may be hard of hearing, have a visual 
impairment, or may not have a disability. The system is 
developed, evaluated, and tested with people with visual 
impairments and people who are hard of hearing to maximize user 
friendliness and value.

4. Development of a Tactile Graphical User Interface Touch Graphics, 
        140 Jackson Street, Brooklyn, NY

                (Principal Investigator: Steven Landau)

    Abstract: This project develops a standardized tactile 
graphical user interface (TGUI) that allows fuller access to 
interactive educational tools and forms of entertainment to 
millions of children, adults, and senior citizens who are blind 
or who have visual impairments. Goals include: (1) a fully 
realized tactile ``screen'' layout that incorporates tools, 
icons, data entry functions, working space, and calibration and 
identification features; (2) a sample application based on the 
TGUI; (3) a full regime of user tests carried out by the 
American Foundation for the Blind; (4) instructional materials 
for using the TGUI and the sample application; (5) a final 
report documenting the findings of the project and the 
feasibility for future development. The resulting device and 
accessories are marketed to schools, libraries, and 
individuals.

5. Trails Web Site with Universal Access Information, Beneficial 
        Designs, Inc., 5858 Empire Grade, Santa Cruz, CA

     (Principal Investigator: Peter W. Axelson; Denise A. Chesney)

    Abstract: This project develops the Trails Web site to 
provide universal access information for trails throughout the 
United States, making the site useful to all hikers, regardless 
of their ability. The Universal Trails Assessment Process 
enables trail managers to assess specific trails objectively 
with regard to grade, cross slope, width, surface 
characteristics, and obstacles. The collected trail data is 
processed to create Trail Access Information in a format 
similar to a Nutrition Facts food label. The Trails Web site 
contains Trail Access Information on numerous hiking trails and 
allows users to search for trails that meet their specific 
access needs.

6. Broadcast Radio for Individuals who are Deaf: Gaining Equity 
        (BRIDGE), TeleSonic Division of Associated Enterprises, Inc., 
        31 Old Solomons Island Road, Annapolis, MD 21041

            (Principal Investigator: Leonard A. Blackshear)

    Abstract: Phase I of this project proved it is feasible to 
transmit multimedia signals over commercial radio and to 
receive them with special decoder devices. Phase II develops 
working models of radio transmitter and receiver devices that 
allow simultaneous radio broadcasting of both audio and visual 
information. Users of TTYs, for example, could receive ``closed 
captioned'' broadcasts of radio programs. Research and 
development tasks include: (1) conducting ongoing technical 
research, (2) examining future directions in radio 
broadcasting, (3) finalizing synchronization schemes, (4) 
updating system specifications, (5) developing models, (6) 
conducting tests with radio stations, (7) identifying modes of 
sustaining further development, and (8) reporting results. 
Anticipated future results include development of a commercial 
broadcast system.

                  state technology assistance programs

    This program, funded under The Technology-Related 
Assistance for Individuals with Disabilities Act of 1988, as 
amended, supports consumer-driven, statewide, technology-
related assistance for individuals of all ages with 
disabilities.
    States and territories are eligible to apply for one 3-year 
development grant, a first-extension grant for years 4 and 5, 
and a second-extension grant for years 6-10. The purpose of 
these grants is to establish a program of statewide, 
comprehensive, technology-related assistance for individuals 
with disabilities of all ages.

   independent living services for older individuals who are blind, 
                         chapter 2 of title vii

    Section 752 of the Rehabilitation Act of 1973, as amended, 
authorizes discretionary grants to State vocational 
rehabilitation (VR) agencies for projects that provide 
independent living services for persons who have severe visual 
impairments and who are aged 55 and older. Each designated 
State unit that is authorized to provide rehabilitation 
services to blind individuals may either directly provide 
independent living services or it may make subgrants to other 
public agencies or private non-profit organizations to provide 
these services.
    The services most commonly provided are: (1) training for 
activities of daily living, (2) the provision of adaptive aids 
and appliances, (3) low vision services, (4) orientation and 
mobility services, (5) training in communication skills, (6) 
family and peer counseling, and (7) community integration, 
which includes outreach and information and referral.
    During FY 1966, the most recent year for which we have 
analyzed data, 26,846 older individuals with significant visual 
impairment or blindness received services. of these consumers, 
64.4 percent were at age 76 or older and 45 percent were age 81 
or older. The individuals served by this program represent 
approximately one-half of the individuals with significant 
visual impairments or blindness who receive rehabilitation and 
independent living services through public and private 
rehabilitation programs as estimated by the Mississippi State 
University and the New York Lighthouse for the Blind.

                      ITEM 5--DEPARTMENT OF ENERGY

                              ----------                              


                              Introduction

    The Department of Energy is a leading science and 
technology agency whose research supports our Nation's energy 
security, national security, environmental quality, and 
contributes to a better quality of life for all Americans. The 
Department's missions include the largest environmental cleanup 
in history, as well as research and development that support 
the Nation's defense, energy, and economic security. DOE 
employs approximately 10,000 federal workers and 100,000 
contract employees. The Department owns and manages more than 
50 major installations located in 35 States.
    At the center of the Department's work is science, 
performed at DOE's 27 laboratories and other scientific user 
facilities and in the Nation's universities. The Department 
supports breakthrough research in energy sciences and 
technology, high energy physics, global climate change, genome 
mapping and the bio-sciences, superconducting materials, 
accelerator technologies, environmental sciences, and super-
computing. DOE also supports science and mathematics education 
in our schools from the K-12 level through post-doctoral work.
    In support of the Nation's energy security, the Department 
promotes development of secure, clean, and sustainable energy 
resources, works to increase the diversity of energy sources 
and fuel choices, and maintains the Strategic Petroleum 
Reserve.
    In fulfilling its national security mission, the Department 
assures the safety and reliability of the U.S. nuclear weapons 
stockpile without underground testing, in compliance with the 
Comprehensive Test Ban Treaty, and supports U.S. 
nonproliferation, arms control, and nuclear safety objectives 
in the states of the former Soviet Union and world-wide.
    In meeting its environmental quality mission, the 
Department is responsible for cleaning up the environmental 
legacy left at the sites where, for some 50 years, the Nation's 
nuclear weapons were designed and manufactured.

                       Energy Efficiency Programs

    Weatherization Assistance Program--The program's mission is 
to make energy more affordable and improve health and safety in 
homes occupied by low-income families, particularly those with 
elderly residents, children, or persons with disabilities. 
Elderly residents make up approximately 40 percent of the low-
income households served by this program. As of September 30, 
1998 about 4.7 million homes had been weatherized with Federal, 
State, and utility funds; of these, an estimated 1.9 million 
were occupied by elderly persons.
    Low-income households spend an average 15 percent of income 
for residential energy--more than four times the proportion 
spent by higher income households. The weatherization program 
allows low-income citizens to benefit from energy efficiency 
technologies that are otherwise inaccessible to them. 
Alleviating the high energy cost burden faced by low-income 
Americans helps them increase their financial independence and 
their flexibility to spend household income on other needs.
    The program has become increasingly effective due to 
improvements in air-leakage control, insulation, water heater 
systems, windows and doors, and space heating systems. A low-
income household now saves approximately $193 per year, about 
one-third of its space heating costs. Program benefits are 
further described in Progress Report of the National 
Weatherization Assistance Program that features 90 photo 
illustrations of specific benefits. The report is available 
through the National Technical Information Service, 703/487-
4650, 5285 Port Royal Rd., Springfield, VA 22161.
    The program is implemented by states through community-
based organizations. The Department of Energy and its State and 
community partners weatherize approximately 70,000 single- and 
multi-family dwellings each year. The program awarded $120.8 
million in Fiscal Year 1997 and $124.8 million in Fiscal Year 
1998 for grants to the 50 States, the District of Columbia and 
six Native American tribal organizations. In addition to DOE 
appropriations, State and local programs receive funding from 
the Department of Health and Human Services Low Income Home 
Energy Assistance Program, from utilities, and from States.
    State Energy Program--The program provides grants to State 
energy offices to encourage the use of energy efficiency and 
renewable energy technologies and practices in states and 
communities through technical and financial assistance. In FY 
1997 $29 million was appropriated and $30.25 million was 
appropriated in FY 1998. States have broad discretion in 
designing their projects. Typical project activities include: 
public education to promote energy efficiency; transportation 
efficiency and accelerated use of alternative transportation 
fuels for vehicles; financial incentives for energy 
conservation/renewable projects including loans, rebates and 
grants; energy audits of buildings and industrial processes; 
development and adoption of integrated energy plans; promotion 
of energy efficient residences; and deployment of newly 
developed energy efficiency and renewable energy technologies.
    There have been some projects that specifically target the 
elderly such as Louisiana's low-income/handicapped/elderly/
Native American outreach program that provided energy-related 
assistance through a joint venture with utilities. The elderly 
also benefit from programs that provide energy audits, hands-on 
energy conservation workshops, and low-interest loans for 
homeowners that can result in significant energy savings. 
Energy efficiency improvements in local and state buildings and 
services also benefit the elderly by freeing up state and local 
government tax revenues for non-energy expenses. Energy 
efficient schools can be less of a burden on property taxes.
    An emerging issue is the restructuring of the electric 
utility industry. The State Energy Program has supported 
workshops with States and local communities to ensure that 
homeowners and disadvantaged groups are not overlooked or 
denied the economic benefits of lower-cost sources of energy 
after deregulation. Utility deregulation workshops for public 
officials have emphasized techniques and negotiating 
strategies, e.g. franchising, to ensure that vulnerable 
populations such as the elderly are not excluded from energy 
pricing competition.

                Information Collection and Distribution

    The Energy Information Administration collects and 
publishes comprehensive data on energy consumption through the 
Residential Energy Consumption Survey (RECS). The RECS is 
conducted in households quadrennially and collects data from 
individual households throughout the country, including those 
headed by elderly individuals. Along with household and housing 
unit characteristics data, the RECS also collects the actual 
billing data from the households' fuel suppliers for a 12-month 
period.
    The results of the RECS are analyzed and published by the 
Energy Information Administration. The most recent household 
survey data are from the 1997 RECS and are published on the 
Internet at http:www.eia.doe.gov/emeu/consumption. The 
consumption and expenditures data from the 1997 RECS will be 
published on the same Internet site in the spring of 1999. At 
that time, the RECS data files will also be made available to 
the public. These files will include demographic 
characteristics of the elderly such as age, marital status and 
household income, as well as estimates of consumption and 
expenditures for electricity, natural gas, fuel oil, kerosene, 
and liquefied petroleum gas used in elderly households.
    In the 1997 RECS, 28.6 million, or 28 percent of all U.S. 
households, were headed by a person 60 years of age or older. 
Of these elderly households, 44 percent were one-member 
households (12.4 million people living alone) and 43 percent 
contained two people. In 19 percent of the two-member elderly 
households both members were under the age of 65; in 21 percent 
of these households, only one member was younger than 65; and 
in 60 percent, both members were over the age of 65. 
Comparisons of elderly versus non-elderly households reveal 
that:
           The 1997 household income of elderly 
        households was generally lower than that of non-elderly 
        households. Nearly a quarter, 23 percent, of elderly 
        households had incomes of less than $10,000, compared 
        to 9 percent of the non-elderly households. Only 12 
        percent of the elderly households had incomes of 
        $50,000 or more, compared to 33 percent of the non-
        elderly households. Of the 14.7 million U.S. households 
        whose income was below the poverty line, 37 percent 
        were headed by a person 60 years of age or older.
           Despite having lower household incomes, the 
        elderly households were more likely to own their 
        housing unit, 80 percent, than were non-elderly 
        households, 63 percent. The elderly were also more 
        likely to live in a single-family house, 76 percent, 
        than were non-elderly households, 71 percent.
           Elderly households are less likely to have a 
        personal computer or a modem connecting that computer 
        to the Internet or e-mail networks than are households 
        headed by persons less than 60 years of age. Among 
        elderly households, 14 percent have a personal computer 
        compared to 43 percent of the non-elderly households. 
        Only 7 percent of elderly households have a modem 
        connection compared to 26 percent of the non-elderly 
        households.
           Elderly households are only marginally less 
        likely to have a microwave oven, 79 percent, than are 
        non-elderly households, 85 percent.
    Analysis of the 1993 RECS data shows that consumption 
patterns differed between the elderly and non-elderly for some 
uses of energy. The elderly used more energy to heat their 
homes but used less energy for air conditioning, water heating, 
and appliances. Expenditures followed the same pattern. 
Specifically,
           The average expenditures per household 
        member in elderly households in 1993 was $68. This 
        amount was higher than the comparable amount for all 
        other households, due to the fact that households 
        headed by persons 60 years or more of age tend to be 
        smaller than those headed by persons under 60 years of 
        age.
           About 61 percent of total energy consumption 
        and about 38 percent of total energy expenditures in 
        elderly households were for space heating. On the other 
        hand, appliances accounted for 16 percent of 
        consumption and 31 percent of total expenditures in 
        elderly households. Energy costs for appliances are 
        much higher relative to consumption than are energy 
        costs for space heating because virtually all 
        appliances are powered by electricity, the most 
        expensive energy source, whereas space heating is 
        largely provided by other, less expensive, energy 
        sources.

                       Research Related to Aging

    In 1997 and 1998, the Office of Environment, Safety and 
Health (EH) sponsored research to further an understanding of 
the human health effects of radiation. As part of this research 
program, the Department of Energy (DOE) sponsored epidemiologic 
studies concerned with understanding health changes over time. 
Lifetime studies of humans constitute a significant part of 
EH's research, and because the risks of various health effects 
vary with age, these studies take age into consideration. EH 
supports research to characterize late-appearing effects 
induced by chronic exposure to low levels of physical agents 
and some basic research concerning certain diseases that occur 
more frequently with increasing age.
    Because health effects resulting from chronic low-level 
exposure to energy-related toxic agents may develop over a 
lifetime, they must be distinguished from normal aging 
processes. To distinguish between induced and spontaneous 
changes, information is collected from both exposed and 
nonexposed groups on changes that occur throughout the life 
span. These data help characterize normal aging processes and 
distinguish them from the toxicity of energy-related agents. 
Summarized below are specific research projects that the 
Department sponsored in 1997-1998.
    Long Term Studies of Human Populations--Through EH, DOE 
supports epidemiologic studies of health effects in humans who 
may have been exposed to chemicals and radiation associated 
with energy production or national defense activities. 
Information on life span in human populations is obtained as 
part of these studies. Because long-term studies of human 
populations are difficult and expensive, they are initiated on 
a highly selective basis.
    The Radiation Effects Research Foundation, sponsored 
jointly by the United States and Japan, continues to work on a 
lifetime followup of survivors of atomic bombings that were 
carried out in Hiroshima and Nagasaki in 1945. Over 100,000 
persons are under observation in this study. An important 
feature of this study is the acquisition of valuable 
quantitative data on dose-response relationships. Studies 
specifically concerned with age-related changes are also 
conducted. No evidence of radiation-induced premature aging has 
been observed.
    Multiple epidemiologic studies involving about 400,000 
contractor employees at DOE facilities are being managed by the 
Department of Health and Human Services through a Memorandum of 
Understanding between the two agencies. These studies include 
assessments of health effects at older ages due to ionizing 
radiation and other industrial toxicants. Several of the 
studies will look closely at workers who were first exposed at 
age 45 or older, assessing the impact of these late exposures 
in relation to the burden of chronic diseases that are common 
among older people. The average age of workers included in 
these studies is greater than 50 years.
    The United States Uranium/Transuranium Registry, currently 
operated by Washington State University, collects occupational 
data including work, medical, and radiation exposure histories 
and information on mortality among workers exposed internally 
to plutonium or other transuranic elements. Most of the workers 
participating ating in this voluntary program are retirees.
    In response to the Defense Authorization Act of 1993, EH 
has established a program involving a number of ongoing 
projects across the DOE weapons complex to identify former 
workers whose health may have been placed at risk as a result 
of occupational exposures that occurred from the 1940's through 
the 1960's. These projects provide medical screening and 
monitoring for former workers to identify those at high risk 
for occupationally related diseases and to identify workers 
with diseases that may be reduced in severity by timely 
interventions.
    In addition to its epidemiologic research and health 
monitoring programs, EH has established the Comprehensive 
Epidemiologic Data Resource, a growing archive of data sets 
from the many epidemiologic studies sponsored by DOE. This 
public archive provides the research community with data that 
continue to be used to gain additional insights into the 
relationships between occupational exposures and a variety of 
health outcomes including diseases of aging, such as cancer.

               Other DOE-Funded Research Related to Aging

    Since the inception of the Atomic Energy Commission, the 
Department and its predecessor agencies have carried out a 
broad range of research and technology development activities 
which have impacted health care and medical research. The 
Medical Sciences Division within the Office of Biological and 
Environmental Research carries out a Congressional mandate to 
develop beneficial applications of nuclear and other energy 
related technologies including research in aging affecting 
older Americans. The aging research involves study of a brain 
chemical, dopamine (DA), and its function in humans as they 
age. A significant decline in the function of the brain DA 
system with age has long been a recognized fact, but the 
functional significance of this loss is not known. Medical 
imaging studies, using radiotracers; and positron emission 
tomography, are designed to investigate the consequences of the 
age-related losses in brain DA activity in cerebral function 
and to investigate mechanisms involved with the loss of DA 
function with normal aging. The results of these studies have 
already shown that in healthy volunteers with no evidence of 
neurological dysfunction there is a decline in parameters of DA 
function, which are associated with decline in performance of 
motor and cognitive functions. The results of these studies 
also indicate that changes in life style, such as exercise, may 
be beneficial in promoting the health of the dopamine system in 
the elderly.
    Additional research has resulted in the creation of a new 
scientific discipline known as biodemography, a melding of 
biology and demography. This research is searching for 
biological information, at all levels of biological 
organization, that predicts and explains patterns of age-
related mortality observed in populations. In the long term, 
biodemography provides a conceptual framework that helps policy 
makers assess the impact that specific biomedical interventions 
such as heart bypass surgery, renal dialysis, chemotherapy, or 
gene therapy will have on population aging and, as a result, on 
the fiscal solvency of government entitlement programs for 
aging citizens.
    The programmatic costs for aging research are estimated at 
approximately $400K annually.

             ITEM 6--DEPARTMENT OF HEATH AND HUMAN SERVICES

                              ----------                              


        THE ADMINISTRATION ON AGING AND THE OLDER AMERICANS ACT

                              introduction

    Today, one in every six Americans, or 44 million people, is 
60 years of age or older. While most older Americans are active 
members of their families and communities, others are at risk 
of losing their independence. These include four million 
Americans aged 85 and older and persons living alone without a 
caregiver. The Administration on Aging (AoA) in the Department 
of Health and Human Services is dedicated exclusively to 
planning and delivering services to our nation's diverse 
population of older Americans and their caregivers. AoA 
provides critical information, assistance, and home and 
community-based support services and programs that protect the 
rights of vulnerable, at-risk older persons.
    Working in close partnership with its sister agencies in 
the Department and throughout the Executive Branch, AoA 
provides leadership, technical assistance and support to the 
national network on aging. This network includes AoA's central 
and regional offices, 57 state units on aging (SUA's), 655 area 
agencies on aging (AAA's), 223 Indian Tribal Organizations 
(ITO's); and thousands of service providers, senior centers, 
caregivers and volunteers. Appendix I includes an 
organizational chart of the National Network on Aging.

                  consumer information and protection

    Educating older persons and their families about issues of 
concern is a critical component of AoA's consumer information 
and protection role. AoA funds programs that link people to 
available services, protects the rights of vulnerable and at-
risk older persons, educates them and their communities about 
the dangers of elder abuse and consumer fraud, and offers 
opportunities for older persons to enhance their health. Two 
important examples include the Eldercare Locator and Insurance, 
Benefits and Pension Counseling Programs.
    AoA's elder rights protection programs also include the 
Long-Term Care Ombudsman Program, that investigates and 
resolves complaints that are made by or on behalf of residents 
of nursing, board and care and similar adult care homes. 
Through the AoA, thousands of paid and volunteer long-term care 
ombudsmen, insurance counselors and other professionals have 
been trained to recognize and report fraud and abuse in nursing 
homes and other settings. The AoA also recruits and trains 
retired professionals, such as doctors, nurses, attorneys, 
accountants, and others to serve as health care ``fraud 
busters.'' These recruits work with other older persons in 
their communities to review their health care benefits 
statements and to identify and report potential waste, fraud 
and abuse.

         supportive services and home and community-based care

    AoA provides funds for home and community-based care 
services, research and demonstrations These services include:
           Access Services--information and assistance; 
        outreach; transportation; and case management.
           In-home Services--home-delivered meals; 
        chores; home repair, modifications and rehabilitation; 
        homemaker/home health aides; and personal care.
           Community Services--congregate meals; senior 
        center activities; nursing home ombudsman services; 
        elder abuse prevention; legal services; employment and 
        pension counseling; health promotion and fitness 
        programs.
           Caregiver Services--respite; adult day care; 
        counseling and education; and support for caregivers of 
        persons with Alzheimer's disease by improving 
        coordination between the health care and social service 
        systems.
           Long-Term Care Resource Centers--researching 
        best practices and innovative models of providing home 
        and community-based care.

                        native american programs

    AoA awards funds to 223 ITO's, representing more than 300 
tribes in the United States, to assist older American Indians, 
Alaskan Natives and Native Hawaiians. Native Americans in 
general--and older Native Americans in particular--are among 
the most disadvantaged groups in the country. AoA's support 
provides home and community-based services in keeping with the 
cultural heritage and specific needs of each person receiving 
assistance.

             capacity building through discretionary grants

    The discretionary grant programs authorized by Title IV of 
the Older Americans Act constitute the major research, 
demonstration, training, and information dissemination effort 
of the AoA. Title IV program outcomes include:
           an expanded understanding of older persons' 
        wants, needs and desires;
           the development of innovative model 
        programs; and
           the provision of technical assistance and 
        information to the aging network and to others who work 
        with older persons.
    The Title IV program supports a number of projects, 
including the continuation of the Eldercare Locator; Family 
Friends; Senior Legal Hotlines, a national legal assistance 
support, and related elder rights projects such as the National 
Resource Centers on Long Term Care Ombudsman Programs and Elder 
Abuse. New Title IV project areas, as earmarked by the 
Congress, include the prevention of health care fraud, waste, 
and abuse; pension information and counseling; minority aging; 
and research on caregiving for Alzheimer's Disease patients. A 
compendium of projects supported by Tile IV in FY 1997 and FY 
1998 can be found in Appendix II.

                        preparing for the future

    Through consumer advocacy and education targeted at present 
and future generations of older Americans, AoA raises public 
awareness about the importance of preparing now for living a 
long life. AoA is providing leadership in addressing longevity 
issues by focusing attention on attitudes and lifestyles, 
interventions which contribute to good health, quality of life, 
and financial security in the future.
    This report is organized and divided into two sections 
summarizing AoA's major activities in FY 1997-1998. Section I 
discusses the activities focused on ``Improving Services for 
Seniors and Their Families.'' Section II discusses the 
activities related to ``Enhancing the Cap of the Network.''

      Section I: Improving Services for Seniors and Their Families

          preserving and strengthening the older americans act

    The AoA, in consultation with key partners in the aging 
network, continued work for the reauthorization of the Older 
Americans Act (the ACT). A summary of the activities in the 
Congress related to reauthorization of the Act follows:
Reauthorization in the 105th Congress
    Senator Barbara Mikulski (D-MD) introduced the 
Administration's proposed bill, S. 390, on March 4, 1997. It 
contained one change from the Administration bill from the 
104th Congress in that it did not transfer the USDA cash in 
lieu of commodities program to AoA. This was consistent with 
the Administration's position for the 105th Congress.
    Representative Matthew G. Martinez (D-CA) introduced H.R. 
1671 with co-sponsors Reps. Green (D-TX), J. Kennedy (D-MA), 
Filner (D-CA) and Reps. Farr, (D-CA), Rep Frank (D-MA), Rep. 
Nancy Pelosi (D-CA), Sanchez (D-CA), Lofgren (D-CA), Kucinich 
(D-OH), Smith, Adam (D-WA), and Stabenow (D-Mich). Mr. 
Martinez's statement which accompanied the bill indicated that 
the bill contained the majority of the principles in the 
Administration's bill from the 104th Congress. Inconsistent 
with the Administration's initial position, Mr. Martinez's bill 
did not transfer the Title V, Senior Community Service 
Employment Program, to AoA.
    On June 19, 1998, Rep. Frank Riggs (R-CA), Chair of the 
House Subcommittee on Early Childhood, Youth and Families, 
introduced H.R. 4099, a bill to reauthorize the Older Americans 
Act.
    On July 13, 1998, Senator John McCain (R-AZ), along with 25 
bipartisan cosponsors, introduced S. 2295, a bill to 
reauthorize the Older Americans Act until the year 2001. S. 
2295 made no changes to current law, last authorized in 1992.
    On July 29, 1998, Rep. Peter A. DeFazio (D-OR) and Rep. 
Frank A. LoBiondo (D-NJ) introduced H.R. 4344 a bill which 
mirrored the McCain bill to reauthorize the Older Americans 
Act, S. 2295. H.R. 4344 was introduced with 151 bipartisan 
cosponsors.
    The House Subcommittee on Early Childhood, Youth and 
Families (Frank Riggs, (R-CA), Chair; Matthew G. Martinez, (D-
CA), (Ranking Democrat), held two hearings (7/9/97 and 7/16/97) 
on the reauthorization of the Older Americans Act. At the first 
hearing held on July 9, 1997. William F. Benson, Acting 
Principal Deputy Assistant Secretary for Aging, provided 
testimony for the Administration. Others who testified at the 
hearing included Judith Brachman, President of the National 
Association of State Units on Aging and Cindy Farson, Past 
President of the National Association of Area Agencies on 
Aging.
Background and Status at Close of 105th Congress
    The most recent reauthorization of the OAA expired on 
September 30, 1995 during the 104th Congress. The 104th and 
105th Congresses adjourned without taking final action on 
reauthorization of the Older Americans Act. During the 105th 
Congress, the Senate and House Majority Committee members 
indicated that they would use their previous proposals (from 
the 104th Congress) as the starting point for their legislative 
proposals.
    The 105th Congress adjourned on October 21, 1998 following 
final passage on the FY 1999 Omnibus Consolidated 
Appropriations bill which contained funding for the Older 
Americans Act and the Administration on Aging for FY 1999. 
Congress did not reauthorize the Older Americans Act because of 
unresolved differences between the Majority and the Minority 
together with the Administration. These differences included 
efforts to alter parts of the Act that target services to low 
income minority elders, that allow for older persons to receive 
nutrition services without being required to pay, and that 
provide employment to low income older persons through Title V 
of the Act, administered by the Department of Labor. Near the 
end of the 105th Congress, much discussion occurred around two 
bills (S. 2295, McCain, R-AZ) and (H.R. 4344, DeFazio, D-OR) 
which would have extended the current authorization, but no 
final action occurred.
    The Administration plans to introduce a bill to reauthorize 
the Older Americans Act early in the 106th Congress.

                       protecting elders' rights

    For close to three decades, state ombudsman programs have 
investigated complaints and protected the rights of nursing 
home and board and care facilities residents as well as brought 
to the attention of the public, policymakers and regulatory 
agencies a host of conditions that required change to improve 
the health, safety, rights and welfare of these residents. In 
FY 1996, ombudsman program funding from all sources totaled 
$41,519,334, almost one million above the previous fiscal year. 
In addition to attempting to improve the quality of care, paid 
and volunteer ombudsman provide support for the 
Administration's initiative to combat fraud, abuse and waste in 
the Medicare and Medicaid Programs.
    According to the Annual Long Term Care Ombudsman Report to 
Congress for Fiscal Year 1996, over seventy-two percent of all 
complaints by nursing home or board and care residents were 
resolved or partially resolved by the national cadre of state 
and local paid and volunteer ombudsmen working throughout the 
nation. This report provides the first-ever compilation of data 
for all state ombudsman programs on the types of problems 
reported by those who seek assistance from the ombudsman 
program. The data collected through this report helps to point 
this nation in the right direction to better care for the 
growing numbers of older persons expected in this country in 
the next several decades.
    Ombudsman opened 126,606 new cases and closed 116,242 
cases, involving 179,111 complaints. Most complaints were filed 
by residents of facilities or friends or relatives of 
residents. Eighty-one percent of the cases closed involved 
nursing home residents. The five most frequent nursing home 
complaints were:
            accidents, improper handling;
            unheeded requests for assistance;
            personal hygiene neglect;
            lack of respect for residents; and
            lack of adequate care plan, resident 
        assessment.
    Seventeen percent of the cases closed involved board and 
care homes, including assisted living, adult day care, and 
similar levels of care facilities. The five most frequent 
complaints in these settings involved:
            menu--quality, quantity, variation, and 
        choice;
            physical abuse;
            administration and organization of 
        medications;
            lack of respect for residents, poor staff 
        attitudes; and
            equipment/building disrepair, hazard, 
        lighting, safety issues.
    A copy of the Executive Summary of the Annual Long Term 
Care Ombudsman Report can be found in Appendix III. Copies of 
the report are also available through the National Aging 
Information Center and the AoA website.

                     preventing crime and violence

    According to the National Elder Abuse Incidence Study 
released by the Assistant Secretaries for Aging and Children 
and Families on October 5, 1998, at least one-half million 
older persons in domestic settings were abused and or/
neglected, or experienced self neglect during 1996. 
Additionally, the study estimated that for every reported 
incident of elder abuse, neglect or self neglect, approximately 
five go unreported. In cases where a perpetrator of abuse and 
neglect is known, the perpetrator is found to be a family 
member in 90 percent of the cases, and two-thirds of these 
perpetrators are adult children or spouses. The report covered 
all major categories of abuse and neglect in domestic settings.
    Domestic elder abuse refers to maltreatment of an older 
person residing in his/her own home or the home of a caregiver. 
The four common kinds of elder abuse are:
            physical abuse, the infliction of physical 
        pain or injury, e.g., slapping, bruising, sexually 
        molesting, restraining;
            psychological abuse, the infliction of 
        mental anguish, e.g., humiliating, intimidating, 
        threatening;
            financial abuse, the improper or illegal 
        use of the resources of an older person, without his/
        her consent, for someone else's benefit; and
            neglect, failure to fulfill a caretaking 
        obligation to provide goods or services, e.g., 
        abandonment, denial of food or health-related services.
    Self-neglect refers to the conduct of an older person 
living alone which threatens his/her own health or safety. A 
copy of the report is included in Appendix IV, and is available 
from the National Aging Information Center and the AoA website.
    On September 30, 1998, a new three-year cooperative 
agreement was awarded to the National Association of State 
Units on Aging (NASUA) to establish a new National Center on 
Elder Abuse (NCEA). The NASUA operates the NCEA in partnership 
with the National Committee for the Prevention on Elder Abuse 
(NCPEA), National Association of Adult Protective Services 
Administrators (NAAPSA), American Bar Association's Commission 
on Legal Problems of the Elderly, University of Delaware's 
Department of Consumer Studies, and the Goldman Institute on 
Aging. The new NCEA will facilitate training and technical 
assistance among state and local service providers working to 
prevent elder abuse.

                         cracking down on fraud

    Since 1995, the Administration on Aging (AoA) has been a 
partner in a government-led effort to fight fraud, waste, and 
abuse in the Medicare and Medicaid programs. The AoA, and its 
national aging network, focused its initial anti-fraud and 
abuse efforts on training state and local ombudsmen, insurance 
counselors, and other professionals to recognize and report 
suspected cases of fraud abuse in nursing facilities, home 
health care agencies, and providers of durable medical 
equipment. The effort was later expanded to train staff and 
volunteers of state and area agencies on aging, senior centers, 
and other aging service personnel.
    Beginning in 1997, the AoA has administered two programs 
designed to combat and prevent health care waste fraud and 
abuse. The first program, funded under the Health Insurance 
Portability and Accountability Act, expanded the training of 
aging network personnel to 15 states. In early 1998, three 
states were added, for a total of 18 states which focus on 
training aging service professionals, and providing outreach, 
counseling, and assistance through community-based provider 
agencies.
    The second program, funded through the enactment of P. 
L.104-209, the Omnibus Consolidated Appropriations Act of 1997, 
recruits and trains retired professionals, such as doctors, 
nurses, teachers, lawyers, accountants, and others to work with 
Medicare and Medicaid beneficiaries to review their health care 
benefits statements and to identify and report potential waste, 
fraud and abuse. In May, 1997, the AoA awarded funds to 12 
state and community-based agencies and organizations for this 
purpose.
    During fiscal year 1998, both projects produced the 
following outcomes:
            held more than 1,600 training sessions;
            trained over 8,000 professionals and 
        retired volunteers who are now working in their 
        communities on anti-fraud, waste, and abuse activities; 
        convened more than 3,000 community education forums 
        which directly informed more than 300,000 beneficiaries 
        in their communities about Medicare waste, fraud, and 
        abuse;
            developed and disseminated more than 250 
        types of products, educational materials and training 
        guides--distributing tens of thousands of materials to 
        beneficiaries;
            reached an estimated 44 million people 
        through public service announcements, community 
        education events, and other activities;
            referred more than 700 calls to the Office 
        of the Inspector General's (OIG) hotline; and
            contributed to the OIG's recovery of 
        millions of dollars in errors, overpayments, civil 
        penalties and monetary awards.
    Based on information gathered from AoA's partners and 
stakeholders, a number of new ORT-related technical assistance 
resources were developed in 1998, including:
            a report of ``best practice'' 
        recommendations developed by the grantees;
            a limited access internet communication 
        link which permits the AoA and its grantees and project 
        officers to ask questions, raise issues, and exchange 
        information with one another simultaneously;
            an AoA anti-fraud web page for posting and 
        downloading manuals, brochures, fact sheets, and other 
        materials;
            a bi-monthly newsletter, which includes 
        updates, volunteer spotlights, and other information;
            the convening of a national technical 
        assistance and resource-exchange conference where 
        grantees exchanged best practice strategies; and
            the drafting of two national brochures 
        designed to recruit volunteers--one targeted to retired 
        professionals and the other targeted to aging network 
        personnel.

    increasing visibility of nutrition as a key component of health

State Nutritionist's Meeting
    On November 14-15, 1997, the Administration on Aging (AoA) 
held the second state nutritionists/administrators meeting, 
``Preparing the Elderly Nutrition Program for the 21st 
Century,'' in Dallas, Texas. Fifty-five state unit on aging 
representatives from 45 states attended.
    The program included presentations by the AoA, the Food and 
Drug Administration, and Food and Nutrition Services of the 
United States Department of Agriculture, state units on aging 
from across the country, and personnel from the National Policy 
and Resource Center on Nutrition and Aging. Individual speakers 
and panels addressed the following topics: managing uncertainty 
and change in Older Americans Act Nutrition Programs; strategic 
planning for nutrition services at federal, state and local 
levels; implementing the National Aging Program Information 
System (NAPIS); using data to reduce risk; maintaining food 
safety; and nutrition challenges including dietary reference 
intakes, the relationship between nutrition and chronic 
disease, and the delivery of nutrition services in home-care 
and managed care.
    Program outcomes included:
            increased understanding of the relationship 
        between nutrition and chronic disease;
            increased understanding of the components 
        necessary to implement the Elderly Nutrition Program 
        (ENP) and willingness to test innovative approaches;
            increased understanding of the challenges 
        facing the ENP and the solutions states are using to 
        meet these challenges; and
            improved partnerships between and among AoA 
        and state units on aging.
    An evaluation of the comments from the meeting indicated 
that states viewed the meeting as a success because it:
            showed national leadership of the AoA 
        regarding the ENP;
            ensured quality networking and information 
        sharing among state staff who often work in isolation 
        from other nutrition professionals or do not 
        communicate often with nutrition professionals;
            integrated the nutrition program into the 
        larger view of home and community based care by 
        encouraging the participation of both nutrition staff 
        and social service and other state staff;
            ensured a learning environment for AoA and 
        state staff in response to identified needs;
            provided visibility for state solutions to 
        issues faced in many states; and
            utilized state staff as partners in 
        developing the nutrition program nationally.
Morning Meals on Wheels
    The AoA and the General Mills Foodservice (GMFS) entered 
into a public-private partnership to expand meal service for 
home bound older adults by adding a breakfast meal. The Morning 
Meals on Wheels Breakfast Program (MMOW) partnership also 
included the National Policy and Resource Center on Nutrition 
and Aging at Florida International University (Center).
    As a result of this public-private partnership, the AoA and 
GMFS, with the assistance of the Center, conducted a six-month 
feasibility study of expanding meal service from a single meal 
at noon, to both breakfast and lunch meals for high risk 
participants in home-delivered meal programs. Based on a 
competitive request for applications, 20 nutrition service 
providers were selected. These nutrition service providers were 
representative of the network to ensure replicability for AoA 
and GMFS. The programs were geographically dispersed; urban and 
rural; large and small; served ethnically diverse populations; 
utilized different methods for meal production; consisted of 
independent non-profit nutrition service providers as well as 
nutrition services directly provided by area agencies on aging; 
targeted different groups of high risk individuals; and 
represented both Title III and Title VI programs.
    Successful applicants received:
           $500 program setup grant from GMFS;
           on-going product discounts; continuing 
        education funding;
           written manual and newsletters;
           technical assistance via conference calls, 
        individual telephone calls and in person visits;
           publicity materials; and
           volunteer materials.
    Nutrition service providers began implementation in 
September, 1997. Selected nutrition service providers agreed to 
participate in an evaluation of the program by the Center which 
would document both strengths and weakness of program 
implementation and recommendations for replication.
    Outcomes included:
           service expansion to high risk homebound 
        older adults at minimal costs;
           successful test of an innovative service 
        model;
           development of individual outcome measures 
        for nutrition services, such as decreased nutritional 
        risk, improved nutrient intake, improved perceived 
        health, improved functionality, and increased caregiver 
        support;
           development of program outcome measures for 
        nutrition services such as improved targeting of high 
        risk participants, improved customer satisfaction, 
        minimized costs for two meal a day service and improved 
        service delivery; and
           independent evaluation of the Morning Meals 
        on Wheels Breakfast Program by the Center.
    Based on an evaluation of the program, the AoA and GMFS 
will consider the national expansion of the program to the 
aging network of state and area agencies on aging, tribes and 
nutrition service providers.

                      providing caregiver support

    AoA continues to support a nationwide, toll free 
information and assistance directory called the Eldercare 
Locator, which can locate the appropriate AAA to help an 
individual needing assistance. Older persons and caregivers can 
contact the Eldercare Locator by calling 1-800-677-1116, Monday 
through Friday, 9:00 a.m. to 8:00 p.m., Eastern Standard Time. 
When contacting the Locator, callers should know the address, 
zip code and county of residence of the person needing 
assistance.
    During FY 1997 and FY 1998 over 144,000 inquiries. Some of 
the most frequently requested information included questions 
about:
           general information and assistance;
           legal services;
           transportation;
           state general information;
           insurance;
           Alzheimer hotline;
           nursing homes; and
           prescriptions.

                         older americans month

    The ``kick-off'' event for Older Americans Month (OAM) was 
the AoA Caregivers Fair on May 1, 1998. The purpose of this 
event was to provide federal employees with information on a 
variety of services and resources available to assist older 
persons and their caregivers. Approximately 40 local and 
national organizations exhibited materials and provided 
consultation and printed information to assist caregivers in 
their efforts to care for a older family member, neighbor or 
friend. The information provided included ``how-to'' 
information for long-distance caregiving, and assistance in 
juggling the many demands of jobs and caregiving 
responsibilities.
    On May 1, 1997, the AoA launched OAM with a caregivers 
resource fair for federal employees working in the southwest 
area of the District of Columbia. The theme for the 1997 OAM 
was ``Caregiving: Compassion in Action.'' State and Area 
Agencies nationwide used the theme in the many events and 
activities they sponsored in celebration of OAM. The caregiver 
fair was designed to assist federal employees access a range of 
care and services in the community to help older loved ones 
maintain their independence and remain in their own homes and 
communities. Forty-five exhibitors provided consultation and 
information about in-home assistance, home-delivered meals, 
home health care, transportation, legal assistance, respite/day 
care, long-distance caregiving and long term care ombudsmen.

           Section II: Enhancing the Capacity of the Network

 improving service delivery to american indians, alaskan natives, and 
                            native hawaiians

    In 1998, grants totaling $18,457,000 were awarded to 223 
Indian Tribal Organizations(ITOs) and one Native Hawaiian 
organization for providing nutrition and supportive services to 
Native American elders. In 1996, over 70,000 elders received 
nearly two million congregate meals, 46,000 elders received 2.2 
million home delivered meals, and nearly 110,000 elders 
received supportive services, including outreach, 
transportation, in-home services, and family support.
    The University of Colorado at Denver and the University of 
North Dakota at Grand Forks were awarded cooperative agreements 
by the AoA totaling $700,000 to continue as National Resource 
Centers for Older Indians, Alaskan Natives and Native 
Hawaiians. The Centers continue to focus on health, community-
based long-term care and related issues. The Resource Centers 
are the focal points for the development and sharing of 
technical information and expertise to ITOs, Title VI grantees, 
Native American communities, educational institutions, and 
professionals and paraprofessionals in the field. In 1998, the 
Resource Centers produced two culturally appropriate training 
modules, entitled ``Diabetes Mellitus in American Indian/Alaska 
Native Elders: Cultural Aspects of Care'' and ``Cancer among 
Elder Native Americans.'' Additionally, they arranged to have 
mammography screening available for elderly women attending the 
National Indian Council on Aging national conference.

            enhancing information and assistance activities

    Over the past year the AoA has worked on several fronts to 
support the enhancement of the Older Americans Act information 
and assistance programs at the state and local levels. The 
Balanced Budget Action of 1997 established the Medicare+Choice 
Program, which authorizes new Medicare health plan options for 
beneficiaries. The AoA has been working in partnership with the 
Health Care Financing Administration (HCFA) to support 
Medicare+Choice and initiated three steps to enhance 
information and assistance activities.
    First, AoA provided funds to State Units on Aging (SUAs) to 
strengthen the capacity of information and referral providers 
at the State, Area Agency and local levels to respond to 
inquiries regarding Medicare+Choice. Second, AoA awarded grants 
to six states to gather more detailed information on the type 
and number of M+C inquiries made to information and referral 
providers and to develop revised protocols for handling such 
inquiries which will be widely disseminated to other SUAs. 
Third, AoA worked in collaboration with the National 
Information and Referral Support Center and HCFA to develop the 
Medicare+Choice Training Manual for Older Americans Act 
Information Referral & Assistance Programs. The manual was 
provided to SUAs and Area Agencies on Aging to assist them in 
developing Medicare+Choice training and outreach activities.

              breast cancer awareness and education grants

    On October 30, 1997, AoA awarded three grants totaling 
approximately $300,000 designed to focus on outreach to older 
under-served women, including Native Americans, to increase 
their awareness of breast cancer, and encourage them to get 
mammograms. The three grants to national aging organizations 
were made available through the Federal Coordinating Committee 
on Breast Cancer and the DHHS Office of Women's Health, and 
were awarded during October, proclaimed by President Clinton as 
National Breast Cancer Awareness Month. These grants were part 
of the Administration's overall efforts to respond to the 
significant threat posed by breast cancer. In 1995, First Lady 
Hillary Rodham Clinton launched a campaign, highlighted at the 
White House Conference on Aging, urging older women to obtain 
mammograms, and to promote the use of Medicare coverage for 
mammography. In 1997, President Clinton proposed, and Congress 
adopted, the expansion of Medicare coverage which will help pay 
for annual mammograms for all Medicare beneficiaries age 40 and 
over.
    Breast cancer is the most commonly diagnosed cancer and the 
second leading cause of cancer deaths among American women. 
There is no proven way to prevent breast cancer, so early 
detection through mammography and clinical breast exams is 
essential. For women aged 50-69, having regular mammograms can 
reduce the chance of death from breast cancer by one third or 
more. The AoA projects were designed to emphasize the national 
aging network's capacity to reach out to older women, in 
particular those who are most at risk, and urge them to become 
more actively aware of the need to get a mammogram and become 
more involved in their own self-care.
    The grantees were:
           The Long Term Care Resource Center of the 
        National Association of State Units on Aging, 
        Washington, D.C. This project was designed to work with 
        state and territorial agencies on aging which 
        administer home and community based care systems to 
        introduce breast cancer outreach and education into 
        several key aging services programs, including 
        information and assistance, congregate and home-
        delivered meals, adult day care; case management and 
        homemaker/chore services. The project also coordinated 
        with the multi-city pilot outreach projects on 
        mammography being conducted by the Health Care 
        Financing Administration.
           The Native Elder Health Resource Center at 
        the University of Colorado Health Sciences Center, 
        Denver, Colorado. This project included the 
        implementation of a coordinated education and 
        dissemination plan to address the root causes of the 
        differential in breast cancer morbidity and mortality 
        that affects older American Indian and Alaskan Native 
        women. The Center augmented its widely used Internet-
        based telecommunications effort to more specifically 
        and effectively disseminate relevant educational 
        materials to key providers, planners, administrators 
        and policy makers in urban, rural and reservation 
        Native communities.
           The National Resource Center on Native 
        American Aging at the University of North Dakota, Grand 
        Forks, North Dakota. This project also implemented a 
        coordinated education plan and pursued a nationwide 
        program of ``train the trainer'' instruction. It 
        disseminated culturally appropriate materials in 
        collaboration with the National Indian Council on 
        Aging, the National Title VI Directors organization, 
        the Recruitment and Retention of American Indians into 
        Nursing Programs (RAIN), the Indian Health Service, and 
        various other direct service programs serving urban and 
        reservation locations. An additional component of this 
        effort was four demonstration projects carried out by 
        RAIN to determine the most effective methods of 
        developing awareness.

                     adult immunization information

    The AoA worked with the aging network to draw attention to 
the importance of adult immunization with particular attention 
to vaccination against influenza and pneumonia before the start 
of the fall season. Every year, in the United States, between 
50,000 to 70,000 adults die of influenza, pneumococcal 
infections and hepatitis B. It is estimated that the cost to 
society for these and other vaccine-preventable diseases of 
adults exceeds 10 billion dollars per year. As a part of the 
Department of Health and Human Services' effort to improve 
health care provider and public awareness of the value of 
immunization in promoting health and preventing disease, the 
AoA encouraged aging network involvement and support of adult 
immunization efforts. The Centers for Disease Control (CDC), 
the National Institutes of Health (NIH), the Food and Drug 
Administration (FDA), the Health Care Financing Administration 
(HCFA) and the AoA, along with other agencies, have joined 
together, over the years, in an effort, to reduce vaccine-
preventable illnesses.
    Congress declared October 12-18, 1997, as National Adult 
Immunization Awareness Week. This special observance 
highlighted the importance of timely adult immunizations. The 
AoA effort emphasized that adults, particularly those 
individuals over age 65, should receive the flu vaccine 
annually before early November. Individuals age 65 and over, or 
others with chronic respiratory disease or a weakened immune 
system, should also receive a once-in-a-lifetime immunization 
against pneumonia. Adult immunization does not receive as much 
public attention as childhood vaccination, partly because there 
are no statutory requirements and partly because many adults do 
not understand the importance of these preventive measures. 
Adults also need immunization for the prevention of hepatitis A 
and B, measles, mumps, rubella, tetanus, diphtheria, and 
chickenpox.

                        managed care principles

    The AoA conveyed a set of principles to assist and help 
guide state and area agencies on aging, tribal organizations 
and service providers in interactions and activities related to 
managed health care. These principles reinforced the essential 
role which state and area agencies on aging and other aging 
organizations play with regard to consumer education, 
protection, and representing the interest of the elderly.
    Following the successful AoA Managed Care Conference in 
February, 1996, many members of the aging network requested 
additional assistance and guidance. The issuance of a set of 
principles seemed to be the best approach for assisting the 
aging network. This approach included receiving input about 
draft documents from other federal agencies, various state and 
area agencies on aging, national aging organizations, 
universities and groups representing consumer concerns.
    The question of the appropriate roles of state and area 
agencies on aging in managed care has been widely discussed. In 
an effort to respond to the issues and questions which have 
been raised, AoA has worked to reinforce the public mission of 
state and area agencies funded under the Older Americans Act in 
the rapidly changing era of health and long-term care reform. 
Our goal was to provide guidance for responding to new issues 
facing the elderly as they encounter changes in health and LTC 
delivery systems. This information was designed to assist the 
aging network in its decision making as its representatives 
worked with managed care organizations and policy makers in 
addressing managed care issues. The guidance alerted the aging 
network to some of the potential benefits and possible pitfalls 
of managed health care plans.
    The principles were developed because of the activity 
related to managed care at the time. As of March 1, 1997, 
approximately 5 million Medicare beneficiaries were enrolled in 
managed care plans, accounting for approximately 14 percent of 
the total Medicare population. Of the total 369 prepaid 
contracts, 285 were risk contracts, 37 were cost contracts, 19 
were demonstrations and 48 were health care prepaid plans. 
There was a 1.6 percent increase in managed care enrollment 
during February, 1997. Enrollment in Medicaid managed care 
plans is also increasing. As of June 30, 1996, approximately 
40.1 percent of the Medicaid population was enrolled in managed 
care. This figure was an increase from 29.37 percent enrolled 
in 1996.

           documenting value of aging network in human terms

    The value of the aging network is readily apparent at the 
local level because of the tangible nature of the assistance 
provided to older individuals. At the national level, the 
network's activities are reflected through the state program 
performance report under the National Aging Program Information 
System (NAPIS). State Agencies on Aging provided a profile of 
who was served with their submission of state program 
performance data for Fiscal Year 1996. This information 
represented the second step toward more client-centered 
reporting by the aging network. The new reporting requirements 
introduced by the AoA for Titles III and VII in 1995, required 
both national and state data on persons served, services 
provided, services expenditures, providers used, state and area 
agency staffing, and the use of senior centers. Program 
performance summaries and profiles of individual state programs 
can be found in Appendix V.

          celebrating the international year of older persons

    The United Nations General Assembly designated 1999 as the 
International Year of Older Persons (IYOP) to highlight the 
challenges and opportunities of a rapidly aging global 
population. President Clinton officially launched IYOP in the 
United States on October 1, 1998, with its theme, ``Toward a 
Society for all Ages''. Over 30 federal government departments 
and agencies, coordinated by the AoA, have worked together to 
plan government-wide activities through December 1999 to review 
common issues that will affect aging populations of this 
country in the next century and to share best practices among 
other nations of the world. Many events in process at the 
federal, state and local level are to highlight the importance 
of an international demographic shift in aging populations and 
the U.S. has assumed a leadership role in developing a 
blueprint for the societal changes resulting from greater 
longevity.



                ADMINISTRATION FOR CHILDREN AND FAMILIES


              Title XX--Social Service Block Grant Program

    The major source of Federal funding for social services 
programs in the States is Title XX of the Social Security Act, 
the Social Services Block Grant (SSBG) program. The Omnibus 
Budget Reconciliation Act of 1981 (Public Law 97-35) amended 
Title XX to establish the SSBG program under which formula 
grants are made directly to the 50 States, the District of 
Columbia, and the eligible jurisdictions (Puerto Rico, Guam, 
the Virgin Islands, American Samoa, and the Commonwealth of the 
Northern Mariana Islands) for use in funding a variety of 
social services best suited to the needs of individuals and 
families residing within the State. Public Law 97-35 also 
permits States to transfer up to ten (10) percent of their 
block grant funds to other block grant programs for support of 
health services, health promotions and disease prevention 
activities, and low-income home energy assistance.
    Under the SSBG, Federal funds are available without a 
matching requirement. In fiscal year 1997, a total of $2.5 
billion was allotted to States. $2.299 billion was appropriated 
for these activities in fiscal year 1998. Within the specific 
limitations in the law, each State has the flexibility to 
determine what services will be provided, who is eligible to 
receive services, and how funds are distributed among the 
various services within the State. State and/or local Title XX 
agencies (i.e., county, city, regional offices) may provide 
these services directly or purchase them from qualified 
agencies and individuals.
    A variety of social services directed at assisting aged 
persons to obtain or maintain a maximum level of self-care and 
independence may be provided under the SSBG. Such services 
include, but are not limited to adult day care, adult foster 
care, protective services, health-related services, homemaker 
services, housing and home maintenance services, 
transportation, preparation and delivery of meals, senior 
centers, and other services that assist elderly persons to 
remain in their own homes or in community living situations. 
Services may also be offered which facilitate admission for 
institutional care when other forms of care are not 
appropriate. Under the SSBG, States are not required to submit 
data that indicate the number of elderly recipients or the 
amount of expenditures provided to support specific services 
for the elderly. States are required, prior to the expenditures 
of funds under the SSBG, to prepare a report on the intended 
use of the funds including information on the type of 
activities to be supported and the categories or 
characteristics of individuals to be served. States also are 
required to report annually on activities carried out under the 
SSBG. Beginning with fiscal year 1989, the annual report must 
include specific information on the numbers of children and 
adults receiving services, the amount spent in providing each 
service, the method by which services were provided, i.e., 
public or private agencies, and the criteria used in 
determining eligibility for each service.
    Based on an analysis of post-expenditure reports submitted 
by the States for fiscal year 1997, the list below indicates 
the number of States providing certain types of services to the 
aged under the SSBG.

Services:                                           Number of States \1\
    Home-Based Services \2\.............................              33
    Adult Protective Services...........................              27
    Transportation Services.............................              16
    Adult Day Care......................................              22
    Health Related Services.............................              13
    Information and Referral............................              14
    Home Delivered/Congregate Meals.....................              13
    Adult Foster Care...................................              13
    Housing.............................................               7

\1\ Includes 50 States, the District of Columbia, and the five eligible 
territories and insular areas.
\2\ Includes homemaker, chore, home health, companionship, and home 
maintenance services.

    In enabling the elderly to maintain independent living, 
most States provide Home-Based Services which frequently 
includes homemaker services, companion and/or chore services. 
Homemaker services may include assisting with food shopping, 
light housekeeping, and personal laundry. Companion services 
can be personal aid to, and/or supervision of aged persons who 
are unable to care for themselves without assistance. Chore 
services frequently involve performing home maintenance tasks 
and heavy housecleaning for the aged person who cannot perform 
these tasks. Based on the FY 97 data, 27 States provided Adult 
Protective Services to persons generally sixty years of age and 
over. These services may consist of the identification, 
receipt, and investigation of complaints and reports of adult 
abuse. In addition, this service may involve providing 
counseling and assistance to stabilize a living arrangement. If 
appropriate, Adult Protective Services also may include the 
provision of, or arranging for, home based care, day care, meal 
service, legal assistance, and other activities to protect the 
elderly.

               Low Income Home Energy Assistance Program

    The Low Income Home Energy Assistance Program (LIHEAP) is 
one of six block grant programs administered within the 
Department of Health and Human Services (HHS). LIHEAP is 
administered by the Office of Community Services (OCS) in the 
Administration for Children and Families.
    LIHEAP helps low income households meet the cost of home 
energy. The program is authorized by the Omnibus Budget 
Reconciliation Act of 198 1, as amended most recently by the 
Community Opportunities, Accountability, and Training and 
Educational Services Act of 1998, the NIH Revitalization Act of 
1993 (P.L. 103-43), and the Human Services Amendments of 1994 
(P.L. 103-252). In fiscal year 1997, all 50 states, the 
District of Columbia, five territories, and 124 tribes and 
tribal organizations received grants amounting to approximately 
$1.215 billion, including $215 million in emergency contingency 
funds.
    In FY 1998, $1.0 billion is available. In addition, $300 
million in emergency contingency funds are available, if the 
President decides to release some or all of the funds because 
of weather, supply shortages, or other energy emergencies. 
Federally-recognized and state-recognized Indian tribes, 
including Alaska native villages, may apply for direct LIHEAP 
funding. The amount to be reserved from a state's allotment for 
a direct grant to a tribe will be based on the ratio of 
eligible tribal households to total eligible households in the 
state, or a larger allotment amount agreed on by the tribe and 
state. Of the $ 1.0 billion appropriated for FY 1998, $25 
million is earmarked for leveraging incentive awards, to reward 
grantees that add non-Federal resources to help low income 
households meet their home heating and cooling needs. Up to 25% 
of the leveraging incentive awards, or $6,250,000, will be used 
to fund grants to LIHEAP grantees under the Residential Energy 
Assistance Challenge Option Program (REACH) to develop 
innovative programs to reduce the energy vulnerability of 
LIHEAP-eligible households.
    For FY 1994, Congress appropriated $1,437,408,000, of which 
$141,950,240 could be used by grantees to reimburse themselves 
for FY 1993 expenses. In addition, Congress rescinded some 
funds and appropriated energy emergency contingency funds of 
$300,000,000, which were released when the President declared 
an emergency and requested the funds from Congress, thus 
providing a total of $1,737,392,360 for FY 1994. The FY 1994 
appropriations act provided advance FY 1995 funds of $1.475 
billion. The FY 1995 HHS appropriations act rescinded part of 
the advance FY 1995 appropriations included in the FY 1994 
appropriations law, leaving funding of $1,319,202,479 for FY 
1995. In addition, Congress appropriated energy emergency 
contingency funds of $300,000,000, of which $100 million were 
released when the President declared an emergency and requested 
the funds from Congress, thus providing a total of 
$1,419,202,479 for FY 1995. The FY 1995 HHS appropriations law 
also provided for advance FY 1996 funding of $1,319,204,000. 
Congress rescinded part of the advance funding for FY 1996 in 
the FY 1995 supplemental appropriations law and in the FY 1996 
appropriations law, leaving funding of $899,997,500. In 
addition, Congress appropriated energy emergency contingency 
funds of $300,000,000, of which $180 million were released when 
the President declared an emergency and requested the funds 
from Congress, thus providing a total of $1,079,997,500 for FY 
1996. Congress did not appropriate in advance for FY 1997.
    Block grants are made to States, territories, and eligible 
applicant Indian Tribes. Grantees may provide heating 
assistance, cooling assistance, energy crisis interventions, 
and low-cost residential weatherization or other energy-related 
home repair to eligible households. Grantees can make payments 
to households with incomes not exceeding the greater of 150 
percent of the poverty level or 60 percent of the State's 
median income.\3\ Most households in which one or more persons 
are receiving benefits from the Temporary Assistance to Needy 
Families (TANF) block grant, Supplemental Security Income, Food 
Stamps or need-tested veterans' benefits, may be regarded as 
categorically eligible for LIHEAP.
---------------------------------------------------------------------------
    \3\ Beginning with fiscal year 1986, States are prohibited from 
setting income eligibility levels lower than 110 percent of the poverty 
level.
---------------------------------------------------------------------------
    Low-income elderly households are a major target group for 
energy assistance. They spend, on average, a greater portion of 
their income for heating costs than other low-income 
households. Grantees are required to target outreach activities 
to elderly or handicapped households eligible for energy 
assistance. In their crisis intervention programs, grantees 
must provide physically infirm individuals the means to apply 
for assistance without leaving their homes, or the means to 
travel to sites where applications are accepted.
    In fiscal year 1998, about 34 percent of households 
receiving assistance with heating costs included at least one 
person age 60 or over, as estimated by the March 1998 Current 
Population Survey.
    OCS is a member of the National Energy and Aging 
Consortium, which focuses on helping older Americans cope with 
the impact of high energy costs and related energy concerns.
    The 1998 reauthorization retains legislation from the 1994 
reauthorization that specifically allows grantees to target 
funds to vulnerable populations, mentioning by name ``frail 
older individuals'' and ``individual with disabilities''. No 
new initiatives commenced in 1997 or 1998 that impacted on the 
status of older Americans.

       The Community Services Block Grant (CSBG) and the Elderly

    I. Community Service Block Grant--The Community Service 
Block Grant Act (Title VI, Subtitle B, Public Law 97-35 as 
amended; and the Coats Human Services Reauthorization Act of 
1998 105-285) is authorized through fiscal year 2003. The Act 
authorizes the Secretary, through the Office of Community 
Services (OCS), an office within the Administration for 
Children and Families in the Department of Health and Human 
Services, to make grants to States and Indian tribes or tribal 
organizations. States and tribes have the authority and the 
flexibility to make decisions about the kinds of local projects 
to be supported by the State or tribe, using CSBG funds. The 
purposes of the CSBG program are:
          (A) to provide a range of services and activities 
        having a measurable and potentially major impact on 
        causes of poverty in the community or those areas of 
        the community where poverty is a particularly acute 
        problem.
          (B) to provide activities designed to assist low-
        income participants including the elderly poor--
                  (i) to secure and retain meaningful 
                employment,
                  (ii) to attain an adequate education;
                  (iii) to make better use of available income;
                  (iv) to obtain and maintain adequate housing 
                and a suitable living environment;
                  (v) to obtain emergency assistance through 
                loans or grants to meet immediate and urgent 
                individual and family needs, including the need 
                for health services, nutritious food, housing, 
                and employment-related assistance;
                  (vi) to remove obstacles and solve problems 
                which block the achievement of self-
                sufficiency;
                  (vii) to achieve greater participation in the 
                affairs of the community; and
                  (viii) to make more effective use of other 
                programs related to the purposes of the 
                subtitle,
                  (C) to provide on an emergency basis for the 
                provision of such supplies and services, 
                nutritious foodstuffs and related services, as 
                may be necessary to counteract conditions of 
                starvation and malnutrition among the poor;
                  (D) to coordinate and establish linkages 
                between governmental and other social services 
                programs to assure the effective delivery of 
                such services to low income individuals; and
                  (E) to encourage the use of entities in the 
                private sector of the community in efforts to 
                ameliorate poverty in the community; (Reference 
                Section 675(c)(1) of Public Law 97-35, as 
                amended).
    It should be noted that although there is a specific 
reference to ``elderly poor'' in (B) above, there is no 
requirement that the States or tribes place emphasis on the 
elderly or set aside funds to be specifically targeted on the 
elderly. Neither the statute nor implementing regulations 
include a requirement that grant recipients report on the kinds 
of activities paid for from CSBG funds or the types of indigent 
clients served. Hence, it is not possible for OCS to provide 
complete information on the amount of CSBG funds spent on the 
elderly, or the number elderly, or the numbers of elderly 
persons served.
    II. Major Activities or Research Projects Related to Older 
Citizens in 1997 and 1998--The Human Services Reauthorization 
Act of 1986 contained the following language: ``each such 
evaluation shall include identifying the impact that assistance 
. . . has on . . . the elderly poor.'' The reauthorization act 
of 1998 requires that states assure a portion of the grant 
funds will be used to support activities for elderly low-income 
individuals as part of their State Application and Plan 
submitted to OCS. Following the 1994 reauthorization, local 
community action agencies began to include a description of how 
linkages will be developed to fill identified gaps in services 
through information, referral, case management, and followup 
consultations as well as a description of outcome measures to 
be used to monitor success in promoting self sufficiency, 
family stability and community revitalization. As a result, the 
CSBG Task Force on Monitoring and Assessment, a representative 
body of eligible entities, established a goal which states, 
``Low income people, especially vulnerable populations, achieve 
their potential by strengthening family and other support 
systems''. This goal assists local, state and federal agencies 
to focus jointly on vulnerable populations, particularly the 
frail elderly.
    III. Funding Levels--Funding levels under the CSBG program 
for States and Indian Tribes or tribal organizations amounted 
to $480.8 million in fiscal year 1997. For fiscal year 1998, 
$485.3 million was appropriated.

              Aging and Developmental Disabilities Program


                       CRITICAL AUDIENCES PROJECT

    Grantee: Institute for the Study of Developmental 
Disabilities, Indiana University
    Project Director: Barbara Hawkins, Ph.D., (812) 855-6506; 
Fax (812) 855-9630
    Project Period: 7/97-6/30/2002; FY '97--$82,680
    The project provides training in a late-life functional-
developmental model for audiences that are critical to 
effective planning and care of older persons. Activities 
include developing training modules and instructional videos 
for interdisciplinary university credit courses, and 
illustrating the model by demonstration projects in community 
retirement settings.

          CENTER ON AGING AND DEVELOPMENTAL DISABILITIES/CADD

    Grantee: University of Miami/CADD, Miami, FL
    Project Director: John Stokesberry, Ph.D., (305) 325-1043
    Project Period: 7/97-6/30/2002; FY '9--$82,680
    CADD is providing education and training to service 
providers, parents and families; advocacy and outreach for 
consumers, information to the public on aging and developmental 
disabilities; networking, policy direction and community-based 
research. Materials will include a manual for parents/
caregivers, a resource guide and a handbook on developing a 
peer companion project.

                   INTERDISCIPLINARY TRAINING CENTER

    Grantee: UAP--Institute for Human Development, University 
of Missouri-Kansas City
    Project Director: Gerald J. Cohen, J.D., M.P.A., (816) 235-
1770; Fax (816) 235-1762
    Project Period: 7/97-6/30/2002; FY '97--$82,680
    The Center addresses personnel preparation needs with a 
focus on administration, interdisciplinary training, exemplary 
services, information/technical assistance/research; and 
evaluation. Materials include training guide for aging, 
infusion models, inservice fellowship curriculum, resource 
bibliography, guide for training volunteers, and course 
syllabus.

                  CONSORTIUM OF EDUCATIONAL RESOURCES

    Grantee: UAP--University of Rochester Medical Center, 
Rochester, NY
    Project Director: Jenny C. Overeynder, ACSW, (716) 275-
2986; Fax (716) 256-2009
    Project Period: 7/97-6/30/2002; FY '97--$82,680
    An inter-university interdisciplinary consortium of 
educational resources in gerontology and developmental 
disabilities is being established in western New York, to be 
linked to local and state networks. The project will develop 
and implement preservice and inservice education curriculum for 
direct care and nursing home staff

         COMMUNITY MEMBERSHIP THROUGH PERSON--CENTERED PLANNING

    Grantee: Eunice Kennedy Shriver Center, Inc. Shriver, 
Center UAP
    Project Director: Karen E. Gould, Ph.D., (617) 642-0238
    Project Period: 7/92-6/30/1999; FY '97--$82,680
    The Center has two primary goals which are: 1) to implement 
a service delivery model that creates a new vision for 
individuals who are labeled ``old'' and ``developmentally 
disabled'' in Massachusetts, one in which entry into valued 
adult roles is expected and capacities and interests form the 
basis for structuring support; and 2) to provide training to 
persons with developmental disabilities, family members and 
friends, graduate students, professionals and community members 
so that they can develop the skills necessary to support 
community entry and inclusion in valued roles and relationships 
for older adults with developmental disabilities, and learn to 
use these skills in other settings.

 NORTH DAKOTA PROJECT FOR OLDER PERSONS WITH DEVELOPMENTAL DISABILITIES

    Grantee: North Dakota Center for Disabilities, Minot State 
University
    Project Director: Dr. Rita Curl and Dr. Demetrios 
Vassiliou, (701) 857-3580
    Project Period: 7/97-6/30/2002; FY '97--$82,680
    The project seeks to upgrade the training opportunities 
available to North Dakotans; 1) project staff works with pre-
service geriatric programs to develop strong DD components; 2) 
project staff expands on an existing inservice training program 
to provide information on aging DD service provision; and 3) 
the project supports the development of training opportunities 
for secondary consumers and advocates.

   INTERDISCIPLINARY TRAINING INITIATIVE ON AGING AND DEVELOPMENTAL 
                              DISABILITIES

    Grantee: Graduate School of Public Health, University of 
Puerto Rico--Medical Sciences
    Project Director: Dr. Margarita Miranda, (809) 758-2525, 
ext. 1453, (809) 754-4377
    Project Period: 7/97-6/30/2002; FY '97--$82,680
    The project provides pre-service training including 
practical experience on best practices in serving the older 
population with developmental disabilities to three (3) 
graduate and to three (3) undergraduate students from different 
disciplines per year (from the second funding year on); 
provides culturally adapted in-service training to the Catano 
Family Health Center's interdisciplinary team and to at least 
40 professionals in the aging service per year through the 
Graduate School and implementation of five regional Seminars on 
Aging and Developmental Disabilities throughout Puerto Rico.

                  CREATIVE CHOICES FOR HEALTHY LIVING

    Grantee: University-Affiliated Program Department of 
Pediatrics, Univ. of Arkansas for Medical Sciences
    Project Director: Judith Holt, Ph.D (501) 682-9900
    Project Period: 7/97-6/30/2002, FY '97--$82,680
    The UAP of Arkansas' Training Initiative Project, Creative 
Choices for Healthy Living, will focus on persons who are aging 
with developmental disabilities, their access to appropriate 
services and supports within the community. Specifically, it 
will enhance the health and well-being of older persons with 
developmental disabilities and other members of the aging 
community; enhance the skill and competencies of community 
trainers to provide the training identified by the community 
action plan; expand the project into new communities; develop 
and disseminate preserve training modules for undergraduate and 
graduate courses; disseminate project training modules for use 
in other settings state- and nation-wide; and evaluate the 
project's effects.

          MEETING THE NEEDS OF A CULTURALLY-DIVERSE POPULATION

    Grantee: Department of Pediatrics, Children's Hospital Los 
Angeles
    Project Director: Irma Castaneda, Ph.D (213) 669-2300-9900
    Project Period: 7/1/97-6/30/2002, FY '97--$82,680
    Develop and implement an interdisciplinary training program 
with a special emphasis on the multicultural aspects of aging 
and developmental disabilities which is integrated into 
Department's curriculum for a minimum of one primary or 
secondary consumer, and two graduate students per year. Will 
integrate material on multicultural aging and developmental 
disabilities into existing gerontology certificate programs. 
Provide training and consultation on the integration of content 
related to multicultural aging and developmental disabilities 
to four university departments. Provide training to a total of 
100 health care providers, community support personnel, and 
family members on the changing health and social needs of aging 
individuals with developmental disabilities from ethnic 
minority groups.

     OFFICE OF THE ASSISTANT SECRETARY FOR PLANNING AND EVALUATION

    The Office of the Assistant Secretary for Planning and 
Evaluation (ASPE) serves as the principal advisor to the 
Secretary on policy and management decisions for all groups 
served by the Department, including the elderly. ASPE oversees 
the Department's legislative development, planning, policy 
analysis, and research and evaluation activities and provides 
information used by senior staff to develop new policies and 
modify existing programs.
    ASPE is involved in a broad range of activities related to 
aging policies and programs. It manages grants and contracts 
which focus on the elderly and coordinates other activities 
which integrate aging concerns with those of other population 
groups. For example, the elderly are included in studies of 
health care delivery, poverty, State-Federal relations and 
public and private social service programs.
    ASPE also maintains a national clearinghouse which includes 
aging research and evaluation materials. The ASPE Policy 
Information Center (PIC) provides a centralized source of 
information about evaluative research on the Department's 
programs and policies by tracking, compiling, and retrieving 
data about ongoing and completed HHS evaluations. In addition, 
the PIC data base includes reports on ASPE policy research 
studies, the Inspector General's program inspections and 
investigations done by the General Accounting Office and the 
Congressional Budget Office. Copies of final reports of the 
studies described in this report are available from PIC.
    During 1997 and 1998, ASPE undertook or participated in the 
following analytic and research activities which had a major 
focus on the elderly.

                      1. Policy Development--Aging

Federal Interagency Forum on Aging-Related Statistic

    ASPE is a member of the Federal Interagency Forum on Aging-
Related Statistics. The Forum was established to encourage the 
development, collection, analysis, and dissemination of data on 
the older population. The Forum seeks to extend the use of 
limited resources among the agencies through joint problem-
solving, identification of data gaps, and improvement of the 
statistical information bases on the older population. The 
primary goals of the Federal Forum were to provide federal 
agencies a venue for discussing aging-related data issues and 
concerns that cut across agency boundaries, facilitate the 
improvement of existing aging data bases and the development of 
new sources of information, improve the dissemination of 
information on aging-related research and data, and encourage 
cross-national research and data collection on population 
aging. The Federal Forum was instrumental in gathering support 
for several important surveys of the aging U.S. population 
(e.g., the Health and Retirement Survey, the survey of Assets 
and Health Dynamics Among the Oldest-Old, and the Second 
Longitudinal Study of Aging) and produced several stand-alone 
reports including Trends in the Health of Older Americans and 
65+ in the United States.

Long-Term Care Microsimulation Model

    During 1997 and 1998, ASPE continued to use extensively the 
Long-Term Care Financing Model developed by ICF and the 
Brookings Institution. The model simulates the use and 
financing of nursing home and home care services by a 
nationally representative sample of elderly persons. It gives 
the Department the capacity to simulate the effects of various 
financing and organizational reform options on public and 
private expenditures for long-term care services. An updated 
version of the model, which will include projections of both 
long-term care and acute care expenditures, will be completed 
in 1999.

                 2. Research and Demonstration Projects

Panel Study of Income Dynamics

    University of Michigan, Institute for Social Research
    Principal Investigators: James N. Morgan, Greg J. Duncan, 
Martha S. Hill
    Through an interagency consortium coordinated by the 
National Science Foundation, ASPE assists in the funding of the 
Panel Study of Income Dynamics (PSID). This is an ongoing 
nationally representative longitudinal survey that began in 
1968 under the auspices of the Office of Economic Opportunity 
(OEO). The PSID has gathered information on family composition, 
employment, sources of income, housing, mobility, health and 
functioning, and other subjects. The current sample size is 
over 7,000 persons, and an increasing number of them are 
elderly. The data files have been disseminated widely and are 
used by hundreds of researchers in this and other countries to 
get an accurate picture of changes in the well-being of 
different demographic groups, including the elderly.
    Funding: ASPE and HHS precursors: FY67 through FY79--
$10,559,498; FY80--$698,952; FY81--$600,000; FY82--$200,000; 
FY83--$251,000; FY84--$550,000; FY85--$300,000; FY86--$225,000; 
FY87--$250,000; FY88--$250,000; FY89--$250,000; FY90--$300,000; 
FY93--$300,000; FY94--$800,000; FY95--$150,000; FY96--$205,000; 
FY97--$100,000; FY98:--$200,000
    End Date: Ongoing

Welfare Reform, the Economic and Health Status of Immigrants and the 
        Organizations That Serve Them

    The Urban Institute
    Principal Investigators: Michael Fox and Leighton Ku
    The main objectives of this study are to profile immigrants 
with regard to health, employment, economic hardship and 
participation in government programs--with special attention to 
distinguishing different categories of immigrants and to 
drawing comparisons with the native population; and to explore 
the impacts of welfare reform on immigrants and the 
organizations that serve them--with special attention to both 
individual and institutional adaptations. To accomplish these 
objectives this project will supplement an examination of 
existing secondary data with intensive data collection in two 
cities that together account for one-fourth of the immigrant 
population in the United States--Los Angeles and New York. 
Investigators will conduct a survey of 1625 immigrant 
households in each city, intensive interviews with public and 
private community organizations that serve immigrants, and in-
depth, in person interviews with immigrants affected by the new 
laws. Secondary data will be used to present national profiles 
of the immigrant population and to compare them with natives. 
Local administrative data will be used to capture relevant 
trends in program participation and, where possible, to develop 
neighborhood indicators of health and other trends. The study 
is structured to gather sufficient data on elderly immigrants 
to make estimates of impacts on this population. We will also 
conduct a survey of community organizations that serve 
immigrants, and in-depth interviews with (1) immigrants 
affected by the new laws; (2) community organizations that 
serve immigrants; and (3) government agencies. Immigrants of 
all ages will be included in the study.
    Funding: (The study is funded under a cooperative agreement 
and is supported by HHS (ASPE, ACF, HCFA), Agriculture (ERS/
FNS), and INS.) ASPE funding: FY97--$500,000; FY 98--$650,000
    End Date: October 2000

A Primer for States and Consumers on Medicaid Home and Community Based 
        Services

    George Washington University Medical Center
    Principal Investigator: Sara Rosenbaum, Lea Nolan
    An important priority of the White House, the Secretary and 
the Department of Health and Human Services is a reduction in 
the over-reliance on unnecessary institutional long-term care 
and an expansion of consumer responsive home and community-
based long-term care options in the Medicaid program. As a step 
toward addressing this priority, ASPE proposes to develop a 
``primer'' on existing long-term care options in Medicaid that 
promote choices in long-term care for consumers. The primer 
will be an important and useful development tool for State 
Medicaid and aging policy and program staff, consumers and 
their representatives, and providers interested in the 
expansion of choices in long-term care, including the promotion 
of home and community-based options.
    Funding: FY98--$150,000
    End Date: July 1999
    Hebrew Rehabilitation Center for the Aged, Boston and 
University of Michigan
    Principal Investigators: John Morris, Boston Brant Fries, 
Michigan

Characteristics of Nursing Home Residents

    Reducing institutionalization is a major long-term care 
policy objective. It is important to identify nursing home 
residents who could be discharged to the community if 
appropriate home and community-based services were available. 
This project will analyze data from a new source--the Minimum 
Data Set (MDS). The MDS consists of assessments which have been 
conducted on all nursing home residents in selected States as 
part of a HCFA demonstration (and starting the summer of 1998, 
the data will be collected in all 50 States). We will learn 
much more about the medical conditions, functional needs, and 
specific services used by nursing home residents than was 
possible with previous data sets. We will also be able to study 
important subpopulations, especially the nonelderly. The policy 
implications of the findings will be assessed.
    Funding: FY98--$150,000
    End Date: September 1999

Comparative International Data on Aging: Health and Disability 
        Indicators

    Organization for Economic Cooperation and Development, 
Paris, France
    Principal Investigator: Peter Hicks
    This project builds on the G8 Summit Aging Experts Meeting 
held in May 1997 and seeks to encourage international 
comparative data collection. A two-day conference is planned 
for Fall 1999 to bring researchers in disability and aging 
measurement, policy experts, and survey administrators together 
to discuss disability/health status measurement and survey and 
data development.
    Funding: FY98--$50,000
    End Date: December 1999

Synthesis and Analysis of Medicare Post-Acute Care Benefits

    The Urban Institute
    Principal Investigators: Korbin Liu, Barbara Gage
    This project will produce a synthesis of what is known 
about: (a) current coverage and payment policies for post-acute 
care (PAQ; (b) predictors of PAC use and nonuse and of the 
type, amount, and duration of PAC use; (c) PAC utilization 
including characteristics of PAC patients, patterns of PAC 
utilization, and geographic distribution of providers; (d) 
Medicare expenditures during the course of PAC episodes; (e) 
outcomes of patients in and across PAC settings; and (f) State 
policies designed to maximize Medicare PAC coverage. Medicare 
PAC services refer to a broad array of services provided in a 
variety of settings ranging from PPS-exempt hospitals to the 
home. ``PAC providers'' include SNFs, HHAs, and LTC and 
rehabilitation hospitals. In 1994, Medicare PAC expenditures 
were approximately $24 billion--up from only $3 billion in 
1986. Such rapid cost increases have caused policy makers to 
focus considerable attention on these benefits and question the 
underlying reasons for these increases. The review and 
synthesis of the literature will discuss any historical issues, 
the extent to which these issues remain, and any new issues 
that have emerged.
    Funding: FY98--$65,000
    End Date: March 1999

A National Study of Assisted Living-for-the Frail Elderly

    Research Triangle Institute
    Principal Investigator: Catherine Hawes
    The major purpose of this project is to analyze the role of 
assisted living within the current long-term care system from 
the perspective of consumers, owners/operators, workers, 
regulators, investors and other stakeholders, and to issue a 
report on its current status and future directions. ``Assisted 
living'' refers to residential settings for people with 
disabilities which combine both housing and personal assistance 
services within a homelike or noninstitutional environment. 
Currently, the number of assisted facilities nationally is not 
known; estimates range from 8,000 to 30,000. Similarly, 
estimates for the number of frail elderly and other persons 
residing in such facilities range from 350,000 to 1,000,000. 
This study will, among other things, generate a more reliable 
estimate of the number of these facilities and their residents. 
As assisted living options multiply, a challenge facing the 
Federal and State governments is how (or whether) to regulate 
such arrangements, balancing consumer protection concerns 
(especially if public funds reimburse costs) with resident 
rights for self-direction, taking risks and maintaining 
accustomed lifestyles. The study will address several broad 
policy-relevant issues, including supply and demand trends; 
barriers; how closely practice parallels philosophy; the impact 
of key features on outcomes; and quality and accountability.
    Funding: FY94--$200,000; FY 96--$200,000; FY98--$350,000
    End Date: December 1999

Personal Assistance Services ``Cash and Counseling'': Demonstration/
        Evaluation

    University of Maryland
    Robert Wood Johnson Foundation
    Principal Investigator: Kevin Mahoney
    This project, undertaken in collaboration with the Robert 
Wood Johnson Foundation, employs a classical experimental 
research design (i.e., random assignment of participants to 
treatment and control groups) to test the effects of ``cashing 
out'' Medicaid-funded personal assistance services for the 
disabled. The demonstration will include elderly as well as 
younger disabled consumers. Two States are expected to 
participate in the demonstration. In these States, control 
group members will receive ``traditional'' benefits--i.e., case 
managed home and community-based services, where payments for 
services are made to vendors--while treatment group members 
receive a monthly cash payment in an amount roughly equal to 
the cash value of the services they would have received under 
the traditional program. It is hypothesized that cash payments 
will foster greater client autonomy and that, as a result, 
consumer satisfaction will be greater. Consumers are expected 
to purchase a somewhat different mix of disability-related 
services and/or assistive technologies when they make the 
decisions and payments themselves than when case managers 
contract with vendors on their behalf. It is also hypothesized 
that States will save Medicaid monies (mostly in administrative 
expenses) from cashing out benefits. The analysis will consider 
the effects of the demonstration according to the varying 
characteristics of the consumers including age, disability, 
gender, family support, and other factors.
    Funding: FY97--$350,000; FY98--$111,389
    End date: January 2001

Evaluation of Practice in Care (EPIC)

    University of Colorado Center for Health Policy Research
    Principal Investigator: Peter Shaughnessy
    PURPOSE: From 1989 to 1992, there was a 210% increase in 
Medicare expenditures for home health services. This increase 
in utilization has generated widespread policy interest in 
appropriate measures to control expenditures without 
compromising quality. Medicare home health has been the subject 
of considerable research, but the actual practice of home 
health care has not been extensively examined. This study will 
analyze ``episodes'' of care under the Medicare home health 
benefit, assess the actual practice of care, the extent to 
which there is variation in practice between acute and long-
term patients, and the factors that account for that variation. 
This study will also examine decision-making processes between 
patients, providers and physicians. What takes place during a 
visit and between visits as ``actual practice'' has never been 
measured. Furthermore, the function of decision-making by 
various parties has not been observed in ``actual practice.'' 
This effort to understand issues surrounding regional and 
practice variations of home health care delivery will aid the 
Department and the industry in combating fraud and abuse, as 
well as contribute valuable data to a future prospective 
payment system.
    Funding: FY97--$200,000, FY98--$0
    End Date: March 2001

Imputation of Annual Family Income on the 1990-96 National Health 
        Interview Survey

    National Center for Health Statistics
    Principal Investigator: Diane Makuc
    The National Health Interview Survey (NHIS) is the primary 
data source for measuring the health of the 
noninstitutionalized population of the United States. The 
survey is conducted by the National Center for Health 
Statistics (NCHS) in the Centers for Disease Control and 
Prevention using a nationally representative, multistage 
probability design. Approximately 50,000 households containing 
roughly 115,000 persons are interviewed annually. In addition 
to health information, the survey also collects demographic and 
socioeconomic data (e.g., race and ethnicity, family 
composition, employment status of household members, family 
income and asset information, home and business ownership, 
etc.). The strong relationship between socioeconomic status and 
health, access to health care, and health care utilization, has 
been widely documented. Annual family income is a key measure 
of socioeconomic status and is used extensively in research 
that measures differences in health status by racial and 
economic subpopulations. These groups are frequently the focus 
of federal government health initiatives and programs. Although 
questions are asked on the NHIS about family income, a sizable 
percentage of respondents do not have valid information. This 
project supports an effort being undertaken by NCHS to impute 
missing total annual family income data for the 1990-1996 NHIS. 
The public use files produced from the project will provide 
public policy analysts and researchers with consistent and 
validated data necessary for comprehensive analyses of the 
NHIS.
    Funding: FY98--$25,000
    End Date: December 1999

Informal Caregivers Supplement to the 1999 National Long-Term Care 
        Survey

    Duke University
    Principal Investigator: Kenneth Manton
    The Office of the Assistant Secretary for Planning and 
Evaluation (ASPE) has been involved in the past in designing a 
modest respite benefit for Medicare beneficiaries with 
Alzheimer's disease for inclusion in the President's budget. In 
1998, there is renewed interest in having proposals for respite 
services and other caregiver supports, on a broader scale, 
incorporated into the President's long-term care budget 
initiative. We are currently working with White House, OMB, and 
Treasury staff to explore the use of tax incentives to help 
informal caregivers be able to afford paid home care services 
as a supplement to their own informal efforts. To respond to 
these kinds of policy analysis requests, it is important for 
ASPE to look ahead and anticipate future data needs. In this 
case, the need is to have data collection mechanisms in place 
to track, over time, changes in the characteristics of informal 
caregivers of the disabled elderly, as we follow changes in the 
population of disabled elders themselves. ASPE supported the 
first and second Informal Caregiver's Supplement to the 
National Long-Term Care Survey in 1982 and 1989 respectively. A 
third round of data collection on informal caregivers is now 
needed in order to remain up-to-date.
    Family members typically initiate the process of nursing 
home placement for disabled elders when they feel that the 
disabled elder needs more help than can be provided in a home 
setting. Often families come to such a decision when one or 
more family caregivers have been providing upwards of 60 hours 
per week of unpaid assistance. This project will enable in-
depth analysis of the conflicts informal caregivers experience 
between employment and eldercare as well as provide information 
about the health status of caregivers and measures of caregiver 
stress and burden. These data can then be used in crafting 
policy initiatives to support caregivers and prevent 
``caregiver burnout'' which could result in premature 
institutionalization. It will help determine whether and to 
what extent caregivers' age, marital status, relationship to 
the care recipient, household income, employment, health 
status, and various measures of caregiver stress and burden are 
associated with greater or lesser use of supplemental formal 
care. We will also be able to measure the extent to which 
caregivers as well as the disabled elders themselves experience 
out-of-pocket spending for supplemental home care.
    Funding: FY98--$300,000
    End Date: March 2000

National Home and Hospice Care Survey (NHHCS)

    National Center for Health Statistics
    Principal Investigator: Thomas McLemore
    Because of the difference in views as to whether or not the 
homebound coverage requirement is being applied appropriately, 
it would be extremely useful to have measures of the homebound 
status of a nationally representative sample of Medicare 
beneficiaries currently receiving services. This information 
could then be used to estimate the extent to which home health 
patients meet various indicators of ``homebound'' status.
    The NHHCS is the only nationally representative survey that 
samples and collects descriptive data on all current users of 
home health services (including nonelderly as well as home 
health users aged 65 and older) during the period when they are 
actually in a home health episode. Because over 70% of home 
health services are Medicare-financed, the sample of current 
patients is predominantly comprised of Medicare beneficiaries. 
The NHHCS Current Patient Survey includes descriptive 
information on users of home health services, including a 
number of potential indicators of ``homebound'' status. 
Additional information on indicators of homebound status may be 
obtained from the Outcome and Assessment Informal Set (OASIS) 
instruments where these were completed and are present in 
patients' files. Because HCFA has announced its intention to 
mandate the use of the OASIS instrument to assess home health 
patients' care needs upon admission and health status outcomes 
at discharge (or every 60 days when their continued need for 
home health services is recertified), many home health agencies 
have already begun using the OASIS instrument on a routine 
basis. It is therefore estimated that a high percentage of 
patients selected for the NHHCS Current Patient Survey will 
have completed OASIS instruments available. NCHS has agreed to 
include in the data collection for these patients a limited set 
of items from the OASIS.
    Funding: FY98--$40,000
    End Date: January 2001

Impact of Medicare HMO Enrollment on Health Care Costs in California

    RAND
    Principal Investigator: Glenn Melnick
    This work is an ongoing project and an extension of 
previous ASPE-funded work. The contractor performs three major 
activities including: (1) updating the earlier analysis of 
competition and selective contracting in California to the most 
recent year available; (2) analyzing the effects of Medicare 
managed care penetration on hospital Medicare Costs and 
Utilization at the county level; and (3) analyzing the effects 
on beneficiary utilization and costs of joining managed care 
plans. In addition, the feasibility of conducting a fourth 
analysis will be assessed; namely to replicate analysis number 
three for beneficiaries who have withdrawn from Medicare 
managed care plans in the recent past to try to see if such 
beneficiaries are different from those who remain in managed 
care. The contractor will put out a public use file with 
documentation of the materials gathered since 1980 with ASPE 
support beginning in 1987.
    The project compares pre-managed care enrollment 
characteristics, service utilization, and costs among 
demographically-matched individuals in standard Medicare and 
Medicare HMOs. In addition, the project includes comparisons 
with a third group of persons who disenrolled from Medicare 
HMOs. This data will then be used to build prediction models 
for subsequent years.
    Funding: FY94--$531,000; FY 97--$160,000; FY98--$200,000; 
FY99--$173,000
    End date: Fall 2000

               CENTERS FOR DISEASE CONTROL AND PREVENTION


  National Center for Chronic Disease Prevention and Health Promotion

    CDC's National Center for Chronic Disease Prevention and 
Health Promotion (NCCDPHP) is involved in a wide array of 
activities on behalf of older Americans. Research and 
programmatic efforts of the Aging Studies Branch of the 
Division of Adult and Community Health focus on musculoskeletal 
diseases (osteoarthritis, osteoporosis), Alzheimer's disease, 
urinary incontinence, long-term care needs among minorities, 
and surveillance. Other efforts of NCCDPHP focus on disability, 
diabetes, cancer, and health information (and various other 
programmatic and research areas.)

                        musculoskeletal diseases

    Musculoskeletal diseases are prevalent and disabling 
chronic diseases, affecting approximately 38 million persons in 
the United States. Data indicate that 49.4 percent of persons 
65 years and older have symptomatic musculoskeletal diseases 
and 11.6 percent of persons in this age group have arthritis as 
a major or contributing cause of activity limitation. Data are 
needed to describe the natural history of disease as well as to 
direct development of effective intervention efforts. To 
address the burden of osteoporosis and arthritis, NCCDPHP:
           developed the National Arthritis Action 
        Plan--A Public Health Strategy. This plan was released 
        in November of 1998 and was developed under the 
        leadership of CDC, the Arthritis Foundation, and the 
        Association of State and Territorial Health Officials. 
        The plan proposes action in three major areas: 
        surveillance, epidemiology, and prevention research; 
        communication and education; and programs, policies, 
        and systems. It is designed to encourage public health 
        organizations, arthritis organizations, and other 
        interested organizations to work together at the 
        national, state, and local levels.
           analyzed the Arthritis Self-Help Course. 
        This analysis showed the course to be a cost-saving 
        intervention from both the societal and health care 
        system perspectives.
           is studying the cost-effectiveness of 
        different interventions designed to prevent 
        osteoporosis in women who are perimenopausal or 
        postmenopausal.
           determined the prevalence of hip and knee 
        osteoarthritis among whites and blacks in Johnston 
        County, NC, a rural, southern county. The Johnston 
        County Osteoarthritis Project is beginning follow-up of 
        3200 Caucasian and African-American residents of a 
        rural North Carolina county to determine factors 
        associated with the development and progression of hip 
        and knee osteoarthritis--the leading causes of 
        arthritis disability.

                          alzheimer's disease

    Chronic neurological diseases, conditions common among 
elderly, causes high levels of morbidity, disability, family 
stress, and economic burden. For example, the costs due to 
dementias were estimated at $24-$48 billion in 1985, and will 
increase as the population ages. However, the epidemiology of 
these conditions is poorly understood. NCCDPHP is studying the 
epidemiology of Alzheimer's Disease to determine disease rates, 
risk factors, and prevention factors.

                          long-term care needs

    NCCDPHP conducted an assessment of long-term care needs 
among older adults in the Indian Health Service Santa Fe 
Service Unit, New Mexico. The objectives of the project were 
(1) to provide estimates of the population of functionally 
dependent adults age 55 and over within the Santa Fe Service 
Unit (SFSU) and distinguish clinically relevant subgroups; (2) 
to document the extent of informal care provided by family 
members to elders with chronic care needs; (3) to analyze the 
strengths and weaknesses of the current formal long-term care 
service system within the SFSU to accommodate the needs of the 
target population.
    NCCDPHP has initiated the EnPOWER project to improve 
prevention services in older women in HMO's. The project aims 
to enhance and promote preventive health services for older 
women in a managed care setting.

                              Surveillance

    NCCDPHP conducts surveillance of the health status of the 
elderly. Studies include:
           planning a surveillance summary of the 
        health status and health services use among Americans 
        age 65 and older;
           monitoring the impact of managed care 
        organizations' growth on the public health of the 
        elderly;
           assessing the prevalence of 
        electroconvulsive therapy on older adults by age, 
        gender, and ethnicity;
           ensuring availability of complete, timely, 
        and accurate cancer surveillance data at state, 
        regional, and national levels;
           generating national and state estimates of 
        the prevalence and incidence of diabetes, the processes 
        and outcomes of care, and the costs of care in the 
        Medicare population;
           using several health-related quality-of-life 
        measures in the state-based Behavioral Risk Factor 
        Surveillance System (BRFSS) to track quality of life in 
        the States;
           determining the feasibility of a Medicare 
        claims-based surveillance system for possible adverse 
        effects of folic acid food fortification among persons 
        with vitamin B12 deficiency; and
           conducting a survey of the knowledge, 
        attitudes, and practices of postmenopausal women 
        regarding hormone replacement therapy (HRT) to 
        determine factors associated with having heard of HRT 
        and initiating use of HRT.

                               Disability

    NCCDPHP funds the Center for Health Promotion in Older 
Adults at the University of Washington at Seattle, School of 
Public Health to promote health among men and women aged 65 
years or older. The Center evaluates the presence of social 
networks and the influence of healthy eating and physical 
activity on elderly residents of public housing units. The 
Center also focuses on reducing disability and falls in older 
adults through interventions to improve physical activity, 
nutrition, and home safety.

                                diabetes

    The burden of diabetes is heavier among elderly Americans. 
More than 18% of adults over age 65 have diabetes. NCCDPHP 
funds diabetes control programs (DCP) in all 50 states, the 
District of Columbia, and eight U.S. affiliated island 
jurisdictions to effect changes and improvements in systems 
that care for and support people with diabetes. The primary 
goal of the DCPs is to improve access to affordable, high-
quality diabetes care and services. Priority is on reaching 
high-risk and disproportionately burdened populations which 
include the aged. NCCDPHP provides resources and technical 
assistance to state-based diabetes control programs to:
           determine the size and nature of diabetes-
        related problems and why they exist,
           develop and evaluate new strategies for 
        diabetes prevention,
           establish partnerships to prevent diabetes 
        problems,
           increase awareness of diabetes prevention 
        and control opportunities among the public, the health 
        care and business communities, and people with 
        diabetes, and
           improve access to quality care to prevent, 
        detect, and treat diabetes complications.
    NCCDPHP also supports programs that try to change the way 
diabetes is treated in the United States by raising awareness 
among affected individuals, age 45 and older, of the importance 
of lowering their blood sugar can make a huge difference in 
their lives.

                                 cancer

    More than 30% of deaths from breast cancer in women over 
age 50 are preventable through widespread use of mammography 
screening for early detection. The National Breast and Cervical 
Cancer Early Detection Program targets underserved women, 
including older women with low income, and women of racial and 
ethnic minority groups. NCCDPHP currently funds the 50 states, 
4 U.S. territories, the District of Columbia, and 15 American 
Indian/Alaska Native organizations through this program.
    The WISEWOMAN (Well-Integrated Screening and Evaluation for 
Women in Massachusetts, Arizona, and North Carolina) program is 
funded by NCCDPHP to determine whether adding other preventive 
services such as cardiovascular disease risk factor screening 
and intervention to the National Breast and Cervical Cancer 
Early Detection Program is effective in improving the health 
status of uninsured women age 50 and older.
    NCCDPHP supports a project to generate information about 
attitudes towards prostate cancer screening and treatment, and 
how quality of life related to early detection and treatment; 
to determine whether screening for prostate cancer actually 
reduces mortality; and to develop appropriate health messages 
for men and their families about prostate cancer screening and 
early detection.
    NCCDPHP sponsors a program promoting the early detection of 
colorectal cancer. The objectives of the project are to promote 
awareness and use of colorectal cancer screening among health 
care providers and the public, especially the older population; 
to support research that promotes the inclusion of colorectal 
cancer screening in quality measures applied to managed care 
organizations; and to support the development of standards for 
screening sigmoidoscopy.

                           health information

    The Health Promotion and Education Database and Cancer 
Prevention and Control Database contain health information that 
pertains to aging. The databases include literature and 
programmatic information about disease prevention, health 
promotion, and health education information on nutrition, 
smoking cessation, cholesterol, high blood pressure, injury 
prevention, exercise, weight management, stress management, 
diabetes mellitus, and breast and cervical cancer screening. 
The databases are a valuable resource for health providers 
working with the elderly. They are available through CDC's CDP 
(Chronic Disease Prevention) File CD-ROM, the Public Health 
Service's Combined Health Information Database (CHID) and CDC's 
WONDER system. CDP File is available from the Superintendent of 
Documents, Government Printing Office, Washington, DC 20402, 
202-512-1800 (Stock No. 717-145-00000-3). CHID can be accessed 
through most library and information services. CHID may be 
accessed via the Internet at http://chid.nih.gov. For more 
information about WONDER, contact CDC WONDER Customer Support 
at 404-332-4569.
    Other NCCDPHP projects are examining:
           co-morbidities among older adults 
        hospitalized with depression
           cost of excess mortality associated with 
        fractures in persons on Medicare
           the experience of 84 Chickasaw Indian Family 
        care givers and their views of community-based services 
        and institutional care for elders
           the individual and population-level 
        distribution of costs and resource utilization 
        associated with 11 types of incident fractures among 
        beneficiaries aged 65 and over during the 1 year period 
        following fracture and the excess costs of these 
        fractures to the Medicare program and to the health 
        system.

                National Center for Environmental Health

    CDC's National Center for Environmental Health (NCEH) 
addresses the prevention of secondary conditions and promotion 
of health among the 54 million Americans with disabilities. 
NCEH is currently involved in two activities related to aging. 
The Center is analyzing NHIS and NHIS-Supplement on Aging data 
to identify the correlates of aging related to sensory 
impairments and to characterize disability in the above 55 age 
groups by race/ethnicity, gender, region, and activity 
limitation. These analyses will be included in the disability 
chapter of the upcoming MMWR Supplement on Aging. NCEH is also 
collaborating with NCCDPHP in the Osteoarthritis of the Hip and 
Knee in Johnston County, NC Project.

                 National Center for Health Statistics

    CDC's National Center for Health Statistics (NCHS) is the 
Federal Government's principal health statistics agency. The 
NCHS data systems address the full spectrum of concerns in the 
health field from birth to death, including overall health 
status, morbidity and disability, risk factors, and health care 
utilization.
    The Center maintains over a dozen surveys and vital 
statistics data files that collect health information through 
personal interviews, physical examination and laboratory 
testing, administrative records, and other means. These data 
systems, and the analyses that result are designed to provide 
information useful to a variety of policy makers and 
researchers. NCHS frequently responds to requests for special 
analyses of data that have already been collected and solicits 
broad input from the health community in the design and 
development of its surveys.
    A broad range of data on the aging of the population and 
the resulting impact on health status and the use of health 
care are produced from these systems. For example, NCHS data 
have documented the continuing rise in life expectancy and 
trends in mortality that are essential to making population 
projections. Data are collected on the extent and nature of 
disability and impairment, limitations on functional ability, 
and the use of special aids. Surveys currently examine the use 
of hospitals, nursing homes, physicians' offices, home health 
care and hospice, and are being expanded to cover hospital 
emergency rooms and surgi-centers.
    In addition to NCHS surveys of the overall population that 
produce information about the health of older Americans, a 
number of activities provide special emphasis on the aging. 
They are described below.

                       Second Supplement on Aging

    In 1994, the National Center for Health Statistics began 
conducting the Second Supplement on Aging (SOA 11) as part of 
the National Health Interview Survey. Interviews were conducted 
with a nationally representative sample of 9,447 civilian 
noninstitutionalized Americans 70 years of age and over. The 
study, released in 1998, provides important data on the elderly 
that can be compared with similar data from the 1984 SOA. In 
addition, SOA 11 serves as a baseline for the Second 
Longitudinal Study of Aging (LSOA 11), which will follow the 
baseline cohort through one or more re-interview waves. The 
first re-interview wave was conducted in 1998.
    Information for the SOA II comes from several sources: the 
1994 NHIS core questionnaire, Phase I of the National Health 
Interview Survey on Disability (NHIS-D), and Phase 2 of the 
NHIS-D, conducted approximately one year after Phase 1. The 
survey questions and methodology are similar to the first LSOA, 
but improvements reflect a number of methodological and 
conceptual developments that have occurred in the decade 
between the LSOA and LSOA II, as well as suggestions made by 
users of the LSOA and others in the research community.
    A primary objective of the SOA 11 is to examine changes 
which may have occurred in the physical functioning and health 
status of the elderly over the past decade. To this end, 
questions concerning physical functioning and health status and 
their correlates are repeated in the SOA 11. These include 
questions on activities of daily living, instrumental 
activities of daily living, and work-related activities, as 
well as medical conditions and impairments, family structure 
and relationships, and social and community support. In 
addition to these repeated items, the SOA 11 questionnaire has 
been expanded to include information on risk factors (including 
tobacco and alcohol use), additional detail on both informal 
and formal support services, and questions concerning the use 
of prescription medications.
    These data, when used in conjunction with data from the 
LSOA, enable users to identify changes in functional status, 
health care needs, living arrangements, social support, and 
other important aspects of life across two cohorts with 
different life course perspectives. This will provide 
researchers and policy planners with an opportunity to examine 
trends and determinants of ``healthy aging.''

                       Trends in Health and Aging

    Objective and Description: The NCHS has launched a new data 
dissemination project, Trends in Health and Aging. Funded in 
part by the National Institute on Aging and located within 
NCHS's Office of Analysis, Epidemiology, and Health Promotion 
(OAEHP), Trends in Health and Aging draws upon the statistical 
resources of NCHS and other Federal statistical agencies to 
provide current, policy-relevant information on the health and 
well-being of the elderly population in the United States. Work 
began on the database in 1997. It will serve as an important 
electronic resource for those seeking relevant national data on 
a host of issues related to future access to affordable health 
care and the enhancement of quality of life.

Project description

    At the heart of Trends in Health and Aging will be the 
routine compilation of trend data on the elderly population in 
the United States organized under four general topic areas, 
demography or population composition, health and well-being, 
health care utilization, and health care expenditures. A set of 
key indicator tables and graphics, drawn from such data systems 
as Vital Statistics and the National Health Interview Survey 
(NHIS) will be placed on the NCHS website and updated annually. 
Summary analyses will accompany these tables as will 
documentation on those administrative systems and surveys from 
which data are drawn. In addition NCHS plans to provide links 
to important micro-level data such as annual Cause of Death 
mortality files and the Supplements on Aging for analysts who 
wish to do their own analysis. Products under development 
include the 1999 Health US: Chartbook on Health and Aging.

               Federal Forum on Aging-Related Statistics

    The Forum was initially established in 1986, with the goal 
of bringing together Federal agencies with a common interest in 
database development and statistical compilation on issues in 
aging. The Forum has played a key role in improving aging-
related data by critically evaluating existing data resources 
and limitations, stimulating new database development, 
encouraging cooperation and data sharing among Federal 
agencies, and preparing collaborative statistical reports.
    During 1998, an organizing committee was established to 
coordinate the activities and goals of the Forum for 1999 and 
beyond. In addition to the Bureau of the Census, the National 
Center for Health Statistics, and the National Institute on 
Aging--the original core agencies--the members now include 
representatives from the Administration on Aging, the Bureau of 
Labor Statistics, the Health Care Financing Administration, the 
Office of Management and Budget, the Office of the Assistant 
Secretary for Planning and Evaluation, and the Social Security 
Administration.

                 NHANES I Epidemiologic Follow-Up Study

    The first National Health and Nutrition Examination Survey 
(NHANES I) was conducted during the period 1971-75. The NHANES 
I Epidemiologic Follow-up Study (NHEFS) tracks and re-
interviews the 14,407 participants who were 25-74 years of age 
when first examined in NHANES I. NHEFS was designed to 
investigate the relationships between clinical, nutritional, 
and behavioral factors assessed at baseline (NHANES 1) and 
subsequent morbidity, mortality, and hospital utilization, as 
well as changes in risk factors, functional limitation, and 
institutionalization.
    The NHEFS cohort includes the 14,407 persons 25-74 years of 
age who completed a medical examination at NHANES I. A series 
of four follow-up studies have been conducted to date. The 
first wave of data collection was conducted from 1982 through 
1984 for all members of the NHEFS cohort. Interviews were 
conducted in person and included blood pressure and weight 
measurements. Continued follow-ups of the NHEFS population were 
conducted by telephone in 1986 (limited to persons age 55 and 
over at baseline), 1987, and 1992.
    Participant tracing and data collection rates in the NHEFS 
have been very high. Ninety-six percent of the study population 
has been successfully traced at some point through the 1992 
follow-up. While persons examined in NHANES I were all under 
age 75 at baseline, by 1992 more than 4,000 of the NHEFS 
subjects had reached age 75, providing a valuable group for 
examining the aging process. Public use data tapes are 
available from the National Technical Information Service for 
all four waves of follow-up. The 1992 NHEFS public use data is 
also available via the Internet. NHEFS data tapes contain 
information on vital and tracing status, subject and proxy 
interviews, health care facility stays in hospitals and nursing 
homes, and mortality data from death certificates. All NHEFS 
Public Use Data can be linked to the NHANES I Public Use Data.

                           NHANES IV Planning

    The Fourth National Health and Nutrition Examination Survey 
is in its final planning stages in preparation for the 
beginning of data collection planned for January, 1999. 
Although a wide range of the conditions assessed in NHANES IV 
are most common among the elderly, several components are 
particularly relevant to aging research:
           Muscle Strength, Impairment, and Disability: 
        All persons age 50+ will have measurement of isokinetic 
        muscle strength of knee extensors and flexors and all 
        persons age 60+ will have an assessment of ability and 
        time to get up from an armless chair five times and 
        time to perform a twenty foot walk at the usual speed. 
        Both sets of measures will provide important data on 
        physical impairment and function in the elderly and 
        will be correlated to other disability related self 
        reported items and other objective measurements 
        obtained in the survey.
           Lower Extremity Disease: For the first time, 
        the survey will include an evaluation of lower 
        extremity disease in persons age 40+, including Ankle-
        Brachial Pressure Index measurement and assessment of 
        peripheral neuropathy. These data are especially 
        important for assessing the complications of diabetes 
        and the prevalence of peripheral vascular disease.
           Visual and Hearing Impairment: Vision (age 
        12+) and hearing (age 20+) will be assessed including 
        assessment of visual acuity, near vision (age 50+), 
        pure tone audiometry thresholds, and typanometry. 
        Sensory impairment is an important component of 
        functional impairment in the elderly.
           Bone Mineral Status: Bone mineral status 
        will be assessed including total bone mineral content 
        and bone mineral density by dual X-ray absorptiometry. 
        Osteoporosis is an important risk factor for hip 
        fractures in the elderly.
           Cognitive Function: Cognitive function will 
        be assessed in persons age 60+ with the Digit Symbol 
        Substitution Test.
           Balance and Vestibular Function: The 
        standard Romberg test of postural sway will be assessed 
        in all persons age 20+. Balance impairment is related 
        to the incidence of many fractures caused by falling, 
        especially hip fractures in the elderly.

                      Analysis of NHANES III Data

    NCHS is engaged in a range of projects analyzing data from 
NHANES III related to aging. These projects include:
           Prevalence of Disability and Risk Factors 
        Associated with Disability. NHANES III data will be 
        analyzed to assess the prevalence of physical and 
        functional limitation. It includes self reported data 
        obtained in the household interview and performance-
        based data obtained in the mobile examination center. 
        The risk factors associated with disability will be 
        assessed to provide a better understanding of the 
        etiology and treatment of disability in the elderly.
           Region of Birth and Cardiovascular Risk 
        Factors. NHANES III data will be used to assess early-
        life influences such as region of birth on the pattern 
        of risk factors for cardiovascular disease in later 
        life.
           Nutritional Intake among the Elderly. The 
        patterns of nutrient intake among adults age 60+ in 
        NHANES III will be analyzed.

                       Vital Statistics on Aging

    Information on mortality from the national vital statistics 
system plays an important role in describing and monitoring the 
health of both the institutionalized and non-institutionalized 
elderly population. The data include measures of life 
expectancy, causes of death, and age-specific death rate 
trends. The basis of the data is information from death 
certificates, completed by physicians, medical examiners, 
coroners, and funeral directors, used in combination with 
population information from the U.S. Bureau of the Census.
    During 1997 and 1998, efforts were made to both assess and 
improve mortality data for the elderly. NCHS is looking into 
the possibility of increasing the level of age detail shown in 
tabulations of mortality for the elderly, focusing on the age 
group 85 years and over, often treated as an aggregated 
category. Current efforts involve assessing both the 
availability and quality of mortality and population data for 
more detailed age groups among the elderly.
    NCHS is expanding outreach to certifying physicians on 
proper completion of the cause-of-death section of the death 
certificate by designing material appropriate for diverse 
settings including professional meetings and electronic death 
certificates.

          National Mortality Followback Survey: 1986 and 1993

    The 1986 National Mortality Followback Survey (NMFS) was 
the first such survey in 18 years. Over 100 papers and 
publications have used data from the survey. The followback 
survey supplements mortality information from the vital 
statistics systems through inquiries of the next of kin of a 
sample of decedents. Because two-thirds of all deaths in the 
Nation occur at age 65 or older, the 1986 survey focused on the 
study of health and social care provided to older decedents in 
the last year of life. This is a period of great concern for 
the individual, the family and community agencies. It is also a 
period of heavy care use. Agency program planning and national 
policy development on such issues as hospice care and home care 
can be informed by the data from the survey. A public use data 
tape from the next-of-kin questionnaire was released in 1988. A 
second tape, combining data from the next-of-kin and hospitals 
and other health care facilities, was available in 1990.
    The 1993 National Mortality Followback Survey is comprised 
of a nationally representative sample of approximately 23,000 
decedents 15 years of age or older who died in 1993, with over-
sampling of black decedents, females, and centenarians. The 
data were released in 1998. The survey design parallels the 
earlier follow-back survey conducted in 1986, with additional 
emphasis on deaths due to external causes, as well as 
disability in the last year of life. Hospital records are not 
included in the 1993 survey, but medical examiner/coroner 
records are included.

            National Health Interview (NHIS): Special Topics

    The NHIS continues to collect data on a wide range of 
special health topics for the civilian, non-institutionalized 
population, including the older population. A recent special 
health topic on disabilities was conducted in two phases. The 
first phase questionnaire identified persons with disabilities. 
It included questions on sensory, communication and mobility 
problems; selected chronic conditions; activities and 
instrumental activities of daily living (ADL/IADL); mental 
health; services and benefits; self-perceived disability, and 
conditions. The second phase collected detailed information 
about persons identified as having a disability. It included 
questions on housing and long-term care services; 
transportation; social activity; work history/employment; 
vocational rehabilitation; assistance with key activities; 
other services; and self-direction. The first year of the Phase 
1 Disability file was released in 1996. The remainder of the 
Disability files were released in 1998.

                    The National Health Care Survey

    The National Health Care Survey (NHCS) is an integrated 
family of surveys conducted by the NCHS to provide annual 
national data describing the Nation's use of health care 
services in ambulatory, hospital and long-term care settings. 
Currently, the NHCS includes six national probability sample 
surveys and one inventory. These seven data collection 
activities include:
           the National Hospital Discharge Survey which 
        examines discharges from non-Federal, short-stay and 
        general hospitals;
           the National Survey of Ambulatory Surgery 
        which examines visits to hospital-based and 
        freestanding ambulatory surgery centers;
           the National Ambulatory Medical Care Survey 
        which examines office visits to non-Federal, office-
        based physicians;
           the National Hospital Ambulatory Medical 
        Care Survey which examines visits to emergency and 
        outpatient departments of non-Federal, short-stay and 
        general hospitals;
           the National Health Provider Inventory which 
        is a national listing of nursing homes, hospices, home 
        health agencies and licensed residential care 
        facilities;
           the National Home and Hospice Care Survey; 
        and
           the National Nursing Home Survey.

         Improving Self-Reports of Health Status by the Elderly

    The National Laboratory for Collaborative Research in 
Cognition and Survey Measurement of NCHS has conducted several 
cognitive research projects with elderly respondents. In 1998, 
Lab staff continued their investigation of recall and judgment 
issues that elderly respondents may have when answering 
questions regarding health status and quality of life. This 
project involved both in-house and extramural research. In-
house research is conducted by recruiting subjects to the NCHS 
Questionnaire Design Research Laboratory. Extramural is 
conducted by the University of Maryland's Survey Research 
Center using split-ballot field experiments.

                     National Immunization Program

    The disease burden due to the occurrence of vaccine-
preventable diseases (VPDs) in adults in the U.S. is 
staggering. Though surveillance of the impact of influenza and 
pneumococcal disease is imprecise, it is estimated that in 7 
influenza seasons since 1990, an average of 23,000 persons died 
each year from complications of illness due to influenza and 
over ten thousand more die from pneumococcal infections 
annually. Increasing antibiotic resistance in pneumococcal 
bacteria makes pneumococcal vaccination all the more important. 
Hepatitis B infection still accounts for over 5,000 deaths 
annually. The overall cost to society of these and other 
vaccine-preventable diseases of adults exceeds 10 billion 
dollars each year.
    In addition to morbidity and mortality, the quality of life 
for older Americans is substantially affected by vaccine-
preventable diseases. 25% of older adults in nursing homes who 
survive influenza infections experienced decline in major life 
functions and independence 3-4 months later, as compared to 
only 16% of adults not infected.
    Vaccines are effective in preventing disease, and cost-
effective. For example, CDC estimates that in 1996-97, between 
8,000 and 12,000 deaths were prevented by influenza vaccination 
in persons 65 years of age. In addition, using data 
from CDC's Behavioral Risk Factor Surveillance System (BRFSS) 
and CDC pneumococcal surveillance data for adults 65 years and 
over, researchers have estimated that an almost 17% increase in 
self-reported receipt of pneumococcal vaccine between 1993 and 
1997 resulted in a gain of over 19,000 quality life years and a 
savings of almost $27 million (1995 dollars) in hospital costs.
    Recommendations from health care providers for vaccination 
are critically important to improve vaccination levels, yet 
adult vaccines are underutilized. Reasons for this include: (1) 
limited appreciation of the impact of adult vaccine-preventable 
diseases and missed opportunities to vaccinate during contacts 
with health-care providers; (2) failure to organize programs in 
medical settings that ensure adults are offered the vaccines 
they need; (3) doubts about the safety and efficacy of adult 
vaccines; (4) selective rather than universal approaches to 
vaccination; and (5) inadequate reimbursement for adult 
vaccination services.
    Improvements in adult immunization levels will require 
major changes in clinical practice, increased financial support 
by public and private health insurers, and closer working 
relationships among public and private health care 
professionals and vaccine companies. HEDIS 3.0 reporting 
measures for influenza vaccination are currently in place for 
persons 65 years and over, and in the testing set for persons 
under 65 years with high-risk medical conditions. CDC is 
working with the American Association of Health Plans and the 
National Committee on Quality Assurance to develop and 
implement a pneumococcal vaccination measure.
    Significant accomplishments in 1998: The Healthy People 
2000 national objective for influenza vaccination in persons 
65 years of age was achieved. The median influenza 
vaccination level reported by CDC's 1997 BRFSS for persons 
65 years of age was 65%, and also exceeded 60% in 45 
States. While pneumococcal vaccination levels did not exceed 
60% in any State for this population, the median level had 
increased 9.8% since 1995, and levels were 50% in 18 
states. Although BRFSS vaccination data do not provide national 
estimates as the National Health Interview Survey, or NHIS, 
does, they are usually very similar to NHIS estimates.
    CDC documented continuing vaccine effectiveness. Three 
health plans collaborated with CDC in assessing the 
effectiveness of influenza vaccine in patients age 65 or older 
in preventing hospitalizations for influenza and pneumonia from 
all causes, and in preventing death from all causes for the 
1996-1997 influenza season. Vaccinating elderly patients 
against influenza during the fall of 1996 prevented about 22% 
of the hospitalizations for pneumonia of any etiology in 
vaccinated persons during influenza season. It prevented 57% of 
all deaths in vaccinated older patients during this period. 
These findings support the concept that not only should health 
plans cover influenza vaccination, but they should actively 
promote vaccination each fall.
    Through partnerships, CDC implemented strategies to improve 
influenza and pneumococcal vaccination. These strategies 
include feedback of patient vaccination data to providers, 
standing orders and provider reminder-recall strategies. Based 
on work done during the 1988-92 Medicare Influenza Vaccine 
Demonstration and expanded in a number of childhood 
immunization programs, CDC undertook a 2-year pilot project in 
collaboration with the Health Care Financing Administration in 
6 New Jersey counties using the Assessment, Feedback, 
Incentives, and exchange (AFIX) model, with results expected in 
the Fall of 1999. The components of this project include:
          Assessment: Medicare claims data for beneficiaries 
        with more than I visit to a provider were assessed;
          Feedback: Profiles were developed for each physician 
        summarizing the proportion of beneficiaries vaccinated 
        and listing all patients' vaccination status;
          Incentives: Professional recognition of providers' 
        efforts; and
          Exchange: Newsletters publicizing aggregate baseline 
        data and best practices, along with presentations at a 
        statewide adult immunization conference.
    The first national satellite video-conference on adult 
immunization technical issues aired on June 4, 1998. The 
satellite conference, presented three times during the day to 
ensure prime time availability for participants coast-to-coast, 
reached an estimated 20,000 public and private health care 
professionals. CDC partners included the University of North 
Carolina School of Public Health, the North Carolina Department 
of Public Health, the Association of Schools of Public Health, 
the Health and Sciences Television Network, and the Long Term 
Care Network.
    Significant accomplishments in 1997: From the 1995 National 
Nursing Home Survey, CDC documented that 62% and 23% of nursing 
home residents had received influenza vaccine in the previous 
year and pneumococcal vaccine ever, respectively. It is 
important to note that for 22% and 43% of residents, no 
documentation or inadequate documentation of influenza or 
pneumococcal vaccination status, respectively, existed.
    The National Immunization Program (NIP), the National 
Vaccine Program Office (NVPO) and the HHS Adult Immunization 
Working Group developed a department-wide Adult Immunization 
Action Plan. This Plan, based on recommendations of the 
National Vaccine Advisory Committee (NVAC) Report on Adult 
Immunization, will enhance activities to protect adults against 
vaccine preventable diseases and maximize accruable health care 
costs savings.
    The first national video conference on successful adult 
immunization strategies aired on April 24, 1997. The satellite 
conference, presented 3 times during the day to ensure prime 
time availability for participants coast-to-coast, reached an 
estimated 20,000 public and private health care professionals. 
CDC partners included the University of North Carolina School 
of Public Health, the North Carolina Department of Public 
Health, the Association of Schools of Public Health, the 
Hospital and Sciences Television Network, and the Long Term 
Care Network.
    CDC continues to provide the Health Care Financing 
Administration (HCFA) technical consultation and assistance to 
improve influenza and pneumococcal vaccination; uses HCFA data 
systems to develop new vaccination strategies; and executes 
special interventions and assessment activities.
    CDC collaborated with HRSA to establish projects to assess 
adolescent and adult vaccination levels and provider practices 
in Community/Migrant Health Centers in three States.
    CDC enhanced the grant guidance for adult immunization 
activities for FY 1998, requiring grantees to outline their 
activities for reaching Healthy People 2000 adult immunization 
objectives and to assign responsibility and accountability to 
existing or new staff to ensure that adult immunization 
strategies are coordinated and intensified.
    CDC established projects in four States to vaccinate 
persons with diabetes.
    CDC supported a project with the Association of Teachers of 
Preventive Medicine (ATPM) which summarized ``best practices'' 
to successfully vaccinate adults. Software will also be 
disseminated to teach providers these strategies.
    CDC co-sponsored a scientific symposium in September 1997 
to review efforts to prevent disease and death among women 
through immunization and develop a work plan on vaccination and 
women's health. Representatives from 16 health organizations 
participated.
    In collaboration with the Roybal Institute of Applied 
Gerontology, California State University, Los Angeles, the 
Center for the Study of Latino Health at the University of 
California at Los Angeles, and the California Department of 
Health, CDC documented low vaccination levels against 
influenza, pneumococcal disease, and tetanus in older Hispanic 
persons in Los Angeles, as well as barriers to vaccination 
perceived by older Hispanics. Interventions based on these 
findings have been implemented to improve vaccination levels

                National Center for Infectious Diseases

    Infectious diseases have a disproportionate impact on older 
Americans. Pneumonia and influenza remain the sixth leading 
cause of death in the United States and septicemia has risen 
dramatically during the past three decades to become the 13th 
leading cause of death. Chronic liver disease, most due to 
hepatitis C virus, is the 10th leading cause of death in the 
U.S. Pneumonia and septicemia are also contributing and 
precipitating factors in the deaths of many Americans with 
other illnesses, especially cardiovascular diseases, cancer, 
and diabetes. Quality of life declines for millions of older 
Americans as a result of infectious illnesses. Prevention and 
control of infectious diseases will enhance and lengthen the 
lives of older Americans.
    CDC emphasizes surveillance and training to prevent and 
control hospital-acquired and other institutionally acquired 
infections in elderly patients. CDC conducts surveillance of 
elderly patients in hospitals and trains practitioners in 
nursing homes. Additionally, CDC staff provides education 
regarding infection control to care providers at nursing home 
and patient care conferences. This education focuses on patient 
care treatment and procedures associated with the highest risk 
of infection. Through the National Nosocomial Infections 
Surveillance (NNIS) system, special infection risks of elderly 
patients have been identified. According to NNIS, over half of 
the hospital-acquired infections occur in elderly patients, 
although these patients represent about one-third of all 
discharges from hospitals. The use of certain devices, such as 
urinary catheters, central lines, and ventilators, are 
associated with high risk of infection in all types of 
patients. In elderly patients, the risk of infection is high 
even when a device is not used, suggesting that infection 
control must address other risk factors such as lack of 
mobility and poor nutrition, in addition to device use.

                          Monitoring Influenza

    Although delivering the influenza vaccine to persons at 
risk is a critical step in preventing illness and death from 
influenza, immunization is only part of the prevention 
equation. Other CDC efforts to combat influenza in the elderly 
include: (1) improving domestic surveillance through the 
sentinel and state health department laboratory surveillance 
networks; (2) conducting studies to better define the 
immunological response of the elderly to influenza vaccines and 
to natural infection; (3) conducting immunological studies 
involving laboratory and clinical evaluation of inactivated and 
live attenuated influenza vaccines in an effort to identify 
improved vaccine candidates; (4) increasing surveillance of 
influenza in the People's Republic of China and other countries 
in the Pacific Basin to better monitor antigenic changes in the 
virus; (5) improving methodologies for rapid viral diagnosis; 
(6) using recombinant DNA techniques to develop influenza 
vaccines that may protect against a wider spectrum of antigenic 
variants; and (7) providing laboratory training in the People's 
Republic of China, other Pacific Basin countries, and Latin 
America to develop and expand capacity for the diagnosis and 
detection of antigenic changes in the virus.

                    Preventing Pneumococcal Disease

    Pneumococcal pneumonia causes an estimated 40,000 deaths 
each year; about 60 percent of these are in persons 65 years 
old. Prevention of pneumococcal disease in the elderly requires 
widespread application of effective immunization. CDC is 
currently evaluating the emergence of drug-resistant 
pneumococcal strains through laboratory-based surveillance and 
is actively promoting increased vaccine use in the elderly and 
other groups at risk. This is critical to decrease illness and 
death from pneumococcal infections in the elderly.

                      Other Respiratory Infections

    Recent studies have suggested that noninfluenza viruses 
such as respiratory syncytial virus the parainfluenza viruses 
may be responsible for as much as 15 percent of serious lower 
respiratory tract infections in the elderly. These infections 
can cause outbreaks that may be controlled by infection control 
measures and treated with antiviral drugs. Respiratory 
syncytial virus vaccines are being evaluated for use by the 
elderly population. Consequently, it is important to define the 
role of these viruses and risk factors for these infections 
among the elderly population. CDC is working to define the 
disease burden associated with respiratory syncytial virus and 
parainfluenza virus infections in the elderly and helping to 
develop vaccination strategies for respiratory syncytial virus 
in elderly populations.

                     Group B Streptococcus Disease

    Group B streptococcus (GBS) is a major cause of invasive 
bacterial disease in elderly persons in the United States. To 
document the magnitude of GBS disease in the elderly and 
develop preventive measures, CDC established population-based 
surveillance for GBS disease and case control studies to 
identify risk factors for GBS disease in the elderly. An 
article published in June 1993 in The New England Journal of 
Medicine documents some of the findings. The incidence of GBS 
disease in nonpregnant adults increased with age and was 
particularly high in older blacks. For example, the incidence 
of black adults who are 70 years and older was 47 per 100,000 
compared to 5 per 100,000 in black adults ages 20-29. The in-
hospital mortality rate for this particular study was 21 
percent among the nonpregnant adults. This data will be 
utilized to develop and evaluate vaccines and to promote the 
prevention and treatment of GBS disease in the elderly 
population.

                           Foodborne disease

    Foodborne disease is of particular concern in the elderly, 
who typically can have higher illness and death rates from 
foodborne pathogens than younger persons. Of particular concern 
are Salmonella enteritidis infections, often caused by 
undercooked eggs, and Escherichia coli O157:H7 infections, 
often caused by undercooked hamburger. CDC is working with USDA 
and FDA to encourage use of pasteurized eggs in nursing homes 
and thorough cooking of hamburger meat.

                        Gastrointestinal Disease

    Studies using information from national data bases show 
that of all age groups, the elderly (70 years) have the highest 
rates of hospitalizations and deaths associated with diarrhea 
in the United States. In the elderly, caliciviruses (also 
called Norwalk-like viruses or Small Round Structured Viruses) 
are likely to be the most common cause of both epidemics and 
sporadic hospitalizations for acute gastroenteritis and studies 
needed to confirm this hypothesis are now underway. These 
studies should lead to a better understanding of ways to 
prevent gastrointestinal disease in the elderly. The recent 
identification of rotavirus as a cause of epidemic diarrhea in 
the elderly suggests that one approach to control may involve 
use of vaccines currently used for young children. Further 
study is now needed to determine the importance of rotavirus to 
gastrointestinal disease in the elderly.

                       Other Infectious Diseases

    It is becoming increasingly evident that infections play a 
major role in causing or contributing to some chronic diseases. 
Some of these conditions result from infection acquired at a 
younger age (including liver cancer and cirrhosis from chronic 
hepatitis B and hepatitis C viruses, stomach and duodenal 
ulcers or gastric cancer from Helicobacter pylori), while 
others develop from exposures later in life. CDC is actively 
promoting and pursuing ways to prevent initial infection and 
the chronic consequences of such infections. Microbes are also 
suspected but not yet proven as triggers of still other chronic 
conditions. CDC is developing research activities that identify 
and define these relationships. The potential to use infection 
control in the prevention or treatment of infections that 
produce chronic disease can improve the quality and length of 
life for many elderly persons.

           National Center for Injury Prevention and Control


                             Fall Injuries

    National studies show that one-third of the people over 65 
living at home will fall each year, and for people over 80, 
this rate increases to 40%. Falls are the second leading cause 
of injury deaths among persons aged 65-84 years and the leading 
cause among persons aged 85 years and older. Of all fall 
injuries, hip fractures produce the greatest morbidity and 
mortality. Approximately 250,000 hip fractures occur each year 
and half of those who sustain hip fractures never regain their 
former level of functioning. Research shows that in order to 
decrease the incidence and severity of fall-related injuries, 
interventions must be multifaceted and include behavioral as 
well as environmental components (e.g., exercising regularly, 
reducing home hazards, and improving vision).
    In 1998, CDC's National Center for Injury Prevention and 
Control (NCIPC) awarded a grant to the San Diego State 
University Foundation to establish a Resource Center for the 
Prevention of Unintentional Injuries Among Older Americans. The 
purpose of this Resource Center is to collect, organize, and 
disseminate injury prevention information to health care 
professionals, caretakers, and other individuals concerned 
about reducing injuries among older Americans.
    Since 1996, CDC has been collaborating with the National 
Fire Protection Association, Consumer Product Safety 
Commission, United States Fire Administration, Indian Health 
Service, and Administration on Aging, on ``Remembering When'', 
a fire and falls prevention program for older adults. To date, 
the program has been pilot tested in the states of Mississippi, 
Arkansas and Alaska, and the cities of Atlanta and Cleveland. 
The program materials are now being revised and printed and 
will be ready for distribution by Spring of 1999.
    CDC has also worked with the Southern California Injury 
Prevention Research Center (SCIPRC) at the University of 
California at Los Angeles on a project to prevent falls and 
fall-related injuries among elderly Hispanics living in East 
Los Angeles. A fall prevention program has been developed and 
is currently being field tested and evaluated among Hispanic 
elderly in East L.A.
    NCIPC has examined weight loss and risk of hip fracture 
among women. Body weight has been shown to be an important 
factor in determining hip fracture risk. In collaboration with 
researchers from the National Center for Health Statistics and 
the National Institute on Aging, data from the Epidemiologic 
Follow-up Study of the National Health and Nutrition 
Examination Survey (NHANES-I) were analyzed to determine the 
association between weight loss from maximum body weight and 
risk of hip fracture. The factors associated with weight loss 
also were investigated.

                        Older Driver Activities

    By the year 2020, it is estimated that there will be 51 
million persons aged 65 and above eligible to drive, or 17 
percent of the licensed driving population. In 1996, 178,000 
older persons were injured in traffic crashes. Little is known 
about how the physical changes that accompany the aging process 
and diagnosed medical conditions affect driving performance. 
For example, there is some evidence to suggest that Parkinson's 
disease may impair driving, although the evidence is weak. More 
needs to be known about the connection between specific medical 
conditions and adverse driving outcomes.
    NCIPC has conducted research concerning fatal motor vehicle 
crashes among older people. Understanding the component risks 
associated with fatal crashes may contribute to a better 
understanding of the potential usefulness of certain types of 
interventions to prevent them. The decomposition method is an 
innovative approach to determining the relative contribution of 
specific factors (such as exposure to the risk of a crash) to 
the overall fatal crash involvement rate. Using this method, a 
study is currently being conducted to determine how these 
factors contribute to age and gender differences in fatal crash 
involvement rates and their relationship to changes in the 
rates over time among the US population aged 65 years or older.
    NCIPC has also conducted a longitudinal study of elderly 
drivers. A prospective cohort study is underway to assess the 
impact of selected functional impairments and medical 
conditions on the safety of older drivers. Data collection for 
the study was carried out from July 1994 through December 1995 
at eight North Carolina driver's license offices (Durham, 
Greensboro, Asheville, Wilmington, Roanoke Rapids/Greenville/
Rocky Mount (combined site), and Hendersonville). All data were 
collected by specially trained data collectors working at the 
licensing office. Drivers ages 65 and above coming to renew 
their license were asked to participate in the study, which 
involved a series of visual and cognitive functional 
assessments along with a survey to gather information on self-
reported medical conditions, use of medications, and driving 
habits. The entire assessment required about 20 minutes per 
subject to complete.
    During the 1\1/2\ year data collection period, a total of 
5,438 license renewal applicants were identified by the license 
examiners as potential study participants. Of these, 3,238, or 
60 percent, elected to participate in the study. Participant 
and non-participant cases were linked with the North Carolina 
driver history files, and initial data analyses were carried 
out examining the role of various cognitive and visual 
functional impairments in recent prior crash involvement and in 
current driving exposure. Follow up analyses are planned in the 
project's final year to examine the usefulness of the driver 
functional assessments in predicting future crash involvement.
    In addition to these efforts, supplemental funding was made 
available by NCIPC to link North Carolina driver history data 
to data collected by UNC's Sheps Center for Health Services 
Research as part of an earlier study examining changes in 
health status and costs associated with Medicare-reimbursed 
screening and health promotion services. This add-on effort 
permitted further analyses of associations between motor 
vehicle crashes and injuries and a broad range of health 
measures in a separate population of elderly NC residents.
    NCIPC has also developed the Elderly Driver Referral 
Project, which is a study attempting to ascertain relationships 
between the capabilities of drivers and their safety of 
operation in order to enable license administrators to initiate 
licensing actions that minimize the threat from those who 
cannot operate safely while preserving the mobility of those 
who can. The psychophysical capabilities of the entire sample 
will be assessed through a battery of test measures designed 
specifically to tap capabilities shown to relate separately to 
age and highway accidents. The relationships obtained in this 
manner will be applied to (1) improve the methods of detecting 
drivers whose abilities may be diminished by age, (2) develop 
tests to validly assess drivers' ability to drive safely, and 
(3) formulate licensing actions capable of achieving an optimum 
balance between safety and mobility.
    Finally, NCIPC is examining driving ability and car crashes 
as they relate to old age and dementia. A study is underway to 
objectively determine which neuropsychological and 
psychophysical measures best discriminate between safe and 
unsafe drivers, by comparing the performance of the Alzheimer's 
Disease (AD) patients on the driving simulator and on a battery 
of off-road behavioral tests. One of the ultimate goals of this 
line of research is the development of fair and accurate 
criteria to predict driving ability in cognitively disabled 
populations.

                             Other Injuries

    NCIPC also analyzed the performance of trauma systems for 
elderly trauma patients. Hospital discharge data from 8 U.S. 
trauma systems were used to evaluate the extent to which 
elderly major trauma patients are triaged to a trauma center 
when needed. A complimentary analysis using Maryland ambulance 
trip report forms addressed the issue of compliance with pre-
hospital triage protocols for major trauma patients.

                      FOOD AND DRUG ADMINISTRATION

    As the percentage of elderly in the Nation's population 
continues to increase, the Food and Drug Administration [FDA] 
has been giving increasing attention to the elderly in the 
programs developed and implemented by the Agency. By the year 
2000, Americans aged 75 and older will be the fastest growing 
group on the United States. The elderly (those over 65) have 
disproportionately high health care demands. Challenges 
associated with this patient subpopulation, such as multiple 
drug interactions, different physiological characterizations 
and reactions to drug regimens, and the need for better medical 
device design for home self-diagnostics and therapies, will 
become more acute. These challenges will require greater 
inclusion of the elderly in clinical testing for drugs, medical 
devices, and other FDA-regulated products. Further, the 
increasing educational needs of the elderly will require more 
focused education programs, including specific dietary 
information and foods targeted to their nutritional 
requirements. The elderly population and food service workers 
who prepare food for the elderly also will require special 
education initiatives concerning proper food handling, because 
as the population ages it becomes more susceptible to foodborne 
diseases.
    On October 1, 1998, the United Nations launched the 
International Year of Older Persons 1999 as a worldwide 
recognition of the global aging society and the need to ensure 
that policies and programs are responsive to the needs of older 
people. The Agency is an active participant on the Federal 
Committee to Prepare for the International Year of Older 
Persons, which is managed by the Administration on Aging. As a 
member of this Committee, FDA is expanding its networks both 
within and outside of the federal government to coordinate 
program activities, exchange information, and disseminate 
material. Working relationships continue with the National 
Institute on Aging, the Centers for Disease Control and 
Prevention, and the Administration on Aging of the Department 
of Health and Human Services to further strengthen programs 
that will assist the elderly now and in the future. Some of the 
major initiatives that are underway are described below.

                International Year of Older Persons 1999

    During 1998, the FDA started several major Agency-wide 
initiatives to strengthen its relationship and interactions 
with the aging community. The Office of External Affairs 
established a steering committee to develop and coordinate an 
approach for making FDA materials not only pertinent to the 
lives of older people, but also more accessible to the aging 
community. Another priority for the steering committee was to 
devise new approaches for informing the aging community of FDA 
activities related to enriching the quality of their lives and 
how to become more active in these activities.
    The following are the primary initiatives undertaken by the 
steering committee in 1998:
           Awareness Campaign on Successful Aging, 
        including a specialized logo and related theme ``Active 
        Aging--A Lifetime of Good Health,'' standard 
        information packet that can be tailored for national 
        and grassroots audiences.
           Internet Website for Older Persons to 
        publicize the availability of FDA materials addressing 
        the health interests of older people, with links to 
        national and international organizations within the 
        aging network.
           Outreach and Network Building to publicize 
        available FDA publications through such vehicles as 
        Parade magazine, disseminating tailored information 
        packets, and building the relationships among aging 
        organizations to enhance the interactions between these 
        organizations and the Agency.

                   FDA Plan for Statutory Compliance


         Food and Drug Administration Modernization Act of 1997

    As required by the 1997 FDA Modernization Act, FDA 
developed a plan outlining innovative approaches for meeting 
the increasingly complex public health challenges of the 21st 
century. The plan sets forth the strategic directions over the 
next 5 years and the specific performance goals that will guide 
FDA in accomplishing what it is required to do under the law as 
well as in meeting public expectations. This plan recognizes 
the International Year of Older Persons and focuses on the 
significant demographic shift that, coupled with longevity, 
will impact the Agency and its work.
    Objective B of this FDA plan--to maximize the availability 
and clarity of information for consumers and patients 
concerning new products--discusses the aging population within 
the context of FDA's mission and identifies specific themes 
directing the Agency's efforts to fulfill this objective 
including:
           Tailoring product information to meet the 
        special needs of diverse populations, such as through 
        the public awareness campaigns that will be targeted 
        to, or involve, older people--such as Take Time To 
        Care, Mammography Awareness Seminars, Food Safety 
        Programs (Fight BAC!), Over-the-Counter Labeling 
        Changes Campaign, and the Partnership for Food Safety 
        Education.
           Increasing the number of stakeholder 
        collaborations, such as the Pharmacist Education 
        Outreach Program, that will assist pharmacists in 
        explaining the drug approval process to consumers, many 
        of whom will be older consumers.
           Ensuring that patients are an integral part 
        of the health care decisionmaking process.
           Providing consumers with quick access to a 
        wide range of information through various methods, such 
        as the Internet and clinical trial registry.
    The 1999 objectives established in the plan published by 
FDA in November 1998 focus on two goals for over-the-counter 
and prescription drugs--evaluating drug information provided to 
75 percent of individuals receiving new prescriptions and 
improving over-the-counter information and consumers' ability 
to understand it by the year 2001.

                          Public Participation

    As part of the Agency's long-standing tradition of 
involving the public in its activities, FDA is forging new 
relationships with organizations in the aging network on both 
the national and grassroots levels. During 1997 and 1998, the 
Agency conducted a variety of activities intended to establish 
and strengthen two-way communication between FDA and its 
constituencies. These activities included national and local 
consumer forums, meetings with organizations, stakeholder 
meetings, and public meetings. The Agency continues its efforts 
to involve older people as consumer members of its advisory 
committees by working with aging organizations to identify 
potential candidates.

                     Project on Caloric Restriction

    The National Center for Toxicological Research (NCTR) in 
partnership with the National Institute on Aging has been 
working for several years on the role caloric restriction (CR) 
plays in the aging process and what effect a reduced caloric 
diet has on disease etiology. Scientists working on the Project 
on Caloric Restriction have concentrated on determining the 
mechanisms by which caloric restriction inhibits spontaneous 
disease, modulates agent toxicity and effects the normal aging 
process. Studies over the last year have focused on the premise 
that by using a single paradigm (caloric manipulation) and 
through interdisciplinary studies a comprehensive integrated 
approach can be developed to understand the effect diet has on 
the initiation and development of disease. The hypotheses that 
support this paradigm are mechanistically based and include the 
following: CR acts through its effects on body growth, on 
glucocorticoids and inflammation, on DNA damage, repair and/or 
gene expression, on toxicokinetics and/or its modification of 
oxidation and fat metabolism. All of these hypotheses have been 
explored through interdisciplinary studies being conducted at 
NCTR or at other institutions in collaboration with scientists 
at NCTR.

                              Body Growth

    Rodent studies at NCTR have found that body weight can be 
used to predict tumorigenicity. For most organs, size is 
directly proportional to the body weight of the animal and it 
has been shown that organ weight can be used to predict 
tumorigenicity. CR inhibits the induction of tumor expression 
and growth and changes the state of differentiation in 
replicating cells. It has also been found that CR can 
specifically alter drug metabolism and reduce drug toxicity. 
This could be very useful in treating and diagnosing disease. 
In addition, the relevance of CR to the human population has 
been strengthened by the fact that biomarkers observed in 
rodents are associated with the risk of chronic disease in 
humans. Plans are in place to extend the CR observation in 
rodents to clinical studies in humans.

                      Oxidation and Fat Metabolism

    A common hypothesis for tumor induction suggests that DNA, 
the blue print of the cell, is damaged by oxidative chemical 
species in the cell released by the metabolism of fat. CR has 
been shown to reduce the impact of oxidative damage at the 
organ level by increasing the oxygen scavengers in the liver 
and in muscle. Similarly, it has been shown that CR reduces 
high fat induced oxidative damage in cellular DNA.

                    Glucocorticoids and Inflammation

    Glucocorticiods are used to diminish normal but undesirable 
body responses to noxious stimuli and trauma, advantages are 
gained by their use in counteracting stressful situations and 
in decreasing pain and discomfort. Another group of normal body 
protective agents are stress proteins, which are produced in 
the body whenever the body undergoes a stress induced response. 
CR has been shown to elevate glucocorticoid levels shortly 
after inception, and has also been shown to alter stress 
proteins levels in the brain.

               DNA Damage, Repair and/or Gene Expression

    As mentioned above DNA is the blueprint of the cell, 
therefore any damage done to DNA has the potential of resulting 
in a disease response. CR has been shown to inhibit genes that 
are associated with tumor induction and enhances various forms 
of DNA repair. One hypothesis for tumor induction suggests that 
chemicals exert their damage to DNA by binding to the 
components of DNA forming adducts. Animals exposed to a CR 
regime and carcinogenic insult show an altered induction of 
various forms of DNA adducts.

                             Toxicokinetics

    Toxicokinetics describes the absorption, distribution, 
metabolism and excretions of toxic chemicals from the body with 
time. Therefore, it refers to the compartmentalization of a 
toxicant within the body. Organs are complicated structures 
that are made up of different kinds of cells, transport 
structures and biological functioning units. CR has been shown 
to alter water transport, fat deposition and waste transport, 
thus complicating cellular compartmentalization, and toxic 
exposure of certain cells to damaging substances.
    Although the work over the last year has concentrated on 
the mechanisms of toxic interaction in the body and the role CR 
has on this process, studies with calorically restricted 
animals have repeatedly shown that CR extends the lifetime of 
animals. How this effects aging is still in question; however, 
the research being conducted in this area is continuing to chip 
away at the problem of how diet effects the aging process, and 
what elements or lack thereof in the human diet may help to 
extend human life.

           Rare Diseases Affecting Primarily Older Americans

    It is the intent of the Orphan Drug Act, and the Office of 
Orphan Products Development [OPD], to stimulate the development 
and approval of products to treat rare diseases. The OPD plays 
an active role in helping sponsors meet agency requirements for 
product approval. Between 1983--when the Orphan Drug Act was 
passed--through the end of 1998, 181 products to treat small 
populations of patients were approved by FDA.
    By the end of 1998, there were 744 designated orphan 
products. Two hundred and sixteen--29 percent--of these 
designated orphan products represent therapies for diseases 
predominately affecting older Americans. One hundred twenty-
five are for treating rare cancers in the elderly--for instance 
ovarian cancer, pancreatic cancer, and metastatic melanoma. 
Forty-five of the orphan products designated for treating 
elderly populations are for rare neurological diseases, such a 
amyotrophic lateral sclerosis [ALS], and advanced Parkinson's 
disease. Twenty-six orphan-designated therapies for elderly 
populations have received FDA market approval: Most noteworthy 
among these is Eldepryl for treatment of idiopathic Parkinson's 
disease, postencephalitic Parkinsonism, and symptomatic 
Parkinsonism; riluzole for treatment of ALS; and Novantrone for 
treatment of refractory prostate cancer.
    FDA's orphan products grants had their beginning in 1983 as 
one of the incentives of the Orphan Drug Act. This incentive of 
the Act provides financial support for clinical studies 
[clinical trials] to determine the safety and efficacy of 
products to treat rare disorders, and to achieve marketing 
approval from the FDA under the Federal Food, Drug, and 
Cosmetic Act. Studies funded by the orphan products grants 
program have contributed to the marketing approval of twenty-
one of these products.
    Because the orphan products program is issue-specific/
indication-specific, it is typical for an approved product to 
be funded under the orphan products grant program for study in 
an indication unique to a distinct group of people: for 
example, women, children, or a population of elderly. Under the 
orphan drug program, disease populations are small; in many 
instances, the firms themselves are very small. The goal of 
orphan product development is to bring to market products for 
rare diseases or conditions. In so doing, it is evident that 
the goals of the Orphan Drug Act promote research and labeling 
of drug for use by and for special populations.
    The orphan products grant program has funded 42 studies 
specifically aimed at treatment of diseases affecting adults 
and older adults. The IV Formulations of Busulfan was approved 
in 1999 for use in geriatric patients undergoing bone marrow 
transplantation.

                      Alzheimer's Disease Research

    Alzheimer's disease currently affects approximately four 
million people age 65 and older, with the number projected to 
increase to fourteen million by the year 2050. Development of 
new drugs to diagnose, treat, and prevent this disease 
represents a goal of profound importance. Alzheimer's drug 
research efforts depend in part upon the availability of 
patients who can participate in clinical studies of these new 
drugs.
    During 1996, FDA's Office of Special Health Issues [OSHI] 
conducted a search and assessment of information in the public 
domain regarding Alzheimer's drug development, and particularly 
opportunities to participate in Alzheimer's drug research. It 
was learned that little information is publicly available 
regarding Alzheimer's research and opportunities to participate 
in Alzheimer's drug development.
    To address this problem, OSHI has undertaken an initiative 
with the National Institute on Aging [NIA] to develop a 
database containing information regarding opportunities to 
participate in clinical trials of Alzheimer's drugs. This 
database, which received some initial funds from the FDA, will 
be maintained at the NIA's Alzheimer's Disease Education and 
Referral [ADEAR] Center, and will be accessible by toll-free 
telephone and the NIA home page on the world wide web. OSHI and 
NIA developed the database and announced the initiative to 
pharmaceutical manufacturers involved in domestic development 
of Alzheimer's drugs. Some manufacturers have submitted 
information for entry into the database, which will be 
operational during Spring 1998.

                         Generic Drug Approvals

    During 1997-1998, the Office of Generic Drugs (OGD) 
approved 775 abbreviated new drug applications (ANDA's). These 
drug products are often substantially less expensive, and 
provide a safe and effective alternative to the brand-name 
products. Many of these approvals represent the first-time a 
generic drug was available for products of special interest to 
older Americans such as terazosin hydrochloride capsules used 
as an antihypertensive and isosorbide mononitrate tablets used 
for angina. These and other recently approved generic drug 
products could save the American Public and Federal Government 
millions of dollars. [In July, 1998 the Congressional Budget 
Office (CBO) published a report: How Increased Competition from 
Generic Drugs Has Affected Prices and Returns in the 
Pharmaceutical Industry. The CBO estimates that in 1994, 
purchasers saved a total of $ 8 billion to $10 billion on 
prescriptions at retail pharmacies by substituting generic 
drugs for their brand-name counterparts.]

                           New Drug Approvals

    In 1997 and 1998, the Center for Drug Evaluation and 
Research approved more than 20 new drug products that are used 
more often, although not solely, in populations 55 or older for 
conditions generally associated with an aging population. 
Indications for these drugs include glaucoma, osteoarthritis, 
benign prostatic hypertrophy, incontinence, prostate cancer, 
and hormone replacement therapy.

        Geriatric Labeling Final Rule and Guidance for Industry

    In a final rule published in the Federal Register on August 
27, 1997, (62 FR 45313), FDA established a ``Geriatric Use'' 
subsection in the labeling for human prescription drug and 
biological products to provide information pertinent to the use 
of drugs in the elderly (persons aged 65 years and over). This 
final rule recognizes the special concerns associated with the 
geriatric use of prescription drugs and acknowledges the need 
to communicate important information so that drugs can be used 
safely and effectively in older patients. The medical community 
has become increasingly aware that prescription drugs can 
produce effects in elderly patients that are significantly 
different from those produced in younger patients. Although 
both young and old patients can exhibit a range of responses to 
drug therapy, factors contributing to different responses are 
comparatively more common among the elderly. For example, 
elderly patients are more likely to have impaired mechanisms of 
drug excretion (e.g., decreased kidney function), to be on 
other medications that can interact with a newly prescribed 
drug, or to have another medical condition that can affect drug 
therapy.
    In January 1998, the FDA published a guidance document 
entitled ``Guidance for Industry-Content and Format for 
Geriatric Labeling.'' This document, which is available in hard 
copy, as well as on the CDER website, is intended to provide 
industry with information on submitting geriatric labeling of 
human prescription drugs and biological products.

                             Drug Labeling

    On February 26, 1997, FDA proposed new labels for over-the-
counter (OTC) drug products. This proposed labeling is designed 
to provide consumers with easier-to-read and understand 
information about the products' benefits and risks, and how 
they should be used. According to the American Pharmaceutical 
Association's Handbook of Nonprescription Drugs, the elderly 
comprise about 12 to 17 percent of the United States population 
but consume about 30 percent of all OTC medications. The 
elderly are projected to consume as much as 50 percent of all 
OTC medications by the year 2000. The new bulleted format, 
including minimum type size and type style, simplified 
language, and uniform, standardized headings, as proposed in 
this rulemaking may be particularly helpful to the elderly.
    In the Federal Register dated February 11, 1998, FDA 
amended its regulations pertaining to new drug applications 
(NDA) to clearly define in the NDA format and content 
regulations, the requirement to present effectiveness and 
safety data for important demographic subgroups, specifically 
gender, age and racial subgroups. The rule also amended 
regulations pertaining to investigational new drug applications 
to require sponsors to tabulate in their annual reports the 
numbers of subjects enrolled to date in clinical studies for 
drug and biological products according to age group, gender, 
and race. This amendment is intended to alert sponsors as early 
as possible to potential demographic deficiencies in enrollment 
that could lead to avoidable deficience later in the NDA 
submission.

             Postmarket Drug Surveillance and Epidemiology

    The Office of Post Marketing Drug Risk Assessment (OPDRA), 
FDA Center for Drug Evaluation and Research [CDER], prepared an 
annual report--entitled ``Annual Adverse Drug Experience [ADE] 
Report''--which provides summary statistics describing some of 
the activities of the postmarketing drug risk assessment 
program. Each year this report contains a number of tabulations 
which show the number of reports received and evaluated by such 
factors as age group, sex, source of report, drug or type of 
outcome. In 1997, there were 243,350 evaluable reports that 
were evaluated and added to the database. In 1998, the Agency 
added 232,500 reports to the evaluation database. At this time, 
we have not stratified this database by age. However, we 
anticipate that the percentage of reports submitted by 
individuals age 60 or older will remain similar to the 
percentages from previous years (23 to 26 percent).
    FDA staff participated in an interagency conference 
entitled ``Substance Abuse and Aging: Estimating Future 
Requirements'', in which the goal of the meeting was to 
identify data sources to assess the future needs of substance 
abuse, drug misuse, and polypharmacy among the elderly. 
Information from the current spontaneous reporting systems, as 
well as previous findings from OPDRA sponsored studies were 
shared. Information about the outpatient use of prescription 
sedative hypnotic drugs in the U.S. from 1970 through 1989 was 
described, documenting the decline in total prescriptions of 
sedative hypnotic drugs, the decline in barbiturate and 
increase in benzodiazepine prescriptions, the increasing use of 
antidepressant drugs for insomnia, and increasing use with age.

                         Dialysis Access Graft

    A dialysis access graft made by Possis Medical Systems, 
Inc., was approved on September 25, 1998. The Perma-Seal Graft 
is for use as a subcutaneous arteriovenous shunt graft to 
provide immediate and subsequent chronic blood access for high-
efficiency hemodialysis in patients who have a central venous 
cannulation that is deemed hazardous or is technically 
unavailable or are being maintained on chronic anticoagulation 
or antithrombotic therapy or are morbidly obese.

                          Vascular Stents (6)

    Before October 1, 1996, only three vascular stents were 
approved and only two of them were for coronary vessels. Six 
coronary vascular stents have been approved since then and are 
for use in patients with symptomatic ischemic heart disease due 
to discrete de novo and restonotic native coronary artery 
lesions with a reference vessel diameter ranging from 3.0 mm to 
3.75 mm and is intended to improve the coronary luminal 
diameter. Coronary stents have made a major impact on the 
treatment of coronary artery disease (prevalence increases with 
age).

                   Transmyocardial Revascularization

    The first transmyocardial revascularization (TMR) device 
The Heart Laser CO2 TMR System marketed by PLC was approved on 
September 25, 1998. Transmyocardial revascularization with The 
Heart Laser System is indicated for the treatment in patients 
with stable angina (Canadian Cardiovascular Society class 3 or 
4) refractory to medical treatment and secondary to objectively 
demonstrated coronary artery atherosclerosis not amenable to 
direct coronary revascularization.

                 Ventricular Assist Device Systems (3)

    On May 21, 1998, the Thoratec Ventricular Assist Device 
System was approved for an expanded indication. The original 
indication was for use as a bridge to cardiac transplantation 
to provide temporary circulatory support for cardiac failure in 
potential transplant recipients at imminent risk of dying 
before donor heart procurement. The expansion of the 
indications is to include post-cardiotomy myocardial recovery. 
These are patients who have had a technically successful open-
heart operation but are unable to be weaned from 
cardiopulmonary bypass.
    On September 29, 1998, two ventricular assist device 
systems were approved. Baxter Healthcare had its first 
application approved and Thermo Cardiosystems (TCI) 
supplemented its previously approved application. The TCI 
device is the electric version of the already approved 
pneumatic device. The HeartMate electric (VE) and the pneumatic 
(IP) LVASs made by TCI are approved for bridge to cardiac 
transplantation. What is unique about both the Novacor LVAS and 
the TCI HeartMate VE LVAS is that both are intended for use 
inside and outside the hospital, thus providing the patient 
with greater mobility.

    Pacemakers (4)/Ablation/Implantable Defibrillators (3)/Leads (3)

    Eleven applications for these devices were approved in this 
time period and all are used increasingly with age.

                         Laser to Extract Leads

    On December 9, 1997 the Spectranetics Laser Sheath was 
approved for use as an adjunct to conventional lead extraction 
tolls in patients suitable for transvenous removal of 
chronically implanted pacing or defibrillator leads constructed 
with silicone or polyurethane outer insulation. This device is 
the first of its kind.

                 Percutaneous Vascular Surgical System

    The Prostar Percutaneous Vascular Surgical System approved 
on April 30, 1997, is the first of its kind and is indicated 
for the percutaneous delivery of sutures for closing the common 
femoral artery access site and reducing the time to hemostasis 
and ambulation (time-to-standing) of patients who have 
undergone interventional procedures using 8 to 11 Fr. Sheaths.

 Deep Brain Stimulator To Control Tremors in Patients With Parkinson's

    On July 31, 1997, the Medtronic Activa Tremor Control 
System was approved. It is a unilateral thalamic stimulation 
and the first device to be approved for the purpose of 
suppression of tremor in the upper extremity. The system is 
intended for use in patients who are diagnosed with essential 
tremor or Parkinsonian tremor not adequately controlled by 
medications and where the tremor constitutes a significant 
functional disability. Both essential and Parkinson's 
associated tremor are more frequent in the elderly.

            Laser for Resurfacing and Treatment of Wrinkles

    FDA, Center for Device and Radiological health has cleared 
a number of laser wavelengths for the indication of skin 
resurfacing and treatment of wrinkles. These devices are 
capable of removing layers of facial skin in a manner that 
wrinkles around the eyes, nose and mouth are partially or 
completely removed and at the same time the aged skin of the 
face is also removed. The result of this treatment, upon 
healing, is both lack of prominent wrinkles and the appearance 
of new facial skin/baby skin.
    The use of lasers for this purpose potentially will affect 
the older population of people as well as persons who have 
experienced lengthy period of time in sunlight. The potential 
use of this new procedure will therefore be seen in the older 
population and in those locals of high sun exposure, that is 
the southwest and west coast.
    Even if the wrinkles themselves are not completely removed, 
the resurfacing effect alone results in improved cosmetic 
appearance of the face, since the healed skin does not have the 
same appearance as older, sun exposed skin.

                           Intraocular Lenses

    Over 1 million intraocular lenses are implanted each year 
in the U.S. predominately in the senior population. These 
implants have revolutionized the treatment of cataracts, which 
a few decades ago were the leading cause of blindness in the 
adult population. A number of flexible lens models have been 
approved by FDA in the last few years and are now on the 
market. These lenses permit smaller incisions which heal more 
rapidly with less scarring and subsequent distortion of the 
optics of the eye.
    However, flexible lenses have led to a number of unexpected 
post-approval consequences. Discoloration, haziness, and 
glistening have all been reported. In 1996, primarily because 
of FDA laboratory testing and discovery of such problems, one 
company voluntarily recalled all distributed units of its 
recently approved flexible IOL model. FDA verified that the 
recall was effective and that monitoring was in place to access 
patients implanted before the recall. FDA tasked all involved 
firms with identifying the sources of these problems and 
revising their quality control to prevent future occurrences. 
FDA's device laboratory developed methods and tested lenses to 
assess the effect of these problems on vision.
    Data on intraocular lenses (IOLs) have demonstrated that a 
high proportion (85-95 percent) of the patients who have 
undergone cataract surgery and IOL implantation will be able to 
achieve 20/40 or better corrected vision with a low risk of 
significant postoperative complications. Because of the proven 
safety and effectiveness of IOLs, they have become the 
treatment of choice for the correction of visual loss caused by 
cataracts. This has allowed elderly patients to maintain their 
sight and a normal lifestyle. FDA continues to monitor some 
investigational IOLs and to date has approved thousands of 
models that have demonstrated safety and effectiveness.
    The first IOLs were all ``monofocal,'' which were designed 
to provide good vision at one distance, usually far. Patients 
who receive monofocal IOLs usually need spectacles to obtain 
satisfactory near vision. Typically, these patients will need 
bifocal spectacles to obtain optimal distance and near vision. 
On September 5, 1997, FDA approved the first ``multifocal'' 
IOL. The multifocal IOL is designed to provide clear distance 
and near vision. The advantage of the multifocal IOL is that 
there is a greater chance that the patient may have 
satisfactory distance and near vision without spectacles, or 
will only need ``monofocal'' (not bifocal) spectacles to 
improve both distance and near vision. The disadvantages of 
multifocal IOLs are : (1) distance vision may not be quite as 
``sharp'' as with a monofocal IOL; (2) there is a higher chance 
of difficulty with glare and halos than with a monofocal IOL; 
and (3) under poor visibility conditions, vision may be worse 
than with a monofocal IOL.
    Throughout the time period of this update, FDA has worked 
closely with industry, ophthalmologists, and researchers to 
assure that the regulatory requirements for new intraocular 
lens models are scientifically valid, but not overly 
burdensome. This activity has occurred via work with both the 
ANSI and ISO standards organizations. FDA also participates in 
the Eye Care Forum, an annual meeting sponsored by the National 
Eye Institute to address issues of mutual interest to the 
clinical, research, and regulatory communities.

                        Prosthetic Heart Valves

    Approximately 80,000 people in the U.S. have artificial 
heart valves implanted every year, both mechanical and 
bioprosthetic (pig, bovine valves). The characteristics of the 
blood flow through these valves can affect the risk of thrombo-
embolism and ultimate valve failure. Turbulence, stagnation and 
cavitation (bubble formation and collapse) may all cause 
adverse effects. For the past few years, and currently, the FDA 
has had programs in place, both research and regulatory, to 
evaluate the flow characteristics of these devices and their 
impact on the valves and blood components.
    These programs include the development of: (1) improved 
techniques to directly measure the flow patterns associated 
with valves using fluorescent particle visualization and 
Doppler ultrasound; (2) mathematical models to assess flow 
patterns as a function of valve design and aortic geometry; (3) 
guidance for manufacturers to standardize and improve their 
testing; (4) techniques to acoustically detect flow induced 
cavitation; (5) methods to directly assess effects on red blood 
cells. Also evaluation of specific valve designs, both 
currently implanted and prototype is ongoing. Finally, analysis 
of a much used diagnostic tool, color Doppler, is being 
undertaken to improve diagnosis or diseased or faulty valves.
    On November 4, 1997, St. Jude Medical's Toronto SPV valve 
was approved, which is a stentless subcoronary porcine aortic 
valve comprised of the valve cusps and enough aortic tissue to 
support the commissures and leaflets. On November 26, 1997, the 
Medtronic FREESTYLE Aortic Root Bioprosthesis which is 
comprised of a porcine aortic root with a cloth covering to add 
to the strength of a proximal (inflow) suture line and to cover 
any exposed porcine myocardium was approved. The design of the 
FREESTYLE bioprosthesis allows the physician to trim the 
prosthesis for replacement using the subcoronary, full-root or 
root-inclusion technique. The need for replacement heart valves 
increases with age.

                               Pacemakers

    On October 28, 1994, the EP Technologies, Inc.'s Cardiac 
Ablation System, the first radio frequency powered catheter 
ablation system was approved. It is indicated for interruption 
of accessory atrioventricular (AV) conduction pathways 
associated with tachycardia, treatment of AV nodal re-entrant 
tachycardia, and for creation to complete AV block in patients 
with a rapid ventricular response to an atrial arrhythmia.
    On December 20, 1995, the Thoratec Ventricular Assist 
Device System was approved. It is indicated for use as a bridge 
to cardiac transplantation to provide temporary circulatory 
support for cardiac failure in potential transplant recipients 
at imminent risk of dying before donor heart procurement. The 
System may be used to support patients who have left 
ventricular (LVAD), right ventricular (RVAD), or biventricular 
failure (BVAD). The Thoratec VAD differs from the other two 
previously approved VADs in that it can be used for right heart 
and/or biventricular failure.
    On May 15, 1996, a new indication for use was approved for 
CPI Guidant's family of Implantable Cardioverter Defibrillators 
(ICDs). The PMA supplement was received in six days and 
contained clinical data in electronic format from the 
Multicenter Defibrillator Implant Trial (MADIT). The new 
patient population consists of patients who have a Left 
Ventricular Ejection Fraction of less than 35%, and a 
documented episode of non-sustained ventricular tachycardia 
with inducible, non-suppressible, ventricular tachycardia. 
Previously, only patients who had sustained ventricular 
tachycardia were candidates for implantation. The MADIT data 
provided evidence that an ICD used in high risk, asymptomatic 
patients produces significantly better results than drugs in 
reducing deaths.
    In 1998, the FDA, Center for Device and Radiological Health 
Office of Surveillance and biometrics, Epidemiology Branch 
conducted and published a study of the epidemiology of cardiac 
pacemakers in the elderly U.S. population. Data for the study 
were obtained from the Nationwide Inpatient Sample, a massive, 
nationally representative sample that includes 850 hospitals 
and six million patient discharge records. The study estimated 
that in a 12 month span, a total of 131,361 pacemakers were 
implanted in recipients 65 years of age or older. The study 
also demonstrated the outward diffusion of pacemaker 
implantations from academic to community hospitals, as the 
majority of pacemakers were found to be implanted outside of 
academic centers.

                             Renal Dialysis

    There were a projected 244,000 patients with kidney failure 
in the United States in 1996. More than 100 individuals are 
diagnosed with end stage renal disease (ESRD) each day. ESRD 
patients will need to remain on either hemodialysis or 
peritoneal dialysis for the rest of their lives unless they are 
able to receive a successful kidney transplant. Therapy can be 
delivered at dialysis facilities or in the home, depending on 
various factors.
    Today, more than 50 percent of the ESRD population is over 
60 years of age. Through age 50, the average remaining life 
span is greater than 5 years for ESRD patients. Although the 
remaining lifetimes are shorter for the elderly ESRD 
population, the general population also faces higher mortality 
with aging. The projected expected remaining lifetime for 
dialyzed patients with ESRD is approximately one-fourth to one-
sixth that for the general population through age 50, while the 
ratio is often closer to one-third for older patients. These 
figures are based on actuarial calculations and assumed death 
rates, and are taken from the U.S. Renal Data System 1997 
Annual Data Report.
    Because of the nature of the underlying disease and 
necessary supportive therapy, ESRD patients are at risk for a 
number of potential complications during or as a result of 
their therapy. Many of the potential complications can occur 
from a failure to correctly maintain or use dialysis equipment, 
insufficient attention to safety features of the individual 
dialysis system components, or insufficient staffing or 
personnel training. FDA's Center for Devices and Radiological 
Health (CDRH), in conjunction with major hemodialysis 
organizations, such as the Health Industries Manufacturers 
Association (HIMA), the Renal Physicians Association (RPA), and 
the American Nephrology Nurses Association (ANNA), developed 
several educational videotapes which address human factors, 
water treatment, infection control, reuse, and delivering the 
prescription, as well as manuals on water treatment and quality 
assurance. Complimentary videos illustrating health and safety 
concerns and the use of proper techniques have been distributed 
to every ESRD facility in the United States. These videos have 
received a favorable acceptance from the nephrology community.
    On October 6, 1995, CDRH completed the final draft of the 
Guidance Document on Hemodialyzer Reuse Labeling for safe and 
effective reprocessing for reuse manufacturers. A letter was 
issued to Manufacturers and Initial Distributors of 
Hemodialyzers on May 23, 1996 to inform them of the requirement 
to obtain 510(k) clearance for ReUse labeling for all 
hemodialyzers which were being marketed for clinics reusing 
their dialyzers. They were given until February 25, 1997, to 
comply with the request. A video on the methods for correct 
reprocessing and reuse of hemodialyzers developed by the FDA, 
RPA, and other concerned groups is available. The video 
attempts to follow the standard protocols that have been 
detailed in the Association for the Advancement of Medical 
Instrumentation (AAMI) Recommended Practice for the Reuse of 
Hemodialyzers. These practices also have been adopted by HCFA 
as a condition of coverage to ESRD providers that practice 
reuse.
    A multistate study conducted for the FDA in 1987 indicated 
that dialysis facilities appeared to have inconsistent quality 
assurance (QA) techniques for many areas of dialysis treatment. 
To address this problem, FDA funded a contract to develop 
guidelines that could be used by all dialysis facility 
personnel to establish effective QA programs. The guidelines 
printed in February 1991 were mailed to every dialysis facility 
in the United States free of charge.
    During 1995-1996, FDA prepared a Draft Guidance Document 
for the Content of Premarket Notifications for Water 
Purification Components and Systems for Hemodialysis. This 
document was circulated for comment by regulated industry and 
other government agencies and was presented at both AAMI and 
Water Quality Association Meetings. The purpose for preparing 
this document was to remind the water treatment community of 
the Federal requirement for submission of premarket 
notifications for these types of device systems (21 CFR 
876.5665). The importance of the quality of the water used for 
preparation of hemodialysate solutions used during hemodialysis 
was strongly emphasized in these presentations and the Guidance 
Document.
    In September 1996, seven patients in Alabama received 
hemodialysis when the blood alarms activated on six of the 
seven patients. Subsequently, the patients began to exhibit 
serious central nervous (CNS) symptoms. FDA field staff, CDRH 
and CDC investigated the various aspects of the incident. The 
epidemiological analysis suggests a causal relationship between 
the age of the dialyzer filters used (ten plus years), and the 
injuries reported to the patients. As a result, CDRH and CDC 
issued a joint Public Health Advisory in December 1996, with 
the simple message, to ``rotate your dialysis stock using 
first-in-first-out practices,'' to avoid this type of problem 
in the future. FDA laboratories began a research program to 
investigate the effects of aging on dialyzer filters, with the 
objective of establishing safe expiration dating labeling.
    Dialyzers of various ages were retrieved from the field and 
tested for material changes. The results of material 
characterization indicated that the cellulose acetate membranes 
degraded over time. To verify the cause of the incident in 
Alabama, water-soluble extracts from aged dialyzers and 
chemically oxidized resin were injected IV into a rabbit model. 
Symptoms similar to the case patients were observed. It was 
concluded that oxidative stress, either at manufacture or 
storage, can generate soluble fractions capable of adversely 
affecting patients. The FDA is working with industry and 
manufacturing associations to develop shelf-life criteria.
    FDA has continued to work cooperatively with the nephrology 
community and the ESRD patient groups to improve the quality of 
dialysis delivery. These efforts appear to be yielding positive 
results. CDRH has also been cooperating with CDC and HCFA in 
the exchange of information to try to increase the safety of 
dialysis delivery.

           Fluoroscopically-Guided Interventional Procedures

    An increasing number of therapeutic procedures are being 
employed for a variety of conditions, such as coronary artery 
disease or irregular heart rhythms, which require x-ray 
fluoroscopy to provide visualization and guidance during the 
procedures. Due to the time required to complete these 
procedures, the potential for large radiation exposures leading 
to acute skin injury exists. During the early 1990s, the FDA 
received reports of such injuries, investigated the 
circumstances and issued an FDA Public Health Advisory to alert 
physicians and health care facilities to this concern. This 
advisory was sent to hospitals and specialist physicians who 
perform such procedures. During 1995 and 1996, the FDA 
continued activities to increase the awareness of physicians to 
this problem, including publishing supporting information for 
physicians, an article in the radiology literature and numerous 
presentations at medical professional meetings. These 
activities brought the attention of physicians to this issue 
and resulted in activities in many healthcare facilities to 
assure proper attention is given to this concern. As many of 
these interventional procedures are performed on older 
patients, this activity contributed to improved care for older 
Americans. During 1997 and 1998, the agency continued efforts 
to assure that new fluoroscopic x-ray systems will be designed 
in a manner that will facilitate dose reduction. This is being 
done through development of an international consensus standard 
for fluoroscopic systems used for interventional procedures and 
development of amendments to the mandatory U.S. performance 
standard. FDA staff is also contributing to the development of 
a report by the international Commission on Radiation 
Protection designed to inform physician users fluoroscopic 
equipment regarding steps which should be observed to prevent 
skin injuries.

                              Mammography

    Since 1975, CDRH [formerly the Bureau of Radiological 
Health (BRH)] has conducted a great many mammography 
activities. These have been done with several goals in mind:
    To reduce unnecessary radiation exposure of patients during 
mammography to reduce the risk that the examination itself 
might induce breast cancer; and
    To improve the image quality of mammography so that early 
tiny carcinoma lesions can be detected at the state when breast 
cancer is most treatable with less disfiguring and more 
successful treatments.

  The National Strategic Plan for the Early Detection and Control of 
                       Breast and Cervical Cancer

    FDA, the National Cancer Institute, and the Centers for 
Disease Control have coordinated a combined effort to cover 75 
professional, citizen, and government groups to develop the 
National Strategic Plan for the Early Detection and Control of 
Breast and Cervical Cancer. The goal of this plan, approved by 
the Secretary of Health and Human Services on October 16, 1992, 
is to mount a unified effort by all interested groups to combat 
these two serious cancer threats. FDA staff took the lead in 
writing the Breast Cancer Quality Assurance section, one of six 
components of the plan, and participated in the development of 
the other components.

               Mammography Quality Standards Act of 1992

    On October 27, 1992, the President signed into law the 
Mammography Quality Standards Act [MQSA] of 1992. This Act 
requires the Secretary of Health and Human Services to develop 
and enforce quality standards for all mammography of the 
breast, regardless of its purpose or source of reimbursement.
    Since October 1, 1994, any facility wishing to produce, 
develop, or interpret mammograms has had to meet these 
standards to remain in operation. The Secretary delegated the 
responsibility for implementing the requirements to FDA on June 
1, 1993, and Congress first appropriated funds for these 
activities on June 6, 1993. Implementation of MQSA is a key 
component of Secretary Shalala's National Strategic Action Plan 
Against Breast Cancer.
    FDA's accomplishments since the Agency was delegated 
authority to implement MQSA in June 1993 include--staffing of a 
new division; development of final standards; approval of four 
accreditation bodies; certification of 10,000 facilities by the 
statutory deadline of October 1, 1994; implementation of a 
rigorous training program for inspectors; development of a 
compliance and enforcement strategy [coordinated with the 
Health Care Financing Administration (HCFA)]; outreach to 
facility and consumer communities; and planning for program 
evaluation.
    On October 9, 1998, the Mammography Quality Standards 
Reauthorization Act of 1998 (MQSRA) was enacted, extending the 
program to 2002. On April 28, 1999, most of the final 
regulations under MQSA will become effective, replacing the 
interim standards, under which facilities have been operating 
since October 1994. Most regulations will not change, though a 
number clarify the requirements of the interim regulations. 
Although there are new personnel and equipment regulations, the 
most significant changes that are directly patient-related are 
as follows:
           Mandated by Congress in the Reauthorization 
        Act, all patients (not just self-referred patients) 
        must receive a written report of their exam results 
        from the facility that performs the mammography exam. 
        This was in response to reports, though rare, of women 
        receiving inaccurate exam reports or no report at all. 
        Because the reports must be written in terms a lay 
        person can easily understand, this provision will help 
        assure that all women have this information for 
        effective communication with their health care 
        providers, and thus are more likely to receive 
        appropriate medical follow-up when a breast problem is 
        detected.
           A mammography facility must notify its 
        patients when FDA determines that there are significant 
        problems with the facility's mammography services, so 
        that patients involved can take appropriate follow-up 
        actions with respect to their healthcare.
           A facility must release original mammograms, 
        not copies, when a patient requests the films, 
        regardless of whether the transfer is permanent or 
        temporary.
           Each mammography facility must develop a 
        consumer complaint mechanism, to assure that all its 
        unresolved serious complaints, such as unqualified 
        personnel or an expired FDA certification, are brought 
        to the attention of the facility's accreditation body 
        or FDA for resolution.
           MQSA inspections have supplanted the Health 
        Care Financing Administration's Medicare Screening 
        Mammography Inspections. Under MQSA, HCFA has agreed to 
        recognize FDA-certification of a mammography facility 
        as meeting quality standards for reimbursement 
        purposes.

                        Blood Glucose Monitoring

    A proposed ISO standard [draft ISO TC 212/WG3] was proposed 
for evaluating the performance of self-monitoring blood glucose 
monitors by comparing monitor results to those obtained by 
clinical laboratory methods. Because the draft standard did not 
address how to select a clinical laboratory method, an attempt 
was made, based upon telephone surveys and discussions with 
CAP, the three most commonly used clinical methods for analysis 
of blood glucose. A strategy was developed to evaluate the 
accuracy of these methods by comparison to the recently 
released Standard Reference Material from the National 
Institute of Standards and Technology that has three certified 
levels of glucose in human sera. Criteria were developed for 
selection of high performance clinical laboratories in order to 
minimize effects due to analysts.

                           Patient Restraints

    Patient restraints are intended to limit the patient's 
movement to the extent necessary for treatment, examination, or 
for the protection of the patient or others.
    One of the most common uses of these devices has been to 
protect the elderly from falls and other injuries. Seventy-nine 
documented deaths have been reported to FDA's Medical Device 
Reporting System (MDR) related to patient restraint use. 
Scientific literature suggests that annual deaths related to 
the use of restraints may be as high as 200. These alarming 
numbers of deaths, with the use of protective restraints raised 
serious concerns regarding the safe use of these devices and 
prompted the FDA to alert the healthcare community about these 
problems.
    The agency worked closely with industry in arriving at 
solutions to help reduce the risk of injury and death 
associated with the use of these devices. As a result, in 
November 1991, FDA moved to make protective restraints 
prescription devices to be used under the direction of licensed 
health care practitioners. In addition, manufacturers were 
required to label patient restraints as ``prescription only'' 
to help ensure appropriate medical intervention with the use of 
these devices. In July 1992, FDA issued a Safety Alert to 
healthcare providers to heighten their awareness of the 
potential hazards associated with the use of these devices. FDA 
identified labeling as its primary focus for intervention in 
resolving this issue, and provided additional labeling 
recommendations as guidance to manufacturers to ensure safer 
designs. Education and training of personnel in the application 
of these devices has also been emphasized.
    On March 4, 1996, FDA published a final rule requiring 
manufacturers of protective restraints to submit premarket 
notifications (510(k)s) to the Agency. Since 1996, FDA has 
reviewed approximately 150 premarket notifications for these 
devices.
    Today, healthcare providers are electing the restraint-free 
alternative. As a result, current literature reports that 
restraint use is dropping.

                              Hearing Aids

    Several events occurred in 1995-1996 which related to FDA's 
development of a guidance document that indicated criteria for 
clinical hearing aid study protocols. Manufacturers met with 
FDA staff to review proposed clinical studies, consultants met 
with FDA to discuss interpretations of the guidance document 
and how they might best interface with the regulated industry, 
and FDA had meetings with the Hearing Industries Association 
(HIA), representing many of the major manufacturers of hearing 
aids, wherein the use of the guidance document was discussed.
    In addition, members of FDA's Hearing Aid Working Group 
completed its draft of the proposal to amend the 1977 hearing 
aid regulation. This new regulation, if adopted, would cover 
21CFR 801.420 and 801.421, Hearing Aids, Professional and 
Patient Labeling and Conditions for Sale.

                  Orthopaedic Implant Porous Coatings

    Porous coatings are widely used in both the orthopedic and 
dental implant industries to fix prosthetic devices through the 
process of bony in-growth without the aid of cements. However, 
the coating qualities such as strength, solubility, and 
abrasion resistance vary considerably depending on 
manufacturing methods and have significant impact on durability 
of the implants. Concern over the long-term revision rates for 
plasma sprayed porous coatings prompted the FDA to require 
post-market surveillance studies for these types of coatings. 
In order to help industry evaluate the coatings under 
surveillance, FDA developed a consensus standard based test, 
qualified it using standard interlaboratory study methods and 
has incorporated that method into a Federal Register Notice 
that is currently out for comment. FDA also began a program to 
evaluate tests to assess the durability of such coatings in 
order to help in the development of longer-lived implants.

                       Hazards With Hospital Beds

    On August 23, 1995, FDA issued a Safety Alert, Entrapment 
Hazards with Hospital Bed Side Rails. The Alert noted that the 
majority of deaths and injuries reported to FDA involving bed 
rails were to elderly patients, and recommended a number of 
actions to prevent deaths and serious injuries. This Alert was 
sent to nursing homes, hospitals, hospices, home healthcare 
agencies, nursing associations, and biomedical and clinical 
engineers throughout the United States.

                        Retinal Photic Injuries

    On October 16, 1995, FDA issued a Public Health Advisory, 
Retinal Photic Injuries from Operating Microscopes During 
Cataract Surgery. Cataract surgery is most frequently performed 
on elderly patients. The Advisory discussed the types of 
injuries to patients reported to FDA, and recommended actions 
to reduce the risk of retinal photic injury. The Advisory was 
sent to ophthalmologists and cataract centers throughout the 
United States.

                         Electric Heating Pads

    On December 12, 1995, FDA working with the CPSC, issued a 
Public Health Advisory, Hazards Associated with Use of Electric 
Heating Pads. At the time of the Advisory, 45% of those 
reporting injuries from using heating pads, were over the age 
of 65. The Advisory pointed out that patients who may be unable 
to feel pain to the skin because of advanced age, diabetes, 
spinal cord injury, or medication, are at high risk for injury. 
This Advisory was sent to hospitals, nursing homes, hospices, 
home healthcare agencies, and biomedical and clinical engineers 
throughout the United States.

            FDA Problem Reporting System for Medical Devices

    The Office for Surveillance and Biometrics receives reports 
involving medical devices through reporting from consumers, 
medical professionals, manufacturers, distributors, and user 
facilities. On the 191,537 reports received during the calendar 
years 1995 and 1996 from all sources, 22,749 (12 percent) 
reported the age of the patient. Of these, 10,855 (48 percent) 
were for individuals 60 years of age or older. Prior to August 
1, 1996, manufacturers of medical devices were not required to 
provide age information. In many instances when manufacturers 
were required to provide age information, the information was 
unknown and therefore not reported.

                       Markers of Bone Metabolism

    Osteoporosis is a major health concern. It is estimated 
that 1.5 million fractures are attributable to osteoporosis in 
the United States each year. One third of women older than 65 
years suffer vertebral crush fractures, and the lifetime risk 
of hip fracture is 15%. The mortality rate accompanying hip 
fracture may be as high as 20%. Twenty-five percent of the 
survivors are confined to long-term care in nursing homes. The 
estimated cost of medical care for osteoporosis each year is 
more than $ 10 billion.
    If a woman has postmenopause-associated osteoporosis, an 
assessment of bone turnover may be helpful. Because of an 
increasing interest in bone disease and a greater understanding 
of bone metabolism, a number of urinary markers of bone 
turnover were cleared by the FDA in 1995 and 1996. The rate of 
bone loss is related to an overall increase of bone turnover 
which can be assessed using these biochemical indicators.

                      Year 2000 Health Objectives

    A consortium of over 300 government and private agencies 
developed a set of health objectives for the Nation which is 
serving as a national framework for health agendas in the 
decade leading up to the year 2000. The overall program is 
called ``Healthy People 2000.'' FDA co-chairs the working group 
responsible for monitoring progress on the set of 21 objectives 
that focus on nutrition, dietary improvements and availability 
of nutrition services and education. In the food and drug 
safety area, objective 12.6 sets as a target to:
          Increase to at least 75 percent the percentage of 
        health care providers who routinely review all 
        prescribed and over-the-counter medicines taken by 
        their patients 65 years and older each time medication 
        is prescribed or dispensed.
Objective 12.8 sets as a target to:
          Increase to at least 75 percent the proportion of 
        people who receive useful information verbally and in 
        writing for new prescriptions from prescribers or 
        dispensers.
    FDA's Marketing Practices and Communications Branch 
conducted a number of studies that track patients' receipt of 
medication information from doctors and pharmacists from 1982 
to 1996. The most recent survey shows that 67% of Americans 65 
and over received at least some oral information about 
prescriptions from physicians and 43% from pharmacists, while 
13% received written information about their prescription 
medications from physicians and 62% received such information 
from pharmacists. Only 2% reported asking questions at the 
doctor's office, and 3% at the pharmacy. The survey is being 
conducted again in 1998 to track progress toward meeting this 
objective. An article outlining results of the surveys from 
1982-1994 will be published in Medical Care in October 1997.
    Efforts are in the final stages to prepare the Healthy 
People 2010 objectives. A draft of the 2010 objectives was 
published for public comment on the September 15, 1998, with 
comments being accepted through December 15, 1998 on over 300 
objectives in 22 focus areas. FDA would lead or co-lead the 
sections on nutrition, food safety, and medical product safety. 
A copy of the draft of the 2010 Healthy People objectives is 
available on the worldwide web at http://www.cfsan.fda.gov--on 
the Center for Food Safety and Applied Nutrition (CFSAN) 
homepage, click on ``Foodborne illness'' and then go further 
down the next page and click on HP2010.

                             Food Labeling

    Food labeling is very important to the elderly. Elderly 
people have a greater need for more information about their 
food to facilitate preparation of special diets, maintain 
adequate balance of nutrients in the face of reduced caloric 
intake, and ensure adequate levels of specific nutrients which 
are known to be less well absorbed as a result of the aging 
process [e.g., vitamin B 12].
    The food label, which is now required on most foods offers 
more complete, useful, and accurate nutrition information to 
help the elderly meet their nutritional needs. The food label 
includes nutrition labeling for almost all foods; information 
on the amount per serving of saturated fat, cholesterol, 
dietary fiber, and other nutrients of major concern to today's 
consumers; nutrient reference values to help consumers see how 
a food fits into an overall daily diet; uniform definitions for 
terms that describe a food's nutrition content [e.g., light, 
low fat, and high-fiber], claims about the relationship between 
specific nutrients and disease, such as sodium and 
hypertension; standardized serving sizes; and voluntary 
quantitative nutrition information for raw fruit, vegetables, 
and fish.
    To help consumers get the most from the food label, 
educational materials have been widely disseminated. Among 
materials now available is a large-print brochure, ``Using the 
New Food Label to Choose Healthier Foods,'' which is easier to 
read for senior citizens who may have vision problems.
    A food label education program has been developed that 
coordinates the efforts of FDA and USDA with various public and 
private sector organizations to educate consumers about the 
availability of new information on the food label and the 
importance of using that information to maintain healthful 
dietary practices. Consumer Research was used to guide the 
development of educational materials and their messages. Print 
and video materials were developed for diverse target 
audiences, emphasizing skills and tips on how to use the food 
label quickly and easily to achieve a healthier diet. The 
agency has released two ``Question and Answers'' documents, 
giving answers to about 400 frequently asked questions.
    FDA's food labeling education program seeks to coordinate 
the Government's efforts with those of the public and private 
sector to insure consistent, action-oriented label education 
messages. A key goal is to promote integrating label education 
into new and existing nutrition education programs for diverse 
target audiences (for example, through national video 
teleconferences on nutrition interventions, children's games 
and nutrition-oriented programs on CD ROMs, and community-based 
programs for multi-cultural populations). Public information 
and education materials are available from FDA's Office of 
Consumer Affairs and have also been posted on CFSAN's home page 
of the World Wide Web (WWW).

                          Dietary Supplements

    The Dietary Supplement Health and Education Act of 1994 
(DSHEA) was signed by the President on October 25, 1994. This 
Act amended the Federal Food, Drug, and Cosmetic Act to alter 
the way the Food and Drug Administration regulates dietary 
supplements and requires the Agency to undertake rulemaking and 
other actions to fully implement the scope of the Act.
    The DSHEA established a new regulatory definition for 
``dietary supplement,'' established a framework for regulating 
the safety of dietary supplements that is different than that 
for conventional food ingredients, defined the term ``new 
dietary ingredient'' and established circumstances under which 
such ingredients can be safely used in dietary supplements, and 
amended the safety provisions of the Act such that FDA must 
establish that a product presents a significant or unreasonable 
risk of illness or injury under the label's conditions of use 
before it can be removed from the marketplace.
    The DSHEA allows dietary supplement manufacturers to make 
certain types of claims for their products. A dietary 
supplement may claim a benefit related to a classical nutrient 
deficiency disease, describe the role of a nutrient or dietary 
ingredient intended to affect the structure or function of the 
body, describe the mechanism by which it acts to maintain 
structure or function, or describe general well-being from 
consumption of a nutrient or dietary ingredient. In order to 
make such claims, manufacturers must have substantiation that 
the claim is truthful and not misleading, the claim must 
contain the mandatory disclaimer stating this statement has not 
been evaluated by the FDA. This product is not intended to 
diagnose, treat, cure, or prevent disease, and the firm must 
notify FDA it is using the claim. However, a firm does not have 
to provide FDA its substantiation for the claim nor get FDA 
approval to use the claim.
    The DSHEA also authorizes FDA to Issue regulations for good 
manufacturing practices for dietary supplements. The Agency 
published an advance notice of proposed rulemaking (ANPR) in 
the February 6, 1997 Federal Register. FDA is reviewing the 
comments received to the ANPR and intends to publish a proposed 
rule. Good manufacturing practices would ensure that dietary 
supplements are manufactured in such a manner that consumers 
can be confident they contain what they purport to contain and 
that they are not adulterated in any way.
    FDA published final labeling regulations for dietary 
supplements in the September 23, 1997 Federal Register. The 
labeling regulations are effective on March 23, 1999 and will 
ensure that dietary supplements are labeled in a clear and 
informative manner. The new labeling requirements should assist 
consumers in making informed choices on whether a particular 
dietary supplement is appropriate for their particular needs.

                           Total Diet Studies

    The Total Diet Study, as part of FDA's ongoing food 
surveillance system, provides a means of identifying potential 
public health problems related to the diets of the elderly and 
other age groups. Through the Total Diet Study, FDA is able to 
measure the levels of pesticide residues, toxic elements, 
chemicals, and nutritional elements in selected foods of the 
U.S. food supply. In addition, the study allows FDA to estimate 
the levels of these substances in the diets of 14 age groups: 
infants 6 to 11 months old; children 2, 6, and 10 years old; 
14- to 16-year-old boys; 14- to 16-year-old girls; 25- to 30-
year-old men; 25- to 30-year-old women; 40- to 45-year-old men; 
40- to 45-year-old women; 60- to 65-year-old men; 60- to 65-
year-old women; men 70 years and older; and women 70 years and 
older. Because the Total Diet Study is conducted yearly, it 
also allows for the determination of trends and changes in the 
levels of substances in the food supply and in daily diets.

               Postmarket Surveillance of Food Additives

    FDA's Center for Food Safety and Applied Nutrition (CFSAN) 
monitors complaints from consumers and health professionals 
regarding food and color additives and dietary practices as 
part of its Adverse Reaction Monitoring System. Currently, the 
database contains 13,158 records. Of the complainants who 
reported their age, approximately 21 percent were individuals 
over age 60. The Special Nutritionals Adverse Event Monitoring 
System (AEMS) may be accessed on the worldwide web at http://
vm/cfsan.fda.gov/-dms/.

                    Medicare Coverage Determinations

    FDA provides representatives and scientific input to the 
Health Care Financing Administrations's Technology Advisory 
Committee (TAC). The TAC is a committee of government 
employees, which advises HCFA on national coverage decisions 
for Medicare recipients. FDA also provides input and expert 
review for technology assessments produced by the Agency for 
Health Care Policy and Research (AHCPR). AHCPR technology 
assessments are used by HCFA and the Civilian Health and 
Medical Program of the Uniformed Services (CHAMPUS) as a basis 
for coverage decisions.
    During the 1995-1996 reporting period, FDA and HCFA 
formulated an arrangement to afford beneficiaries Medicare 
coverage for investigational medical devices determined by FDA 
to constitute only a minor change from an already covered 
device. This arrangement allows manufacturers to validate the 
safety and efficacy of improved products without denying 
coverage during the period of study.

                          Pharmacy Initiative

    During 1995 and 1996, DHHS and FDA have sought to encourage 
greater pharmacy-based counseling. Through speeches, articles, 
and editorials in major medical and pharmacy journals, DHHS and 
FDA have encouraged the increased role of pharmacists, using 
computers to print information to informing patients about the 
uses, directions, risks and benefits of prescription 
medications. The pharmacy profession has responded positively, 
bringing many examples of their initiatives to FDA's attention. 
In particular, several organizations have informed FDA of the 
expanded use of new technology to provide patient instructional 
materials to their customers. In August of 1996 Congress took 
up this issue and developed performance goals for the private 
sector to meet. In December of 1996 the private sector had 
developed an Action Plan with criteria on how to determine the 
usefulness of information for consumers. The Plan would then be 
presented to the Secretary of HHS for concurrence. A survey by 
FDA, with data collected beginning December 1996, showed 67% of 
patients reporting that they received written information with 
their prescription drugs. FDA will conduct studies in the 
future to review the usefulness of that information and will 
continue to work closely with private sector organizations in 
an effort to increase the dissemination of useful information 
to patients about their prescription medications.

                              Health Fraud

    Health fraud is the deceptive promotion and distribution of 
false and unproven products and therapies to diagnose, cure, 
mitigate, prevent, or treat disease. These fraudulent practices 
can be serious and often expensive problems for the elderly. In 
addition to economic loss, health fraud can also pose direct 
and indirect health hazards to those who are misled by the 
promise of quick and easy cures and unrealistic physical 
transformations.
    The elderly, more often than the general population, are 
the victims of fraudulent schemes. Almost half of the people 
over 65 years of age have at least one chronic condition such 
as arthritis, hypertension, or a heart condition. Because of 
these chronic health problems, senior citizens provide 
promoters with a large, vulnerable market.
    To combat health fraud, the FDA uses a combination of 
enforcement and education. In each case, the Agency's decision 
on appropriate enforcement action is based on considerations 
such as the health hazard potential of the violative product, 
the extent of the product's distribution, the nature of any 
mislabeling that has occurred, and the jurisdiction of other 
agencies.
    The FDA has developed a priority system of regulatory 
action based on two general categories of health fraud: direct 
health hazards and indirect hazards. The Agency regards a 
direct health hazard to be extremely serious, and it receives 
the Agency's highest priority. FDA takes immediate action to 
remove such a product from the market. When the fraud does not 
pose a direct health hazard, the FDA may choose from a number 
of regulatory options to correct the violation, such as a 
warning letter, a seizure, or an injunction.
    The Agency also uses education and information to alert the 
public to health fraud practices. Both education and 
enforcement are enhanced by coalition-building and cooperative 
efforts between government and private agencies at the 
national, State, and local levels. Also, evaluation efforts 
help ensure that our enforcement and education initiatives are 
correctly focused.
    The health fraud problem is too big and complex for any one 
organization to effectively combat by itself. Therefore, FDA is 
working closely with many other groups to build national and 
local coalitions against health fraud. By sharing and 
coordinating resources, the overall impact of our efforts to 
minimize health fraud will be significantly greater.
    FDA has worked with the National Association of Attorney's 
General [NAGS] and other organizations to provide consumers 
with information to help avoid health fraud. Since 1986, FDA 
has worked with the National Association of Consumer Agency 
Administrators [NCAA] to establish the ongoing project called 
the NCAA Health Products and Promotions Information Exchange 
Network. Information from FDA, the Federal Trade Commission 
[FTC], the U.S. Postal Service [USPS], and State and local 
offices is provided to NCAA periodically for inclusion in the 
Information Exchange Network. This system provides information 
on health products and promotions, consumer education materials 
for use in print and broadcast programs, and the names of 
individuals in each contributing agency to contact for 
additional information.
    In 1995 and 1996, FDA's Public Affairs Specialists [PASs] 
continued to alert diverse and culturally specific elderly 
populations throughout the United States by sponsoring 
community-based education programs, information exchanges, and 
outreach efforts. Dietary supplements remained a key issue. In 
addition to health fraud workshops and other community-based 
programs, the PASs also convey this important information 
through additional networks such as radio, television shows, 
and public service announcements. With respect to enforcement, 
in 1997 and 1998, the Agency took actions against the 
importation of Corvalolum, a Russian product containing 
dangerous levels of phenobarbital. The Agency issued national 
publicity to alert consumers to the dangers of this product and 
worked with the U.S. Customs Service to immediately confiscate 
this product upon entry into the U.S. In addition, the Agency 
took actions against firms marketing various unproven products 
offered for cancer, AIDS, diabetes, gonorrhea, lupus, 
schizophrenia and other serious disease conditions.

                             Women's Health


Information about drug effects in certain populations.

    Over the past decade there has been growing concern that 
the drug development process does not provide sufficient 
information about drug effects in certain populations, 
including minorities and women of all ages. On September 8, 
1995, the FDA, in an effort to collect this necessary 
information, proposed to amend its regulations regarding the 
format and content of investigational new drug applications 
(INDs) and new drug applications (NDAs). The proposed rule 
would require IND sponsors of drugs and biological products to 
include in their annual reports a characterization of study 
subjects by subgroups, such as age, gender, and race. Sponsors 
would also be required to present safety and efficacy data by 
subgroup when submitting NDAs. This rule has since gone into 
effect and will assist in the determination of the optimal use 
of drugs in special populations which have a variety of factors 
that can lead to different responses to medical products.

Women's health research agenda

    During 1995 and 1996, FDA participated with the NIH Office 
of Women's Health in defining specific objectives of the 
research agenda for the 21st century. The effort culminated in 
plans for a workshop including experts from the federal 
government and universities to be held in 1997. Some specific 
age-related conditions were evaluated including cardiovascular 
and pulmonary diseases, oral health, bone and musculoskeletal 
disorders, kidney conditions, and cancer.

Hispanic women's health conference

    On May 9-10, 1996, the Office of Women's Health sponsored 
the Hispanic Women's Health Conference held in Miami, Florida. 
Over 150 people attended the conference which was designed as a 
grassroots effort to bring together community based 
organizations, academia, federal, state and local agencies and 
public/private health care providers concerned with Hispanic 
women's health issues, many of which affect aging American 
women. The two day meeting featured national and local speakers 
who addressed key Hispanic health concerns in the areas of 
diabetes, heart disease, cancer, mental health, substance 
abuse, osteoporosis, and HIV/AIDS. Its purposes were to create 
an ongoing network of health professionals in Southern Florida 
to address this community's health needs, and to consider 
priority issues on which ongoing public education should occur.

Minority women health empowerment: Workshops

    The office sponsored this series of Conferences in 1995, 
1996 and 1997. The purpose of the workshops was to equip 
minority women, including the aging, in urban areas of the New 
Jersey and Delaware Valley with information on how to take care 
of themselves, how to prevent illness and disease, and what the 
benefits are of early detection and treatment. This project 
targeted women who were at high risk for HIV/AIDS, 
cardiovascular disease, breast and other cancers, and diabetes. 
The programs were conducted in community centers, Head Start 
Centers, local parish halls, school auditoriums, and hospital 
conference rooms. Audiotapes in English and Spanish were given 
to participants at the end of the workshop.

Women's health: Take time to care

    In 1996, the FDA Office of Women's Health (OWH) conceived 
of a new program partnering with American women. In order to 
enhance the health of women, the FDA wanted to provide mid-life 
and older women, particularly in under served populations, with 
the information they need to promote and protect their own 
health. OWH met with 46 advocacy groups representing women, the 
elderly, and disease conditions, to discuss their health 
concerns. The theme, Women's Health: Take Time To Care, will be 
used for a variety of health prevention messages. Women, as 
represented by these organizations, told us that the first 
message should be presented Use Medicines Wisely. As major 
consumers of pharmaceuticals, women and their health are 
significantly effected by the use of medications. In 1997, 
Pilot programs using this message were conducted in Chicago, IL 
and Hartford, CT. FDA provided the printed materials and 
information and community organizations sponsored numerous 
public awareness events. This program will be rolled out 
nationally in 1998 and will be brought to 15 cities, rural 
empowerment zones, and Native-American reservations across the 
country.

``Before time runs out''

    Breast cancer is the number one cause of cancer related 
deaths among African American women. The FDA Office of Women's 
Health provided funds to educate African American women in the 
Houston area about the importance of screening and the impact 
of breast cancer on the African American community through the 
use of a locally-inspired play. This drama, which was written 
and produced by an African American playwright (Thomas 
Meloncon) entitled ``Before Time Runs Out'' was inspired by Mr. 
Meloncon's sister who died of breast cancer. The play was 
followed by a panel discussion and pertinent brochures were 
distributed. This series was presented in selected churches in 
under served communities in Houston in 1996 and 1997.

Public education brochures

    Asian Pacific Islander women have low rates of utilization 
of breast and cervical cancer screening procedures due to 
language barriers and a subsequent lack of understanding of the 
importance of these tests. In 1995, the Office of Women's 
Health sponsored the translation of mammography and cervical 
cancer screening materials into several languages to address 
the needs of linguistically isolated Asian Pacific Islander 
women.

                   Materials, Outreach, and Exhibits

    The FDA Center for Food Safety and Applied Nutrition is 
working with the American Association of Retired Persons (AARP) 
to develop information for seniors on food safety. The project 
will support the United Nation's observation of the 
International Year of Older Persons 1999. AARP has developed a 
program geared toward making seniors better able to manage 
independently in their own homes, and food safety is an 
important component of this effort.
    FDA launched a public awareness campaign on the risk that 
unpasteurized or untreated juices may present to vulnerable 
populations, including the elderly. Educational materials 
including a press kit, consumer brochure, video news release, 
and a public service announcement were distributed to senior 
citizen groups, as well as day care centers, elementary 
schools, state PTA offices and media outlets. AARP and other 
organizations also assisted in distribution of the information.
    FDA issued an advisory that the elderly, children and 
people with compromised immune systems should avoid eating raw 
alfalfa sprouts due to the increased risk of pathogens.
    The Agency routinely develops Talk Papers, Press Releases, 
and FDA Consumer articles that focus on topics of high interest 
to older consumers. During 1998, the Agency issued Talk Papers 
and Press Releases on the FDA approval of the first ultrasound 
device for diagnosing osteoporosis (Sahara Clinical Bone 
Sonometer) that does not involve the use of x-rays; the launch 
of a grassroots campaign, Women's Health: Take Time To Care, 
which is primarily directed to women over age 45 focusing on 
the management of medications for themselves and their 
families; and the FDA approval of the first oral treatment for 
active rheumatoid arthritis (Arava or leflunomide).
    During 1997 and 1998, FDA published articles in the FDA 
Consumer on a wide variety of topics of interest and concern to 
older consumers. The topics of these articles included FDA's 
early warning system for unforeseen medical product problems; 
FDA regulation of label claims linking food with disease 
prevention or better health; testing and treatments for 
prostate cancer; remedies for sleeplessness; new drugs and 
medical devices for treating Parkinson's Disease; new 
medications and therapies for treating serious depression; 
helping caregivers to learn more easily about the latest on 
Alzheimer's; advances in the prevention and treatment of 
stroke; treating back pain; medications and older adults; hair 
replacement; new drugs and medical devices that show promise in 
curbing ventricular arrhythmias; and estrogen replacement 
therapy.
    The Agency has established networks and communication 
channels to reach the national and local aging network with 
consumer-oriented information. By working with a variety of 
external constituencies--consumers, patients, health 
professional community, academia and scientific organizations, 
industry, women's organizations, minority groups, and the 
international community--FDA is able to form the collaborations 
and cooperative arrangements to significantly extend its 
outreach to older consumers. The Agency exhibits at major 
annual meetings of national--such as the American Public Health 
Association--as well as at community events and local health 
fairs sponsored by grassroots organizations.

                        Community-Based Programs

    Public Affairs Specialists, located throughout the country 
in FDA field offices, conducted a variety of community-based 
programs in 1997-1998 to address the health concerns and 
information needs of older Americans. The topics addressed by 
field programs, exhibits and outreach efforts are timely and 
diverse, including such topics as food labels; food safety; the 
safe use of medications; Take Time To Care; health fraud; 
clinical trials; dietary supplements; prostate cancer; 
osteoporosis; breast cancer; arthritis; and cataracts.
    During 1995-1996, FDA Public Affairs Specialists focused on 
informing older Americans about the Nutrition Labeling and 
Education Act and how to use the new food label for a healthy 
or special diet. These Specialists developed information kits 
for older people and distributed these kits in communities 
throughout the country. These kits included wallet cards on the 
new food labeling law; large-print fact sheets; place mats; and 
trainer guides. Senior volunteers were trained in a nutrition 
program sponsored by DHHS Region V Administration on Aging in 
Chicago, Illinois to disseminate information on food labeling 
to senior citizens, especially older people in minority 
communities.
    In 1997-1998, the FDA Public Affairs Specialists used a 
variety of approaches and met with wide diversity of elderly 
organizations on three key issues--food safety, Take Time To 
Care and safe medication use, and health fraud. Food safety 
presentations and roundtable discussions provided valuable 
vehicles for communicating the safe food handling message of 
the ``Fight BAU campaign to senior citizens and to food service 
workers. Take time To Care and the safe medication use message 
were held throughout 1997-1998. This program, which is directed 
primarily to older women, was held at locations throughout the 
country--the programs held in San Francisco are representative 
of the Take Time To Care Programs held in other locations where 
the program was held from March 21-28, 1998. During this time, 
approximately 50 events were held, with 100,000 brochures being 
disseminated, and a wide diversity of community organizations 
participating--such as American Diabetes Association, American 
Indian Family Health Center, Area Agency on Aging, Center for 
Elder's Independence, HealthNet Seniority Plus, National 
Council of Negro Women, Older Women's League, San Francisco 
General Hospital, and the YWCA. Numerous food safety 
presentations to Meals-on-Wheels programs and senior centers in 
the San Francisco District area were conducted. The 
presentations focused on food microbiology and prevention of 
foodborne illness through proper food handling techniques. 
Fight BAC brochures were distributed at each location. The FDA 
Public Affairs Specialists continue to work with community-
based organizations to cooperate in communicating important 
information about contemporary health frauds and how to avoid 
them.

                  HEALTH CARE FINANCING ADMINISTRATION

    The mission of the Health Care Financing Administration 
(HCFA) is to promote the timely delivery of appropriate, 
quality health care to its beneficiaries-over 75 million aged, 
disabled, and poor Americans.
    Medicaid and Medicare ore the principle sources of funding 
long-terrn care in the United States. The primary types of care 
reimbursed by these programs of HCFA are a variety of 
institutional (e.g., skilled nursing facilities (SNFs), 
intermediate care facilities for the mentally retarded (ICFs/
MR), inpatient rehabilitation, and home and community-based 
care services (e.g., home health, personal care).
    HCFA conducts demonstration projects that demonstrate and 
evaluate optional coverage, eligibility delivery system, 
payment and management alternatives to the present Medicare and 
Medicaid programs. HCFA also conducts research studies on a 
range of issues relating to long-term care services and their 
users, providers, quality and costs.
    Information follows on specific HCFA demonstrations and 
research:

Wisconsin partnership program

    Project No.: 11-W-00123/05
    Period: October 16, 1998-December 31, 2004
    Funding: $0
    Award: Waiver-Only
    Principal Investigator: Steve Landkamer
    Awardee: Wisconsin Division of Health and Family Services, 
1 West Wilson Street, Madison WI 53701
    HCFA Project Officer William D. Clark, Office of Strategic 
Planning
    Description: The State of Wisconsin submitted an 
application to HCFA in February 1996 for Medicare and Medicaid 
demonstration waivers to establish a ``Partnership'' model of 
care for dually entitled nursing home certifiable beneficiaries 
who are either under age 65 with physical disabilities or frail 
elders. Waivers were approved for this demonstration on October 
16, 1998. One site (Elder Care--Madison) became operational 
under Medicare and Medicaid waivers on January 1, 1999; 
Community Care for the Elderly--Milwaukee is expected to become 
operational on March 1, 1999. Community Living Alliance--
Madison and Community Health Partnership--Eau Claire are 
expected to become operational in spring, 1999.

The partnership model

    The ``Partnership'' model is similar to the Program for 
All-inclusive Care for the Elderly (PACE) model in the use of 
multi-disciplinary care teams, prepaid capitation, and 
sponsorship by community-based service providers. This model is 
a variant of PACE. Rather than the physician being co-located 
with the multi-disciplinary team, the ``Partnership'' program 
will enable participants to use a physician of their choice in 
the community who agrees to participate as a contractor with 
the Partnership Plan. This model utilizes nurse practitioners 
and other multi-disciplinary team members to provide continuity 
and coordination with the physicians who elect to participate. 
The Partnership also will rely less on adult day care centers 
than do PACE sites, as the organizing focus for the provision 
of care. The model is proposed as a fully voluntary enrollment 
model for 1,200 beneficiaries.

Benefits

    All Medicare and Medicaid covered benefits are offered 
under full capitation for eligible participants who elect to 
enroll.

Four demonstration sponsors

    Partnership sites for the frail elderly are the existing 
PACE sites in Milwaukee and Madison. The Partnership model for 
people with disabilities will utilize Centers for Independent 
Living in Madison and Eau Claire. The model for people with 
disabilities is believed to be the first site in the nation for 
fully capitated Medicare and Medicaid services for people with 
physical disabilities.
    Status: The project is in the early development stage.

Multi-state evaluation of dual eligibles demonstrations

    Period: 9/30/1997-9/29/2002
    Funding: $5,623,414
    Contractor: University of Minnesota, 420 Delaware Street, 
SE., Minneapolis, MN 55455-0392
    Investigator: Robert L. Kane, M.D.
    The Department of Health and Human Services has been 
encouraging efforts to better coordinate services provided to 
individuals who are eligible for both Medicare and Medicaid, 
also known as dual eligibles. As a result of this policy, a 
number of demonstration applications have been submitted and 
the Health Care Financing Administration has approved or 
expects to approve several of these demonstrations to test 
various models of managed care that are specifically directed 
at better coordinating care received by dual eligibles. These 
include the Minnesota Senior Health Options Program, the 
Wisconsin Partnership Program, Monroe County Continuing Care 
Networks Demonstration (New York), and the Colorado Integrated 
Care and Financing Project. While directed at different 
populations and having very different operational approaches, 
each is designed to use a managed care approach to better 
integrate Medicare and Medicaid services to meet the needs of 
dual eligibles more efficiently and effectively.
    This evaluation is designed to assess the impact of dual 
eligible demonstrations in the States of Minnesota, Wisconsin, 
New York, and Colorado. Analyses will be conducted for each 
State and across States. The quasi-experimental design will 
utilize surveys, case studies, and Medicare and Medicaid data 
for analysis. Major issues to be examined include the use of a 
capitated payment strategy to expand services while reducing/
controlling costs, the use of case management techniques and 
utilization management to coordinate care and improve outcomes 
and the goal of responding to consumer preferences while 
encouraging the use of noninstitutional care. A universal theme 
to be developed is the difference between managing and 
integration.
    Beneficiary surveys and case study interviews are in 
progress in the Minnesota demonstration. Preliminary 
discussions have been held between the contractor and 
representatives from the demonstrations in Wisconsin and New 
York. Summaries and findings from completed work to date will 
be included in the First Annual Report to HCFA.

Multi-State dual eligible data base and analysis development

    Project No.: 500-95-0047/03
    Period: September 1997-September 2000
    Funding: $1,350,000
    Award: Task Order
    Principal Investigator: Don Lara
    Awardee: Mathematica Policy Research, Inc., 101 Morgan 
Lane, Plainsboro, NJ 08536
    HCFA Project: William D. Clark, Officer, Office of 
Strategic Planning
    Description: This project will use available Medicare/
Medicaid-linked statewide data in 10-12 States to develop a 
uniform database that can be used by States and the Federal 
government to improve the efficiency and effectiveness of the 
acute- and long-term care services to persons eligible for both 
Medicare and Medicaid (dual eligibles). It will also conduct 
analyses derived from these data to strengthen the ability to 
develop risk-adjusted payment methods and deepen the 
understanding of Medicare-Medicaid program interactions as they 
relate to access, costs, and quality of service. Finally, it 
will recommend longer range options that will improve the 
usefulness of the database for operational and policy purposes.
    Status: The project is constructing a multi-State dual 
eligible database and beginning their analyses. Results from 
some of the studies conducted in this contract are anticipated 
in early 2000.

Continuing care networks demonstration, Monroe County, New York

    The Health Care Financing Administration is reviewing a 
demonstration proposal entitled: ``Continuing Care Networks 
Demonstration (CCN): Monroe County, New York'' which was 
submitted by the New York State Department of Health and the 
Community Coalition for Long Term Care (CCLTC). The CCN 
project, a 5-year demonstration, is designed to test the 
efficiency and the effectiveness of financing and delivery 
systems which integrate primary, acute, and long-term care 
services under combined Medicare and Medicaid capitation 
payments. Participants will be both Medicare only, and dually 
eligible Medicare/Medicaid beneficiaries, who are 65 or older. 
The State is proposing that the CCNs will enroll, over a five-
year period, at least 10,000 Medicare-only and dually eligible 
Medicare/Medicaid beneficiaries in Monroe County, New York. 
Enrollment will be voluntary for all participants.
    The State is proposing that CCN participants be eligible 
for all Medicare Part A and Part B covered services. Medicaid 
participants will be eligible for the full range of Medicaid-
covered services in the New York State Plan, including long 
term benefits as provided under the State's 1915 waiver 
program. Medicare enrollees will be offered the same package of 
chronic (long-term) care benefits as is available to the dually 
eligible participants. Payment for the benefit package will be 
either in the form of a capitation premium equivalent to the 
Medicaid impaired-in-the-community capitation rate, or on a 
private pay, fee-for-service basis from CCN providers. A 
limited chronic care benefit of up to $2,600 per year (and not 
to exceed a $6,000 lifetime maximum) will be available to all 
who join the CCN as community-based unimpaired participants on 
enrollment. The benefit is designed to prevent, or delay, 
functional decline among members who are considered to be at 
risk of future institutionalization.
    All enrollees will complete a Health Assessment 
Questionnaire at the time of enrollment. The questionnaires 
will be reviewed by the care management staff to determine the 
level of services needed, based on risk targeting criteria 
developed for this project. Depending upon the results of the 
risk targeting process, the care manager may arrange for an 
assessment to be performed. The proposed assessment instrument, 
the DMS-1, is currently used State-wide to assess eligibility 
for both the Long Term Home Health Care Program, and, beyond a 
certain score, nursing home admission. Since the DMS-1 
assessment will be used for both care planning and determining 
the assessed enrollee's payment cell, the tool will be 
administered under the CCN demonstration, by designated project 
staff from an independent assessment organization.
    Medicare and Medicaid payments will be capitated. Existing 
county rate book rates, established as a result of the Balanced 
Budget Act of 1997, will be used for Medicare. The county rate 
book rates will be multiplied by a combination of existing 
AAPCC adjustors and additional adjustors which reflect three 
levels of impairment (based on the DMS- I score) within the 
population that could be certified for nursing home admission. 
Adjustors for the ``unimpaired/non-Medicaid'' and ``unimpaired 
Medicaid'' categories are lower than existing AAPCC adjustors 
to balance the higher adjustors being proposed for those 
enrollees who are living in the community, but could be 
certified for nursing home admission. There will be three 
separate categories for Medicaid rates: nursing facility 
residents, beneficiaries living in the community who could be 
certified for nursing home admission, and unimpaired 
beneficiaries.
    The State is hypothesing that combined capitated payments 
from Medicare and Medicaid coupled with an integrated service 
delivery system will facilitate more rational, efficient, and 
cost-effective clinical approaches to providing health services 
for older persons, including those who are functionally 
impaired.

Evaluation of the nursing home case-mix and quality demonstration

    Project: 500-94-0061
    Period: 9/30/1994-9/29/1999
    Funding: $2,980,219
    Award: Contract
    Principal Investigator: Robert J. Schmitz, Ph.D.
    Awardee: Abt Associates, Inc., 55 Wheeler Street, 
Cambridge, MA 02138-1168
    HCFA Project Officer: Edgar A. Peden REG/DPR
    Description: Using data from the Nursing Home Case-Mix and 
Quality (NHCMQ) Demonstration, HCFA is evaluating the new 
practice of paying skilled nursing facilities (SNFs) for 
Medicare skilled nursing services on a prospective basis. Prior 
to July 1, 1998, SNFs were reimbursed on a retrospective basis 
for their reasonable costs. Since that date, however, following 
methods used in the NHCMQ demo, a new prospective methodology 
has been implemented. Under this methodology, patients are 
classified into resource utilization groups which are then used 
to calculate each facility's case mix. HCFA then pays 
facilities for each covered day of care, according to the case 
mix of patients residing there on any given day. Though some 
costs will continue to be paid on a retrospective cost basis 
under the demonstration, the prospective rate will eventually 
include inpatient routine nursing costs and therapy costs. To 
guard against the possibility that inadequate care would be 
provided to patients with heavy care needs, a system of quality 
indicators has been developed that will be used to monitor the 
quality of care. The demonstration project which led to the 
current program was implemented in six States (Kansas, Maine, 
Mississippi, New York, South Dakota, and Texas) in the summer 
of 1995, with Medicare-certified facilities in these States 
being offered the opportunity to participate on a voluntary 
basis. The evaluation of this demonstration project seeks to 
estimate specific behavioral responses to the introduction of 
prospective payment and to test hypotheses about certain 
aspects of these responses. The principal goal of the 
evaluation of the NHCMQ Demonstration is the estimation of the 
effects of case-mix-adjusted prospective payment on the health 
and functioning of nursing home residents, their length of 
stay, and use of health care services; on the behavior of 
nursing facilities; and on the level and composition of 
Medicare expenditures.
    Status: The evaluation design has been finalized, interim 
analyses of admitting patterns and select outcomes have been 
undertaken, and visits to demonstration and non-demonstration 
facilities have been conducted in order to understand provider 
response to the payment demonstration. Current analytic 
activities center around database construction and analysis of 
the third phase of the demonstration, which bundled skilled 
therapy services into the prospectively paid routine rate. Of 
special interest is the analysis of primary data regarding the 
provision of professional therapy services from both 
demonstration sites and comparison sites. This primary data 
collection activity was completed in January, 1999, and will 
serve to augment Medicare claims data, which may not offer 
reliable information on the quantity and duration of 
professional therapies. Another key issue being evaluated is 
the probability of patient discharge or transfer under case-
mix-adjusted prospective payment.

Case-mix adjustment for a national home health prospective payment 
        system

    Project: 500-96-0003/02
    Period: 7/26/1996-4/30/2000
    Funding: $2,966,5524
    Award: Task Order
    Principal Investigator: Henry Goldberg
    Awardee: Abt Associates Inc., 55 Wheeler Street, Cambridge, 
MA, 02138-1168
    HCFA Project Officer: Ann Meadow, Sc.D. REG/DPR
    Description: The primary focus of this study is to 
understand existing variation in home health resource patterns 
and to use this information to develop a case-mix adjustment 
system for a national home health prospective payment system 
(PPS). In this study, the Outcome and Assessment Information 
Set (OASIS), which has been developed for outcome-based quality 
assurance and improvement for Medicare home health agencies, is 
being examined to see whether items included in this instrument 
will be useful for case-mix adjustment. Detailed information, 
including information on resource utilization and additional 
items needed for case-mix adjustment not included on OASIS, is 
being collected from participating agencies.
    Status: Ninety agencies from eight States were recruited 
and trained in the spring and summer of 1997. All agencies 
began data collection on a six-month cohort of new admissions 
to home care beginning in October 1997. Data collection is 
scheduled to end in the spring of 1999. Analysis to date has 
resulted in a viable, clinically coherent system of 80 case mix 
groups that explains more than 30% of the variation in resource 
use on a development sample drawn from the cohort members. 
Resource use is measured for 60-day periods of care, to conform 
to the planned unit of payment under the forthcoming national 
PPS. Selected OASIS assessment items, collected at the start of 
care, are used in the grouping system. The case mix items fall 
into three major domains: clinical factors, functional-status 
factors, and utilization factors. Within each domain, a 
parsimonious set of items is summarized into a score for the 
patient. In two of the domains, scores are partitioned into 
four levels corresponding to high, moderate, low, and minimal 
impact, based on the relationship of the score to resource 
utilization. In the third domain, scores are partitioned into 
five impact levels. A patient's combination of levels on all 
the three domains identifies the group into which the patient 
is classified for purposes of case-mix adjusting the 
prospective payment amount. Under this system, the patient's 
case mix classification is updated at the end of the payment 
period to reflect the actual amount of home therapy services 
received during the 60-day payment period. This information is 
necessary to arrive at a final score for the utilization 
domain.
    Results of the study to date are described in two reports:
          Case-Mix Adjustment for a National Home Health 
        Prospective Payment System: First Interim Report, July, 
        1998 (revised December, 1998)
          Case-Mix Adjustment for a National Home Health 
        Prospective Payment System: Second Interim Report, 
        January 25, 1999
    A third interim report is expected early in 1999.

Maximizing the cost effectiveness of home health care: The influence of 
        service volume and integration with other care settings on 
        patient outcomes

    Project: 17-C-90435/8
    Period: 9/1/1994-12/31/1999
    Funding: $1,496,245
    Award: Cooperative Agreement
    Principal Investigator: Robert Schlenker, Ph.D.
    Awardee: Center for Health Policy Research, 1355 South 
Colorado Boulevard, Suite 706, Denver, CO 80222
    HCFA Project Officer: Ann Meadow, Sc.D., REG/DPR
    Description: Home health care (HHC) has been the most 
rapidly growing component of the Medicare budget in recent 
years. The rapid growth in home health use has occurred despite 
limited evidence about the necessary volume of HHC to achieve 
optimal patient outcomes and whether it substitutes for more 
costly institutional care. Little is known about integrating 
HHC with care in other settings to reduce overall health care 
costs. The central hypotheses of this study are that volume-
outcome relationships are present in HHC for common patient 
conditions; that upper and lower volume thresholds exist that 
define the range of services most beneficial to patients; and 
that a strengthened physician role and better integration of 
HHC with other services during an episode of care can optimize 
patient outcomes while controlling costs. To test these 
hypotheses, a target sample size of 3,600 patient records has 
been set, to be gathered from agencies in 20 States. Trained 
data collectors at each agency will record patient health 
status and service information between HHC admission and 
discharge to assess patient outcomes and costs within the HHC 
episode. Long-term, self-reported outcomes will be assessed 
from telephone interview data at HHC admission and from 6-month 
follow ups. These primary data concerning patient status and 
outcomes will be combined with Medicare claims data over the 
episode of care to assess the relationship between service 
volume in HHC and both patient outcomes and costs. Analysis of 
data relating to physician involvement and the sequence of use 
of other providers will address issues of integration with 
other services.
    Status: Study Paper 1, Research Design Update, which 
summarized the research design and its evolution from the 
original proposal, was finalized in September, 1998. Primary 
data collection ended in late 1998. An interim, descriptive 
report on a subsample of 1,000 patients is scheduled for 
delivery early in 1999.

Evaluation of phase 11 of the home health agency prospective payment 
        demonstration

    Project: 500-94-0062
    Period: 9/30/1994-9/29/1999
    Funding: $3,732,642
    Award: Contract
    Principal Investigator: Valerie Cheh, Ph.D.
    Awardee: Mathematica Policy Research, Inc., P.O. Box 2393, 
Princeton NJ 08543-2393
    HCFA Project Officer: Ann Meadow, Sc.D., REG/DPR
    Description: This contract is evaluating Phase II of the 
Home Health Agency Prospective Payment Demonstration, under 
which home health agencies (HHAs) are paid on a prospective 
basis for an episode of care reimbursed by the Medicare 
program. (Phase I tested per-visit prospective payment for home 
health agencies.) Ninety-one agencies from five sites--
California, Florida, Illinois, Massachusetts, and Texas--were 
randomly assigned to either the treatment group (PPS payment, 
48 agencies) or the control group (conventional cost-based 
reimbursement, 43 agencies). The agencies phased in to the 
demonstration at the beginning of their 1996 fiscal year. 
Treatment-group agencies can reduce the cost of care they 
provide during a 120-day payment period by reducing visits, 
changing the mix of visits to make less costly visits a larger 
proportion of visits, reducing per-visit costs, or some 
combination of all three. The cost-reducing activities raise 
the possibility that quality of care might deteriorate under 
episode-based payment. Quality impacts, along with cost, 
utilization, and qualitative, behavioral effects, are the focus 
of the evaluation. The findings will indicate not only the 
overall effects of the change in payment methodology, but also 
how the effects are likely to vary with the characteristics of 
agencies and patients.
    Status: Interim findings from the evaluation based 
primarily on the first 8 to 15 months of demonstration 
operations are described in six documents:
          Transition Within a Turbulent System: An Analysis of 
        the Initial Implementation of the Per-episode Home 
        Health Prospective Payment Demonstration, August 6, 
        1997
          Preliminary Report: The Impact of Prospective Payment 
        on Medicare Home Health Quality of Care, January 30, 
        1998
          Preliminary Report: The Impact of Prospective Payment 
        on the Cost per Episode: Striking the Balance Between 
        Decreasing Use and Increasing Cost, Draft Report, 
        February 26, 1998
          Preliminary Report: The Impact of Prospective Payment 
        on Medicare Home Health Use--Promising Results for a 
        Future Program, July 22, 1998
          Preliminary Quality Results from Four-Month Survey, 
        Memorandum, November 24, 1998
          The Impact of Prospective Payment on Medicare Service 
        Use and Reimbursement During the First Demonstration 
        Year, December 1998.
    Findings from the interim analysis of cost impacts suggest 
that, on average, prospective payment reduced the cost of care 
during the 120-day episode period by $419, or 13 percent. The 
impact on cost was similar across different types of agencies, 
except that small agencies (less than 30,000 visits in the year 
before the demonstration) exhibited a significantly smaller 
effect than large agencies. Findings from the utilization study 
suggest that the per-episode group of home health agencies was 
able to reduce the number of visits provided during the 120-day 
episode period by 17 percent and the time from admission to 
discharge by 15 percent. The proportion of patients receiving 
care in each home health discipline changed little under 
episode payment. The utilization findings generally applied to 
agencies regardless of size, nonprofit status, affiliation 
status (hospital or freestanding), or use pattern (that is, 
whether the agency provided more or less than the average 
number of visits during a base year, given its case mix).
    The reduction in visits has not led to compensating 
utilization in other parts of the health care system. An 
analysis of utilization and reimbursement for Medicare-covered 
services other than home health found that prospective payment 
did not affect the use of, or reimbursement for, such services 
during the 120-day episode period. An investigation of 
spillover effects in settings not covered by Medicare similarly 
found no compensating utilization. For example, prospective 
payment did not affect the likelihood of receiving non-
residential services such as personal care aides and adult day 
care, based on results from a patient survey. These findings 
suggest that a reduction in home health utilization at the 
level observed under the demonstration does not adversely 
affect care quality or shift costs to services in other 
settings. Other interim analyses of quality impacts found few 
differences in patient outcomes between treatment and control 
agencies, and when differences were found, they were small. 
Analysis of claims data indicated that PPS patients have 
significantly lower emergency room use. There were no 
significant differences due to PPS in any other outcomes 
studied from the claims data, including institutional 
admissions for a diagnosis related to the home health 
diagnosis, and mortality.
    Results from the first patient survey on client 
satisfaction suggested that both treatment and control group 
clients were generally satisfied. On three specific components 
of satisfaction with agency staff, treatment-group clients were 
found to be somewhat less satisfied than control group clients, 
although satisfaction levels were quite high in both groups. 
Measures of health and functional outcomes from the survey 
offered equivocal evidence for small negative effects of 
prospective payment in a few of the functional outcomes. These 
results are preliminary and require further study in a planned 
follow up survey. Half of the treatment agencies selected for 
the case study early in the demonstration reported plans for 
specific initiatives to reduce per-episode costs spurred by 
their participation in the demonstration project. From the case 
studies, the evaluators concluded that treatment agencies were 
not planning to change their behavior in ways that threatened 
access or quality of care.
    Subsequent evaluation reports will focus on utilization, 
cost, and quality effects beyond the 120-day episode period. 
There will be further case study results on agency response to 
the demonstration and an extension of previous work on cost 
impacts to include an analysis of agencies' financial 
performance. Finally, supplementary analyses will consider the 
representativeness of the demonstration sample and the patient 
selection behavior of agencies.

Evaluation of the program of all-inclusive care for the elderly (PACE)

    Project: 500-96-0003/04
    Period: 4/23/1997-3/31/1999
    Funding: $1,081,029
    Award: Task Order
    Principal Investigator: David Kidder, Ph.D.
    Awardee: Abt Associates, Inc., 55 Wheeler Street, 
Cambridge, MA 02138-1168
    HCFA Project Officer: Fred Thomas, REG/DPR
    Description: The Evaluation of the Program of All-inclusive 
Care for the Elderly (PACE) consists of both qualitative and 
quantitative components. The purpose of the qualitative 
component is to examine, in detail, the structure and process 
of case management as well as gain a better understanding of 
the factors that drive interdisciplinary team decision-making 
in the PACE model. Since enrollment in PACE has been lower than 
originally expected, except for On Lok, the first part of the 
quantitative part of the evaluation of PACE is examining the 
decision to participate in PACE. This is particularly important 
given the anomaly of under-enrollment in virtually all long-
term care alternatives, as well as the policy interest in 
encouraging increased use of managed care. In the evaluation, 
the process by which people come to participate in PACE is 
modeled. The ``refusers'' or those who apply to PACE and pass 
the initial screening eligibility criteria but do not actually 
enroll in the program serve as the comparison group for the 
evaluation of the impact of PACE. The impact evaluation of PACE 
is addressing a broad range of questions including:
          Does the government spend less on PACE clients than 
        it would have spent on them in the absence of PACE?
          Does the PACE program spend no more on PACE clients 
        than the capitation amount?
          Does PACE alter the mix of services provided?
          Does the quality of life and satisfaction with 
        services increase for participants and family members?
          Does PACE impact the presence and amount of formal 
        in-home care, formal care outside the home, informal 
        in-home care and informal care outside the home?
          How does PACE affect the health status and functional 
        status of PACE participants?
    Status: All of the data collection for this project has 
been completed and the contractor is analyzing the impact of 
PACE on Medicare costs. A final report entitled, ``The Impact 
of PACE on Participant Outcomes'' has been received. Briefly, 
this study found that compared to the comparison group: (1) 
PACE enrollees had much lower rates of nursing home and 
inpatient hospital utilization, and higher rates of ambulatory 
care, (2) PACE enrollees reported better health status and 
quality of life, (3) PACE participants had lower mortality 
rates. The benefits of PACE appeared to be magnified for those 
participants with high levels of physical impairment. Work 
continues on the study of the cost effectiveness of PACE and a 
final report on this issue is expected before March 31, 1999.
    Project: 500-96-0010/02
    Period: 9/12/1997-6/30/1999
    Funding: $178,125
    Award: Task Order
    Principal Investigator: Steven Garfinkel
    Awardee: Research Triangle Institute, PO Box 12194, 
Research Triangle Park, NC 27709-2194
    HCFA Project Officer: Fred Thomas REG/DPR
    Description: The purpose of this task order is to: (1) 
compare Medicare costs for the population that could be 
certified for nursing home admission to costs for the overall 
Medicare population; and (2) make recommendations regarding an 
appropriate frailty adjuster for this population. Currently, 
the Program of All-inclusive Care for the Elderly (PACE) 
demonstration projects receive a frailty adjuster of 2.39. This 
project will determine whether this is an appropriate adjuster, 
using data from the National Long-term Care Survey and the 
Medicare Current Beneficiary Survey.
    Status: The final report was submitted on December 30, 
1998. The study found that there is significant variation among 
States in the manner in which they determine the population 
that could be certified for nursing home admission. The 
application of these various definitions to available survey 
data indicates that there is a natural clustering of results, 
despite the apparent difference among definition formats. 
Marginal cost differences between those who could be certified 
for nursing home admission and individuals who could not can be 
explained in part by key variables: age, sex, functional 
impairment, and the level of recent health service utilization. 
With no prior risk adjustment, the data suggest that an average 
frailty factor of about 200% is appropriate. However, this 
factor should be adjusted for the profile of participants at 
each site,

Evaluation of the District of Columbia's demonstration project, managed 
        care system for disabled and special needs children

    Project: 500-96-0003/03
    Period: 9/25/1996-3/24/2000
    Funding: $1,397,452
    Award: Contract
    Principal Investigator: David Kidder, Ph.D.
    Awardee: Abt Associates, Inc., 55 Wheeler Street, 
Cambridge, MA 02138-1168
    HCFA Project, Officer Fred Thomas REG/DPR
    Description: The District of Columbia submitted a waiver-
only request for Medicaid waivers under section 1115(a)(1) for 
a 3-year demonstration project to test the efficacy of a 
managed care service delivery system designed for children and 
adolescents under the age of 22 who are eligible for Medicaid 
and are considered disabled according to Supplemental Security 
Income (SSI) Program guidelines. This study represents a unique 
opportunity to examine the experiences of a managed-care system 
with voluntary enrollment of children with disabilities. The 
project, which seeks to integrate acute- and long-term-care 
services for children with disabilities into a single capitated 
payment methodology, is the first approved demonstration of its 
kind. The information gathered will be used to inform both 
State and Federal policy makers who have increasingly come to 
regard managed care as a mechanism to contain growing health 
care expenditures. This study will provide for a special 
analysis of the enrollment and disenrollment processes, as well 
as of the project's implementation process (including 
enrollment and participation, services/benefits, provider 
participation and training, organizational and administrative 
issues, contracting and risk-sharing arrangements, provider fee 
schedules, community involvement, and quality assurance, 
administrative and data management systems). Outcome analyses 
will focus on enrollee/family outcomes (including care 
management, service utilization and costs, enrollee/family 
satisfaction, quality of care and health status indicators, 
access to care, and family/informal care giving), 
organizational outcomes (including an analysis of Health 
Services for Children with Special Needs, Inc.'s (HSCSN) 
financial performance, and the risk sharing arrangements 
between HSCSN and the District of Columbia), and the impact 
upon the provider community. Data for the evaluation will come 
from surveys (primary data collection), case study interviews, 
focus groups, Medicaid Management Information System and 
encounter data, and SSI data.
    Status: The first and second year reports have been 
completed. In the first year, considerable time was spent in 
planning and finalizing details of the research design. 
Interviews were conducted with HSCSN providers in order to 
obtain information on their incentives and how they participate 
in HSCSN's care management system. The evaluators also 
conducted the first set of focus groups with parents. In the 
second year, additional interviews were conducted with 
providers and participants. Quantitative analyses were 
increased, and the survey component neared completion. The 
HSCSN and the District Medicaid program both experienced major 
reorganizations during the year, which may have led to 
difficulties in coordination. The HSCSN reorganization was also 
accompanied by changes in strategy and operations, which may 
have contributed to improved financial performance. In July, 
1998, the District requested and subsequently received a one-
year extension to develop a replacement waiver. There is 
increasing evidence that care managers experienced an overload 
of cases during the past year, and the HSCSN has both 
recognized and begun to address this problem. Evidence from two 
sources suggests that selection for the demonstration is 
adverse. Most parents believe that their children have been 
better off since joining the plan.

Evaluation of the medicare+choice risk adjustment method

    Project: 440-98-40200
    Period: 8/5/98-2/5/99
    Funding: $24,900
    Award: Purchase Order
    Principal Investigator: Bill Bluhm, FSA, MAAA
    Awardee: The American Academy of Actuaries, 1100 17th St, 
NW, Washington, DC 20036
    HCFA Project Officer: Fred Thomas, REG/DPR
    Description: The Balanced Budget Act of 1997 requires 
Medicare to implement a risk-adjusted payment system for its 
Medicare-Choice program by January 1, 2000. The BBA requires 
the Secretary to write a Report to Congress that outlines the 
method of risk adjustment that will be used. An independent 
actuarial evaluation of the soundness of this method must be 
attached to this Report to Congress. The American Academy of 
Actuaries will evaluate the risk methodology and soundness of 
the proposal and will prepare a report of their findings.
    Status: The American Academy of Actuaries has formed a Work 
Group to review and evaluate the risk adjustor method. HCFA 
provided documentation of the methodology, met with the Work 
Group, and answered questions posed by the group. The final 
report is expected before January 31, 1999.

Design of an integrated post acute care system

    Project: 500-96-0008/04
    Period: 9/30/1997-9/29/1999
    Funding: $880,427
    Award: Task Order
    Principal Investigator: Robert L. Kane, M.D.
    Awardee: University of Minnesota, 420 Delaware Street, SE., 
Minneapolis, MN 55455-0392
    HCFA Project Officer: Fred Thomas, REG/DPR
    Description: HCFA intends to create an infrastructure of 
post-acute and long-term care delivery and payment systems that 
are better integrated and more flexible in meeting the needs of 
beneficiaries with chronic illnesses and disabilities. The 
transition from our current benefit and provider-based system 
to a beneficiary centered system requires several elements--an 
assessment tool that can be used and shared across provider 
types, and more flexible benefit packages. Funding based on 
beneficiary health and functional needs, and case management 
that involves formal and informal caregivers in care planning, 
and supports and encourages, where appropriate, beneficiaries 
to direct their own care. Additional work that incorporates 
beneficiary preferences into outcome measures, as well as 
further attempts to differentiate outcomes by post-acute care 
modality for different patient conditions, is also needed. The 
purpose of this project is to design several elements needed in 
a more integrated system--an assessment tool, potential case 
management models, appropriate payment systems, and outcome 
measures that cross settings and incorporate beneficiary 
preferences, with the ultimate intent of pilot testing and 
refining these elements in a demonstration. A second purpose of 
this project is to design an optional demonstration that tests 
the feasibility and effectiveness of creating a more integrated 
post-acute care system.
    Status: Work has begun on developing potential case 
management models as well assessment instrument.

94-074  Design and implementation of medicare home health quality 
        assurance demonstration

    Project: 500-94-0054
    Period: 9/30/1994-12/31/2000
    Funding: $4,340,309
    Award: Contract
    Principal Investigator: Peter W. Shaughnessy, Ph.D.
    Awardee: Center for Health Policy Research 1355 South 
Colorado Boulevard, Suite 706 Denver, CO 80222
    HCFA Project Officer: Armen Thoumaian, Ph.D., QCSQ
    Description: Currently, Medicare's home health survey and 
certification process is primarily focused on structural 
measures of quality. Although this process provides important 
information about home health care, an approach based on 
patient outcome measures would substantially increase the 
Medicare program's capacity to assess and improve patient well-
being. To address this need, the Medicare home health quality 
demonstration will test an approach to developing outcome-
oriented quality assurance and promoting continuous quality 
improvement in home health agencies.
    The demonstration was implemented through a contract with 
the Center for Health Policy Research (CHPR), University of 
Colorado, to determine the feasibility of and establish the 
methodology for national approach for outcome-based quality 
improvement (OBQI). Outcome measures are computed using the 
Outcomes and Assessment Information Set (OASIS), a set of 
valid, reliable measures, developed through research efforts 
conducted for HCFA by the Center for Health Policy Research 
(CHPR) (1988-1994) to assess patient outcomes to care provided 
in the home.
    Under the demonstration, staff of 50 regionally dispersed 
home health agencies (HHAs) complete the OASIS data collection 
instrument for each patient at the start of care and at 60-day 
intervals (up to and including discharge). The OASIS data is 
submitted monthly to CHPR for validation and storage. There are 
three rounds of data analysis and outcome report generation 
each based on 12 months of data.
    The general framework for OBQI is a two stage process of 
continuous quality improvement. Data is collected at regular 
time intervals for all adult patients. Risk adjustment is 
undertaken and outcome reports are produced for specific 
patient conditions (``focused reports'') and for all adult 
patients (``global reports''). These reports are provided to 
the participating HHAs and are used to determine which outcomes 
are inferior, there by, providing a focus for agency staff to 
target problematic care. Exemplary care is also investigated in 
order to reinforce positive care behaviors. A plan of action 
allows the agency to monitor the changes in care behavior and 
through the next round of data collection, determine if 
targeted outcomes have improved and if reinforcement activities 
have maintained exemplary outcomes.
    Status: Fifty agencies in 26 States were phased into the 
demonstration beginning January, 1996. In January, 1997 the 
demonstration agencies received their first outcome reports and 
developed plans of actions to improve care for two patient 
outcomes during 1997. Agencies received their second annual 
reports in May, 1998 which contained baseline comparisons from 
1997 and will receive their third and final reports in May, 
1999. The original contract was modified extending it to 
September, 30, 2000. In August, 1998, the contract was further 
modified to provide assistance in the nationwide implementation 
of OASIS collection and reporting with funding increased to a 
total of $4,340,000. A final report on the evaluation of the 
demonstration effort is expected by the Summer, 2000.
    Research Plan ID: 2626.11

Program of All-Inclusive Care for the Elderly (PACE) Quality Assurance

    Period: 9/24/1990-6/30/2000
    Funding: $1,837,148
    Contractor: Center for Health Policy Research, 1355 S. 
Colorado Blvd, Suite 306 Denver, CO 80222
    Investigator: Peter W. Shaughnessy, Ph.D.
    This project will develop a core data set that will provide 
the foundation for an outcome-based continuous quality 
improvement system (OBCQI) for the PACE program. The OBCQI 
System consists of two phases. During the first phase, the PACE 
sites will complete a draft data instrument which will contain 
items for outcome measurement and risk adjustment at specific 
time intervals. In the second phase, the sites will take a 
closer look at why and how they are achieving specific outcomes 
and make recommendations for improvements in the case of poor 
outcomes. This project is currently in the initial phase of 
feasibility testing.

Quality Assurance for Phase 11 of the Home Health Agency Prospective 
        Payment Demonstration

    Period: 9/22/1995-9/29/2000
    Funding: $2,799,265
    Contractor: Center for Health Policy Research, 1355 South 
Colorado Boulevard, Suite 306 Denver, CO 80222
    Investigator: Peter W. Shaughnessy, Ph.D.
    This project was designed to test the effect of per-episode 
prospective payment on the quality of care provided to Medicare 
patients receiving home care. (HHAs receive an agency-specific 
episode payment based on 120 days of care and outlier payments, 
reimbursed at per-visit prospective rates, for episodes that 
extend beyond 120 days). A new episode of care is identified 
when there has been a gap in home health services for 45 or 
more days after the initial 120 days. Agencies receiving per-
episode payments were subject to stop-loss and profit sharing 
provisions as well as case-mix adjustments. Ninety volunteer 
HHAs from five States (CA, FL, IL, MA, TX) were randomly 
assigned to either the control group (cost-based payment) or 
the treatment group (per-episode payment). All HHAs had entered 
the demonstration by January 1996. As of December 31, 1998, all 
participating agencies ended participation in the QA Component 
of the PPS Demonstration. All data collection will be complete 
by January 18, 1999. A final report is due to HCFA September, 
1999.

Community nursing organization demonstration

    Period: September 1992-December 1999
    Contractors: See below
    Section 4079 of Public Law 100-203 directs the Secretary of 
the Department of Health and Human Services to conduct 
demonstration projects at four or more sites to test a 
capitated, nurse-managed system of care. The two fundamental 
elements of the Community Nursing Organization (CNO) 
demonstration are capitated payment and nurse case management. 
These two elements are designed to promote timely and 
appropriate use of community health services and to reduce the 
use of costly acute care services. The legislation mandates a 
CNO service package that includes home health care, durable 
medical equipment, and certain ambulatory care services. Four 
applicants were awarded site demonstration contracts on 
September 30, 1992. The selected sites represent a mix of urban 
and rural sites and different types of health providers, 
including a home health agency, a hospital-based system, and a 
large multi speciality clinic. All CNO sites have undergone a 
1-year development period and began a 3-year operational period 
in January 1994, which continued in 1998. The Balanced Budget 
Act of 1997 extends the demonstration through December 31, 
1999. Abt Associates Inc. was selected to evaluate the project 
and to provide technical assistance to the sites. Abt 
Associates Inc also was awarded the external quality assurance 
contract.
    Contractor: Care Clinic Association, 307 East Oak, Suite 3, 
P.O. Box 718, Mahomet, IL 61853
    Contractor: Carondelet Health Services, Inc., Carondelete 
St. Mary's Hospital, 1601 West St. Mary's Road, Tucson, AZ 
85745
    Contractor: Living at Home/Block Nurse Program, Ivy League 
Place, Suite 225, 475 Cleveland Avenue North, St. Paul, MN 
55104
    Contractor: Visiting Nurse Service of New York, 107 East 
70th Street, New York, NY 10021-5087

Site development and technical assistance for the second generation 
        social health maintenance organization demonstration

    Period: September 1993-December 2000.
    Funding: $2,251,123.
    Contractor: University of Minnesota, School of Public 
Health Institute for Health Services Research, D-351 Mayo 
Memorial Building, 420 Delaware Street, SE., Box 197 
Minneapolis, MN 55455-0392.
    Investigator: Robert L. Kane, M.D.
    In January 1995, the Health Care Financing Administration 
selected six organizations to participate in the Second 
Generation Social Health Maintenance Organization (HMO) 
Demonstration. The purpose of this project is to study the 
impact of integrating acute- and long-term care services with a 
capitated managed care system. It was developed to refine the 
targeting and financing methodologies and the benefit design of 
the current Social HMO model, which was initiated as a 
demonstration in 1985.
    Although similar services are provided under both of these 
projects the Second Generation Social HMO Demonstration 
features a greater emphasis on geriatric care and a more 
inclusive case management system. Another distinguishing 
characteristic of the project is its risk-adjusted payment 
methodology that is based on individuals' health status and 
functioning level. The primary focus of the project's 
evaluation will be to compare beneficiaries enrolled in the 
demonstration with beneficiaries in a section 1876 HMO program.
    The University of Minnesota and its subcontractor, the 
University of California, San Francisco are providing technical 
assistance and support in the development, implementation, and 
operation of the Second Generation Social HMO Demonstration.
    The developmental phase of the Second Generation Social HMO 
Demonstration began in January, 1995. Since that time, The 
University of Minnesota and the University of California, San 
Francisco have been providing technical assistance to the 
organization participating in the project. They also have 
developed a questionnaire that will be used to determine a 
beneficiary's capitated payment rate, a series of geriatric 
protocols to help physicians identify and treat certain health 
conditions, and a care coordination assessment instrument to 
assist case managers with care planning. The Health Plan of 
Nevada began enrolling beneficiaries into the demonstration in 
November, 1996.

Second generation of social health maintenance organization 
        demonstration

    Period: November 1996-December 2000
    Funding: Waiver-only
    Grantees: See below
    Description: In accordance with section 2344 of Public Law 
98-369, the concept of a social health maintenance organization 
(S/HMO) integrates health and social services under the direct 
financial management of the provider of services. All acute- 
and long-term-care services are provided by or through the S/
HMO at a fixed, annual, prepaid capitation sum. The Omnibus 
Budget Reconciliation Act (BBA) of 1990 authorized the 
expansion of the S/HMO demonstration. The BBA-97 extended the 
demonstration through December 31, 2000. The purpose of this 
second generation S/HMO (S/HMO-11) demonstration is to refine 
the targeting and financing methodologies and the benefit 
design of the current S/HMO model. The S/HMO model also will 
provide an opportunity to test more geriatrically-oriented 
models of care. Six organizations in the project will be 
selected to participate. Only one plans is operational, the 
Health Plan of Nevada.
    Grantee: CAC Ramsey Health Plan, 75 Valencia Avenue, Coral 
Gables, FL 33134.
    Grantee: Contra Costa County Health Plan, 5 95 Center 
Avenue, Suite 100, Martinez, CA 94553.
    Grantee: Fallon Community Health Plan, Chestnut Place, 10 
Chestnut Street, Worcester, MA 01608.
    Grantee: Health Plan of Nevada, Inc., P.O. Box 15645, Las 
Vegas, NV 89114.
    Grantee: Richland Memorial Hospital, Five Richland Medical 
Park, Columbia, SC 29203.
    Grantee: Rocky Mountain Health Maintenance Organization, 
2775 Crossroads Boulevard, Grand Junction, CO 81506 Phase 11 
implementation of the Home Health Agency (HHA) Prospective 
Payment Demonstration.
    Period: September 1995-December 2001
    Funding: $1,811,184
    Contractor: Abt Associates Inc, 55 Wheeler Street, 
Cambridge, MA 02138
    Investigator: Henry Goldberg
    Description: This contract implements and monitors Phase II 
of the Home Health (HHA) Prospective Payment Demonstration. 
Under phase II, a single payment per episode approach will be 
tested for Medicare-covered home health care. HHA participation 
is voluntary. It is expected that approximately 100 agencies in 
California, Florida, Illinois, Massachusetts, and Texas will 
participate in the demonstration. HHAs that agree to 
participate will be randomly assigned to either the prospective 
payment method or a control group that continues to be 
reimbursed in accordance with the current Medicare 
retrospective cost system. HHAs will participate in the 
demonstration for three years.
    Phase II recruitment began in Fall 1994 under a previous 
contract with Abt Associates, Inc. The HHA entered into the 
demonstration at the beginning of their fiscal years. Several 
HHAs began receiving per-episode payments in June, 1994, with 
the majority entering the demonstration in January 1996. The 
episodic payment rates are prospectively set for each HHA, 
reflecting their previous practice and cost experience. Rates 
are to be adjusted annually. As a protection to both the HHAs 
and the Medicare program, there will be retrospective 
adjustments for sharing of gains or losses and for changes in 
an HHA's projected case mix.

On Lok's risk-based community care organization for dependent adults: 
        On Lok Senior Health Services

    Period: November 1983-Indefinite
    Funding: Waiver only
    Grantee: On Lok Senior Health Services, 1333 Bush Street, 
San Francisco, CA 94109 and California Department of Health 
Services, 714-744 P Street, P.O. Box 942732, San Francisco, CA 
94234-7320
    Description: As mandated by sections 603(c) (1) and (2) of 
Public Law 98-21, the Health Care Financing Administration 
granted Medicare waivers to On Lok Senior Health Services and 
Medicaid waivers to the California Department of Health 
Services. Together, these waivers permitted On Lok to implement 
an at-risk, capitated payment demonstration in which more than 
300 frail elderly persons, certified by the California 
Department of Health Services for institutionalization in a 
skilled nursing facility, are provided a comprehensive array of 
health and health-related services in the community. The 
current demonstration maintains On Lok's comprehensive 
community-based program but has modified its financial base and 
reimbursement mechanism. All services are paid for by a 
predetermined capitated rate from both the Medicare and 
Medicaid (Medi-Cal) programs. The Medicare rate is based on the 
average per capita cost for the San Francisco County Medicare 
population. The Medi-Cal rate is based on the State's 
computation of current costs for similar Medi-Cal recipients, 
using the formula for prepaid health plans. Individual 
participants may be required to make copayments, spend down 
income, or divest assets based on their financial status and 
eligibility for either or both programs. On Lok has accepted 
total risk beyond the capitated rates of both Medicare and 
Medi-Cal, with the exception of the Medicare payment for end 
stage renal disease. The demonstration provides service funding 
only under the waivers. Research and development activities are 
funded through private foundations.
    Section 9220 of Public Law 99-272 has extended On Lok's 
Risk-Based Community Care Organization for Dependent Adults 
indefinitely, subject to the terms and conditions in effect as 
of July 1, 1985, with the exception of the requirements 
relating to data collection and evaluation. On Lok is 
continuing to collaborative projects with other organizations 
in the San Francisco Bay area. A pilot agreement with the 
Institute on Aging (IOA) has been completed and the two 
organizations have entered into a venture agreement in which 
IOA established an adult day health center, operating it under 
the rules of the program of All-Inclusive Care for the Elderly 
protocol. The site is in the Richmond area of San Francisco. On 
Lok provides quality assurance oversight as well as marketing 
and enrollment support. IOA receives a portion of On Lok's 
capitation via the HCFA demonstration and a portion is retained 
by On Lok to cover administrative expenses.

Randomized controlled trail of expanded medical care in nursing homes 
        for acute care episodes: Monroe County Long-Term Care Program, 
        Inc.

    Period: March 1992-December 1996
    Funding: $1,054,007
    Grantee: Monroe County Long-term Care Program, Inc., 349 
West Commercial Street, Suite 2250, Piano Works East Rochester, 
NY 14445
    Investigator: Gerald Eggert, Ph.D.
    Description: The objective of this demonstration is to 
develop, implement, and evaluate the effectiveness of expanded 
medical services to nursing home residents who are undergoing 
acute illnesses that would ordinarily require hospitalization. 
The intervention would here include many services that are 
available in acute hospitals and are feasible and safe in 
nursing homes. These include an initial physician visit, all 
necessary follow up visits, diagnostic and therapeutic 
services, and additional nursing care (including private duty), 
if necessary. The major goals are to reduce medical 
complications and dislocation trauma resulting from 
hospitalization and to save the expense of homes with expanded 
services. The design phase of the demonstration has been 
completed. This demonstration did not enter the operational 
phase because of the rapid changes in treatment patterns and 
the impact of the implementation of the case mix demonstration.

Texas nursing home case-mix and quality demonstration

    Period: February 1992-December 1998
    Funding: $532,830
    Grantee: State of Texas Department of Human Services, P.O. 
Box 149030 (MC-E-601), Austin, TX 78714-9030
    Investigator: Ken. C. Stedman
    Texas will participate in the Multistate Nursing Home Case-
Mix and Quality (NHCMQ) Demonstration. The objective of the 
demonstration is to test the feasibility and cost effectiveness 
of a case-mix payment system for nursing facility services 
under the Medicare and Medicaid programs that are based on a 
common patient classification system. The addition of Texas 
enhances the Health Care Financing Administration's ability to 
project the results of the demonstration on a national basis. 
Texas represents a western pattern of service using more 
proprietary multistate chain providers than is the pattern used 
in the East. Twenty Texas Medicare facilities were part of the 
original data collection for the development of the resource 
utilization group (RUG) III system. Texas has the second 
largest number of hospital-based facilities in the country. 
There are more than 20 metropolitan statistical areas of 
varying size. In addition, the State has a large number of 
rural areas. The State was traditionally a flat-rate 
intermediate care facility Medicaid payment system. This RUG-
type payment system makes Texas well-suited for inclusion in 
the Medicare portion of the demonstration.
    During the first year of participation, the Texas 
Department of Human Services worked with the Texas Department 
of Health to change the resident assessment being used in the 
State. In April, 1993, Texas implemented the minimum data set 
plus statewide as its resident assessment instrument. Analyses 
of 1990 Medicare Cost Report data, Medicare provider analysis 
and review Part A skilled nursing facility stay data, and the 
Texas Client Assessment and Review Evaluation (CARE) data have 
been conducted for use in developing the demonstration's 
Medicare case-mix payment system. Under the Medicaid 
demonstration, Texas began development of the Quality 
Evaluation System of Texas, a resident characteristic 
information and reporting system using the CARE instrument. 
During the first year, the staff continued the development and 
enhancement of the system, which was codified into law by the 
Texas Legislature in Summer 1993. They now are producing 
facility-level reports with statewide comparisons for Texas 
providers on a twice-a-year basis. The Medicare portion of the 
NHCMQ demonstration was implemented July 1, 1995, in Texas.

              HEALTH RESOURCES AND SERVICES ADMINISTRATION


                     Bureau of Primary Health Care

    The Bureau of Primary Health Care (BPHC) helps assure that 
primary health care services are provided to persons living in 
medically underserved areas and to persons with special health 
care needs. It also assists States and communities in arranging 
for the placement of health professionals to provide health 
care in health professional shortage areas. The Bureau provides 
services to older Americans through Bureau-supported Health 
Centers, including Community Health Centers, Migrant health 
Centers, Health Care for the Homeless program sites, Public 
Housing Primary Care program sites, the National Health Service 
Corps, and the Division of Federal Occupational Health.
    In 1996, the Bureau established a Geriatric Work Group, 
consisting of members of the various Bureau divisions and 
programs that serve elderly populations, to determine if there 
was a need for the Bureau to target elderly populations for the 
provision of services. In addition, the Work Group is currently 
establishing partnerships with other Federally funded programs 
and BPHC-supported programs at the State and local levels and 
is working with Primary Care Organizations and Primary Care 
Associations to expand existing program efforts to meet the 
health needs of older persons.
    A study was initiated during 1996 to examine service 
provision to older populations, as well as to identify barriers 
to services, in Bureau-supported Health Centers. The findings 
of this study are now available (attached). In addition, a 
project is currently underway to develop training curricula for 
community-based health care providers to better serve older 
patients.

                      Consolidated Health Centers

    On October 11, 1996, the President signed the Health 
Centers Consolidation Act of 1996. This Act consolidates the 
Community Health Centers, Migrant Health Centers, Health Care 
for the Homeless programs, and Public Housing Primary Care 
programs under a single statutory umbrella that revised section 
330 of the Public Health Service (PHS) Act. Health Center 
programs are designed to promote the development and operation 
of community based primary health care service systems in 
medically underserved areas for medically underserved 
populations. Legislation governing this program can be found in 
section 330 of the PHS Act, as amended (42 U.S.C. 254b). The 
Health Centers Consolidation Act of 1996, under section 
330(a)(1) of the PHS Act, defines the term ``health center'' as 
an entity that serves medically underserved population 
comprised of migratory and seasonal agricultural workers, the 
homeless, and residents of public housing.
    The Community Health Centers (CHC) Program entered into 
fiscal year 1997 with 631 grantees and a total of approximately 
$633 million covering over 3,000 sites, located in medically 
underserved areas throughout the United States and its 
territories. The CHC program entered into fiscal year 1998 with 
645 grantees and approximately $657 million.
    Health Centers provide access to case-managed, family-
oriented, culturally sensitive preventive and primary health 
care services for people living in rural and urban medically 
underserved areas. The medical services include: preventive 
health and dental services, acute and chronic services, and 
appropriate hospitalization and specialty referrals. Health 
Centers also provide essential ancillary services such as 
laboratory tests, X-ray, environmental health and pharmacy 
services. In addition, many centers provide such enabling 
health and community services as transportation, health 
education, nutrition, counseling, and translation. Case 
management--the coordination of the center's services with 
community services appropriate to the needs of the patient 
(social, medical, or economic)--is emphasized.
    Health Centers target medically underserved, disadvantaged 
populations. These populations include: minorities, women of 
child-bearing age, infants, persons with HIV infection, 
substance abusers and/or homeless individuals and their 
families. In fiscal year 1997, the Health Center program served 
more than 8,000,000 patients annually. Of this total, 7 percent 
were age 65 or older.
    The BPHC has implemented clinical performance measures 
related to the primary and preventive care of elderly users. 
The measures include: (1) a functional assessment of activities 
of daily living; (2) an inventory of prescription and 
nonprescription drug use; and (3) pneumococcal and influenza 
immunization administration.

    EXHIBIT A.--BREAKDOWN BY PROGRAM AND AGE CLUSTER OF THE NUMBER OF
  ELDERLY PERSONS WHO RECEIVED HEALTH CARE SERVICES FROM BPHC-SUPPORTED
                       PROGRAMS FOR THE YEAR 1997
------------------------------------------------------------------------
             Program                Age 65 + years        Total users
------------------------------------------------------------------------
Community & migrant.............  Females: 376,290..  Medical: 7,085,235
Health center...................  Males: 228,691....  Dental: 1,124,576
                                  Total: 604,981....  Total: 8,209,811
Homeless program................  Females: 3,624....  430,000
                                  Males: 5,767......
                                  Total: 9,391......
Public housing..................  Females: 1,337....  47,378
Primary care program............  Males: 598........
                                  Total: 1,935......
                                 ---------------------------------------
      Total.....................  616,307...........  8,687,189
------------------------------------------------------------------------


   EXHIBIT B.--BREAKDOWN BY PROGRAM AND AGE CLUSTER OF THE NUMBER OF ELDERLY PERSONS WHO RECEIVED HEALTH CARE
                                      SERVICES FROM BPHC FOR THE YEAR 1997
----------------------------------------------------------------------------------------------------------------
                                                                                          Subtotal
                    Program                       Age 65-74    Age 75-84     Age 85+      elderly    Total users
----------------------------------------------------------------------------------------------------------------
1997 Cluster...................................      362,165      181,689       67,267      611,121    8,253,898
----------------------------------------------------------------------------------------------------------------

                   The National Health Service Corps

    The National Health Service Corps (NHSC) places primary 
care physicians, nurse practitioners, physician assistants, 
certified nurse midwives, dental and mental health 
professionals in health professional shortage areas. There are 
now 2,400 clinicians serving communities and populations of 
greatest need (60 percent rural/40 percent urban). Older 
Americans with special health care needs benefit from the 
proximity of dedicated primary care clinicians that provide 
high quality health care. The NHSC works closely with Bureau-
supported Health Centers, other primary care delivery systems, 
and the Indian Health Service to provide assistance in 
recruiting and retaining health personnel for the poorest, the 
least healthy, and the most isolated of our fellow Americans, 
including the aging population.

                Division of Federal Occupational Health

    The Division of Federal Occupational Health (DFOH) provides 
a variety of services related to health promotion and disease 
prevention in the elderly to managers and employees of over 
3,000 Federal agencies. Retirement planning, care of aging 
parents, and prevention of osteoporosis are some examples of 
generic issues that are regularly addressed in educational 
seminars and employee assistance programs.

           Alzheimer's Demonstration Grant to States Program

    The Alzheimer's Demonstration Grant to States Program, 
established under section 398 of the Public Health Service Act, 
as amended by Public Law 101-157, the Home Health Care and 
Alzheimer's Disease amendments of 1990, was transferred from 
the Health Resources and Services Administration's Bureau of 
Primary Health Care to the Administration on Aging. The 
effective date was November 1, 1998. Eight of the programs 
funded through this initiative continue to collaborate with 
consolidated health centers and their service areas.

                      Bureau of Health Professions

    The Bureau of Health Professions (BHPr) provides national 
leadership to assure a health professions workforce that meets 
the health care needs of the public. The Bureau has established 
five strategic functions to guide the implementation of the 
Bureau's programs to achieve its mission. These functions are:
    1. Enabling access to health care through improved health 
professions distribution,
    2. Enabling culturally competent health care through 
improved racial and ethnic diversity and cultural competence in 
the health professions workforce.
    3. Ensuring adequate information, analysis and planning to 
strategically enable national health professions workforce 
development.
    4. Enabling ongoing improvement in the quality of health 
professions education through demonstration, education 
research, innovation and dissemination; and of health 
professions practice through innovations in financing and 
regulation.
    5. Providing public information and technical assistance 
relating to health professions.
    The strategy defined by these functions will be implemented 
through a variety of collaborative public and private efforts 
and programs supported and operated by the Bureau. Programs 
include: education and training grant programs for institutions 
such as health professions schools and health professions 
education and training centers; loan and scholarship programs 
for individuals, particularly those from disadvantaged 
backgrounds; the National Practitioner Data Bank; and the 
Vaccine Injury Compensation Program. In addition, BHPr 
administers several education-service network multi-
disciplinary and inter-disciplinary programs such as the Area 
Health Education Centers (AHECs), the Geriatric Education 
Centers (GECs), and Rural Interdisciplinary Training Programs.
    The Bureau supports the Council on Graduate Medical 
Education, which reports to the Secretary and the Congress on 
matters related to graduate medical education, including the 
supply and distribution of physicians, shortages, or excesses 
in medical and surgical specialties and subspecialties, foreign 
medical graduates, financing medical educational programs, and 
changes in types of programs. It also supports the National 
Advisory Council on Nurse Education and Practice which provides 
advice and recommendations to the Secretary concerning policy 
matters relating to nurse workforce, education, and practice 
improvement.
    The National Vaccine Injury Compensation Program is 
administered by BHPr. The program which became effective 
October 1, 1988, was created by the National Childhood Vaccine 
Injury Compensation Act of 1986, as a no-fault system through 
which families of individuals who suffer injury or death as a 
result of adverse reactions to certain childhood vaccines can 
be compensated without having to prove negligence on the part 
of those who made or administered the vaccines.
    BHPr maintains a federally sponsored health practitioner 
data bank on all disciplinary action and malpractice claims. 
The National Practitioner Data Bank (NPDB) was created by The 
Health Care Quality Improvement Act of 1986, Title IV of P.L. 
99-660, as amended November 1986. The Act authorized the 
Secretary of Health and Human Services to establish a data bank 
to ensure that unethical or incompetent medical and dental 
practitioners do not compromise health care quality. The NPDB 
is a central repository of information about: malpractice 
payments made on behalf of physicians, dentists, and other 
licensed health care practitioners; licensure disciplinary 
actions taken by State medical boards and State boards of 
dentistry against physicians and dentists; and adverse 
professional review actions taken against physicians, dentists, 
and certain other licensed health care practitioners by 
hospitals and other health care entities, including health 
maintenance organizations, group practices, and professional 
societies. The NPDB opened on September 1, 1990.
    The Secretary of the U.S. Department of Health and Human 
Services, acting through the Office of Inspector General, was 
directed by the Health Insurance Portability and Accountability 
Act of 1996 to create the Healthcare Integrity and Protection 
Data Bank (HIPDB). The HIPDB is a national health care fraud 
and abuse data collection program for the reporting and 
disclosure of certain final adverse actions taken against 
health care providers, suppliers and practitioners.
    The Notice of Proposed Rulemaking was published October 29, 
1998. The Division of Quality Assurance is in the process of 
preparing the Final Rule. The Data Bank is expected to be 
operational by the end of this year.

                          Division of Medicine

    The Division continues to support through its grant and 
cooperative agreement programs significant educational and 
training initiatives in geriatrics.
    For FYs 1997 and 1998, 13 predoctoral grantees and 57 
graduate program grantees indicated that they were actively 
involved in the development, implementation, and evaluation of 
their geriatrics curriculum and training. The predoctoral 
grantees received funds totaling $639,643, the residency 
program grantees received funds totaling $858,108. In addition, 
15 faculty development programs reported that they provided 
geriatrics training. One program grantee received an award 
totaling $172,800 for the purpose of strengthening geriatric 
training and carrying out research activities in this area.
    Nine Physician Assistant Training Program grantees have 
instituted training activities in geriatrics. These grantees 
were awarded $398,610 specifically for their efforts in this 
area.
    Seven grantees receiving support for Podiatric Primary Care 
Residency Training have included curricular emphasis in 
geriatric health. These grantees received a total of $652,603.

                          Division of Nursing

    The Division of Nursing continues to administer grants 
awarded through four programs:
    (1) Advanced Nurse Education, (2) Nurse Practitioner/Nurse 
Midwifery, (3) Special Projects, and (4) Professional Nurse 
Traineeships. The fourth program provides funds to schools that 
allocate these funds to individual full-time master's and 
doctoral students preparing to be nurse practitioners, nurse-
midwives, nurse educators, public health nurses, or other 
clinical nurse specialists.
    The Advance Nurse Education Program supported two programs 
totaling $484,208 in FY 1997, and three programs totaling 
$872,116 in FY 1998 for gerontological nursing programs leading 
to a master's or doctoral degree. Graduates of these programs 
are prepared broadly to meet a wide range of health needs 
relative to the elderly in many settings, but are particularly 
prepared to deal with the older individual with multiple health 
care needs. In addition, the program prepares nurses who can 
teach and offer consultation in this important field.
    The Nurse Practitioner and Nurse-Midwifery Program, 
supported seven master's or postmaster's geriatric nurse 
practitioner (GNP) program grants totaling $1,284,115 in FY 
1997, and six master's or postmaster's GNP program grants 
totaling $1,255,000 in FY 1998. In addition, ten Adult Nurse 
Practitioner (ANP) programs were supported in FY 1997 for a 
total of $1,972,260, and seven Family Nurse Practitioner (FNP) 
programs were supported in FY 1998 for a total of $7,123,120. 
Both ANPs and FNPs provide primary care services to older 
adults. As nurses with advanced academic and clinical 
preparation, they are prepared as primary health care providers 
to manage the health problems of the elderly in a variety of 
settings, such as long-term care facilities, ambulatory 
clinics, and homes. They provide nursing care and clinical 
management of common acute and chronic health problems, 
including health promotion and maintenance, disease prevention, 
health assessment, and long-term management of chronic health 
problems. Emphasis is placed on teaching and counseling the 
elderly to actively participate in their own care and to 
maintain optimal health.
    The Nursing Special Projects Grant Programs supported six 
Long-Term Care Fellowships for Paraprofessional projects in 
four institutions totaling $321,988 in FY 1997, and five 
projects in five institutions totaling $1,205,960 in FY 1998. 
These fellowships supported approximately 45 individuals in FY 
1997 and 73 individuals in FY 1998 employed by nursing 
facilities, including long-term care facilities or home health 
agencies as paraprofessionals and enrolled in approved nursing 
program. The agencies assist the fellows financially to obtain 
further education in nursing.
    The Nursing Special Projects Grant Program supports nursing 
clinics to demonstrate methods of improving access to primary 
health care in medically under served communities. In FY 1997, 
three nursing clinics providing services to elderly populations 
received support totaling $469,709. In FY 1998, ten nursing 
clinics providing services to elders in housing and other 
community sites received support totaling $1,662,090. The 
nursing clinic project at the University of Delaware, Newark, 
Delaware, now in its fourth year of a five year grant award, is 
designed to establish a community-based nurse-managed health 
center to improve access to primary care for older adults. The 
HEALTH (Healthy Elder Adult Living Through Holistic Healthcare) 
Center provides a wide variety of health promotion, disease 
prevention, and chronic disease management services through 
case management by advanced practices nurses (APNs). The HEALTH 
Center initially featured two extremely needed services in 
Delaware: (1) comprehensive geriatric assessment and (2) mental 
health services for older adults. In addition to filling health 
care gaps, the HEALTH Center provides clinical experiences for 
nursing students that will prepare them to provide the 
specialized care needed by older adults. Project activities are 
based in home and community settings in both urban and rural 
areas.

                     Office of Rural Health Policy

    The Office of Rural Health Policy (ORHP) was established in 
1987 at the urging of the Senate Special Committee on Aging in 
order to address severe shortages of health services in rural 
areas, where one quarter of the Nation's elderly live. Aging-
related issues are of particular importance to the Office, 
since rural counties have, on average, a higher percentage of 
seniors over 65 years of age than urban counties; and these 
residents are often poorer, sicker, and more isolated than 
their urban counterparts.
    To strengthen support for health services in rural areas, 
the office plays a collaborative role throughout the Department 
and with the States and the private sector. For example, it 
apprises interest groups, such as the National Council on Aging 
and the American Association of Retired Persons about its 
activities and about the needs of the rural elderly. Within the 
Department, the Office advises the Secretary on the effects 
that Medicare and Medicaid programs have on rural health care, 
on the shortage of health care providers, the viability of 
rural hospitals, and the availability of primary care and also 
emergency medical services to elderly and other rural 
residents.
    The Office supports local and States initiatives to build 
rural health care services through a $32.0 million grant 
program to rural communities, themselves, and a $3 million 
program of matching grants to the States to support States 
offices of rural health, which can recruit rural providers and 
assist their rural communities in developing more local health 
services.
    The ORHP also promotes informed policy making by 
administering a small $2.5 million program of grants for 
policy-relevant studies at established rural research centers 
throughout the country. These centers provide data capability 
on a wide range of rural health concerns, including areas 
relevant to the elderly. For example, one study currently 
underway looks at the development in rural communities of 
assisted living facilities to determine what challenges exist 
to their growth and viability. Another is comparing mental 
health treatment for residents of rural nursing homes with 
treatment available to residents of urban facilities. Also 
under study is the supply of health practitioners for the care 
of chronically ill Medicare beneficiaries in rural areas.
    The Office also administers a new $25 million grant program 
to States to help them implement the Rural Hospital Flexibility 
Program. Under this program, rural hospitals that convert to a 
smaller Rural Critical Access Hospital can receive cost-based 
payments from the Medicare. The grants help States and rural 
communities plan and implement the conversion of rural 
hospitals and promote the development of new local networks of 
care.
    In collaboration with other Federal agencies such as the 
Health Care Financing Administration, the Department of 
Agriculture, the Department of Transportation, and the National 
Institute on Aging, ORHP sponsors workshops and seeks public 
advice on a range of rural health needs. These issues may 
include such issues as emergency medical services, managed care 
options for Medicaid and Medicare clients, physician 
recruitment, and rural economic development.
    To enhance dissemination of information on strategies for 
better health services to rural regions, the Office initiated a 
national rural health information and referral service with 
USDA that is available to rural residents throughout the Nation 
with a toll-free line (1 -800-633-7701) and through an 
electronic bulletin board.
    The Office also channels public advice on rural issues to 
the Department by staffing the Secretary's National Advisory 
Committee on Rural Health, a citizen's advisory panel chartered 
in 1987 to address health care crises in rural America.

            Division of Associated Dental and Public Health

    The Division supports the training of health professionals 
through its Geriatric Education Centers (GECs). GECs use 
ambulatory care centers, hospitals, long-term care facilities 
and senior centers to provide appropriate educational 
experiences to health professions students and providers, to 
prepare them to deliver humane and dignified care and to be 
responsive to older individuals whose ability to care for 
themselves has been reduced by physical and/or mental 
disorders.
    Of the 43 Geriatric Education Centers that make up the 
membership of the National Association of Geriatric Education 
Centers, 30 received awards in FY 1997 and 30 received awards 
in FY 1998. In FY 1997, sixteen GECs were consortia 
partnerships of two or more universities with many representing 
multiple schools of the health professions in their respective 
States. In FY 1998, nineteen GECs were consortia. At the State 
and National level the GECs comprise a comprehensive 
educational system, serving as the primary coordinating body 
for the preparation of faculty, health professions students, 
and health care personnel to better serve the Nation's elderly 
in their own homes and in long-term care institutions and 
community based agencies. Over 40,000 health care professionals 
received education and training through the GECs in FY 1997-
1998. Awards were made to the following institutions in FY 1997 
and FY 1998:

------------------------------------------------------------------------
                                                  FY 1997      FY 1998
------------------------------------------------------------------------
Consortia:
    University of California, Los Angeles,         $316,665     $159,796
     Univ. of California, Davis; Univ. of
     California, San Francisco; UCLA School of
     Medicine; California State University at
     Fresno...................................
    New York University; Columbia University;       161,209      263,639
     Hunter College...........................
    University of Pittsburgh; Pennsylvania          262,963      317,362
     State University; Temple University......
    University of Miami; Barry University;          322,810      161,672
     Florida A&M Florida International
     University...............................
    St. Louis University; U. of Missouri,           156,733      269,990
     School of Optometry; Washington U.,
     Occupational Therapy; St. Louis College
     of Pharmacy; Kirksbille College of
     Osteopathic Medicine.....................
    University of Kentucky; East Tennessee          160,569      261,653
     State Univ.; U. of Ohio Cincinnati.......
    University of Medicine & Dentistry. of NJ;      162,000      271,823
     Rutgers University School of Social Work.
    University of Oregon; Portland State            288,431      159,292
     University...............................
    University of Iowa; University of                     0      161,999
     Osteopathic Medicine and Health Sciences.
    Baylor College of Medicine; University of       162,000      270,000
     Texas, Houston HSC; Univ. Texas, Medical
     Branch; Univ. of North Texas; Univ. of
     Texas-Pan AM; Texas Southern Univ.; Univ.
     of Houston; Texas A&M University.........
    George Washington University; Georgetown        161,283      299,201
     University; Howard University............
    Case Western Reserve University; Ohio           161,199      266,401
     University college of Osteopathic
     Medicine; Bowling Green State University;
     Northeastern Ohio Universities College of
     Medicine.................................
    Marquette University; Univ. of Wisconsin-       306,675            0
     Madison; Univ. of Wisconsin-Milwaukee;
     Milwaukee Area Technical College; Medical
     College of Wisconsin; Geriatrics Inst. of
     Sinai Samaritan Medical Center...........
    Michigan State University, Wayne State          165,359      162,000
     University; Michigan Primary Care
     Association; St. Lawrence Hospital.......
    University of New Mexico; New Mexico State      325,426      160,648
     University; New Mexico Highlands
     University; National Indian Council on
     Aging; Indian Health Service; Sisters of
     Charity Health Care System...............
    University of Pennsylvania; Geisinger           277,251      160,209
     Medical Center; Lehigh Valley Hospital;
     Philadelphia College of Pharmacy.........
    University of Rhode Island; Rhode Island        262,681      317,126
     College; Brown University; Rhode Island
     Hospital.................................
    Meharry Medical College; Alabama A&M            158,760      162,000
     University; Tennessee State University...
    Stanford University; San Jose State             302,064      162,000
     University; On Lok, Senior Health
     Services.................................
Single Institution:
    University of Hawaii......................      107,840      161,760
    University of Oklahoma....................      185,715      161,890
    University of Puerto Rico.................      162,000            0
    University of Texas San Antonio HSC.......      160,940      214,051
    University of Washington..................      215,639      107,974
    University of South Florida...............      104,489      162,000
    University of Nevada......................            0       75,131
    University of Rochester...................      167,832      271,970
    University of Virginia Commonwealth.......      107,854      161,744
    University of West Virginia...............      107,130      155,633
    Harvard Medical School....................      158,443      260,197
    University of Florida.....................      100,956       95,267
    University of Minnesota...................      162,000      270,000
------------------------------------------------------------------------

    Awards for the 30 GECs totaled $5,851,916 for Fiscal Year 
1997. Funding for FY 1998 was $6,051,428. Awards for FY 1999 
are expected to be approximately $8 million. These Centers are 
educational resources providing multi disciplinary and 
interdisciplinary geriatric training for health professions 
faculty, students, and professionals in allopathic medicine, 
osteopathic medicine, dentistry, pharmacy, nursing, 
occupational and physical therapy, podiatric medicine, 
optometry, social work, and related allied and public or 
community health disciplines. They provide comprehensive 
services to the health professions education community within 
designated geographic areas. Activities include faculty 
training and continuing education for practitioners in the 
disciplines listed above. The Centers also provide technical 
assistance in the development of geriatric education programs 
and serve as resources for educational materials and 
consultation.
    During FY 1995, a three phase Geriatric Education Futures 
Project was developed to improve geriatric education in the 
health professions and thereby respond to a national health 
care need. The first phase was the development of eleven study 
groups to develop white papers on the status of geriatric 
education in medicine, nursing, dentistry, public health, 
social work, allied and associated health, interdisciplinary 
education, ethnogeriatrics, case management, managed care and 
long-term care. Recommendations were presented to Federal, non-
Federal and response panels during the second phase. Two 
reports emerged from these phases: ``A National Agenda for 
Geriatric Education: White Papers and A National Agenda for 
Geriatric Education: Forum Report''. Copies are available from 
the Bureau of Health Professions, HRSA. The third phase of the 
Futures Project is the development of innovative educational 
collaborative.

    Faculty Training Projects in Medicine, Dentistry, and Psychiatry

    Eight joint medicine and dentistry projects were funded 
under the Faculty Fellowship Program in Geriatric Medicine, 
Dentistry, and Psychiatry. These interdisciplinary programs 
have four learning components: longitudinal clinical 
experience, teaching, research, and administration.
    The following institutions received awards for both 1997 
and 1998.

------------------------------------------------------------------------
                                                  FY 1997      FY 1998
------------------------------------------------------------------------
University of California, Los Angeles.........     $190,812     $196,566
Boston University.............................      307,708      310,178
Harvard University............................      348,494      353,582
University of Michigan........................      374,178      361,499
University of Medicine and Dentistry of New         351,976      268,323
 Jersey.......................................
Duke University...............................      328,631      335,705
University of North Texas.....................      314,112      247,721
University of Texas, San Antonio..............      357,828      276,741
------------------------------------------------------------------------

                Contracts Under Title VII of the PHS Act

    Funding--FY1995-FY1996
    Project: State University of New York at Buffalo, 
``Education Performance Outcomes Measures Model,'' 8/13/96-8/
12/97--$25,000.
    Project: Baylor College of Medicine, ``Tenth Workshop for 
Key Staff of Geriatric Education Centers,'' 7/19/96-7/18/97--
$149.000.
    Project: American Society on Aging, ``Local Implementation 
of a Key Ethnogeriatrics Recommendation,'' 8/6/96-5/5/97--
$6,460.
    Project: Institute for Health Care Improvement, 
``Community--Based Quality Improvement Education for the health 
Professions,'' 9/30/96-9/29/98--$150,228.
    Project: Virginia Geriatric Education Center, ``Geriatric 
Education Centers Resources Project,'' 12/30/97-3/l/98--$5,941.
    Project: Stanford University, ``Ethnogeriatric Education 
Collaborative,'' 7/3/97-2/28/99--$35,000.
    Project: State University of New York at Buffalo, 
``Education and Evaluation of an Expanding Education 
Performance Outcomes Measures Model,'' 6/28/97-6/30/98--
$22,500.
    Project: American Society on Aging, ``Local Implementation 
of a Key Ethnogeriatric Recommendation,'' 9/5/97 & 7/22/98--
$6,460.
    Project: Wisconsin Geriatric Education Center, ``Updated 
Geriatric Education Centers Directories,'' 6/18/98--$5,001.

                              Publications

    A National Agenda for Geriatric Education: Forum Report, 
Volume 2. Rockville, MD: Interdisciplinary, Geriatrics and 
Allied Health Branch, Division of Associated, Dental and Public 
Health Professions, Bureau of Health Professions, Health 
Resources and Services Administration, Public Health Service, 
U.S. Department of Health & Human Services. 1996.
    A National Agenda for Geriatric Education: White Papers, 
Volume I--Rockville, MD: Interdisciplinary, Geriatrics and 
Allied Health Branch, Division of Associated, Dental and Public 
Health Professions, Bureau of Health Professions, Health 
Resources and Services Administration, Public Health Service, 
U.S. Department of Health & Human Services. 1995.
    Geriatric Education Centers: A Resource Directory, 
Rockville, MD: Interdisciplinary, Geriatrics and Allied Health 
Branch, Division of Associated, Dental and Public Health 
Professions, Bureau of Health Professions, Health Resources and 
Services Administration, Public Health Service, U.S. Department 
of Health & Human Services. 1998.

                                 Events

    Advisory Committee for the joint American Geriatric 
Society/John A. Hartford Foundation initiative entitled 
``Enhancing Geriatric Care Through Practicing Physician 
Education, New York, NY--April 6,1997.
    I0th Geriatric Education Centers Workshop for key 
leadership of grantees sponsored by BHPr, Washington, DC--
February 2-9, 1997.
    Gerontological Society of America's Annual Meeting. 
Cincinnati, OH-- November 13-17,1997.
    Association for Gerontology in Higher Education, Present 
information from the Bureau--sponsored ``National Agenda for 
Geriatric Education: White Paper'' Chapter on Interdisciplinary 
Education at a preconference Workshop, Boston, MA--February 19-
23, 1997.
    Collaborative on Ethnogeriatric Education Workgroup , San 
Francisco, CA--March 26, 1998
    1998 Leadership in Collaborative Practice: A cross--program 
conference, Las Vegas, NV--June 8-10, 1998, for 
interdisciplinary programs of the Division of Associated, 
Dental and Public Health Profession, BHPr, HRSA.
    National Assocaition of Medical Minority Educators 
Conference (NAMME), Chicago, IL--September 27-28, 1998.
    Gerontological Society of America's Annual Meeting. 
Philadelphia, PA--November 20-23,1998

                      OFFICE OF INSPECTOR GENERAL


                              Introduction

    The Office of Inspector General (OIG) was established by 
the Inspector General Act of 1978. The OIG's mission is to 
identify ways to improve effectiveness and promote economy and 
efficiency in HHS programs and operations, and protect them 
against fraud, waste, and abuse. This is accomplished by 
conducting independent and objective audits, evaluations, and 
investigations which provide timely, useful, and reliable 
information and advice to Department officials, the 
Administration, the Congress, and the public. In carrying out 
its mission, the OIG partners with the Department and its 
operating divisions, the Department of Justice (DOJ), other 
Federal and State agencies, and the Congress to bring about 
systemic improvements in HHS programs and operations, and 
successful prosecutions and recovery of funds from those who 
defraud the Government. The OIG is comprised of the following 
components:
    The Office of Audit Services (OAS) conducts and oversees 
audits of HHS programs, operations, grantees, and contractors; 
identifies systemic weaknesses that give rise to opportunities 
for fraud, and abuse; and makes recommendations to prevent 
their recurrence. The OAS also provides overall leadership and 
direction in carrying out the responsibilities mandated under 
the Chief Financial Officers Act of 1990 and the Government 
Management Reform Act of 1994 relating to financial statement 
audits.
    The Office of Evaluation and Inspections (OEI) seeks to 
improve the effectiveness and efficiency of departmental 
programs by conducting program inspections that provide timely, 
useful, and reliable information and advice to decision makers. 
These inspections are program and management evaluations that 
focus on specific issues of concern to the Department, the 
Congress, and the public. The results of these inspections 
generate accurate and up-to-date information on how well HHS 
programs are operating and offer specific recommendations to 
improve their overall efficiency and effectiveness.
    The OIG's Office of Investigations (OI) conducts 
investigations of fraud and misconduct to safeguard the 
Department's programs and protect the beneficiaries of those 
programs from individuals and activities that would deprive 
them of rights and benefits. Working with Federal and State law 
enforcement agencies, OIG investigators seek criminal, civil, 
and exclusion actions against those who commit fraud or who 
thwart the effective administration of HHS programs.
    The Office Counsel to the Inspector General (OCIG) 
coordinates the OIG's role in the resolution of health care 
fraud and abuse cases, including the litigation and imposition 
of administrative sanctions, such as program exclusions, civil 
monetary penalties, and assessments; the global settlement of 
cases arising under the Civil False Claims Act; and the 
development of corporate agreements for providers that have 
settled their False Claims Act liability with the Federal 
Government. It also develops and promotes industry awareness of 
models for corporate integrity and compliance programs and 
monitors ongoing integrity agreements. The OCIG also provides 
all administrative litigation services required by OIG, such as 
patient dumping cases and all administrative exclusion cases. 
In addition, OCIG issues special fraud alerts and advisory 
opinions regarding the application of OIG's sanction statutes 
and is responsible for developing new, and modifying existing, 
safe harbor regulations under the anti-kickback statute. 
Finally, OCIG counsels OIG components on personnel and 
operations issues, subpoenas, audit and investigative issues, 
and other legal authorities.
    The Office of Management and Policy (OMP) provides support 
services to the OIG, including congressional relations; public 
affairs; strategic planning and budgeting; financial and 
information resources management; and preparation of the OIG's 
semiannual and other reports.

                            Accomplishments

    During Fiscal Years 1997 and 1998, the OIG reported more 
than $1.2 billion in fines and restitutions deposited into the 
Medicare Trust Fund. More than 5,700 individuals and entities 
were excluded from doing business with Medicare, Medicaid, and 
other Federal and State health care programs--up from 2,846 
exclusions in the previous two years. In addition, convictions 
increased by nearly 20 percent in 1997, and another 16 percent 
in 1998. The OIG's 1998 accomplishments included 261 
convictions of individuals or entities that engaged in crimes 
against departmental programs, and 927 civil actions.
    The OIG reported record savings of $11.6 billion for Fiscal 
Year 1998. This is comprised of $10.9 billion in implemented 
legislative or regulatory recommendations and actions to put 
funds to better use; $146 million in audit disallowances: and 
$515 million in investigative receivables. The savings that 
result from OIG recommendations that are implemented into law 
or regulation represent the dollars that will not be spent.

                              Health Care

    In recent years, Medicare has been a major focus of OIG 
work. Approximately 75 percent of OIG resources in the past two 
years were dedicated to Medicare audits, evaluations, and 
enforcement activities. OIG work continues to show that 
Medicare is not always a prudent purchaser of health care goods 
and services and is inherently vulnerable to making improper 
payments. In discharging its responsibilities, the OIG responds 
both reactively and proactively to counteract these problems 
and is pleased to report that measurable progress is being 
made.
    Increasingly, the OIG is working with representatives of 
the health care provider community to develop reasonable and 
voluntary compliance guidelines for insuring accurate billings 
to the Medicare program. Medicare beneficiaries are also 
enlisted for their support. For example, the OIG recently 
launched a major outreach campaign with the Health Care 
Financing Administration (HCFA), the Administration on Aging 
(AOA), DOJ, and the American Association of Retired Persons 
(AARP) to encourage senior citizens to identify improper 
Medicare payments. Beneficiaries are encouraged to carefully 
review their health care bills and to call their health care 
provider when a possible improper item, service or good not 
received is spotted. If that fails to ``clear up'' the matter, 
it is suggested that the beneficiary call their Medicare 
contractor and, only if necessary, to report a suspected fraud 
to the OIG hotline.
    Some of the significant OIG work involving the elderly, 
during this reporting period, includes the following:
    Outreach/Hotline: Enlisting beneficiaries as partners in 
fighting fraud assists in identifying abuses at an early stage, 
and preventing ongoing or widespread abuse. An OIG survey found 
that Medicare beneficiaries are well-positioned to identify 
fraud, with three out of four stating that they ``always'' read 
their Explanation of Medicare Benefit statements. The HHS/OIG 
continued to work with AOA, HCFA, and AARP to develop a 
national outreach campaign designed to educate beneficiaries 
and those who work with the elderly to recognize fraud and 
abuse and to report it appropriately. This campaign will be 
fully ``launched'' in 1999. OIG operates an HHS/OIG Hotline to 
receive complaints of improprieties in the Medicare program and 
other HHS programs. In FY 1997, the Hotline was expanded to 
accommodate more callers and to provide more user friendly 
service. In FY 1997 and 1998, the Hotline received over 134,000 
calls, which resulted in more than 19,500 complaints. An 
estimated $4 million in collections are associated with Hotline 
complaints referred to and resolved by HCFA and its 
contractors.
    Beneficiary Satisfaction: OIG continued to report on 
Medicare beneficiary satisfaction and understanding with the 
Medicare program, including fee-for-service and managed care. 
The reviews examined general satisfaction with the program as 
well as beneficiary satisfaction with supplemental health 
insurance and the Medicare handbook. Reviews also examined 
beneficiary awareness of Medicare risk HMOs, HMO appeals and 
grievance processes, and HCFA publications.
    Safeguarding Long-Term Care Residents: The OIG found 
shortcomings in State nurse aide registries, which are required 
to record findings of abuse, neglect and misappropriation of 
property involving the elderly. This work is an indication 
that, among other things, HCFA and AOA should work with States 
to improve the safety of long term care residents and to 
strengthen safeguards against the employment of abusive workers 
by elder care facilities. In addition, the OIG recommended that 
HCFA consider establishing Federal requirements and criteria 
for performing criminal background checks. The HCFA and AOA 
generally agreed with our findings and recommendations.

       NATIONAL INSTITUTES OF HEALTH, NATIONAL INSTITUTE ON AGING

    There are great differences in how people age; some persons 
lead healthy, independent, and productive lives well into their 
70's, 80's, 90's and even beyond; other persons succumb to age-
associated diseases and disabilities in their 60's or even 
earlier. The National Institute on Aging (NIA), part of the 
National Institutes of Health (NIH), promotes research to 
understand the mechanisms of normal aging and their 
relationship to costly age-associated disease and disability. 
Each day experts translate this new knowledge into strategies 
to improve the health and quality of life for older Americans. 
NIH is the principal biomedical research arm of the Federal 
Government. NIA is the primary sponsor of aging research in the 
United States.
    This report highlights a number of research advances 
conducted or supported by NIH during 1997 and 1998. Section 1 
of this report outlines NIA's key advances for 1997. Section 2 
presents NIA's key advances for 1998. Section 3 provides 
selected findings from some of the other NIH institutes 
involved in aging research. They are the National Eye Institute 
(NEI); National Library of Medicine (NLM); Office of Research 
on Women's Health (ORWH); National Heart, Lung, and Blood 
Institute (NHLBI); National Institute of Nursing Research 
(NINR); National Center for Research Resources (NCRR); National 
Human Genome Research Institute (NHGRI); National Institute on 
Deafness and Other Communication Disorders (NIDCD); National 
Institute of Arthritis and Musculoskeletal and Skin Diseases 
(NIAMS); National Institute of Mental Health (NIMH); National 
Institute of Dental and Craniofacial Research (NIDCR); National 
Institute of Diabetes and Digestive and Kidney Diseases 
(NIDDK); National Institute of Child Health and Human 
Development (NICHD); National Institute on Neurological 
Disorders and Stroke (NINDS).

                     Section 1.--1997 Introduction

    Congress created the NIA in 1974 as part of the National 
Institutes of Health. At that time, aging research was in the 
early stages of developing ways to explore fundamental aspects 
of the aging process. Since then, knowledge about the 
fundamental processes of biology has grown as have new insights 
about the processes of health and disease in later years. The 
goal of NIA-supported research is to understand the basic 
mechanisms of normal aging and age-associated disease, 
disability, and other special problems and needs of the aged, 
and to translate this knowledge into treatment and prevention 
strategies.
    An increasing interest in aging research is driven in part 
by a projected dramatic increase in the older population. 
People over age 65, who made up only four percent of the U.S. 
population in 1900, constitute approximately 12 percent now and 
will make up about 20 percent of the population by the year 
2025. The over-85 age group, often referred to as the ``oldest 
old'', is the fastest growing segment of the older population. 
Population aging will become an important phenomenon of the 
next half century as the presently middle-aged ``baby-boom'' 
generation becomes eligible for Social Security and Medicare.

Alzheimer's disease

    As the baby boomers age and Americans continue to live 
longer, there is an increasing concern about Alzheimer's 
disease (AD), a devastating neurological disease which affects 
the cognitive function of sufferers who are primarily in the 65 
and older age group. AD now affects an estimated four million 
Americans and is projected to reach critical proportions in the 
U.S. in the near future. Unless we can develop interventions to 
prevent or delay this dreaded disease, perhaps as many as 15 to 
20 million older people and their families will experience the 
nightmare of Alzheimer's disease early into the 21st century. 
This is one reason that AD research continues to be a top 
priority for NIA.
    In the past five years we have made remarkable progress in 
AD research. Scientists have discovered genetic mutations 
linked to AD on four separate chromosomes: 1, 14, 19, and 21. 
Chromosomes 1, 14, and 21 are associated with early-onset, 
familial AD, an aggressive form of the disease that can cause 
symptoms in people as young as 30 years of age. Scientists are 
now trying to discover precisely what abnormal proteins or 
processes these mutations generate and to clarify how these, 
together with environmental factors, play a role in the 
disease. Within the past five years, scientists discovered that 
the risk of developing the more common, late onset form of AD 
is linked to a gene located on chromosome 19 that codes for a 
protein known as ApoE. One of the variants of this gene, ApoE4, 
is associated with greatly increased susceptibility to AD and 
earlier age of onset. In contrast, ApoE2 may confer a 
protective effect. These important discoveries have led to 
increased research activity to discover the molecular 
mechanisms underlying the effects of ApoE on the development of 
AD pathogenesis. If ApoE is directly involved in susceptibility 
for AD, it would then become a target for interventions.
    The dual goals of accurate diagnosis and early detection 
have long been central to AD research. A recently reported 
study that combined the use of ApoE4 typing with brain imaging 
showed that it is possible to identify abnormalities in brain 
function of individuals who are at high risk for Alzheimer's 
disease, but who have no detectable disease symptoms, as many 
as 20 years before they would be expected to develop symptoms. 
This advance opens the opportunity for potential treatments 
which could be started before the brain has suffered damage 
from more advanced AD.

Basic biology of aging

    Parallel to the discoveries in basic neurobiology, which 
should eventually enable us to prevent nerve cell destruction 
and onset of Alzheimer's disease symptoms, research on the 
basic biology of aging will provide the foundation for 
developing new or improved interventions to combat multiple 
age-associated diseases and disabilities. Recent research has 
advanced our understanding of the genes and biochemical 
pathways involved in regulating the life span of some lower 
organisms. By incorporating these ``longevity'' genes into the 
chromosomes of experimental animals, NIA researchers have 
actually been able to increase life span. Once researchers have 
a better understanding of life span control in simple animals, 
they will be able to study life span control in more complex 
animals and determine the relationship of these processes to 
human aging, health and disease, and longevity.
    Both aging and cancer researchers share interest in one 
particular field that concerns the end structures on 
chromosomes known as ``telomeres,'' structures which serve to 
maintain the chromosome's integrity and stability. We now know 
that telomeres play a key role in determining the capacity of 
individual cells to divide; after losing this capacity, cells 
become senescent. Telomerase is an enzyme that works to 
maintain telomere length by compensating for the shortening 
which occurs each time the cell divides. Cancer cells express 
relatively high levels of telomerase which enables them to 
divide indefinitely. A more complete understanding of 
telomerase and telomere length regulation should lead directly 
to studies on the delay of cellular senescence and age-related 
disease, as well as to new strategies to prevent the unlimited 
replication of cancer cells.
    Another important area in basic aging research is that of 
oxidative damage. Damage to cells and subcellular components 
from ``free radicals,'' which are naturally occurring 
byproducts of normal metabolism, has long been believed to be a 
factor in the degenerative processes which accompany aging in 
all animal species. Recently completed research demonstrated a 
strong inverse correlation between life span and the level of 
free radicals produced by mitochondria, the energy-producing 
powerhouses located within all cells. Thus, a promising 
intervention against age-associated disease and disability 
might be one which would reduce the level of free radicals by 
increasing the biochemical efficiency within the cell's 
mitochondria.

Applied/clinical research

    The NIA also conducts research with immediate clinical 
significance. NIA-supported research on treatments for AD span 
a wide range of approaches, from research to develop candidate 
drugs to clinical trials of drugs that show promise. In 
addition to these efforts at drug development, research will 
continue on the effectiveness of behavioral approaches and 
services such as AD special care units, which are long-term 
care settings designed to meet the needs of people with AD and 
related cognitive impairments. The results of research on 
special care units should inform public policy on ways to 
improve care for Alzheimer's patients by determining the 
effectiveness of special care units for their residents, their 
families, and the unit staff members.
    Physical disability is a major concern to older persons and 
is associated with billions of dollars spent annually on long-
term care. For many older persons, physical disability is the 
result of multiple, complex, and interacting factors. 
Osteoporosis, which affects an estimated 25 million older 
Americans, most of them women, is an obvious example of a major 
risk factor for physical disability. Osteoporosis predisposes 
older persons to serious and debilitating fractures. Each year, 
thousands of older Americans, more women than men, are 
hospitalized and then admitted to costly long-care facilities 
because of hip fracture. Recent studies revealed that estrogen 
use is associated with lower hip fracture rates, indicating the 
potential for preventing bone loss and related fractures. Other 
researchers, conducting a four-year longitudinal study of 
women, identified hip fracture risk factors which allow 
targeting of very high-risk women for preventive strategies. 
There was a 25-fold difference in hip fracture rate between 
those women with two or fewer risk factors and normal bone 
density, and those women with five or more risk factors and low 
bone density. Maintaining body weight, walking for exercise, 
avoiding long-acting benzodiazepines, minimizing caffeine 
intake, treating impaired vision, and taking measures to 
maintain bone density are among the steps identified that may 
decrease hip fracture risk. NIA will continue to fund basic 
laboratory studies of the biology of osteoporosis and bone cell 
function, clinical studies of age-related bone loss and 
fracture epidemiology, and trials to prevent and reverse bone 
loss.
    Menopause is a universal phenomenon in women and until 
recently has been understudied. To gather critical information 
on the chronology of the biological and psychosocial factors 
related to menopause and its subsequent effects on health and 
age-related disease, NIA supports the Study of Women's Health 
Across the Nation (SWAN). This study will generate extensive 
data on menstrual cycle characteristics such as ovarian 
function, nutrition, ethnicity, reproductive history, risk 
factors for diabetes, hypertension and cardiovascular disease, 
and physical activity.
    Cardiovascular disease is another major cause of disability 
and remains the leading cause of death of older Americans, 
killing approximately half of those age 65 and older. Although 
age is the main risk factor for cardiovascular disease, the 
precise reasons are presently unknown. One potential risk 
factor for cardiovascular disease in the elderly is stiffening 
of the large and medium-sized arteries, leading to increased 
stress on the heart. NIA is conducting research to identify 
ways of preventing and reversing vascular stiffening, such as 
exercise and other beneficial lifestyle changes. Other NIA 
researchers are evaluating the possible roles gene therapy may 
have for treatment of age-associated heart disease. These 
scientists are examining whether gene therapy can be used to 
enhance blood circulation in animal models of chronic heart 
disease and have successfully induced the growth of new 
coronary blood vessels in laboratory animals to reestablish 
blood flow following heart attack. In another study, gene 
therapy is being tested as a way to combat the renarrowing of 
blood vessels following angioplasty, a technique used to open 
narrowed coronary arteries. The potential benefit of preventing 
or reducing age-associated cardiovascular disease is 
considerable, both in terms of cost savings and quality of life 
of older Americans.
    Many of the problems of aging result from behaviors that 
place individuals at greater risk for poor health, depression, 
and other negative outcomes. NIA-supported research has 
documented the benefits for health and longevity of adopting 
healthy lifestyle practices, such as physical activity and 
nutrition, and avoiding health-impairing habits, such as 
smoking, even at a very old age. As one example, numerous 
studies have documented the influence of exercise and physical 
activity on longevity, even among the oldest old. Recent 
studies also show the benefit of regular exercise in reducing 
costly hospital stays and nursing home admissions. Current 
research advances document the importance of the social and 
behavioral context when studying physical activity and exercise 
among older adults. Nevertheless, surveys report that older 
people often are not motivated to make the desired changes. 
Additional research is therefore being stimulated on topics 
such as the social and behavioral factors involved in 
initiating and maintaining health-enhancing behaviors, the role 
of health care providers in identifying risk and encouraging 
positive self-care practices, and the design of regimens 
appropriate for older people in community and institutional 
settings. Even with the hope of major advances in the treatment 
and prevention of disabling conditions, the demand for long-
term care is expected to increase due to predictable 
demographic trends. Research will be conducted on many aspects 
of long-term care, particularly on new and evolving forms of 
care with a goal of identifying the most effective and cost-
efficient approaches.
    As life span and vitality in later life have increased, 
more and more older people are able and willing to work 
productively well into late adulthood. According to NIA's 
Health and Retirement Survey, almost three-fourths of American 
workers now would prefer to phase in their retirement with a 
gradual shift to part-time work rather than stop working 
abruptly. One major goal of this research is to understand the 
productive potential represented by workers over age 60, 
especially for part-time engagement in the workforce.
    A vision for 21st century America drives our research 
efforts. It is the prospect of an older but healthier 
population of productive and independent citizens. Some of the 
progress made toward this goal through the multi-faceted 
research approach of the NIA is described in the following 
pages.

                          EXTRAMURAL RESEARCH

    NIA funds a broad portfolio of research grants, contracts, 
and training awards encompassing many research fields and 
scientific disciplines. Although not all of NIA's research 
initiatives can be covered within this document due to space 
limitations, many high priority research areas are described in 
the following sections:

Declining cognitive function and interventions for older adults

    A major concern of older adults is thinking and 
remembering. A particularly exciting development is the rapid 
advance of neuroimaging techniques, such as magnetic resonance 
imaging (MRI) and positron emission tomography (PET), which 
permit researchers to study images of the brain while cognitive 
processing occurs. These and other techniques are relating 
learning and memory impairments to changes in brain structure 
and physiology, permitting a mapping of areas affected by 
Alzheimer's disease (AD) and other neurological disorders. This 
knowledge is valuable for detection, early diagnosis, and 
treatment of cognitive losses due to disease. Future research 
promises to identify the locations and processes of various 
components of memory and to differentiate the memory loss that 
can occur during normal aging to that which results from 
disease. Promising work has also produced interventions that 
can enhance some aspects of cognitive ability in older people. 
The NIA and the National Institute of Nursing Research are now 
soliciting grant applications for a trial to test such 
behavioral interventions in older adults of varying racial, 
ethnic, socioeconomic, and cognitive characteristics. The study 
should identify means of maintaining or increasing basic 
abilities critical for independence.

Alzheimer's disease: a decline in cellular communication

    In AD, communication between nerve cells breaks down and 
leads to nerve cell dysfunction and cell death. AD destroys 
neurons in parts of the brain involved with cognition, 
especially in the hippocampus (a structure deep in the brain 
that plays an important role in memory encoding). As the 
hippocampal nerve cells degenerate, short-term memory falters, 
and eventually the ability to perform familiar tasks declines 
as well. AD also attacks the cerebral cortex (the outer layer 
of the brain). The greatest damage occurs in areas of the 
cerebral cortex responsible for functions such as language and 
reasoning. Emotional outbursts and disturbing behaviors appear 
with increasing frequency as the disease progresses. In the 
final stages, AD destroys the affected person's ability to 
recognize close family members or communicate in any way, 
leaving the person totally dependent upon others for care.

Prevalence and costs of Alzheimer's disease

    An estimated 4 million Americans currently suffer from AD, 
and the lives of their caregivers are affected by this 
devastating illness. Families experience great emotional, 
physical, and financial stress. As the disease progresses and 
abilities steadily decline, family members face painful 
decisions about the long-term care of their loved ones. 
Moreover, AD puts a heavy economic burden on society. One 
recent NIA-supported study estimated that the cost of caring 
for one person with advanced AD can be more than $47,000 a 
year, whether the patient lives at home or in a nursing home. 
For a disease that can range in duration from two to 20 years, 
the overall costs of AD to families and to society are 
staggering.
    Other factors in our changing society will compound the 
problem of AD in the near future. Life expectancy has been 
increasing since the turn of the century. Today in most 
industrialized countries, the 85 plus age group is the fastest 
growing segment of the older population and is also the segment 
of the population most devastated by AD, with an estimated 47 
percent prevalence rate. These demographics emphasize the 
urgency of the need to find successful interventions that will 
delay or prevent onset of AD.

Genes in early-onset Alzheimer's disease

    AD can strike early and often in some families--and the 
disease in families such as these is identified as early-onset 
familial Alzheimer's disease (FAD). Studying the DNA of some of 
these early-onset FAD families, NIA-supported researchers have 
recently identified abnormalities in a gene on chromosome 21 in 
a subset of people with FAD. Over the last year, other 
investigators identified mutations in a gene on chromosome 1 in 
a set of families from Germany and mutations in a recently 
identified gene on chromosome 14 in other FAD families. The FAD 
genes on chromosome I and on chromosome 14 code for highly 
similar membrane proteins whose functions are not yet known. 
These mutated genes are responsible for very aggressive forms 
of FAD and may also play a role in the development of other 
types of AD. Further research on these mutations is expected to 
clarify key steps in the disease process. The FAD gene on 
chromosome 21 codes for an abnormal form of the precursor for 
amyloid protein, consistent with a role of amyloid protein in 
some forms of AD. Interestingly, people with Down's syndrome, 
who have an extra copy of chromosome 21, usually develop AD-
like pathologies as they grow older.

ApoE4 and Alzheimer's disease

    In addition to the genes on chromosomes 1, 14, and 21 
associated with FAD, the ApoE4 gene on chromosome 19 has been 
linked to late-onset AD, the most common form of the disease. 
Everyone has ApoE, a protein which helps transport cholesterol 
in the blood throughout the body. The gene coding for the 
production of ApoE occurs in three versions: ApoE2, ApoE3, and 
ApoE4. ApoE3 is the one most commonly found in the general 
population. ApoE2 may confer some protective effect against AD. 
ApoE4 is associated with greatly increased susceptibility to AD 
and earlier age of onset. It is found in many late-onset AD 
patients and is not limited to people with a family history of 
AD. On average, people with two copies of the gene for ApoE4 
start showing AD symptoms before age 70 and are eight times 
more likely to develop AD than those who have two copies of the 
more common ApoE3 version. For those with no copies of ApoE4, 
the average age of onset is over 85.
    Researchers have discovered that ApoE is localized in the 
two abnormal structures found in the AD brain: amyloid plaques 
and neurofibrillary tangles. Located outside and around 
neurons, these plaques contain dense deposits of amyloid 
protein. Neurofibrillary tangles are twisted fibers inside 
neurons. Progress continues to be made in determining the 
makeup of these abnormal structures and in elucidating the 
mechanisms that account for their buildup in AD.
    The presence of ApoE4 in a blood sample does not 
necessarily predict AD. A person can have ApoE4 and not get the 
disease, and a person can get AD without having ApoE4. Because 
screening for ApoE4 would miss a large percentage of those who 
will develop AD and falsely identify others as future AD 
patients, widespread screening cannot presently be advocated. 
However, testing for the ApoE gene in combination with other 
tests, may soon contribute to the diagnosis of AD. The 
mechanism by which ApoE influences the risk of AD is currently 
under study. Scientists found marked differences in the rates 
at which ApoE3 and ApoE4 bind to critical nerve cell proteins 
involved in receiving signals from other cells, providing a 
potential basis for the influence of ApoE variants on the risk 
of AD.
    While still controversial and far from proven, the 
hypotheses surrounding ApoE4 are driving new research. The 
relatively rare protein ApoE2 may protect people against the 
disease; it seems to lower risk and delay the age of onset. For 
instance, people with one ApoE2 gene and one ApoE3 gene have 
only one-fourth the risk of developing AD as people with two 
ApoE3 genes. If ApoE2 proves to be beneficial, then substances 
that mimic its effects might be candidate therapies to be 
tested for the ability to slow or prevent the progress of AD. 
Similarly further explanation of preliminary findings may lead 
to ways to reduce the effects of ApoE4, develop drugs to treat 
or prevent AD, and ultimately, decrease its occurrence.

Research on dementia special care units

    Another line of AD research sponsored by the NIA concerns 
the effectiveness of special care units (SCUs), which are long-
term care settings designed to meet the needs of people with AD 
and related cognitive impairments. The results of these studies 
may provide ways to improve care for these patients by 
determining the effectiveness of SCUs for their residents, the 
residents' families, and the unit staff members. This research 
also assesses the impact of SCUs on residents with and without 
dementia in non-specialized nursing home units. Research will 
define what constitutes ``special care'' and identify effective 
features of SCUs, including environment, staffing, activities, 
care planning, admission policies, size, and patient 
segregation. Preliminary results reveal how care in SCUs 
influences behavior, cognition, and physical functioning. For 
example, some of the most promising outcomes of SCUs are seen 
in the residents' quality of life as measured by increases in 
social behaviors and interactions.

Alzheimer's disease cooperative study: clinical trials of experimental 
        treatments

    The Alzheimer's Disease Cooperative Study is composed of 35 
research sites and was established to conduct clinical studies 
of promising drugs. This important work broadly complements 
other areas of AD research activity sponsored by the NIA such 
as the 27 NIA-funded Alzheimer's Disease Centers and an almost 
equal number of satellite centers. A study to assess the 
effectiveness of Deprenyl and vitamin E in slowing the course 
of AD began in October 1992. NIA-supported researchers found 
that the two drugs delayed important milestones, such as entry 
into nursing homes, for people with moderately severe 
Alzheimer's disease, and decreased their loss of daily 
activities, including bathing, dressing, and handling money, by 
about 25 percent. Another study on drug and behavioral 
treatment of agitation began in June 1994 and is scheduled to 
end October 1996. A study of the anti-inflammatory drug 
prednisone to treat AD began in January 1995 and is scheduled 
to end in January 1997.
    The latest trial, a pilot study investigating whether or 
not estrogen can improve function in women with AD who had 
previously undergone complete hysterectomy (with removal of 
both ovaries), was initiated in September of 1995. Previous 
reports suggested that post-menopausal women on estrogen 
therapy experienced benefits including improvements in mood, 
concentration, and memory. The major question addressed by this 
study is whether or not women with AD who had undergone prior 
complete hysterectomy show benefit from a twelvemonth period of 
estrogen therapy. Study results should be available by the end 
of 1997.

Aging at the cellular level: senescence, longevity genes, and telomeres

    The initial discovery that isolated mammalian cells have 
only a limited potential for continued cell division has 
provided an important paradigm for the study of aging and of 
cancer. Scientists think that this phenomenon, also known as 
cellular senescence, is a tumor-suppressive mechanism as well 
as an underlying cause of aging. Previously, the demonstration 
of cellular senescence was limited to an analysis of cells in 
culture. This year NIA-sponsored research has demonstrated that 
cell senescence also occurs in cells within live organisms. 
Additional efforts by NIA-funded researchers have resulted in 
the identification of specific genes involved in cell 
senescence.
    Recent research on longevity assurance genes using 
invertebrate model systems, has significantly advanced our 
understanding of the genes and biochemistry involved in the 
regulation of longevity. Researchers have actually extended the 
life and/or health span of some lower organisms by 
incorporating these genes within their chromosomes. Once 
researchers gain a better understanding of lifespan control in 
simple model systems, they will be in a better position to 
study these processes in animals such as mammals, and to 
determine the relationship of these processes to aging, health, 
and disease.
    Although it has long been known that cells in culture have 
a limited life span before proliferation ceases, the counting 
mechanism that determines this species-specific limit has been 
unknown. Somewhat akin to the plastic wrap on the end of a 
shoelace that prevents its unraveling and destruction, 
chromosomes have end structures known as ``telomeres'', which 
serve to maintain the structural integrity and stability of the 
chromosome. A recent hypothesis is that telomeres shorten each 
time they are replicated during cellular division, and that 
continued cellular proliferation requires some minimal telomere 
length, yet to be defined. However, relationships among 
telomere shortening, cellular proliferative potential, and age-
related disease remain to be clarified. Telomerase is an enzyme 
that functions to elongate telomeres, thus compensating for the 
telomere shortening which occurs with cell division. Cancer 
cells have been found to express relatively high levels of 
telomerase, thus allowing the cancer cell to replicate 
indefinitely. A more complete understanding of telomerase and 
telomere length regulation has the potential to elucidate 
approaches to delaying cell senescence as well as to prevent 
the unlimited replication of cancer cells.

Oxidative damage, antioxidant defense, and aging

    ``Free radical'' damage has long been believed to be a risk 
factor for the degenerative processes which accompany aging in 
animal species ranging from insects to humans. Free radicals 
are byproducts of normal metabolism that are produced as cells 
turn food and oxygen into energy. To defend against these 
reactive and damaging molecules, cells have a multi-layer 
defense system including anti-oxidants that react with and 
neutralize the radicals which otherwise will damage proteins, 
membranes, and nucleic acids including DNA. Evidence continues 
to accumulate about the ubiquity of free radicals and their 
considerable destructive potential in living tissues. Recent 
NIA-funded studies demonstrated a strong inverse correlation 
between life span and production in the mitochondria (energy-
producing powerhouses located within each cell) of reactive 
oxygen species, one particular form of free radicals. Thus, a 
promising aging intervention might be one which can increase 
the efficiency of the mitochondrial electron transport system.
    Aging research in rodents has demonstrated that caloric 
restriction results in substantial increases in life span. 
Recent studies have shown that the extension of life span in 
mice by caloric restriction is accompanied by decreases in 
resting respiratory rate, mitochondrial generation of free 
radicals, and one type of damage in the mouse DNA, all of which 
are consistent with the hypothesis that oxidative stress is an 
important factor in aging. More research is needed to establish 
the critical relationships among free radical sources and the 
body's protective systems. An improved understanding of free 
radical processes may lead to the development of interventions 
(dietary, pharmacological, or genetic) for many of the diseases 
associated with aging and markedly increase healthy life span.

Nutrition in the elderly

    Recently, attention has focused on the nutritional status 
and nutrition-related needs of older individuals in this 
country. Researchers have indicated that a substantial 
proportion of Americans over the age of 50 have diets or 
diseases that place them at a high risk of malnutrition. 
Malnutrition can be either primary, which is defined by 
deficits in dietary intake or excesses (obesity, alcohol 
intoxication and various dietary imbalances) caused by the diet 
alone; or secondary, which arises from other factors such as 
the presence of disease, special physiological states, or 
inborn errors of metabolism. In order to focus on the role of 
nutritional factors in preventing age-related diseases, it is 
imperative to define the alterations in nutrition and 
nutritional requirements which occur during aging and determine 
what interventions could be implemented to prevent or delay 
malnutrition. NIA will continue to promote nutrition-related 
research in order to improve our understanding of the 
interrelationships between nutrition, aging, health, and 
disease.

Melatonin and sleep

    There has been much recent publicity in the media about the 
potential effects of melatonin, including claims that this 
brain hormone can slow the human aging process, improve immune 
function, and scavenge DNA and protein damaging ``free-
radical'' molecules. These claims unfortunately are 
unsubstantiated and controlled research is needed to confirm or 
deny them. However there is a solid base of data related to 
melatonin's role in the regulation of the body's circadian 
(day-night) rhythms and sleep, and it is possible that 
melatonin may act as an effective ``hypnotic'' agent for 
humans, able to induce sleep in both young and old individuals. 
Studies are underway to understand how melatonin affects the 
cells within the body's circadian clock, located deep within 
the brain. Melatonin appears to be a signal molecule telling 
the body that night is present; how it affects other systems in 
the brain and body requires further study. There is a need for 
continued research to determine potential interactions between 
time of administration and disruption of normal circadian 
rhythms with chronic usage, as well as possible other adverse 
health effects, and the delineation of what types of sleep 
disorders may be treated with melatonin.

Cardiovascular disease, vascular stiffening, and control of 
        hypertension

    Cardiovascular disease remains a main cause of disability 
and the leading cause of death of older Americans, killing 
approximately 50 percent of those age 65 and older. Although 
age is the main risk factor for cardiovascular disease, the 
precise reasons are presently unknown. Continued research in 
cardiovascular and related fields is essential to ensure 
progress in defining important age-associated changes in the 
heart and blood vessels and in understanding the interactions 
between common age-related changes and the development of 
cardiovascular disease.
    A potential risk factor that may underlie cardiovascular 
disease in the elderly is a stiffening of the large (e.g., the 
aorta) and medium-sized arteries. Age-associated vascular 
stiffening is accompanied by an increase in systolic blood 
pressure. In some individuals, vascular stiffening may become 
severe enough to lead to the development of isolated systolic 
hypertension. High blood pressure is the major risk factor for 
stroke and is also an important risk factor for coronary artery 
disease, heart attacks, and heart failure in older Americans. 
Since vascular stiffening has been considered a part of 
``normal'' aging, treatment that may decrease arterial 
stiffness (e.g., lifestyle modification or pharmacologic 
intervention) is rarely advocated. NIA is conducting research 
to identify ways of preventing and reversing vascular 
stiffening, such as exercise and other beneficial lifestyle 
changes. The potential benefit of preventing or reducing age-
associated vascular stiffening is considerable, both in terms 
of cost savings and quality of life of older Americans.
    Control of systolic hypertension now appears to be more 
important for good health than previously believed. A recent 
NIA-supported epidemiologic study has shown that high blood 
pressure in mid-life is a risk factor for cognition and memory 
problems in late life. As systolic blood pressure goes up, so 
does the risk of later cognitive difficulties. The study 
compared scores on cognitive tests given in old age with blood 
pressure readings taken up to 25 years before. Data from the 
study strongly suggest that early control of high blood 
pressure reduces the risk for cognitive impairment in old age.

Menopause, osteoporosis, and estrogen replacement therapy

    Menopause, a universal phenomenon in women as they age, has 
been remarkably understudied. To rectify this situation, NIA, 
in collaboration with other organizations will continue to 
support the recently initiated multi-site, multi-discipline 
Study of Women's Health Across the Nation (SWAN). This study 
will gather critical information on the chronology of the 
biological and psychosocial factors related to the menopausal 
transition and the effect of this transition on subsequent 
health and age-related disease. SWAN will generate extensive 
data on menstrual cycle characteristics such as markers of 
ovarian function, nutrition, ethnicity, reproductive history, 
risk factors for diabetes, hypertension and cardiovascular 
disease, and physical activity.
    Osteoporosis and its consequences, particularly vertebral 
and hip fractures, are a significant cause of frailty, 
morbidity, and mortality in old age. An estimated 25 million 
older Americans are currently affected by osteoporosis. Each 
year, thousands of older Americans, more women than men, are 
admitted to costly long-care facilities due to hip fracture. 
NIA-supported osteoporosis research includes clinical studies 
of age-related bone loss and fracture epidemiology, 
intervention trials to prevent or reverse bone loss, and basic 
laboratory studies on the biology of osteoporosis and bone cell 
function. Results of studies are encouraging as to the 
potential for preventing bone loss and related fractures. For 
example, newly published results further indicate the benefits 
of estrogen replacement therapy. Estrogen use and bone mass 
were assessed in more than 9,000 older women to determine the 
association between estrogen use and fractures. Current 
estrogen use was associated with a decreased risk for many 
fractures when compared with no estrogen. Data from the study 
indicates that for optimal protection against fractures, 
estrogen should be initiated soon after menopause and continued 
indefinitely; additional studies are needed to confirm these 
findings.
    Laboratory studies will continue to generate the knowledge 
based upon which new or improved interventions can be designed 
to prevent or reverse bone loss. One recently completed NIA-
supported study was designed to determine the ability of 
parathyroid hormone (PTH) to restore lost bone in animals at 
skeletal sites with moderate and severe bone loss. The findings 
from this study indicate that: (1) PTH is much more effective 
than antiresorptive

agents in restoring lost bone in the estrogen-deficient 
skeleton, (2) treatments with antiresorptive agents and PTH 
have no additional benefit over PTH alone, and (3) PTH fails to 
restore the most severe states of bone loss. The latter finding 
may provide insight into the failure of some osteoporotic 
patients to respond adequately to agents such as fluoride or 
PTH. Further animal studies are needed to build upon these 
findings before initiating human studies.

Strategies to prevent disability in older persons

    Disability among older Americans is a major contributor to 
the more than $100 billion spent annually on long-term care in 
the U.S. Identification and reduction of risk factors in older 
people can make a critical contribution to quality of life and 
help prevent the disability that leads to long-term care. 
Recently completed studies typify NIA's approach to applying 
relatively simple, inexpensive technologies to prevent the 
complex and expensive problems brought on by disability. To 
identify older individuals with pre-clinical disabilities who 
may benefit from targeted interventions, NIA scientists have 
been evaluating functional assessment tests for use in 
screening. One such study of older non-disabled persons found 
that three short tests of physical performance abilities 
strongly predicted disability as much as four years in advance.
    In another study, researchers conducted the first 
randomized controlled trial using the multiple risk factor 
approach to reduce falls in older people. The interventions 
targeted risk factors for falls, such as muscle weakness, 
postural hypotension, use of sedatives or multiple medications, 
and impairments of motion such as balance and gait. 
Participants received individualized treatment, including 
medication adjustments, strength and balance training, and 
instruction on safe practices to avoid lightheadedness and 
environmental hazards. Over a one-year follow-up period, the 
participants' rate of falls was reduced by nearly half compared 
to that of the control group which had received only social 
visits. The intervention was also shown to be cost-effective, 
particularly among individuals at high risk for falling. Since 
more than 250,000 hip fractures occur each year among persons 
over age 65, a substantial national cost savings should result 
from incorporating the tested strategy into the usual health 
care of older persons.
    A four-year longitudinal study of women identified risk 
factors for hip fracture that allow targeting of very high-risk 
women for preventive strategies. There was a 25-fold difference 
in hip fracture rate between those women with two or fewer risk 
factors and normal bone density, and those women with five or 
more risk factors and low bone density. Maintaining body 
weight, walking for exercise, avoiding long-acting 
benzodiazepines, minimizing caffeine intake, treating impaired 
vision, and taking measures to maintain bone density are among 
the steps identified that may decrease hip fracture risk.
    Older people often lose their independence and require 
long-term care after hospitalization for acute illnesses. In a 
recent study, older persons admitted to a teaching hospital for 
general medical care were randomly assigned to receive either 
usual care or special care including a carefully prepared 
environment, specific protocols for prevention of disability 
and rehabilitation, and planning for the patient's return home. 
Without increasing in-hospital or post-discharge costs, the 
study showed that individuals who were helped to maintain or 
achieve independence in self-care activities were significantly 
more able than individuals receiving usual care to perform 
basic activities of daily living and less likely to need 
institutional long-term care at the time of discharge.

Elder-friendly environments

    Human factors research adapts technologies and redesigns 
home and community environments to accommodate the sensory, 
motor, and cognitive abilities of older adults. This research 
results in devices and other components of the physical 
environment that better match the skill levels and abilities of 
users, helping to prevent injuries such as hip fractures, and 
remove physical and social barriers to independence. In 
addition to modifying structures to foster community access, 
this research targets design of kitchens, bathrooms, and 
security systems as well as medical devices, instructions, and 
labeling. Data from human factors research has already helped 
improve driving safety and product ease of use. Special 
emphasis is now being given to how older people use computers 
and other aspects of the office environment and new information 
technology as the U.S. workforce ages.

Health behaviors and behavior change over the life course

    Many of the problems of aging result from behaviors that 
place individuals at greater risk for poor health, depression, 
and other negative outcomes. NIA-supported research has 
documented the benefits for health and longevity of adopting 
healthy lifestyle practices, such as physical activity and 
nutrition, and terminating health-impairing habits, such as 
smoking, even at a very old age. These benefits and recommended 
steps for lifestyle changes have been well publicized. 
Nevertheless, surveys report that older people often are not 
motivated to make the desired changes. Additional research is 
therefore being stimulated on topics such as the social and 
behavioral factors involved in initiating and maintaining 
health-enhancing behaviors, the role of health care providers 
in identifying risk and encouraging positive self-care 
practices, and the design of regimens appropriate for older 
people in community and institutional settings.
    As one example, numerous studies have documented the 
influence of exercise and physical activity on longevity, even 
among the oldest old. Recent studies are also showing the 
benefit of regular exercise in reducing costly hospital stays 
and nursing home admissions. Current research advances document 
the importance of the social and behavioral context when 
studying physical activity and exercise among older adults. 
There is a growing consensus that exercise programs, to be 
effective, must be tailored to older people's functional 
status, also taking into account older people's beliefs and 
readiness to adopt and maintain new exercise habits. Home-based 
physical activity programs supervised by telephone contact 
represent one promising strategy for reducing barriers to 
regular exercise experienced by caregivers with demanding care 
responsibilities.
    However, more than half of older people are sedentary or 
under-active. For men and women aged 55-84, the primary reason 
for not exercising was ``lack of interest.'' The remaining 
leading reasons given by older people for inactivity vary by 
gender; women specified not having an exercise companion as a 
major reason. Among the men and women older than 85, fatigue, 
imbalance, and concerns about falls were the primary reasons 
given for not exercising. Understanding the reasons older 
people give for limiting or avoiding many moderate and vigorous 
physical activities is a critical step in designing exercise 
programs that will actually be incorporated into older adults' 
daily routines.

Health, work, and retirement: Medicare, technology, and rising health 
        costs

    As lifespan and vitality in later life have increased, more 
and more older people are able and willing to work productively 
well into late adulthood. According to NIA's Health and 
Retirement Survey, almost three-fourths of American workers now 
would prefer to phase in their retirement with a gradual shift 
to part-time work rather than stop working abruptly. The 
economic cost of workers who retire for 25 percent or more of 
their lives is already creating a considerable social and 
financial burden that will increase when the baby boomers 
retire. One major goal of this research is to understand the 
potential represented by workers over age 60, especially for 
part-time engagement in the workforce.
    NIA's research on the economics of health and retirement 
focuses on the determinants and implications of economic well-
being and health among older households as individuals age. 
Given the changing context of Medicare, pensions, and Social 
Security, many demographic, sociological, and health components 
of aging may be best understood in concert with economic 
analyses. Recently developed data indicate that Medicare 
hospital expenditure growth is not restricted to the highest-
cost beneficiaries, but occurs across the board. Similar rates 
of hospital expenditure growth were found among high-cost and 
low-cost users, and similar growth rates occur among different 
age, race, and gender groups. Related research has found that 
more use of intensive procedures, many of which are relatively 
low cost has accounted for much of the growth in hospital 
expenditures for Medicare beneficiaries in recent years. Thus, 
more characterization of the specific technologies associated 
with rising expenditures might be particularly useful to guide 
strategies for cost containment. Research has made significant 
progress in demonstrating how some provisions of Medicare 
policy can actually result in relatively more frequent use of 
certain intensive procedures.
    Other work has measured the effectiveness of alternative 
treatments in improving health outcomes. Results suggest that 
the use of invasive procedures for heart attack patients could 
be reduced by at least one-fourth with no consequences for 
mortality, but with savings of over $300 million per year in 
hospital costs alone. Similar studies will be carried out 
examining heart arrhythmias and major cancers and will include 
outcomes such as the subsequent development of medical 
complications.

                      INTRAMURAL RESEARCH PROGRAM

    In addition to the extramural research supported through 
grant and contract awards, NIA directly funds and conducts 
aging-related research in its own intramural laboratories 
located at the Gerontology Research Center in Baltimore, 
Maryland, as well as on the NIH campus in Bethesda.

Characterization of normal aging

    In order to understand the biological changes found in 
various disease states associated with old age, it is important 
that the changes occurring in normal aging be properly defined. 
At NIA laboratories, these changes are studied at the systemic, 
cellular, and molecular levels. One area of study focuses on 
identifying the mechanisms responsible for the progressive cell 
loss observed in the aging brain. This work is complemented by 
longitudinal studies assessing the general decline in total 
brain mass, the increases in cerebrospinal fluid volumes, and 
the difference in brain function observed in aging. Using a 
variety of testing methods, researchers at the NIA have found 
that blood flow to the brain during information processing 
differs significantly between healthy young and old subjects. 
It also has been reported that increasing age is associated 
with difficulty in shifting attention from one sense (sight, 
hearing, etc.) to another. These results complement other 
studies showing immediate visual memory impairment in older 
participants. One theory regarding the aging process and some 
age-associated diseases is that such changes occur as a result 
of accumulated damage to the genes and an inability to repair 
damage to the genes. Recent studies by scientists at NIA have 
demonstrated that gene repair declines with increasing age. 
Ongoing studies are clarifying the mechanisms of genetic repair 
which may lead to a better understanding of how repair 
mechanisms are altered by the aging process.

Factors that alter normal aging

    In an attempt to improve the longevity and quality of life, 
scientist seek medical interventions that reduce the 
degenerative changes associated with aging. At the NIA, several 
laboratories have been successful in developing new strategies 
that appear to ameliorate some of the deleterious changes 
associated with aging. Scientists are examining risks 
associated with heart disease, estrogen hormone deficiencies, 
and dietary factors. For example, it is known that reducing 
caloric intake by about 30 percent lengthens the life span of 
laboratory rats and that these animals have a lower incidence 
of cancer and other diseases. Parallel studies are now being 
done in monkeys. These studies aim to identify the biochemical 
mechanisms that are altered by caloric restriction. It is hoped 
that the results from these studies will lead to development of 
interventions that can promote longevity and reduce age-
associated diseases.

Novel treatment intervention strategies

    Current treatment for many diseases associated with aging 
relies on the use of new or improved pharmaceutical compounds. 
However, other methods are also being explored including the 
use of gene therapy. Experimental gene therapy is being used to 
(1) replace damaged or `` bad'' genes, (2) add new (or 
previously deleted) genes, or (3) increase or decrease the 
production of critical proteins. NIA researchers are evaluating 
the possible roles gene therapy may have for treatment of age-
associated diseases such as heart disease, central nervous 
system degeneration, and cancer. Studies are underway to 
investigate if gene therapy can be used to enhance blood 
circulation in animal models of chronic heart disease. Using 
laboratory rabbits bred for the study of heart disease, NIA 
scientists have successfully induced the growth of new coronary 
blood vessels to reestablish blood flow following heart attack. 
In another study, gene therapy is being tested as a way to 
combat the renarrowing of blood vessels following angioplasty, 
a technique used to open narrowed coronary arteries. Gene 
therapy is also being tested in laboratory animal studies of 
Parkinson and Huntington diseases. These studies inserted a 
dopamine (a neurochemical) receptor gene into cells normally 
deficient in doparnine receptors. The results from these 
studies were dramatic and showed that the cells with the 
inserted dopamine receptor gene produce new, normally 
functioning, dopamine receptors that improved motor control in 
the animals.

Alzheimer's disease

    Although the exact cause of Alzheimer's disease (AD) is 
still unknown and therapeutic treatments remain limited, the 
pace of new discoveries continues to increase. One of the 
characteristic features of AD is the accumulation of amyloid in 
brain plaques, a defining pathologic change associated with the 
disease. NIH researchers have found a possible link between 
specific mutations in the amyloid precursor protein and the 
characteristic neuronal cell death that is seen in AD patients. 
Early detection studies have reported that identifiable 
cognitive changes are evident in patients who subsequently 
progress to develop clinically apparent AD. Similarly, specific 
cognitive changes have been identified with sustained attention 
and immediate visual memory tasks. Although it is unclear where 
the cellular and biochemical changes initially occur in the 
brains of AD patients, there is a consistent decrease in the 
level of acetylcholine (a key neurotransmitter). Scientists at 
the NIA are researching new drug therapies for treatment of AD 
which target this and other neurotransmitter systems. One such 
candidate agent, phenserine, dramatically improved the ability 
of laboratory rats that had memory-affecting brain lesions, to 
navigate a maze. This drug is now in preclinical toxicology 
testing.

Cancer

    NIA researchers are studying cancers that increase in 
incidence with aging, including breast, prostate, and colon 
cancers. It is known that through normal cellular processes, 
oxygen is metabolized and forms several compounds (metabolites) 
which, if not cleared, appear to be toxic to cells. The 
accumulation of these metabolites appears to cause genetic 
damage that if left unrepaired by the cell, can seriously 
interfere with its ability to produce key proteins, and may 
initiate the transformation of a normal to a cancerous cell. 
One group of NIA researchers is specifically studying the role 
oxidative damage plays in breast cancer. Another group is 
studying the genetic programming that is thought to determine 
how breast cancer cells divide and proliferate. Collectively, 
these studies will advance our understanding of the genetic 
changes involved in breast cancer, which may help us understand 
the cause for other cancers such as colon and prostate.

Diabetes

    Diabetes is a common illness among the elderly. It is the 
high glucose blood levels that lead to most of its clinical 
complications including blindness, vascular disease, and kidney 
disease. Adult diabetes is associated with a (1) diminished 
ability of the pancreatic beta cells to release insulin in 
response to blood glucose, and (2) reduced sensitivity of 
target tissues to insulin. Research efforts are directed at 
developing methods to lower blood glucose safely by restoring 
glucose sensitivity to beta cells and improving insulin action 
at the target cells. The NIA's interest in finding new ways to 
maintain the pancreatic beta-cell function in aged animals has 
led to the cloning of the genes that control beta-cell 
regeneration in mice. NIA investigators have also synthesized a 
new compound that increases insulin receptor signaling when 
introduced into intact cells. The development of such reagents 
that act as specific modulators of insulin receptor function 
may provide an effective way to treat diabetes.

Osteoporosis

    Osteoporosis occurs frequently among the elderly, and is 
associated with increased morbidity and mortality. NIA 
researchers have discovered that there are several deficits 
associated with aged bone including reduced bone formation, 
reduced number of cells which make bone, and impaired 
production of the compounds needed to make and maintain bone. 
Researchers are investigating several interventions for 
treatment of osteoporosis including enzyme regulation, cell 
replacement, and growth factor supplementation. These 
scientists have found that anticollagenase (an enzyme) 
treatment can prevent the bone loss seen in certain laboratory 
animals used to study osteoporosis. It is hoped that similar 
studies in patients can be conducted to determine if such an 
approach will work as a treatment for osteoporosis in humans.

Baltimore longitudinal study on aging

    The NIA manages and operates the Baltimore Longitudinal 
Study on Aging (BLSA) which began in 1958. To date, over 2,200 
men and women research volunteers have participated. Recent 
studies using BLSA participants found that women who received 
estrogen hormone treatment made significantly fewer errors in 
short-term visual memory tasks than women not taking estrogen. 
Even women who had recently started estrogen treatment had less 
memory loss compared to women who never received estrogen 
therapy. These findings support a beneficial role of estrogen 
replacement on cognitive functioning in aging women. In 
prostate cancer, BLSA studies have altered the standard of 
practice. Rather than using an absolute value of serum levels 
of prostate specific antigen (PSA) to screen for prostate 
cancer, data from BLSA studies have showed that the rate of 
change of PSA levels over time is a more specific indicator of 
disease. Restricting diagnostic biopsies to patients with PSA 
increases greater than 0.75 units/yr. can significantly reduce 
the number of biopsy procedures thereby reducing the total 
number and cost of unnecessary surgeries. Other studies using 
BLSA participants have provided equally valuable scientific 
information for other medical conditions including 
cardiovascular disease, and AD.

Research management and support

    The research and management support (RMS) activity provides 
administrative support and scientific management for the 
extramural grants and contract awards, for NIA's intramural 
research program, as well as for overall program direction and 
policy development. The extramural initiatives supported by NIA 
have been developed and are managed by the extramural program 
staff funded by the RMS activity. Scientific staff members 
focus their efforts on developing research initiatives, 
reviewing, awarding, and administering grants/contracts on 
aging research and training to universities, hospitals, medical 
centers, and other organizations. The RMS mechanism also 
provides funding for facility support costs, related expense 
items essential to all research programs, and the mandated 
Alzheimer's Disease Education and Referral (ADEAR) Center which 
gathers, maintains, and disseminates information on Alzheimer's 
disease research and services. The center operates a toll-free 
telephone number to provide the latest information and referral 
services to health professionals. Direct support is also 
provided for the operation of several interagency coordinating 
committees related to aging research; NIA is chair or co-chair 
of these committees which include the Federal Forum on Aging, 
and the DHHS Advisory Panel on Alzheimer's Disease.

 Section 2.--1998 Selected Scientific Accomplishments and Opportunities


                          ALZHEIMER'S DISEASE

Taking estrogen after Menopause may delay the onset and reduce the risk 
        of Alzheimer's disease

    A recently completed epidemiologic study of 1,124 women 
over age 70 provides the strongest evidence to date that taking 
estrogen after menopause may delay the onset and reduce the 
risk of Alzheimer's disease in postmenopausal women. At the end 
of the five-year study period, researchers found that 16.3 
percent of the women who had not used estrogen developed 
Alzheimer's disease, while only 5.8 percent of the women who 
had taken estrogen developed the disorder. The age at onset of 
Alzheimer's disease was significantly later in life in women 
who had taken estrogen than in those who did not. Even women 
who took estrogen for as little as one year were less likely to 
develop the disorder. None of 23 women who were taking estrogen 
at study enrollment developed the disease. African-American, 
Hispanic, and Caucasian women who took estrogen benefited 
equally from estrogen replacement, as did women with varying 
educational and socioeconomic levels. Although researchers are 
not sure how estrogen might be protective against Alzheimer's 
disease, studies suggest that estrogen promotes the growth and 
survival of neurons. Estrogen also may protect neurons from 
being injured by toxic substances. A prospective controlled 
clinical trial is planned to confirm the preventive effects of 
estrogen, to assess its safety, and to establish the dose and 
duration of estrogen required to provide any observed benefits 
in elderly postmenopausal women.

New mouse model developed for Alzheimer's disease displays hallmarks of 
        disease

    Researchers have genetically engineered the first animal 
model that exhibits both the behavioral and neuropathological 
symptoms of Alzheimer's disease (AD). The mice were produced by 
insertion of a gene, found in a large Swedish family with 
early-onset AD, that overproduces a protein (beta-amyloid 
precursor protein) which in turn produces the toxic protein 
(beta-amyloid) associated with amyloid plaques. Large numbers 
of these plaques are found in the brain tissue of AD patients, 
and their presence is used to diagnose the disease. While the 
transgenic mice appeared normal at two to three months of age, 
by 9-10 months they exhibited impaired ability in spatial 
learning tasks, and their brains contained dense deposits of 
amyloid plaques; both symptoms and plaques increased with age. 
This model provides an important research tool for 
understanding AD and for expediting means of testing potential 
drug therapies.

Study suggests causes of dementia may vary between cultures

    While overall dementia rates seem to be generally similar 
among nations, reports of the relative frequencies vary between 
the two major subtypes of dementia, AD and vascular dementia. 
For some time, AD has emerged as the major subtype in most 
Western nations, and vascular dementia usually has been 
reported to be the dominant subtype in Japan and possibly in 
other Asian nations. To determine the basis for these disparate 
rates, NIA intramural investigators and others analyzed data on 
3,734 participants aged 71 to 93 years, living in the community 
and in institutions, from the Honolulu-Asia Aging Study (HAAS), 
an epidemiologic investigation of aging and dementia being 
conducted in cooperation with NHLBI's Honolulu Heart Program. 
Cognitive performance was assessed using standardized methods, 
instruments, and diagnostic criteria. The researchers found 
that Japanese-American men living in Hawaii have a higher rate 
of Alzheimer's disease when compared with levels found in 
several studies of men of similar age living in Japan, but 
similar to rates of AD among European-ancestry populations. In 
contrast, the prevalence of vascular dementia is slightly lower 
in Hawaii than in Japan, but higher than rates of vascular 
dementia in European-ancestry populations. These results 
suggest that environmental factors which differ for men of 
Japanese ancestry living in Hawaii or in Japan influence the 
risk of AD and vascular dementia. Observations from this study 
will guide a search for environmental, genetic, and cultural 
factors that may influence the development of both Alzheimer's 
disease and vascular dementia.

                            BIOLOGY OF AGING

Discovery of the genetic defect that causes Werner's syndrome may 
        provide insights into biological aging processes

    Werner's syndrome, a rare, recessive disease with clinical 
symptoms resembling premature aging, results in shortened life 
span and early susceptibility to a number of major age-related 
diseases, including atherosclerosis, cancer, diabetes, and 
osteoporosis. People with Werner's syndrome begin to have gray 
hair, lose elasticity in their skin, and develop cataracts 
while in their twenties, and most die before age 50. Werner's 
syndrome is therefore considered a partial model of human 
aging. Researchers have identified the genetic defect that 
causes Werner's syndrome in a gene on chromosome 8. The gene 
shows a significant similarity to those coding for enzymes that 
unwind paired DNA strands to prepare for repair, replication, 
or expression of genetic material. Scientists are speculating 
that the consequences of this defective gene may be related to 
the accumulation of DNA damage in the patient's cells, leading 
to the premature development of age-related diseases. 
Continuing research, including studies in transgenic mice to 
determine the biological function of the mouse gene that 
performs a function similar to the human Werner's syndrome 
gene, is aimed at determining the role of the gene product. 
Besides the importance of this finding to understanding 
Werner's syndrome, this work is expected to yield important 
insights into cancers, because of the array of rare tumors 
associated with Werner's syndrome; into other age-related 
diseases; and into the biological processes involved in aging.

Gene involved in regulating longevity in C. elegans may provide clues 
        to human aging

    Several ``longevity genes'' have been discovered in mammals 
and lower organisms. These genes have provided insight into 
biologic control of life span, and appear to make the animals 
less susceptible to environmental stresses. Normal development 
and longevity in a primitive worm, C. elegans, are regulated by 
the ``age-1'' gene. Lack of age-1 activity in adult worms, due 
to mutations in the age-1 gene, results in a doubling of adult 
lifespan. NIA-supported researchers determined that the normal 
age-1 gene encodes the analogous gene in the worm of a key 
enzyme (phosphatidyl-inositol-3-OH-kinase) in cellular 
communication and signal transduction. The research team 
speculates that mutations in the age-1 gene, resulting in lower 
levels of this enzyme, may trigger a biochemical program in the 
worm, ultimately leading to a decreased rate of aging and 
senescence. Often the effect of longevity genes depends upon 
the activity of other genes. Human genes that serve the same 
function as age-1 have also been identified. The effect of 
these genes on aging is now being investigated. Continued 
research on age-1 and other longevity assurance genes is viewed 
as a critical first step in the design of biologically-based 
interventions to promote human longevity, extend healthy life 
span, and improve the quality of life in older individuals.

Progress made in telomere genetics

    Telomeres are segments of DNA that protect the ends of 
chromosomes from degradation and recombination. Study of these 
structures and the enzyme telomerase that causes telomeres to 
lengthen has relevance to broad issues of human aging and 
disease. There is a strong correlation between telomere 
shortening and senescence, the loss of cells' ability to divide 
and replicate. Senescence may play a central role in age-
related disease processes and loss of function. The 
uncontrolled growth of malignant cells seen in cancer is in a 
sense the reciprocal phenomenon to senescence. The enzyme 
telomerase, which lengthens telomeres, is rarely active in 
normal cells, but is highly active in nearly all malignant or 
immortalized human cells that have been examined. Because of 
this link to cancer, understanding the role and regulation of 
telomerase activity in normal and malignant cells is of 
critical importance. During the past year, significant progress 
has been made toward understanding the nature of telomerase 
regulation. Scientists cloned the mouse and human genes for a 
portion of telomerase. The molecular cloning of the remaining 
(protein) segment of telomerase is under way. Recently, 
scientists reported on the expression of telomerase by normal 
human cells, including those of the immune system. Parallel 
initiatives are exploring whether and how telomerase governs 
the function and replication of tumor and immune cells.

                        MUSCULOSKELETAL RESEARCH

Antibiotic shows promise in treating osteoporosis

    Osteoporosis is a major public health threat, and afflicts 
25 million Americans, 80 percent of whom are women. The loss of 
bone mass due to osteoporosis contributes to 1.5 million 
fractures annually. NIA intramural scientists showed that 
minocycline, one of the tetracycline-like antibiotics, improves 
bone strength and formation and slows bone resorption in aged 
laboratory animals with surgically-induced menopause. While 
estrogen has been shown to prevent bone loss, minocycline 
appears to prevent bone loss and to increase bone formation, 
possibly achieving mineral density beyond premenopausal levels. 
Minocycline is inexpensive and, because it is not a hormone, 
may not exert the adverse effects seen with estrogen, such as 
those on the uterine lining. Researchers are now launching a 
one-year clinical trial to study the effects of minocycline in 
postmenopausal women with osteoporosis.

Exercise found to be safe and effective for knee osteoarthritis

    The osteoarthritic diseases are the most prevalent 
disorders of the joint, with radiographic evidence seen in at 
least 70 percent of those over age 65. A clinical study, 
conducted at one of NIA's Claude D. Pepper Older Americans 
Independence Centers, suggests that people with osteoarthritis 
of the knee who exercise in moderation experience a significant 
improvement in physical functioning, and up to a 12 percent 
reduction in knee pain, compared with individuals who received 
health education only. In this 18-month study of 439 people 
over age 60, aerobic training was divided into a three-month 
walking program on an indoor track with a trained exercise 
leader, followed by a 15-month walking program in the home 
environment designed by the exercise leader. Participants 
exercised for 1 hour, which included warm-up calisthenics and 
stretching three times a week, during each phase. The 
resistance training program, involving dumbbells and cuff 
weights for strengthening both the upper and lower body, also 
consisted of a three-month facility-based program followed by a 
15-month home-based program. The study concluded that exercise 
over a long period of time is safe as well as beneficial for 
older people with knee osteoarthritis. Further research is 
needed to understand how to prevent degenerative joint disease, 
a problem that afflicts tens of millions of older persons.

                          CARDIOVASCULAR AGING

Treatment found effective in preventing major cardiovascular events

    After five years of treatment of isolated systolic 
hypertension with low doses of diuretic-based anti-hypertensive 
medication, men and women aged 60 and older had fewer strokes, 
heart attacks, and other coronary heart disease, as well as 
lower overall mortality, than those given a placebo. The 
reduction in the rate of major cardiovascular disease with 
treatment was 34%, and the absolute risk reduction was twice as 
great for diabetic as compared with nondiabetic patients, 
reflecting the diabetic patients' higher risk. Increased use of 
the relatively inexpensive medication to treat isolated 
systolic hypertension could save substantial hospital and 
medical costs.

Exercise boosts cardiac fitness in sedentary older people

    Cardiovascular diseases remain a main cause of disability 
and the leading cause of death of older Americans, accounting 
for approximately 50 percent of deaths in persons age 65 and 
older. Declines in cardiovascular reserve capacity with aging 
lead to a greater prevalence and severity of cardiovascular 
disease in older individuals. With age, the hearts of otherwise 
healthy sedentary people gradually lessen their ability to 
increase their heart rate and ejection fraction (the percentage 
of blood leaving the heart during each heart beat) during acute 
exercise. While it has become clear that aerobic exercise 
conditioning can partially offset age-associated cardiovascular 
declines, even for those who begin at age 60 or 70, scientists 
questioned whether the beneficial effects of aerobic exercise 
training in older individuals depend upon their prior fitness 
level. A team of investigators led by NIA intramural 
researchers started with two groups of men at opposite ends of 
the fitness spectrum and inversely varied their training 
status. A group of sedentary older men exercised for 24 to 32 
weeks, and a group of endurance-trained older athletes stopped 
their exercise for 12 weeks. Researchers measured the subjects' 
aerobic capacity and cardiovascular performance at the 
beginning and end of the study using a treadmill exercise test 
and a graded bicycle exercise test of the heart's ability to 
pump blood. With training, the sedentary men increased their 
ejection fraction from 73 to 81 percent and their 
VO2 max, a measure of a person's aerobic capacity, 
by 11.3 percent; the detrained athletes had decreases in these 
functions that were qualitatively and quantitatively similar in 
magnitude, although directionally opposite. The results show 
that even the most sedentary older men can improve cardiac 
function through aerobic exercise, and that age and prior 
fitness level is no barrier to achieving these gains.

Vascular stiffness contributes to cardiovascular disease

    Recent findings have identified the stiffening of large and 
medium-sized elastic arteries, such as the aorta, as a 
potential risk factor for cardiovascular morbidity in the 
elderly. This stiffening occurs in healthy older people; but 
for approximately half of Americans age 65 and older, the 
degree of vascular stiffening may become great enough to lead 
to isolated systolic hypertension, a major risk factor for 
stroke, and to other cardiovascular disorders. Research into 
the biological and physiological mechanisms involved in 
vascular stiffening may suggest effective treatments, and may 
enable physicians to determine when the degree of vascular 
stiffening passes from the normal to the pathological range, 
thus helping to prevent its negative effects. NIA is promoting 
research to reduce both vascular stiffening and cardiovascular 
risk factors associated with lifestyle, as well as to 
understand age-related changes in cardiac function, circulatory 
hemodynamics, blood pressure regulation, and lipid metabolism, 
all significant contributors to morbidity and mortality in the 
elderly.

                            AGING AND CANCER

Test provides earlier prediction of prostate cancer

    An estimated 81 percent of persons affected by prostate 
cancer are 65 years and older. It was projected that, in 1996, 
approximately 317,000 men would be diagnosed with prostate 
cancer, and approximately 41,400 men would die of this disease. 
African-American men experience the highest incidence of this 
cancer in the world. In a recent advance, NIA intramural 
investigators have found that prostate cancer may be predicted 
up to ten years before it is diagnosed, by comparing, over 
time, the ratios in a man's blood of free (not bound to a 
protein) to total prostate specific antigen (PSA, an enzyme 
produced by the prostate gland). Repeating measurements of both 
free and total PSA and calculating the ratio between the two 
over time may allow the physician to predict whether prostate 
cancer is developing, and to distinguish it from benign 
prostatic hypertrophy.

Breast cancer a major health problem in elderly women

    Women age 65 and older have an incidence rate more than six 
times that of women under age 65, and mortality rates show 
similarly dramatic increases with age. Nevertheless, no 
comprehensive guidelines for prevention, diagnosis, 
pretreatment evaluation, or treatment have been formulated that 
take into account the multiple health problems and special 
needs of older women. There are also insufficient data from 
clinical trials about the effect of breast cancer treatment on 
older women, and minimal research on how to encourage older 
women to increase their participation in cancer prevention 
practices. With the projected increase in the aged female 
population in the U.S., the need for findings relevant to 
breast cancer control is becoming more critical.

                          AGING AND DISABILITY

Chronic disability rates continue to decline in the elderly U.S. 
        population

    Between 1982 and 1994, the prevalence rates for chronic 
disability in the U.S. elderly population, ages 65 and older, 
declined 3.6 percentage points, based upon data from the 1982, 
1989, and 1994 National Long Term Care Surveys. The decline is 
highly significant statistically, and occurred at nearly all 
levels of disability. In absolute terms, the differences in 
prevalence suggest that there are approximately 1.2 million 
fewer disabled persons in 1994 than would have been predicted 
if the 1982 rates had remained the same; that is, 7.1 instead 
of 8.3 million persons. The declines in disability rates are 
linked to differences among birth cohorts, with those in the 
oldest cohorts (born 1888 to 1897) having much higher rates of 
disability than younger cohorts. This suggests that declines in 
disability are likely to continue with new cohorts. The 
findings have implications for health care costs and needs for 
health care resources. Given the higher acute and long term 
care service needs of the disabled elderly population, 
Medicare, Medicaid, and private expenditures may be 
significantly lower than if declines had not occurred. NIA 
plans to analyze the dynamics underlying this apparent decline 
in old-age disability in order to enhance this trend.

For people 80 years old or older, life expectancy is greater in the 
        United States than in Sweden, France, England, or Japan

    In many developed countries, life expectancy at birth is 
higher than in the United States. In contrast, once American 
men and women celebrate their eightieth birthday, they are 
likely to live about 1 to 2 years longer than their 
counterparts in other highly developed countries. The study, 
comparing life expectancy at advanced ages in the U.S., Sweden, 
France, England, and Japan, shows that in 1987 American women 
lived 9.1 years and American men lived 7 years, on average, 
past age 80. The investigators calculated life expectancies for 
people at the age of 80 as well as the probability of surviving 
five years at ages 80 through 95. Counter to demographers' 
expectations, regardless of how the data were analyzed, life 
expectancy at age 80, and survival probabilities from 80 to 
100, were significantly greater for white U.S. men and women 
than for the oldest cohorts in the other countries studies. The 
findings highlight U.S. success in increasing survival of the 
very old and suggest that Medicare and the overall U.S. health 
care system, as well as comparatively higher education among 
American elderly, may play a role in extending U.S. life 
expectancy in later years.

Benefits of exercising encourage a healthy lifestyle in old age

    Studies such as the Institute's Baltimore Longitudinal 
Study of Aging and the Claude D. Pepper Older Americans 
Independence Centers have shattered stereotypes about 
inevitable physical and mental decline with age, and have 
demonstrated the benefits of exercise, even for people well 
into their nineties. Regular physical exercise has been shown 
repeatedly to improve health and functioning. A study of more 
than 13,000 men and women found that, at any age, even modest 
amounts of regular exercise, equivalent to walking 30 to 60 
minutes a day, can significantly improve health, prevent 
disease, and reduce the risk of death. A more recent study by 
the same investigator of more than 9,000 men aged 20 to 82, 
which compared death rates in physically unfit men who remained 
unfit over five years with physically fit men who became fit 
during the same period, found that unfit men aged 60 and over 
who became fit had death rates 50 percent lower than those who 
remained unfit. These findings have helped form the basis for 
recommendations, where health permits, for older people to 
adopt a more active lifestyle.

                     BEHAVIORAL AND SOCIAL RESEARCH

Individualized care in nursing homes produces positive effects on 
        residents

    An intervention program consisting of interdisciplinary 
care planning, family support, and activity programming for 
persons with moderate dementia produced a decrease in 
psychiatric and behavioral problems, as well as a decrease in 
daytime levels of verbal agitation, when compared with nursing 
home residents not exposed to the intervention. This study is 
representative of NIA research designed to improve the long-
term care of older people in institutional and residential 
settings. In addition, a recent survey of 16,876 nursing 
facilities documented a doubling in the number of special care 
units (such as special units for dementia, rehabilitation, and 
AIDS) between 1991 and 1996. Investigators who studied this 
trend suggest that special care units may be an organizational 
strategy for concentrating limited resources where needs and 
benefits to the resident and facility may be the greatest. NIA 
is encouraging development of cross-site analyses of special 
care units and outcome studies of long-term care in residential 
settings.

Study identifies factors that influence compliance with medical 
        regimens

    A significant number of persons with diabetes, arthritis, 
and hypertension demonstrate misunderstanding of recommended 
medical treatments. In a recently reported study, middle-aged 
and elderly members of a health maintenance organization were 
randomly selected on the basis of whether they had arthritis, 
hypertension and/or diabetes, and then interviewed to evaluate 
self-reports of treatment as compared to the treatment regimens 
recorded by their physicians. Patients with arthritis 
demonstrated a greater likelihood to misunderstand treatment 
regimens (50%) than patients with diabetes or hypertension 
(30%). The study showed that several factors influenced the 
lack of patient understanding of treatments, and highlighted 
the influence of doctor-patient relationships on older clients' 
understanding of and compliance with treatment regimens. 
Physician style (shared decision making, tolerance of non-
compliance) was related to how well individuals with arthritis 
and hypertension understood prescribed treatments. Age 
contributed to reported inaccuracies for diabetic patients 
only, with older age groups demonstrating the least complete 
understanding when compared to other diabetic patients. The 
implications for health and well-being for the group who 
misunderstood information, particularly the arthritis patients, 
warrant continued research on best strategies to educate 
patients about their recommended treatment regimens, especially 
in light of the growth of managed care arrangements which 
provide a new context for doctor-patient interactions.

         Section 3.--Research Sponsored by Other NIH Institutes


                         National Eye Institute

Age-related macular degeneration

    Age-related macular degeneration (AMD) is the leading cause 
of new blindness in persons over age 65. Based on recent 
advances, research is being directed toward the identification 
of genes which, when mutated, contribute to the development of 
AMD. Techniques of molecular genetics allow scientists to 
examine ``candidate'' genes to determine whether mutations 
occur with a higher frequency in persons affected by AMD than 
in unaffected persons. While such mutations might not by 
themselves be sufficient to cause AMD, they may contribute to 
the occurrence of AMD in the presence of other mutant genes or 
environmental insults. Scientists in the NEI intramural program 
will screen approximately 1000 patients and age-matched control 
individuals from the Age-Related Eye Disease Study (AREDS). 
AREDS is a large, multi-center, research program designed to 
improve our understanding of the predisposing factors, clinical 
course, and prognostic factors of AMD and cataract. DNA samples 
from the study's participants will be examined for mutations or 
sequence variants in a group of well-characterized genes known 
to be involved in a fundamental retinal function or to cause 
retinal disease. A repository of genetic material from the 
AREDS participants is being created to test candidate genes for 
AMD as they are identified. Extramural investigators will have 
access to this resource. Finding a genetic basis for AMD will 
increase our understanding of the pathophysiology of the 
disease and assist in developing new treatments or methods of 
prevention.

Prevention of complications from age-related macular degeneration

    Another new direction for age-related macular degeneration 
research has been through NEI support for the Complications of 
Age-related Macular Degeneration Prevention Trial (CAPT). This 
trial will assess the safety and effectiveness of laser 
treatment in preventing loss of vision among patients at high-
risk for developing age-related macular degeneration. In 
addition to the primary outcome, which is visual acuity loss, 
quality of life will be assessed. Twenty-five clinical centers 
will conduct the study over the next five to seven years.

Low vision education program

    The NEI staff, through its National Eye Health Education 
Program (NEHEP), has begun the development of a new Low Vision 
Education Program. The primary target audience for this program 
is people age 65 and older with a visual impairment that 
interferes with daily activities. Focus groups were conducted 
across the country to learn more about the knowledge, 
attitudes, and practices of this target audience as they relate 
to how their visual impairment affects their lives and whether 
they know about and access services and devices available. 
Planning meetings were held with an ad hoc working group and 
NEHEP Partnership members to define program messages and 
strategies as well as to identify avenues to strengthen this 
public-private partnership. Based on recommendations from these 
groups, the following strategies will be utilized: (1) a broad-
based consumer media campaign; (2) an education kit with 
resources for health care professionals, social service 
organizations, and other groups to use in educating the target 
audience; and (3) an outreach program, including traveling 
exhibits, for both the general public and health care and 
social service professionals that work with and serve older 
adults. It is anticipated that the program will be launched 
during FY2000.

                      National Library of Medicine

Seniors enter medical cyberspace

    The National Library of Medicine (NLM), co-sponsored a 
project to ``train trainers'' of senior citizens from around 
the country in how to access health information on the 
Internet. NLM coordinated the joint project with two other 
components of the NIH--the National Heart, Lung, and Blood 
Institute and the Office of Research on Women's Health--and the 
HHS Health Care Financing Administration and the Office of 
Disease Prevention and Health Promotion.
    The project was administered by the SPRY (Setting 
Priorities for Retirement Years) Foundation in Washington, D.C. 
SPRY is a nonprofit national organization devoted to research 
and education efforts on senior citizens health and retirement 
issues.
    The train-the-trainer project, consisted of a series of 
intensive workshops for 21 trainers of senior citizens from a 
dozen states (AZ, DC, FL, IA, MA, MD, MO, NC, NY, OH, PA, VA). 
The program gave special emphasis to trainers from public 
libraries, senior centers, and subsidized housing who work with 
low income and minority seniors. After they participate in the 
training in Bethesda, the trainers returned home to train a 
minimum of 10 seniors per site. A multiplier effect is expected 
to raise that number substantially as more and more senior 
citizens find that they can retrieve valuable information about 
their health.

Seniors cruise the net for health information

    NLM joined the National Heart, Lung, and Blood Institute, 
the Office of Research on Women's Health, and the Department of 
Health and Human Service's Health Care Financing Administration 
to release findings of a jointly sponsored project to ``train 
trainers'' of senior citizens from around the country in how to 
access health information on the Internet.
    Results of the project indicate that training had a 
positive impact on seniors' confidence in using computers and 
the Internet, in conducting consumer health information 
searches online, and in sharing health care information with 
doctors, families and friends. The report also found that 
seniors can learn to use the Internet and don't want to be left 
behind on the information superhighway. Two-thirds of those who 
searched for health information on the Internet talked about it 
with their doctors, and more than half indicated they were more 
satisfied with their treatment as a result of their search. The 
findings suggest that the ``train the trainer'' approach may be 
used successfully to enable older adults to access credible 
medical information on the Internet.
    The report, ``Internet Train-the-Trainer Program for Older 
Adults,'' may be requested from the Library's Office of 
Communications and Public Liaison.

                  Office of Research on Women's Health

    In conjunction with the NIA, the Office of Research On 
Women's Health (ORWH) supports a variety of studies through the 
Research Enhancement Awards program including:

Functional decline in victimized older women

    The specific aim of this research is to identify risk 
factors for functional decline in an observational cohort of 
urban community-dwelling older women who are followed for 12 
months after experiencing violence or the threat of violence. 
The long-term goal of this project is to develop intervention 
strategies to prevent functional decline in victimized older 
women based on identified risk factors.

Age, ethnicity and clinical trials participation

    The goal of this research is to develop barrier models for 
participation of older women, particularly minority older 
women, in prevention clinical trials for heart disease and 
breast cancer. The purpose is to improve recruitment strategies 
to ensure greater participation by this under-represented group 
of women in prevention clinical trials. The effects of 
ethnicity will also be tested and added to the limited database 
on the decision-making processes of older adults.

               National Heart, Lung, and Blood Institute

    Several research areas supported by the National Heart, 
Lung, and Blood Institute (NHLBI) are closely entwined with 
improving the health of older people. For example, heart 
failure affects about 4.8 million Americans--3.4 million age 60 
or older, and heart disease is a major health concern of 
postmenopausal women. The following describes some recent 
NHLBI-supported research results of special relevance to older 
Americans.

Treatment for systolic hypertension in the elderly

    Clinical trial results from the Systolic Hypertension in 
the Elderly Program (SHEP) have revealed that treatment with a 
low-dose diuretic antihypertensive drug cuts in half the risk 
that an older person with isolated systolic hypertension will 
develop heart failure. The study also found that treatment with 
diuretics decreases the risk of heart failure even further--by 
80 percent-- among individuals who have already had a heart 
attack. Rates for both fatal and nonfatal cases of heart 
failure dropped dramatically with treatment. Even patients aged 
80 and older benefited from treatment. The potential public 
health impact of these findings is considerable, because 
millions of Americans over age 60 have isolated systolic 
hypertension, and more than 3 million have blood pressure as 
high as that treated in the SHEP trial.

Designer estrogens

    Investigators have found that at least two independent 
pathways exist by which estrogen can act on the blood vessels 
in mouse models, and that a variety of estrogen-like compounds 
produce different effects. Estrogen replacement therapy has 
been recommended for postmenopausal women as a preventive 
measure against heart disease, but it has unwanted side effects 
such as a slightly increased risk of breast cancer and an 
increase in deep-vein thrombosis. The research findings suggest 
that it may be possible to develop specific ``designer 
estrogens'' that could provide safe, acceptable protection 
against heart disease while, at the same time, reducing or 
eliminating unwanted and potentially costly health side 
effects.

Lifestyle interventions to reduce blood pressure

    The Trial of Nonpharmacologic Interventions in the Elderly 
examined the extent to which weight control and reduction of 
dietary sodium diminished the need for antihypertensive 
medication in older patients. Researchers found that reducing 
sodium intake by about 30 percent or losing an average of about 
9 pounds reduced the need for drug treatment substantially; an 
even greater benefit was derived from combining these two 
strategies, and no adverse effects of either lifestyle 
intervention were observed. These results, which indicate that 
older patients can successfully change life-long habits, 
provide strong impetus for programs using such approaches to 
improve control of high blood pressure.

First estimate of lifetime risk for developing heart disease

    The lifetime risk for developing coronary heart disease 
(CHD) has been estimated for the first time by researchers at 
the NHLBI Framingham Study. The risk is high at all ages: 50 
percent of men and 33 percent of women aged 40 and under will 
develop CHD. Even among those 70 years old, 33 percent of men 
and 25 percent of women will develop CHD in their remaining 
years of life. It is clear that to improve overall public 
health, increased attention must be focused on this fast-
growing older segment of our population.

                 National Institute of Nursing Research

    Americans expect to live longer than earlier generations, 
but these additional years should be lived well--with health 
and independence intact for as long as possible. Nursing 
researchers are exploring interventions with this goal in mind 
in order to preserve cognition and the ability to function, and 
to maintain or improve quality of life.
    The National Institute of Nursing Research (NINR) supports 
studies that address these and other health issues of the older 
population, including prevention of illness and disability; 
health promotion strategies; management of the symptoms of 
chronic diseases, including pain; interventions for family 
caregivers to help them maintain their own health as well as 
that of their ill relatives; and end-of-life issues to ensure 
that dying patients receive compassionate and life-affirming 
health care that promotes comfort and dignity.
    Among the findings of FY 1997-98 are studies that help 
older people recover after hospitalization for chronic 
illnesses, such as heart attack and respiratory failure, and 
that address end of life issues that promote comfort and 
dignity throughout the dying period.
           Older people with common medical and 
        surgical problems, who were discharged from the 
        hospital following treatment, realized a significant 
        improvement in their health at reduced costs to the 
        health care system. A study tested a transitional care 
        model using a multidisciplinary team. The model 
        involves comprehensive discharge planning, including 
        determination of patient care needs outside the 
        hospital, and follow-up in the home by advanced 
        practice nurses specializing in geriatrics. Findings 
        indicate that six months after discharge, only 20% had 
        multiple hospital readmissions versus 14.5% for 
        controls. Per-patient days in the hospital were fewer 
        for the group receiving transitional care--1.53 versus 
        4.09 for controls, and the costs of post-discharge 
        health services for the 177 patients in the group were 
        about $600,000 lower than for controls. When 
        considering the number of frail older people 
        hospitalized each year with similar conditions, the 
        potential benefits to the patient and savings to the 
        health care system could be substantial.
           As the lead Institute to coordinate research 
        on end-of-life palliative care, NINR is committed to a 
        focus on improving interactions between the health care 
        system and those who are dying. Multidisciplinary 
        research led by an NINR scientist has explored what 
        patients and families want and expect in end-of-life 
        care. The investigator found that families in the study 
        whose relatives were dying in hospitals were willing to 
        stop aggressive treatment if the condition was terminal 
        and if they believed high quality comfort care would be 
        provided. They reported that in the last week of life, 
        their relatives had more pain and other physical 
        distress than the health care team realized. They also 
        expressed concern about the views of some health care 
        professionals that death is a medical failure. Patients 
        without adequate health insurance were found to lack 
        access to good palliative care and were likely to 
        require expensive hospitalization for symptoms that 
        could have been managed by hospice or home-health 
        nurses. These research results help guide current and 
        future NINR research directions in management of pain 
        and other physical stressors, caregiving training, 
        bioethical issues and the decision-making processes of 
        patients, their families, and clinicians.

                 National Center for Research Resources

    The National Center for Research Resources (NCRR) creates, 
develops, and provides a comprehensive range of human, animal, 
technological, and other resources to enable biomedical 
research advances in aging research. NCRR serves as a 
``catalyst for discov-

ery'' for NIH-supported investigators by supporting resources 
in four areas: Biomedical Technology, Clinical Research, 
Comparative Medicine, and Research Infrastructure.

Conversion of electron microscope images to three-dimensional 
        structures

    Using an intermediate high-voltage electron microscope and 
a massive parallel supercomputer, investigators at an NCRR-
supported microscopy and imaging research center at the 
University of California, San Diego, have devised a method to 
derive three-dimensional structures from electron microscopy 
images. With the electron microscope, researchers obtained 
images of tissue specimens at various depths from the surface, 
roughly comparable to cutting a sausage in thin slices. After 
converting the stack of ``slices'' to computer-readable data, 
the supercomputer used a process called electron tomography to 
derive a three-dimensional image from the multilayer flat 
images. Used in conjunction with other advanced tools, electron 
tomography provides unprecedented details of structures inside 
cells. The new method may provide fresh approaches to detect 
and treat Alzheimer's and Parkinson's diseases as well as other 
diseases that involve buildup of harmful structures inside 
cells.

Scientists home in on gene for age-related sight loss

    By studying a large family affected by macular 
degeneration, NCRR-supported researchers at the Oregon Health 
Science University have homed in on the location of a gene that 
causes this inherited form of eye disease. Millions of 
Americans suffer gradual fading of central vision known as age-
related macular degeneration and 7 percent of those older than 
75 have progressed to the late stage of this disease. This 
research will help develop tools for early detection and 
ultimately lead to treatments than can eliminate the disease.

Estrogen replacement and blood pressure in postmenopausal women

    Coronary heart disease (CHD) is the leading cause of death 
for women in the United States, responsible for one-quarter 
million deaths each year. One in nine women who are between 45 
and 65 years old has clinical evidence of CHD, but one in three 
women older than 65 years has CHD. Although there is a 
significant risk reduction for CHD in postmenopausal women 
receiving estrogen replacement therapy, estrogen's effect on 
blood vessel stiffness--a contributing factor to hypertension--
and blood pressure sensors in blood vessels was unknown. Now 
researchers at the NCRR-supported General Clinical Research 
Center at Columbia University have shown that short-term 
estrogen treatment decreased vascular stiffness and increased 
the sensitivity of the pressure receptors, producing 
significantly lower blood pressure both during rest and during 
isometric exercise. These findings provide a basis for better 
treatment of cardiovascular risk factors in older women.

Vitamin D deficiency

    A study of 290 patients at an NCRR General Clinical 
Research Center in Boston found that more than half had too 
little vitamin D in their bodies. Vitamin D deficiency, common 
among older people, can lead to fractures and can also 
exacerbate arthritis, affect immune function, and lead to 
muscle weakness and a bone condition called osteomalacia. This 
study supports other scientific evidence that most people 
should take vitamin D supplements.

Slowing progression of Alzheimer's disease

    In a multicenter trial involving several NCRR-supported 
General Clinical Research Centers, researchers studied whether 
treatment to reduce accumulation of free radicals would slow 
progression of Alzheimer's disease. More than 300 patients with 
moderately severe Alzheimer's disease received the antioxidants 
selegiline, vitamin E, a combination of the two, or a placebo 
daily for two years while being monitored for disease 
progression. Compared to those receiving placebo, the time to 
severe disease deterioration was prolonged by 150 to 200 days 
in patients receiving antioxidant treatment.

Early diagnosis of Parkinson's disease using SPECT imaging

    Destruction of dopamine-producing nerve cells is a 
principal cause of Parkinson's disease, which affects about one 
million Americans, according to the American Parkinson Disease 
Foundation. Using nonhuman primates, scientists at the NCRR-
supported New England Regional Primate Research Center have 
discovered a chemical that selectively binds to dopamine 
transporters and can be detected using a novel imaging 
procedure--single-photon emission computer tomography. This 
procedure can diagnose Parkinson's disease much earlier than 
before by measuring the level of the chemical that transports 
dopamine in nerve cells.

Pathology of aging in rhesus macaques

    For 14 years, a researcher at the NCRR-supported Wisconsin 
Regional Primate Research Center evaluated the causes of death 
of 175 macaques aged 20 to 37. His research showed that while 
these macaques lived in controlled and sheltered environments, 
they still died of many of what are considered the most common 
human geriatric diseases, including colon cancer, hardening of 
the arteries, and brain plaques similar to Alzheimer's. 
According to his research, the diseases appear to be brought on 
by old age and predisposing genetic factors, versus 
environmental or lifestyle factors.

                National Human Genome Research Institute

    The National Human Genome Research Institute (NHGRI) funds 
a project to address the ethical and policy issues regarding 
current genetic susceptibility testing for late-onset Alzheimer 
disease (AD). It also addresses ethical aspects of ongoing gene 
testing in families with early-onset AD. The project's 
Community Advisory Board and National Study Group will take up 
the following tasks: examine current testing developments in AD 
genetics, their pre-symptomatic applicability, and clinical 
usefulness; consider costs of testing, potential testing pool, 
and justice in access to testing; address potential impact of 
susceptibility testing on private long-term care insurance 
industry; develop ethics guidelines for the use of 
susceptibility tests that detect a form of the apolipoprotein 
(ApoE) gene; develop ethics guidelines for the use of tests 
that detect an alteration in the amyloid precursor protein 
(APP) gene; and develop recommendations for the Alzheimer's 
Association in ensuring public understanding of test 
developments. In addition, a pilot questionnaire study of 
population attitudes toward ApoE susceptibility testing, to be 
implemented in Chicago, is included. This project is conducted 
in collaboration with the national Alzheimer's Association.
    NHGRI also funds efforts to create the tools and 
infrastructure to locate genes contributing to human disease. 
These efforts often focus on diseases that may affect people in 
later life, such as Alzheimer's disease, heart disease, 
diabetes, and many common cancers such as prostate and breast 
cancer. The Center for Inherited Disease Research (CIDR), 
located on the Bayview campus of Johns Hopkins University, 
supports disease research by providing high-throughput 
genotyping services, study design advice, and sophisticated 
database assistance to research efforts attempting to identify 
genetic loci and allelic variants. CIDR is a joint effort by 
eight NIH institutes: National Cancer Institute (NCI); National 
Institute of Child Health and Human Development (NICHD); 
National Institute on Deafness and Other Communication 
Disorders (NIDCD); National Institute on Drug Abuse (NIDA); 
National Institute of Environmental Health Sciences (NIEHS); 
National Institute of Mental Health (NIMH); National Institute 
of Neurological Disorders and Stroke (NINDS); and the National 
Human Genome Research Institute (NHGRI) serving as the lead. A 
more complete description of CIDR, including application 
procedures, is available at: http://www.cidr.jhmi.edu/

    National Institute on Deafness and Other Communication Disorders

Hearing loss

    Presbycusis, the late onset of progressive hearing loss, is 
one of the most common health problems in the elderly. Hearing 
loss of at least 25 decibels occurs in only 1 percent of young 
adults between 18-24 years of age; however, this figure 
increases to 10 percent of individuals between 55-64 years of 
age and to approximately 50 percent in octogenarians. 
Scientists supported by the National Institute on Deafness and 
Other Communication Disorders (NIDCD) are examining the 
underlying molecular and cellular events that lead to the loss 
of hearing function with age. By characterizing age-related 
alterations in the inner ear, scientists will foster the 
development of a rationale for designing pharmacological gene-
mediated therapies for some forms of hearing impairment, 
including presbycusis.

Stroke

    NIDCD-supported scientists are taking a cross-linguistic 
approach to language development, language processing, and 
language breakdown in aphasia. Aphasia is a language disorder 
that results from damage to portions of the brain that are 
responsible for language; it usually occurs suddenly, 
frequently the result of a stroke or head injury. The disorder 
impairs both the expression and understanding of language as 
well as reading and writing. For centuries, language was 
believed to be a fixed, special-purpose ``organ'' that is 
neatly localized in one or two well-defined parts of the left 
side of the brain. Studies of patients with aphasia and other 
types of disorders of language function are revealing that 
language is a plastic, broadly distributed, dynamic system that 
is organized in time as well as space. These studies are 
valuable in developing the highest level of function and 
communication for persons with aphasia.
    Using functional magnetic resonance imaging (fMRI), NIDCD-
supported investigators have documented reorganization of brain 
activity after treatment for acquired reading disorders 
following a stroke. fMRI performed during a reading task before 
and after treatment indicated a shift in brain activation from 
one area of the brain to another, showing that it is possible 
to alter brain activity patterns with therapy for acquired 
language disorders.
    Additionally, stroke or head injury may affect the 
coordination of the swallowing muscles or limit sensation in 
the mouth and throat. NIDCD supported-scientists are conducting 
research that will improve the ability of physicians and 
speech-language pathologists to evaluate and treat swallowing 
disorders.

 National Institute of Arthritis and Musculoskeletal and Skin Diseases

    Researchers supported by the National Institute of 
Arthritis and Musculoskeletal and Skin Diseases (NIAMS) use 
powerful research tools to acquire and apply new knowledge to 
studies on some of the most challenging diseases affecting 
older Americans today. Many of these diseases have troubled 
patients and their health care providers for decades, but each 
year significant discoveries have brought researchers closer to 
fully understanding, diagnosing, treating, and ultimately 
preventing these common, crippling, costly, and chronic 
diseases, which greatly compromise quality of life. These 
disorders include the many different forms of arthritis and 
numerous diseases of joints, muscles, bones, and skin.

Osteoarthritis

    Osteoarthritis, the most prevalent disease of the joints, 
is characterized by progressive degeneration of the cartilage, 
primarily affecting the hip and knee joints. It is predicted 
that osteoarthritis will affect at least 70 percent of the 
population over 65. In a clinical trial funded by the NIAMS and 
the NIA, researchers began studying the effects of the 
antibiotic doxycycline on osteoarthritis. Certain antibiotics, 
such as doxycycline, inhibit the enzymes that degrade 
cartilage. The NIAMS also started an initiative to study the 
biological responses of cartilage and bone to various 
mechanical forces and how those responses affect the onset and 
progression of osteoarthritis.

Rheumatoid arthritis

    NIAMS researchers and their colleagues studied rats with an 
autoimmune inflammatory arthritis that resembles human 
rheumatoid arthritis. Through genetic analyses of rats with 
different disease susceptibilities and severity, they found 
that the genetic basis in the inflammatory arthritis bore a 
striking similarity to what is known about the genetics of 
rheumatoid arthritis. Multiple genes are involved in both 
diseases making it more complicated for researchers to reveal 
the causes of the disease and design effective therapies. The 
researchers located several of the particular genes that affect 
arthritis susceptibility and severity in rats. One of these 
genetic loci has been previously linked to other autoimmune 
diseases and may play a role in the phenomenon of autoimmunity.
    The NIAMS began support for the North American Rheumatoid 
Arthritis Consortium to comprehensively study the genetic 
aspects of rheumatoid arthritis in a national project involving 
800 sibling pairs affected with rheumatoid arthritis.
    The Institute also issued a Request for Proposals to 
encourage studies of technology and methodology of gene therapy 
relating to arthritis and skin diseases. Finally, the NIAMS 
took the initiative in developing a roundtable forum of major 
participants interested in rheumatoid arthritis and 
osteoarthritis: the NIH, the FDA, and representatives from 
industry, academia, and voluntary and professional groups.

Osteoporosis

    Osteoporosis, a disease characterized by low bone mass and 
structural deterioration of bone tissue, is the leading cause 
of bone fractures in postmenopausal women and older people in 
general. The NIAMS cosponsored the NIH Postmenopausal Estrogen/
Progestin Interventions trial that reported that postmenopausal 
women taking hormone replacement therapy gained significant 
amounts of bone mass at the hip and spine. In other work, 
investigators showed that estrogen induces ``programmed cell 
death'' in the cells (osteoclasts) responsible for bone 
degradation, and that supplemental calcium prevents spine 
fractures in elderly women.
    The NIAMS also partnered with other NIH Institutes in 
issuing a Program Announcement for the study of the basic 
biology, epidemiology, prevention, and treatment of 
osteoporosis and osteoporosis-related fractures in men.

                  National Institute of Mental Health

    The National Institute of Mental Health (NIMH) program of 
research on aging includes studies in the basic sciences as 
well as research in neurobiology and brain imaging, clinical 
neuroscience, treatment assessment, psychosocial and family 
studies, and service systems research. Studies involve mental 
disorders with initial occurrence in late life as well as 
illnesses that begin in early adulthood but continue throughout 
the life course. Major areas of research focus are the 
psychiatric aspects of Alzheimer's disease and related 
dementias, depressive disorders, schizophrenia, anxiety 
disorders, and sleep disorders.

Alzheimer's disease

    An estimated 4 million Americans age 65 and older suffer 
from Alzheimer's disease or other forms of dementia. An 
important area of NIMH research on Alzheimer's disease focuses 
on genetic factors. NIMH-supported researchers recently 
identified a new gene mutation strongly associated with the 
risk of developing late-onset Alzheimer's disease, the most 
common form of the brain disorder. Using the NIMH Genetics 
Initiative Alzheimer's disease sample (a collection of DNA 
samples and clinical information from hundreds of families in 
which more than one individual has Alzheimer's), and new 
methodology, the researchers found that a particular gene 
mutation, alpha-2 macroglobulin-2 (A2M-2), was significantly 
associated with Alzheimer's. The finding, if replicated, will 
offer important clues into the disease process and will help 
discern the role of additional genetic and environmental 
factors involved in creating vulnerability to the disease.

Depression

    Nearly 5 million of the 32 million Americans age 65 and 
older suffer from depression. Significantly, many late-life 
depressions are amenable to treatment. Recent NIMH-supported 
studies provide important information relevant to depression 
treatment in the elderly. One study compared treatment response 
among elderly depressed patients who had their first depressive 
episode early in life and those whose first episode occurred at 
age 60 or older. Although age at onset did not affect overall 
efficacy of treatment, patients who had experienced their first 
depressive episode early in life took 5-6 weeks longer to reach 
remission. This slower treatment response, combined with the 
increasing rates of suicide among the elderly, particularly 
among males, indicates that elderly depressed patients with 
early-onset illness need particularly careful management.
    Another study found that a combination of pharmacotherapy 
and psychotherapy is extremely effective in preventing 
recurrence of depression among the elderly. Older adults who 
received interpersonal therapy and an antidepressant medication 
during a three-year period were much less likely to experience 
recurrence than those who received medication only or therapy 
only. Positive long-term outcome, however, was less durable in 
individuals above age 70 than in those below this age.

Suicide

    Older Americans are disproportionately likely to commit 
suicide. Comprising only 13 percent of the population, they 
account for 20 percent of all suicide deaths. The rate of 
suicide is particularly striking among white males aged 85 and 
older: in 1996, the most recent year for which statistics are 
available, the rate in this group was 65.4 per 100,000--about 
six times the national U.S. rate of 10.6 per 100,000. 
Researchers interviewed families and associates of elderly 
individuals who committed suicide to determine the state of 
mind of such individuals just prior to their suicide. The 
investigators concluded that major depression was the sole 
predictor of suicide in this study population. At least 70 
percent of those who committed suicide had visited primary care 
providers within a month of the suicide. The findings point to 
the urgency of enhancing both the detection and adequate 
treatment of depression in primary care settings as a means of 
reducing the risk of suicide among the elderly. NIMH is 
currently funding a multi-site study in the elderly to test the 
effectiveness of an intervention aimed at improving the 
recognition of suicidal ideation and depression by primary care 
providers.

         National Institute of Dental and Craniofacial Research

    The National Institute of Dental and Craniofacial Research 
(NIDCR) is interested in structures and functions of the 
craniofacial complex which are critical throughout the human 
lifespan. This is evident in behaviors that range from the most 
basic necessary to sustain life to the complex behaviors 
encompassing interpersonal communication. For example, both the 
cleft lip or palate that is frequently found in infants with 
craniofacial birth defects and the lack of saliva that 
accompanies Sjogren's syndrome in older adults, pose threats to 
both normal feeding and speaking behaviors.

Oral and pharyngeal cancer

    Ninety five percent of oral cancer cases are diagnosed in 
individuals older than 40 years of age, with an average age at 
diagnosis of 60 years. Recent NIDCR-sponsored findings have 
increased knowledge of tumor suppression mechanisms for oral 
cancers. Understanding the genetic basis for cancers afflicting 
the head and neck provides the opportunity to develop new 
diagnostics and preventive strategies.

Salivary gland dysfunction

    Many older Americans are affected by salivary gland 
dysfunction which can result from cancer therapy, Sjogren's 
syndrome, and treatment with any of the more than 500 drugs 
known to impair salivary function. Oral dryness interferes with 
normal functions of talking, chewing and swallowing and, 
deprived of the protective properties of saliva, puts patients 
at high risk for dental and oral infections. NIDCR scientists 
have developed an animal model of gene therapy to restore 
salivary gland function and work on developing an artificial 
salivary gland is in progress.

Bone and hard tissues

    NIDCR has a long history of support for research on bone 
and hard tissues. A new mouse model of osteoporosis, developed 
by NIDCR scientists, provides a means to test new therapies for 
prevention of osteoporosis. In addition, recent findings on 
bone morphogenetic proteins (BMPs) and cartilage-derived 
morphogenetic proteins (CDMPs) offer promise for therapeutic 
regeneration of bone and cartilage tissue.

Pain

    It is estimated that about 22 percent of adults have 
experienced some form of orofacial pain within the last 6 
months. Orofacial pain is a major component of Bell's palsy, 
trigeminal neuralgia, fibromyalgia, and diabetic neuropathy. A 
recently developed animal model of gene therapy to stimulate 
production of beta-endorphins may form the basis of a future 
treatment for chronic pain conditions.

Arthritis

    It is projected that by the year 2020, nearly 60 million 
Americans will experience some form of arthritis. Using ``naked 
DNA'', NIDCR scientists have developed an animal model of gene 
therapy for arthritis. They observed dramatic reductions in 
inflammation and joint degeneration in arthritic rats.

    National Institute of Diabetes and Digestive and Kidney Diseases

    The National Institute of Diabetes and Digestive and Kidney 
Diseases (NIDDK) supports basic and clinical research in 
several major diseases that disproportionately afflict older 
Americans. Several major research initiatives are yielding 
advances in the understanding and treatment of these 
debilitating disorders.

Diabetes

    The risk of type 2 diabetes, the most common form of this 
devastating disease, rises dramatically in middle age and takes 
a major toll on older people. Of the nearly 15 million 
Americans who have type 2 diabetes, 6.3 million are age 65 or 
older. Among Americans age 65 and older, 18.4 percent have 
diabetes, with the highest prevalence in minority groups.
    The most important risk factors for type 2 diabetes are 
obesity, insulin resistance, physical inactivity, impaired 
glucose tolerance, and a history of gestational diabetes or a 
family history of diabetes. The Diabetes Prevention Program, a 
clinical trial taking place in 26 medical centers nationwide, 
seeks to determine whether type 2 diabetes can be prevented 
with diet and exercise or medication. The study will find out 
whether lowering blood sugar levels in people with impaired 
glucose tolerance (IGT) can prevent or delay development of 
type 2 diabetes. People with IGT, a precursor to diabetes, have 
high blood sugar but not high enough to be diagnosed as having 
diabetes. The study has nearly completed its recruitment goal 
of 3,000 volunteers.
    NIDDK also supported a multicenter clinical trial in 
patients with type 2 diabetes, the United Kingdom Prospective 
Diabetes Study, that recently demonstrated the importance of 
good blood sugar control in slowing the, eye, nerve, and kidney 
damage caused by diabetes. These findings reinforce the results 
of the nationwide Diabetes Control and Complications Trial, 
which showed similar benefits in type 1 diabetes.
    Type 2 diabetes is a multifactorial disease with a 
significant genetic component. A genetic mutation has been 
implicated in a rare form of type 2 diabetes called Maturity-
Onset Diabetes of the Young (MODY), but the vast majority of 
type 2 cases follow a complex pattern of inheritance, and the 
genes underlying most cases remain elusive.
    Scientists supported by NIDDK are making major gains in 
understanding the genetic factors that control both pancreatic 
development and insulin secretion, and such research may lead 
to ways of producing insulin-secreting cells that could be 
transplanted into patients with diabetes. Recently, the NIDDK 
issued a Request for Applications to encourage research in this 
area.

Renal disease

    Kidney disease of diabetes mellitus; (KDDM) is the single 
most common cause of end-stage renal disease. Several avenues 
of NIDDK research are approaching the problem of how KDDM 
develops and how it might be arrested before serious organ 
damage occurs. Results of a major NIDDK-supported clinical 
trial indicate that a heart medication used to control high 
blood pressure can significantly slow the progression of KDDM.
    End-stage renal disease (ESRD) is a major public health 
problem whose incidence has doubled in individuals aged 65-74 
and more than doubled in those over 75 years of age in the last 
decade. A major cause of ESRD in the elderly is hypertension. 
The Institute is currently supporting a multicenter clinical 
trial, ``The African American Study of Kidney Disease and 
Hypertension,'' that will help determine the treatment most 
likely to retard progression of hypertensive kidney disease.
    In addition, a recently completed five-year study of the 
U.S. Renal Data System (USRDS), the Dialysis Morbidity and 
Mortality Study, will help clarify what causes excessively high 
rates of illness and death among elderly ESRD patients. The 
Hemodialysis Clinical Trial is addressing the effects of 
increased dialysis dose as well as the effects of high-flux 
dialysis in treating elderly dialysis patients.

Osteoporosis

    Parathyroid hormone (PTH), an important regulator of bone 
metabolism, may have potential benefits for the treatment of 
osteoporosis, a major public health problem that inflicts 
significant pain and disability in older people. Therapeutic 
use of glucocorticoid hormones such as prednisone causes a 
severe form of osteoporosis. Last year, a small-scale clinical 
trial in women with osteoporosis due to long-term use of 
glucocorticoids showed that treatment with PTH resulted in 
increased bone mineral density in the lumbar spine, hip, and 
arm. Another small trial in young women with estrogen 
deficiency as a result of treatment for endometriosis showed 
that PTH administered once a day for a year increased bone 
mineral density in the spine, while stopping loss of bone 
mineral in other bones including the hip and arm. These 
preliminary findings raise the hope that PTH administration may 
have therapeutic value for people with osteoporosis.

Prostate disease

    Prostate diseases affect over 2 million American men. NIDDK 
is studying the genes and other factors that may affect 
prostate growth and prostate cancer. The Institute currently 
supports five George M. O'Brien Urology Research Centers, three 
of which are dedicated to studying benign and malignant 
prostate cell growth and the mechanisms that regulate the 
expression of prostate specific antigen (PSA) and tumor 
progression. The Chronic Prostatitis Collaborative Clinical 
Research Study is a large multicenter trial designed to gather 
specific clinical information on prostatitis that will allow 
testing and evaluation of new treatments for this problematic 
disorder.
    Enlarged prostate or benign prostatic hyperplasia (BPH) 
affects more than 50 percent of men past age 60 and 80 to 90 
percent of men past age 80. NIDDK supports basic research on 
prostate cell structure and function in BPH, biomarkers of BPH, 
and prostate stem cells and stem cell genes. Clinical research 
focuses on a major multicenter clinical trial. The Medical 
Therapy of Prostatic Symptoms (MTOPS) study is assessing the 
effectiveness of two different drugs in preventing the 
progression of symptomatic BPH.

        National Institute of Child Health and Human Development

    The National Institute of Child Health and Human 
Development (NICHD) supports a broad research portfolio that 
has far-reaching implications for the entire human lifespan. 
Listed below are examples of the Institute's initiatives on 
aging-related research highlighting major studies in a range of 
important topics.
    In keeping with the Institute's commitment to advancing 
women's reproductive health, the NICHD is supporting research 
on the effects of maternal aging on the process of meiosis in 
the human oocyte. Women attempting to reproduce beyond their 
prime reproductive years often experience an increased 
incidence of ``nondisjunction'' (failure of chromosomes to 
separate) in their oocytes. Recent advances in molecular 
cytogenetics permit researchers to identify the specific 
chromosomes that most frequently separate improperly. Continued 
research in this area will provide information on the 
mechanisms responsible for the effect of maternal aging on 
reproduction. Since more women are attempting to become 
pregnant later in life, studies within this area can lead to 
strategies to foster healthy pregnancies in women as they age.
    The transition to menopause encompasses a wide ranging set 
of changes for women. In this area, NICHD-supported scientists 
are conducting a range of research:
           Biodemographic models of reproductive aging 
        in women are being developed. This work offers a unique 
        opportunity to explore women's transition to menopause 
        by linking it to their prior menstrual, reproductive, 
        and health-related histories. Research will yield new 
        insight into the patterns and causes of variation in 
        women's experience of the menopausal transition and 
        will provide a foundation for future epidemiological 
        studies of the health consequences of different 
        patterns of reproductive aging.
           Uterine fibroids (leiomyomata), benign 
        tumors of smooth muscle cells and fibrous connective 
        tissues that develop within the wall of the uterus, are 
        responsible for approximately 200,000 hysterectomies in 
        the U.S. each year. When women with fibroids reach the 
        perimenopausal or postmenopausal periods, they face a 
        troubling treatment dilemma. If they wish to preserve 
        their uterus, they may change the risk of increasing 
        fibroid growth by taking hormone replacement therapy 
        (HRT) during this time period. Yet, the benefits of 
        using HRT are substantial, particularly for women at 
        risk for cardiovascular disease or osteoporosis. The 
        NICHD is supporting a randomized controlled trial to 
        investigate the extent to which a commonly prescribed, 
        low-dose, HRT regimen stimulates fibroid growth and 
        proliferation in both Black and White postmenopausal 
        women. The results of this study will be of significant 
        value to a growing number of fibroid patients reaching 
        menopause and the clinicians who treat them.
    Physical disability is one of the most prevalent major 
health problems in the aging population, and the associated 
need to enhance our scientific understanding of medical 
rehabilitation is great for all age groups, particularly the 
elderly. As the home to the National Center for Medical 
Rehabilitation Research, the NICHD is sponsoring research on 
the following:
           Researchers are trying to identify the major 
        risks and other factors associated with physical 
        disability, the use of medical services, and the 
        subsequent costs of care. A major goal is to assess 
        trends and changes in these factors as individuals 
        progress from young adulthood through old age.
           Researchers are trying to develop treatments 
        that can substantially reduce the incapacitating motor 
        deficit of many elderly stroke patients and improve 
        their independence. In particular, scientists are 
        developing a technique to strengthen the upper limbs of 
        stroke patients. The goal is to find a way to improve 
        motor function, amount of limb use, and range of motion 
        shortly following and in the long term after a stroke.
           Through continuing and innovative work under 
        a Small Business Innovation Research Grant, 
        investigators have developed a new approach to correct 
        urinary incontinence. This condition affects more than 
        13 million people in the U.S. and costs the health care 
        system over $ 10 billion per year. Using recombinant 
        DNA technology, scientists have developed special 
        polymers that, when injected around the urethra, 
        effectively strengthen the damaged muscles found in 
        patients with stress incontinence. This discovery holds 
        tremendous promise for restoring independence and 
        improving the quality of life for millions of men and 
        women, particularly elderly women who may experience 
        incontinence due to estrogen loss in menopause.
    The prevention of osteoporosis, a disease that is most 
prevalent in older women, is dependent upon maximizing peak 
bone mass and minimizing subsequent bone loss during childhood 
and adolescence. NICHD research in this area includes a number 
of studies, including the following:
           Scientists are investigating the influence 
        of calcium supplementation using dairy products and 
        skeletal loading on bone mineral accretion in the 
        preadolescent. In particular, researchers are 
        investigating the effect of a school-based exercise and 
        calcium intervention program on bone accrual at the 
        lumbar spine, at the proximal femur and for the total 
        body, in a group of elementary school children.
           Researchers are conducting genetic linkage 
        analyses in seven families to help identify a region on 
        their chromosome that could account for low bone 
        mineral density. This study will define the importance 
        of two genes that effect the inheritance of bone 
        density, and will provide the basis for susceptibility 
        testing in the population.
    Dementia is a condition commonly associated with aging. 
Early diagnosis and improved knowledge about the etiology of 
dementia are important in developing improved and appropriate 
interventions. In this area, the NICHD, with its research 
targeting mental retardation and developmental disabilities is 
focusing on Down syndrome (DS). Although adults with DS are 
believed to be at increased risk for dementia of the 
Alzheimer's type, the natural history of dementia in these 
individuals is not well understood. Researchers are comparing 
adults with DS and with other forms of mental retardation to 
better understand the differences and similarities in their 
neuropsychological and behavioral function. Results from this 
study will contribute to improved diagnosis, treatment and 
prediction of risk for dementia.

        National Institute on Neurological Disorders and Stroke

    The National Institute of Neurological Disorders and Stroke 
(NINDS) supports major research programs on a number of nervous 
system disorders such as Parkinson's disease, Alzheimer's 
disease, and stroke that occur over the course of the lifespan 
but that increase in incidence with age.

Parkinson's disease

    Parkinson's disease research focuses on many areas. Some 
investigators are studying the functions and anatomy of the 
motor system and how it regulates movement and relates to major 
command centers in the brain. Scientists looking for the cause 
of Parkinson's disease will continue to search for possible 
environmental factors, such as toxins that may trigger the 
disorder, and to study genetic factors to determine which 
defective genes play a role. While genetic defects have been 
identified that cause Parkinson's in some families, the search 
for new genes will continue through FY 1999 in response to an 
NINDS program announcement on the genetics of Parkinson's 
disease. For the great majority of patients under 50 years of 
age, the origins of the disease are genetic; for those over 50, 
genetic factors are not significantly important. Understanding 
the genetic forms of the disease will help scientists 
understand the mechanisms of action in the brain which cause 
Parkinson's symptoms to appear.
    Another major approach focuses directly on the study of 
cell biology. To capitalize on the genetic gains, whole new 
areas of research techniques are being used by NINDS grantees, 
including making transgenic mice that often mimic the clinical 
disease, using yeast two-hybrid systems to identify interacting 
proteins, and investigating pathological functions or related 
proteins in simple organisms. Further work to clarify the role 
of Lewy bodies, alpha-synuclein and other proteins, and to 
determine their relation to the disease, has begun.
    NINDS intramural scientists are studying the regulation of 
brain receptors for dopamine. The ability to regulate these 
receptors on cells grown in culture will allow more efficient 
screening of experimental drugs for Parkinson's disease, 
resulting in more effective treatments with fewer side effects. 
NINDS intramural scientists are also studying several 
alternative non-dopaminergic drugs that would mimic the actions 
of dopamine, targeting the specific dopamine receptors involved 
in Parkinson's disease, but avoiding the receptors involved in 
the negative side effects now experienced by nearly half of the 
patients receiving levodopa.
    NINDS grantees are currently conducting five therapeutic 
trials to determine the efficacy of several interventions, 
including: the surgical implantation of fetal tissue: 
pallidotomy for advanced Parkinson's disease; the effects of 
coenzyme Q10 in early disease; and the effects of earlier or 
later administration of levodopa. The NINDS Intramural Division 
is also conducting several clinical studies on Parkinson's 
disease. The NINDS Experimental Therapeutics Branch is 
conducting follow-up clinical studies to investigate the 
neuroprotective effect of a new free radical scavenger, OPC-
14117. NINDS scientists are investigating the mechanisms of 
cell death in the substantia nigra and are seeking ways to 
successfully interdict this process. They are also studying the 
mutated form of synuclein that triggers cell death, and the 
transcription factors that stimulate the premature death of 
dopamine cells. NINDS is supporting both intramural and 
extramural studies to evaluate the results of surgical 
implantation of deep brain stimulators.
    Attempts to replace doparnine cells by transplantation of 
fetal tissue are also ongoing; this procedure has provided 
benefits to at least some patients. Transplants of cultured 
cell lines and stem cells should eventually replace fetal 
tissue with further study.
    With NINDS support, two new genes have been identified that 
provide clues to the pathogenesis and mechanisms of Parkinson's 
disease. One gene carries the blueprint for a protein called 
alpha-synuclein, earlier identified as one of the components of 
``amyloid plaques,'' the abnormal clumps of proteins in the 
brains of Alzheimer's patients. Under NINDS and NHGRI 
sponsorship, scientists are now pursuing this lead to discover 
the role of synuclein in Parkinson's disease and to find other 
defective genes that may contribute to Parkinson's disease in 
other families.
    In another follow up study, scientists demonstrated that 
synuclein is found in Lewy bodies of the most common, non-
inherited form of Parkinson's disease. Lewy bodies are abnormal 
clumps of material in certain parts of the brain that are a 
hallmark of Parkinson's disease and are also found in certain 
other diseases. This finding supports the idea that inherited 
Parkinson's disease may provide insights about the more common 
forms of the disease. The finding also complements a growing 
body of evidence that abnormal aggregations of proteins, such 
as those found in Lewy bodies of Parkinson's disease, amyloid 
plaques of Alzheimer's, and the ``nuclear inclusions'' in 
Huntington's disease, are not just disease markers but actively 
harmful in damaging the brain. Stopping or slowing the 
formation of these aggregations may present an entirely new 
approach to preventing the death of brain cells in 
neurodegenerative diseases.
    NINDS-supported scientists and their collaborators have 
shown that a growth factor derived from glial (supporting) 
cells of the nervous system (GDNF) supports and protects 
dopamine neurons in vivo. They have also demonstrated that 
recombinant GDNF has similar effects. This growth factor 
preserves cells from destructive effects and repairs cells 
after damage.
    Intramural NINDS scientists found that when the 
experimental drug Ro 40-7592 is added to the standard drug 
treatment for Parkinson's disease, levodopa-carbidopa, symptom 
relief is prolonged by more than 60 percent. This promising new 
drug that blocks the breakdown of dopamine and levodopa would 
allow patients to take fewer doses and smaller amounts of 
levodopa-carbidopa and to decrease the problems of the wearing-
off effect. Ro 40-7592 was approved by the Food and Drug 
Administration and is now available for physicians to prescribe 
for their Parkinson's patients.
    NINDS and the NHGRI sponsored a workshop on the genetics of 
Parkinson's disease in December, 1997, at Cold Spring Harbor 
that has continued to spark research interest. Encouraged by 
the workshop, additional work is being focused on understanding 
the products and processes that are affected by the genes 
involved in familial, and perhaps other, forms of Parkinson's 
disease.

Stroke

    The NINDS supports a large number of basic and clinical 
studies on stroke. This research program includes 
investigations of stroke risk factors, especially those that 
are treatable; genetic causes of stroke; the biology and 
pathology of certain brain cells involved in stroke; the events 
that damage and kill nerve cells in the minutes and hours 
following a stroke and the brain's reaction to them; and the 
cellular and molecular interactions among blood, cerebral 
vessel and brain cells involved in stroke. Other studies are 
looking at brain imaging to improve diagnosis; the use of 
targeted protective agents for compromised cells; and ways to 
isolate, purify, and characterize neuropeptides that confer 
tolerance to hypoxia and ischernia. Studies to identify 
potential new treatments and clinical trials of surgical and 
medical methods to prevent stroke are also a major part of the 
NINDS stroke research program.
    Additional studies to find ways to facilitate recovery of 
function; determine the points at which reversible and 
irreversible damage occur; identify the fundamental biochemical 
processes that may lead to DNA damage and repair in the brain; 
determine the role of angiogenesis in CNS cell and tissue 
survival; and find growth and trophic factors that can 
accelerate the repair and recovery of specific types of neurons 
are also being supported.
    Several major clinical trials are either ongoing or have 
recently been completed. They include:
           The North American Symptomatic Carotid 
        Endarterectomy Trial (NASCET). This trial is attempting 
        to determine whether surgery (carotid endarterectomy) 
        can prevent stroke in selected patients who have had a 
        stroke or experienced warning signs of stroke. In 1998, 
        this study determined that, for symptomatic patients 
        with stenosis in the 50-69% range, surgery may be 
        worthwhile.
           Carotid Stenting. Carotid endarterectomy, 
        whether done in symptomatic or asymptomatic patients, 
        has a low but important rate of serious complications, 
        including stroke and death. A new method has been 
        developed for treating carotid stenosis through less 
        invasive angiographic techniques using metallic stents 
        to hold the vessel open after the stenosis has been 
        expanded from within the arterial system. A planned 
        trial will compare carotid angioplasty and stenting to 
        the standard endarterectomy, which has been shown to be 
        effective for many patients in the NASCET and earlier 
        ACAS trials.
           Aspirin and Carotid Endarterectomy (ACE). 
        The purpose of this trial was to determine if aspirin 
        reduces surgical complications from carotid 
        endarterectomy. Patients received one of four daily 
        doses of aspirin, and were followed for 3 months after 
        surgery to record all strokes, deaths, and changes in 
        functional status. The results of the study indicated 
        that aspirin did not have a major effect on the outcome 
        of this form of surgery.
           NINDS Stroke Trial. This trial determined 
        that, if tissue plasminogen activator (t-PA) is 
        administered within three hours of the onset of the 
        more common form of stroke, there is a 33 percent 
        increase in the number of patients that are free of 
        disability three months post-stroke. The trial also 
        showed that effective treatment can be carried out in a 
        variety of health care settings. The findings were so 
        convincing that the FDA approved t-PA in 1996 for the 
        emergency treatment of ischemic stroke six months after 
        the clinical trial results were published.
           Trial of Org 10172 in Acute Stroke Treatment 
        (TOAST). For many years, it has been common practice to 
        administer anticoagulants such as heparin to patients 
        immediately after a stroke in an effort to limit brain 
        injury and to prevent recurrent strokes. However, this 
        study showed that, for most patients, this therapy may 
        not work. These results may bring about a change in the 
        way the medical community treats stroke.
           Warfarin Antiplatelet Recurrent Stroke Study 
        (WARSS). This is an ongoing study to find out whether 
        warfarin or aspirin is more effective in preventing a 
        second stroke in persons who have had a prior ischemic 
        stroke.
           Antiphospholipid antibodies and stroke study 
        (APASS). APASS investigators are studying the blood 
        levels of anti phospholipid antibody (aPL) in patients 
        to see if it is a cause of ischemic stroke.
           Stroke Prevention in Atrial Fibrillation III 
        (SPAF). The initial NINDS Stroke Prevention in Atrial 
        Fibrillation (SPAF) study was launched to evaluate the 
        effectiveness of aspirin and warfarin to prevent an 
        initial stroke in patients with atrial fibrillation, a 
        common type of irregular heartbeat associated with an 
        increased risk of stroke. Results from the study 
        revealed that both drugs were so beneficial that the 
        risk of stroke was cut by 50 to 80 percent. The results 
        suggested that 20,000 to 30,000 strokes could be 
        prevented each year with proper treatment. The SPAF 
        study was continued to determine long-term effects from 
        treatment and to determine the relative benefits of 
        warfarin compared to aspirin. Results showed that a 
        daily adult aspirin can provide adequate stroke 
        prevention for many of the people with atrial 
        fibrillation. For most people with atrial fibrillation 
        under 75 years old, and for those over 75 with no 
        additional stroke risk factors such as high blood 
        pressure or heart disease, aspirin provided adequate 
        protection with minimal complications. This is good 
        news for patients with atrial fibrillation, since 
        warfarin is significantly more expensive and must be 
        monitored regularly. SPAF III studied the remaining 
        atrial fibrillation patients with additional risk 
        factors for stroke and for whom warfarin had been shown 
        effective. The study clearly demonstrated the benefit 
        of standard warfarin therapy over the combination 
        therapy of aspirin and fixed-dose warfarin in these 
        high-risk patients. An ongoing component of the SPAF 
        III study is assessing the reliability of the method of 
        identifying atrial fibrillation patients at low risk 
        for stroke, for whom anticoagulation therapy may be 
        avoided or postponed.
           Women's' Estrogen for Stroke Trial (WEST). 
        In order to investigate the interrelationship of 
        estrogen and stroke, this trial has been studying the 
        use of estrogen to decrease the risk of stroke in post 
        menopausal women who have already had a stroke. When 
        follow-up is completed, significant new information 
        will be available to those treating this special 
        population.
           Vitamin Intervention for Stroke Prevention. 
        This ongoing trial seeks to determine whether the 
        addition of a multivitamin with high dose folic acid 
        and B6 and B12 can reduce recurrent cerebral infarction 
        and coronary heart disease in patients with non-
        disabling cerebral infarction: The role of homocysteine 
        in heart disease and stroke has received public 
        attention in the public news media, and NINDS supported 
        a study which showed high homocysteine concentrations 
        and low concentrations of folate and vitamin B6 are 
        associated with an increased risk of stenosis in the 
        elderly. Folate levels in the American diet have 
        recently been increased in an attempt to prevent birth 
        defects caused by abnormal brain development in the 
        unborn children of women with low levels of the vitamin 
        folate. The trial will see if even higher levels of 
        supplementation will reduce stroke and heart disease 
        without causing serious problems.
           African American Antiplatelet Stroke 
        Prevention Study. This ongoing major clinical trial 
        seeks to evaluate the use of the drug ticlopidine 
        compared to aspirin to prevent stroke in an African 
        American population. Both medicines are considered 
        ``antiplatelet'' medications, but they work by 
        different mechanisms. The reason for this trial is that 
        previous studies suggest that African-Americans may 
        have a more favorable response to ticlopidine than the 
        general population. An additional aspect of this trial 
        is making the community more aware of the importance of 
        stroke prevention and early treatment of high blood 
        pressure and other modifiable risk factors.
           Motor Recovery in Treatment of Patients with 
        Recent Stroke Using Amphetamine and Rehabilitation 
        Medicine. NINDS intramural scientists are conducting 
        this clinical study to determine if the administration 
        of the drug dextroamphetamine linked with intense 
        physical therapy will accelerate motor recovery after 
        stroke. Additionally, the study will allow 
        identification of the brain regions activated in 
        associated with recovery.
    Findings from other NINDS-supported research include 
preliminary results of a study by researchers at the University 
of Cincinnati Medical Center suggesting that the number of 
strokes in the United States may be dramatically higher than 
previously reported. According to the study, which was 
published last year, approximately 700,000 first-ever and 
recurrent strokes occur in the United States every year, a 
figure substantially higher than the previous estimate of 
500,000 strokes a year. Earlier studies counted only the number 
of first-time strokes, a traditional method of epidemiological 
study. Yet people who suffer strokes frequently experience more 
than one stroke, and their recurrent strokes are often more 
disabling and deadly than their first stroke. The Greater 
Cincinnati/Northern Kentucky study included strokes in 
individuals who had experienced more than one stroke. In the 
new study, the incidence rate of stroke in 1993 was found to be 
1.6 times greater for blacks than the overall age and sex-
adjusted incidence rate of stroke among the white population of 
Rochester Minn. during 1985-1989. Blacks under the age of 65 in 
the Greater Cincinnati study had a two to four times greater 
incidence of first-ever stroke compared with the rates among 
whites of similar age in the Rochester population; however, 
age-specific stroke incidence rates were similar for elderly 
blacks and whites.
    At the time of a stroke, some brain cells are immediately 
killed; others brain cells are at risk of dying in the days 
following a stroke. One mechanism of cell death is believed to 
be an overabundance of calcium ions. Now, a protective 
mechanism has been discovered that may help to delay cell 
death. A protein, Bcl-2, has been previously identified as a 
critical regulator of the ``cell suicide'' program by which the 
body can eliminate unwanted cells. A new study by an NINDS-
supported investigator now shows that Bcl-2 seems to help fight 
cell death by enhancing the ability of nerve cell 
mitochondria--structures found within many cells--to sequester 
large amounts of calcium ions.
    There is overwhelming evidence that harmful ``free 
radicals'' are involved in the pathophysiology of cerebral 
ischernia. Although the molecular mechanisms are not completely 
understood, strong evidence supports the principle that 
cerebral ischernia and the restoration of blood flow cause an 
increase in oxygen free radicals and can damage cell membranes 
and function. Recent evidence from and NINDS-supported study 
now shows that programmed cell death is mediated via genetic 
damage caused by elevated oxygen free radicals during and after 
cerebral ischernia. The hydroxyl radical, a known mutagen, 
causes DNA damage and induces DNA repair synthesis through the 
expression of a repair enzyme.
    NINDS leads the Brain Attack Coalition, an umbrella group 
of national organizations dedicated to reducing the occurrence, 
disabilities, and death associated with stroke. On behalf of 
the Coalition, NINDS has established a web site (www.stroke-
site.org) that features an acute stroke ``toolbox'' which 
consists of guidelines, protocols, and critical pathways to 
guide the development of stroke teams, along with links to 
other organizations with information about the treatment of 
stroke.
    NINDS published the Proceedings of the 1996 National 
Symposium on the Rapid Identification and Treatment of Acute 
Stroke, which provided guidelines on how to respond rapidly to 
acute stroke. Copies have been distributed in to EMS 
physicians, state EMS program directors, EMS dispatchers, 
emergency departments, etc., to establish better emergency 
treatment procedures.
    Other public education activities include the distribution 
of the booklet ``Preventing Stroke,'' along with a book mark 
with risk factors and symptoms of stroke, at health fairs and 
to libraries in inner cities where a high number of people are 
African-American. All stroke public information materials are 
now posted on the World Wide Web.
    NINDS has also begun an effort to reach out to the Hispanic 
community with information about stroke, its symptoms, and how 
to seek medical help. ``Preventing Stroke'' and the stroke 
bookmark are available in Spanish. In addition, as part of a 
new NIH initiative, NINDS staff worked with Dr. Elmer Huerta, 
who broadcasts health information on 49 Spanish language radio 
stations in the U.S. and Puerto Rico, to prepare a message 
about stroke that was broadcast on March 9, 1998.

Alzheimer's disease

    NINDS supports a broad array of studies directed toward 
understanding how Alzheimer's disease develops. Identifying the 
causes of dementia and methods of early diagnosis are major 
goals. To achieve understanding of these areas, the NINDS 
focuses on the pathogenesis of Alzheimer's disease. NINDS-
funded researchers are looking at the organization of memory in 
the cerebral cortex of mammals, the structure and function of 
neurons in this system, the pathology of these neurons 
including plaques and tangles, and genetic factors. They also 
seek to develop and use animal models of the disorder.
    Continued research involving neurotransmitters is also 
integral to the study of diseases such as Alzheimer's disease. 
As more is learned about the disorder, researchers are 
discovering their role in normal brain activity as well as in 
disease. Areas of research include studies to characterize 
neurotransmitters and their receptors, and therapies that 
modulate neurotransmitter systems.
    The NINDS Intramural Laboratory of Adaptive Systems is 
continuing its efforts to develop a successful laboratory test 
that may be a useful as a diagnostic test for Alzheimer's 
disease.
    Investigators do not yet know how the various factors that 
may play a role in Alzheimer's disease interrelate. Scientists 
are focusing on a number of research issues, including:
           Clarifying the role of presenilins. Current 
        challenges include identifying additional mutations; 
        determining how presenilins 1 and 2 are produced and 
        processed, how they interact with cellular systems, and 
        whether they play a role in the development of late-
        onset Alzheimer's disease; learning the effect of 
        different presenilin mutations on APP metabolism; and 
        studying patterns of presenilin 2 expression at the 
        cellular level over the life span of both healthy 
        people and those with Alzheimer's disease.
           Developing animal models. Ongoing research 
        to develop animal models (e.g., for presenilins and 
        FAD) is aiding researchers' understanding of the 
        pathology of the disease and helping them identify 
        treatments to retard disease progression. For example, 
        comparing behavioral and anatomical approaches, 
        researchers are trying to determine whether the 
        appearance of the plaques in transgenic mice carrying 
        human APP mutations comes before or after learning and 
        memory problems.
           Determining the relationship of beta-amyloid 
        to Alzheimer's disease. Alzheimer's disease researchers 
        are extending the search for additional cellular 
        receptors affected by beta-amyloid; working to 
        understand the pathways involved in oxidative stress 
        and beta-amyloid production and looking for substances 
        that may protect against these processes; and 
        attempting to determine whether defects in the system 
        that moves electrons within cells contribute to brain 
        diseases.
           Understanding why cells weaken and die. Much 
        research is under way to determine why cells stop 
        functioning properly and die in Alzheimer's disease. 
        Some researchers now believe that cells previously 
        thought to be dying may actually be resting. If further 
        research confirms this theory, scientists may be able 
        to find substances that will reactivate cells.
           Improving diagnostic methods. Scientists are 
        seeking to validate and refine current diagnostic and 
        autopsy procedures; establish whether differences in 
        disease patterns in Alzheimer's disease reflect 
        genetic- and gender-based factors; determine how age 
        affects the clinical and pathological criteria; find 
        tests to determine which people with mild cognitive 
        impairment will progress to clinical Alzheimer's 
        disease; develop biochemical and molecular methods for 
        quickly diagnosing Alzheimer's disease and compare the 
        results to data obtained from currently recommended 
        methods; develop and standardize qualitative methods; 
        and determine the nature and significance of white 
        matter pathological changes in Alzheimer's disease.
           Identifying pharmacological treatments. 
        Researchers are initiating studies of a variety of 
        types of pharmacological treatments for Alzheimer's 
        disease, including comparative, combination, and 
        sequential approaches. Studies are under way to 
        determine the effectiveness of estrogen, anti-
        inflammatory agents, and other treatments.
    The pace of discovery in Alzheimer's disease research has 
been most impressive in genetic studies. Scientists supported 
by the NIA and the NINDS found two genes linked to FAD, 
presenilins 1 and 2. The two genes produce similar proteins 
with unknown functions. In analyzing gene sequences, scientists 
recently have shown that proteins produced by these two genes 
have chemical structures that are similar to that of a protein 
involved in the signaling and development of cells in a species 
of worm (c. elegans). The powerful genetic techniques that can 
be applied in this species may help researchers understand the 
function of these proteins. Additional recent studies suggest 
that these proteins are made by neurons throughout the brain 
and that they play a role in the processing of other proteins 
such as APP.
    The NINDS Intramural Experimental Therapeutics Branch is 
conducting a clinical trial of a new anti-dementia medication, 
CX 516 (Ampakine), for patients with mild to moderate dementia. 
Scientists are studying CX 516 for properties that improve 
thinking and memory.




          ITEM 7--DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

                              ----------                              


        U.S. HOUSING FOR THE ELDERLY--FISCAL YEAR 1997 AND 1998

    The Department of Housing and Urban Development is 
committed to providing America's elderly with decent affordable 
housing appropriate to their needs. The Department's goal is to 
provide a variety of approaches so that older Americans may be 
able to maintain their independence, remain as part of the 
community, have access to supportive services, and live their 
lives with dignity and grace.

                               I. Housing

a. section 202--capital advances for supportive housing for the elderly 
    and section 811 supportive housing for persons with disabilities

    The National Affordable Housing Act of 1990 authorized a 
restructured Section 202 program while separating out and 
creating the new Section 811 program for Housing for Persons 
with Disabilities. Funding for both programs is provided by a 
combination of interest-free capital advances and project 
rental assistance. Project rental assistance replaces Section 8 
rent subsidies. The annual project rental assistance contract 
amount is based on the cost of operating the project. The 30 
percent maximum tenant contribution remains unchanged.
    Since the passage of the National Affordable Housing Act of 
1990, there have been 49,363 units approved under the Section 
202 program and 14,210 units approved under the Section 811 
program. Of those amounts 6,006 Section 202 units and 1,169 
Section 811 were approved in Fiscal Year 1997. In FY 1998 there 
were 6,563 additional units approved under Section 202 for 
$464,251,000 and 1,650 more units approved under Section 811 
for $108,714,400.

     b. section 231--mortgage insurance for housing for the elderly

    Section 231 of the National Housing Act authorized HUD to 
insure lenders against losses on mortgages used for 
construction or rehabilitation of market rate rental 
accommodations for persons aged 62 years or older, married or 
single. Nonprofit as well as profit-motivated sponsors are 
eligible under this program. The program is largely inactive 
since most sponsors and lenders prefer to use the Section 
221(d)(3) and 221(d)(4) programs instead.

     c. section 221(d)(3) and (4)--mortgage insurance program for 
                          multifamily housing

    Sections 221(d)(3) and (4) authorized the Department to 
provide insurance to finance the construction or rehabilitation 
of market rate rental or cooperative projects. The programs are 
available to non-profit and profit-motivated mortgagors as 
alternatives to the Section 231 program. While most projects 
under the programs have been developed for families, projects 
insured under Section 221 may be designed for occupancy wholly 
or partially for the elderly, and the mobility impaired of any 
age.

d. section 232--mortgage insurance for nursing homes, intermediate care 
  facilities, and board and care homes, and assisted living facilities

    The Section 232 program assists and promotes the 
construction and rehabilitation (or purchase or refinance of 
existing projects) of nursing homes, intermediate care 
facilities, board and care homes, and assisted living 
facilities by providing mortgage insurance to finance these 
facilities. The vast majority of the residents of such 
facilities are the frail elderly. In FY 1997 HUD insured 179 
projects worth $1.5 billion. In FY 1998 HUD insured 155 
projects worth $896 million containing 76 nursing homes, 53 
assisted living facilities, and 26 board and care homes.

                     e. section 8--new construction

    The Section 8 program sponsored the new construction of 
housing for families and for the elderly by attaching subsidies 
to the units being developed. That way the landlord was 
guaranteed a stream of income that would facilitate finding 
financing and that would guarantee the ability to make payments 
and operate the developments. The new construction program was 
active from 1974 until the mid-1980s. There are 1.4 million 
private, project-based Section 8 units, about 47 percent of 
which serve elderly households. About 193,000 of these 658,000 
units were built under the Section 202 program before the 
restructuring of that program in 1990. That means that about 
465,000 units developed with Section 8 project-based assistance 
serve elderly households. The Section 8 new construction 
program is no longer in operation.

              f. service coordinators in assisted housing

    The National Affordable Housing Act authorized funding for 
service coordinators under the Section 202 program in 1990. 
Eligibility was expanded to cover Sections 8, 221(d)(3), and 
236 projects in 1992. A service coordinator is a social service 
staff person who is part of the project's management team. That 
individual is responsible for ensuring that the residents of 
the project are linked with the supportive services they need 
from agencies in the community to assure that they can remain 
independently in their homes and avoid premature and 
institutionalization as long as possible.
    In FY 1997, HUD awarded $8,885,025 to 65 projects, 55 of 
which were Section 202 projects; the remainder were Section 8, 
2219(d)(3) or 236.
    In FY 1998, HUD funded 51 projects for $6.5 million in new 
grants, 24 of which were 202s, 10 were Section 8, 3 were 
Section 221(d)(3) and 14 were Section 236. An additional 34 new 
grants were funded with $4,447,985 in FY 1997 carryover 
dollars. Of these 1 was a Section 202 project and 33 were 
Sections 8, 221(d)(3) and 236 projects.

               g. the congregate housing services program

    The Congregate Housing Services Program (CHSP), initially 
authorized in 1978 and revised in 1990, provides direct grants 
to States, Indian tribes, units of general local government and 
local non-profit housing sponsors to provide case management, 
meals, personal assistance, housekeeping, and other appropriate 
supportive services to frail elderly and non-elderly disabled 
residents of HUD public and assisted housing, and for the 
residents of Section 515/8 projects under the Department of 
Agriculture's Rural Housing and Community Development Service.
    In FY 1998, HUD extended 10 existing grantees for an 
additional year. There were no funds appropriated for new 
grants in FY 1997 or FY 1998.

    h. flexible subsidy and loan management set aside (lmsa) funding

    The Flexible Subsidy Program (Flex) provides funding to 
correct the financial and physical health of HUD subsidized 
properties, including those which house the elderly. Flex 
provides funds for projects insured under Section 221(d)(3), 
Section 236, and funded under the 202 program (once they have 
reached 15 years old). Flex has been limited to Section 202 
since FY 1995. In FY 1997, HUD funded 37 projects for 
$19,420,277. In FY 1998, Flex funded 30 projects for 
$9,273,177.
    The Loan Management Set Aside (LMSA) Program provides 
Project-based Section 8 funding to HUD-insured and HUD-held 
projects and projects funded under the 202 program, which need 
additional financial assistance to preserve the long term 
fiscal health of the project. Funding has not been available 
for this program in several years.

                       i. manufactured home parks

    The Housing and Urban-Rural Recovery Act (HURRA) of 1983 
amended Section 207 of the National Housing Act to permit 
mortgage insurance for manufactured home parks exclusively for 
the elderly. The program has been operational since the March 
1984 publication of a final rule implementing the legislation, 
although HUD insures very few manufactured home parks.

             j. title i property improvement loan insurance

    Title I of the National Housing Act authorizes HUD to 
insure lenders against loss on property improvement loans made 
from their own funds to creditworthy borrowers. The loan 
proceeds are to be used to make alterations and repairs that 
substantially protect or improve the basic livability or 
utility of the property. There are no age or income 
requirements to qualify for a Title I loan. HUD funded 87,648 
loans in FY 1997 and an estimated 60,065 loans in FY 1998.

              k. title i manufactured home loan insurance

    Title I of the National Housing Act authorizes HUD to 
insure lenders against loss on manufactured home loans made 
from their own funds to creditworthy borrowers. The loan 
proceeds may be used to purchase or refinance a manufactured 
home, a developed lot on which to place a manufactured home, or 
a manufactured home and lot in combination. The home must be 
used as the principal residence of the borrower. There are no 
age or income requirements to qualify for a Title I loan. HUD 
funded 2,303 loans in FY 1997 and 552 loans in FY 1998.

          l. home equity conversion mortgage insurance program

    The Department has implemented a program to insure Home 
Equity Conversion Mortgages (HECM), commonly known as ``reverse 
mortgages.'' The program is designed to enable persons aged 62 
years or older to convert the equity in their homes to monthly 
streams of income and/or lines of credit. HUD funded 5,192 
loans in FY 1997 and 7,898 loans in FY 1998.

                     II. Public and Indian Housing

          a. section 8 rental certificates and rental vouchers

    Section 8 of the U.S. Housing Act of 1937 authorizes 
housing assistance payments to aid low-income families in 
renting decent, safe, and sanitary housing that is available in 
the existing housing market.
    About 17 percent of Section 8 certificate and voucher 
recipients are being used by the elderly. This represents 
237,800 units.

                b. elderly/disabled service coordinators

    Section 673 of the Housing and Community Development Act of 
1992 authorized the Department to fund services coordinators in 
public housing developments to assure the elderly and non-
elderly disabled residents have access to the services they 
need to live independently. From FY 1994 to 1998, the 
Department awarded 227 grants totaling approximately $62.8 
million for public housing authorities to hire service 
coordinators for their elderly and non-elderly disabled 
residents to provide general case management and referral 
services, connect residents with the appropriate services 
providers, and educate residents on service availability.

                     c. tenant opportunity program

    Section 20 of the U.S. Housing Act of 1937, as amended, 
authorized the Tenant Opportunities Program (TOP). The program 
enables resident entities to establish priorities and training 
programs for their specific public housing communities that are 
designed to encourage economic development, stability, and 
independence. The program began in 1988 and to date has awarded 
about 986 grants totaling approximately $80 million. Public 
housing developments with elderly residents are eligible to 
participate and perhaps 7 percent are primarily elderly 
grantees.

                 d. public housing development program

    The Public Housing Development Program was authorized by 
Sections 5 and 23 of the U.S. Housing Act of 1937 to provide 
adequate shelter in a decent environment for families that 
cannot afford such housing in the private market.
    In 1997, 267 additional units of public housing and Indian 
housing for the elderly were reserved, 115 were under 
construction, and 441 became available for occupancy. In 1998 
no additional units were reserved, 165 were under construction, 
and 324 became available for occupancy. The following 
statistics are provided for the elderly low income population 
of public and Indian housing:

Public and Indian Housing.....................................   371,400
Public Housing residents......................................   360,000
Indian housing................................................    11,400

                III. Community Planning and Development


  A. COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) ENTITLEMENT COMMUNITIES 
                                PROGRAM

    The CDBG Entitlement Communities program is HUD's major 
source of funding to large cities and urban counties for a wide 
range of community development activities. These activities 
primarily help low- and moderate-income persons and households, 
however, they can also be used to help eliminate slums and 
blight or meet other urgent community development needs.
    The Department normally does not ask grantees to report 
program beneficiaries by age. The Department estimates, based 
on the 1995 Grantee Performance Report (the most recent 
performance report for which the Department has reliable 
information) that grantees spent about 1 percent of their 
program funds (about $30 million) each year for public services 
that were specifically targeted to senior citizens and about 
0.6 percent of their funds (about $18 million) for public 
facilities for senior citizens. In addition, HUD staff are 
aware that senior citizens frequently benefit from local 
housing rehabilitation programs that are funded by CDBG. What 
is not known is how many of those benefiting from 
rehabilitation projects are elderly. It has been the experience 
of the Department that the percentage of CDBG funds spent on 
these activities by grantees has not varied much from year to 
year.
    No further information is available at this time.

 B. CDBG STATE-ADMINISTERED AND HUD-ADMINISTERED SMALL CITIES PROGRAMS

    The CDBG State-administered program and the HUD-
administered Small Cities program for the States of New York 
and Hawaii are HUD's principal vehicles for assisting 
communities with under 50,000 population that are not central 
cities of metropolitan areas. States and small cities/counties 
use the CDBG funds to undertake a broad range of activities and 
structure their projects to give priority to eligible 
activities that they wish to emphasize. As is also true with 
the Entitlement Communities program, these activities must 
primarily help low- and moderate income persons and households, 
however they can also be used to help eliminate slums and 
blight or meet other urgent community development needs.
    The Department has no specific information on the extent of 
benefit from these programs for the elderly, however HUD staff 
are aware that elderly persons and households who live in these 
small cities and counties are benefiting from CDBG-funded 
activities.
    No further information is available at this time.

                     C. HOME INVESTMENT PARTNERSHIP

    The HOME Program continues to serve as a major resource for 
elderly housing assistance, particularly for the rehabilitation 
of deteriorating properties of low-income elderly homeowners, 
allowing them to remain in their own homes and keep those homes 
in standard condition. The figures below represent the number 
of HOME-assisted units completed in FY 1997 and FY 1998 that 
are occupied by elderly residents, and the percentage of units 
in that category that this figure represents. For example, in 
FY 1998 HOME funds assisted 4,883 elderly homeowners 
rehabilitate their homes; this is 41.4 percent of all HOME-
assisted homeowner rehabilitations completed in that year.

----------------------------------------------------------------------------------------------------------------
                                                                    Fiscal year
           Tenure type            ------------------------------------------------------------------------------
                                              1998                      1997                   Cumulative
----------------------------------------------------------------------------------------------------------------
Homeowner Rehabilitation.........  4,883 or 41.4%...........  5,547 or 41.7%..........  25,663 or 42.9%.
Rental Units.....................  2,902 or 16%.............  2,470 or 12.3%..........  8,604 or 16.8%.
New Homebuyers...................  732 or 3%................  777 or 3.4%.............  2,287 or 3.1%
                                  ------------------------------------------------------------------------------
      Total elderly units........  8,517....................  8,794...................  36,554
----------------------------------------------------------------------------------------------------------------

    To date, HOME has assisted 36,554 low-income elderly 
households. This constitutes an investment of over $594,075,000 
in HOME funds, which have leveraged another $891,113,000 in 
private investment and other non-HOME funds to provide housing 
for the elderly (estimates based on a weighted average of 
$16,252/per unit HOME investment in for production, and 
conservative estimate of $1.50 per $1.00 of HOME as leverage).
    For data collection purposes, the HOME Program defines 
elderly as 62 or older. Therefore the above numbers do not 
reflect projects which are designed for seniors between 55 and 
62.

                  D. EMERGENCY SHELTER GRANTS PROGRAM

    The Emergency Shelter Grants Program provides funds to 
States, metropolitan cities, urban counties, Indian tribes, and 
territories to improve the quality of emergency shelters, make 
available additional shelters, meet the cost of operating 
shelters, provide essential social services to homeless 
individuals, and help prevent homelessness.
    No further information is available at this time.

              E. SUPPORTIVE HOUSING DEMONSTRATION PROGRAM

    The Supportive Housing Program funds may be used to 
provide: (i) transitional housing designed to enable homeless 
persons and families to move to permanent housing within a 24 
month period, which may include up to 6 months of follow-up 
services after residents move to permanent housing; (ii) 
permanent housing provided in conjunction with appropriate 
supportive services designed to maximize the ability of persons 
with disabilities to live as independently as possible within 
permanent housing; (iii) innovative supportive housing; or (iv) 
supportive services for homeless persons not provided in 
conjunction with supportive housing.
    A sample of grantees annual reports indicates that 4.1 
percent of SHP participants were over 51 years of age, the only 
breakout for which data are available.

             IV. Fair Housing and Equal Opportunity (FHEO)


                        A. THE FAIR HOUSING ACT

    The Fair Housing Act prohibits discrimination in housing 
based on race, color, religion, sex, national origin, handicap, 
or familial status. The Act exempts from its provisions against 
discrimination based on familial status ``housing for older 
persons,'' which is defined as housing intended and operated 
for occupancy by elderly persons. The statutory exemption of 
``housing for older persons'' comprises three categories of 
housing: (1) housing provided under any State or Federal 
program that the Secretary of HUD determines is specifically 
designated and operated to assist elderly persons; (2) housing 
intended for and solely occupied by residents 62 years of age 
and older; and (3) housing intended for and solely occupied by, 
at least one person 55 years of age or older per unit, provided 
various other criteria are met.

              B. THE HOUSING FOR OLDER PERSONS ACT OF 1995

    The Housing for Older Persons Act (HOPA) of 1995 amends the 
``55 and older'' housing exemption to the Fair Housing Act's 
prohibition against discrimination based on familial status. 
HOPA eliminates the requirement that ``housing for 55 and older 
persons'' have significant services and facilities and 
establishes a good faith reliance defense from monetary damages 
based on a legitimate belief that the housing was entitled to 
an exemption. In order to qualify for the ``55 and over 
housing'' exemption a housing community or facility must: (1) 
have at least 80 percent of its occupied units occupied by at 
least one person 55 years of age or older; (2) adhere to 
policies and procedures which demonstrate an intent by the 
owner or manager to provide housing for persons 55 and older; 
and (3) verify the age of its residents through reliable 
surveys and affidavits.
    The Department published a proposed rule to implement the 
Housing for Older Persons Act of 1995 on January 14, 1997, with 
a 60-day public comment period. HUD received approximately 130 
public comments. The final rule, ``Implementation of the 
Housing for Older Persons Act of 1995,'' has been cleared 
within the Department and is currently with the Office of 
Management and Budget for review under the Paperwork Reduction 
Act. After OMB completes its review, the final rule will be 
published in the Federal Register.

                       C. AGE DISCRIMINATION ACT

    The Department's regulations implementing the Age 
Discrimination Act became effective on April 10, 1987, and are 
codified at 24 CFR Part 146.
    During FY 1996, the Department received five complaints 
alleging age discrimination, of which were referred to the 
Federal Mediation and Conciliation Services (FMCS). Two of 
these complaints were successfully mediated and agreements were 
reach. Three were unsuccessfully mediated, and may be 
administratively closed out at a later date. Data on 1997 
activity is expected in March 1999.

                         D. DESIGNATED HOUSING

    The 1992 Housing and Community Development Act authorized 
HUD to approve Public Housing Authority plans to designate 
mixed population housing units (serving elderly and persons 
with disabilities) for elderly families only, if the plans met 
certain statutory requirements. The Housing Opportunities 
Program Extension Act of 1996 simplified and streamlined those 
requirements, but continued to require HUD to review and 
approve or disapprove designate housing plans.
    For FY 1998 25 housing authorities received approval to 
designate 4,953 units for elderly families. For FY 1997 44 
housing authorities designated 8,289 units.

              V. Office of Policy Development and Research


                       A. AMERICAN HOUSING SURVEY

    The American Housing Survey for the United States, Current 
Housing Reports H150 for the year 1995 contains special 
tabulations on the housing situations of elderly households in 
the United States. (Data for 1997 will be available soon.) 
Chapter 7 of the regular report provides detailed demographic 
and economic characteristics of elderly households, detailed 
physical and quality characteristics of their housing units and 
neighborhoods and the previous housing of recent movers, and 
their opinions about their house and neighborhood. The data are 
displayed for the four census regions, and for central cities, 
suburbs, and non-metropolitan areas, and by urban and rural 
classification. The non-elderly chapters (total occupied, 
owner, renter, Black, Hispanic, central cities, suburbs, and 
outside MSAs) as well as the publications for the 47 largest 
metropolitan areas individually surveyed over four- to six-year 
cycles. Current Housing Reports H170, also contain data on the 
elderly.
    An elderly household is defined as one where the 
householder, who may live alone or head a larger household, is 
aged 65 years or more. Special information in these 
publications is provided on households in physically inadequate 
housing or with excessive cost burden, and on households in 
poverty.

    B. EVALUATION OF THE CONGREGATE HOUSING SERVICES PROGRAM (CHSP)

    The New Congregate Housing Services program was authorized 
under the National Affordable Housing Act of 1990 and amended 
by the Housing and Community Development Act of 1992.
    The CHSP combines project-based rental assistance with 
community-based supportive services to help low-income frail 
elderly and non-elderly persons with disabilities maintain 
independence and avoid institutionalization. In addition to 
rental assistance, HUD pays 40 percent of the supportive 
services cost, the grantees pay 50 percent of the cost, and the 
participants pay 10 percent, if they are able. To be eligible 
for the program, residents must need assistance with at least 
three activities of daily living (ADL) as defined by HUD or, if 
they are non-elderly, they must have temporary or permanent 
disabilities.
    Data for the evaluation was collected over a two-year 
period. The data collection phase has been completed. The final 
report, which is Congressionally mandated, is being written. It 
is expected that the report will be available by March 1999.
    Preliminary results show that the program was implemented 
in many community settings ranging from small non-metropolitan 
areas to large cities and metropolitan areas. Participants were 
interviewed initially to obtain a baseline and again at 12 
months and 24 months. Preliminary data shows that CHSP appears 
to be targeted to those at risk of being institutionalized and 
who are likely to be appropriately served by community-based 
options.
    CHSP participants are older and much frailer (in terms of 
ADL criteria) than elderly persons in the general population, 
but they are somewhat similar to residents of more restrictive 
environments such as board and care homes and, in some cases, 
nursing homes. The average age of CHSP participants is 81 
years. CHSP participants require a broad range of services, 
including help with housework, meals, transportation, and other 
types of personal care assistance. CHSP participants receive on 
average four services from the program and outside service 
providers in addition to help from family and informal sources.
    Because the CHSP participants are so frail and old, many 
are not able to continue to live independently, even with CHSP 
services. Overall about half of the participants left CHSP. Of 
those who left the program, 38 percent moved to a more 
restrictive environment or died. Those who left the program are 
more likely to be older, have more ADL impairments, and be 
males. Those who stayed are more likely to be satisfied with 
program services and have less interaction with family.

Comparison of HOPE IV and CHSP

    Comparisons based on preliminary data analysis show that 
both programs appear to be targeted to those at risk of being 
institutionalized who are likely to be appropriately served by 
community-based options.
    The two populations are very similar in most respects, 
except that the HOPE IV participants are frailer at a younger 
age. In general, elderly participants in both programs are much 
frailer (in terms of ADL criteria) than elderly persons in the 
same age range in the general population. At the end of the 
two-year study period (covering the initial and follow up 
interviews) a little over half of the participants remain in 
the respective programs. A relatively small number have died--
13 percent for HOPE IV and 15 percent for CHSP. More CHSP 
participants (25 percent) than HOPE IV participants (9 percent) 
moved to a higher level of care. The rate for CHSP is high 
relative to national data for the frail-elderly.
    Although the overwhelming majority of participants 
receiving services say they are satisfied with the programs, 
some of the participants in these programs say that they need 
more services to remain independent. However, these programs 
are not intended to serve the elderly who have aged in place 
and have gotten progressively more frail in a nursing home like 
setting. The need for transition to a higher level of care will 
be a reality for many who are frail and elderly.
    The final report is scheduled to be completed in March 
1999.

   C. EVALUATION OF THE HOPE FOR ELDERLY INDEPENDENCE DEMONSTRATION 
                                PROGRAM

    The program was conceived as an alternative to the 
Congregate Housing Services Program (CHSP). The major 
difference between the two programs is that HOPE IV is a tenant 
based program implemented by the PHAs. Beyond specifying 
minimum age, level of frailty and income requirements, HUD has 
allowed considerable flexibility in local implementation of the 
HOPE IV program. HUD expected the grantee to recruit and assess 
the candidates with the help of a service coordinator, obtain 
matching funds for its share of the cost of services, and serve 
as a contractor for service delivery.
    The evaluation has been completed and the final report is 
in the process of being cleared through HUD for publication. 
The evaluation shows that the HOPE IV Program was appropriately 
targeted to clients at risk of being institutionalized. The 
level of assistance necessary to maintain independence 
corresponded to the level of frailty and impairment of the 
program participant.
    At the end of the of the two-year period of the study, 40 
percent of the HOPE IV elderly either died, went to nursing 
homes, moved to other locations, left HOPE IV but retained 
their Section 8 rental assistance, or left for unspecified 
reasons. The impact of the HOPE IV program was most noticeable 
in the quality of life and care of the participants. Despite 
increased frailty and worsening health conditions, 90 percent 
of the participants were satisfied with the HOPE IV Program. In 
addition, about half of those in the program said they were 
satisfied with their lives, liked their neighborhoods and 
living arrangements, were confident and had few worries, had 
good appetites, and were in control of their lives. This 
suggests that even the frailest elderly, who are also low 
income, and have few or no support systems, are able to live 
independently in a service rich environment that includes case-
management.

                   ITEM 8--DEPARTMENT OF THE INTERIOR

                              ----------                              


               Departmental Office for Equal Opportunity

    The Department of the Interior's (DOI) age discrimination 
regulation applies to its federally assisted programs and 
activities other than those that are of an insurance or 
guarantee nature. The rule is codified in the Code of Federal 
Regulations at 43 CFR 17, Subpart C. These rules and 
regulations are proactively enforced throughout all aspects of 
DOI's operations.
    In 1998, DOI conducted a total of 1,121 civil rights 
compliance reviews under the authority of its age 
discrimination regulations. These compliance reviews covered, 
in part, whether or not recipients were in compliance with the 
requirements of the Act. These reviews were initiated and 
completed in 1998. DOI ensures compliance with the Act through 
established civil rights compliance and enforcement programs in 
its various bureaus and offices. To this effect, each of DOI's 
bureaus and offices is responsible for ensuring compliance with 
the Act in federally assisted programs and activities that they 
administer. In terms of policy development, direction, and the 
provision of technical assistance and training in furtherance 
of the requirements of the Act, the Departmental Office for 
Equal Opportunity serves as the focal point for this 
responsibility. All 1,121 of DOI's civil rights compliance 
reviews considered age discrimination compliance issues. These 
compliance reviews were conducted of public park and recreation 
programs, including fishing and hunting activities throughout 
the United States.
    In 1998, the Departmental Office for Equal Opportunity 
developed detailed civil rights complaint processing procedures 
for the benefit of DOI's bureaus and offices. The procedures 
explain how to process and investigate age discrimination 
complaints. They describe DOI's role and the Federal Mediation 
and Conciliation Service's responsibilities in handling age 
discrimination complaints. The procedures also describe time 
limits for filing complaints and steps to be taken by both DOI 
and its recipients in conducting ``informal'' and ``formal'' 
complaint investigations under the Act.
    DOI's civil rights working group remains in place. The 
group includes equal opportunity specialists from all bureaus 
and offices including the Departmental Office for Equal 
Opportunity The group meets frequently throughout the year for 
civil rights training purposes. The group operates as a 
``cross-bureau'' team in addressing a variety of complex civil 
rights compliance issues including those faced by older 
Americans.
    The public is informed of how to file age discrimination 
complaints through an established public notification program. 
This public notification program entails nationwide 
dissemination of civil rights posters which DOI requires to be 
prominently posted in reasonable numbers and places throughout 
all areas of the recipient's operations. The poster describes 
the procedures for filing age discrimination complaints against 
DOI's recipients. The public is also informed of DOI policies 
regarding the Act through civil rights compliance reviews, 
complaint investigations, and written correspondence to 
recipients and potential and actual program beneficiaries. 
Additionally, DOI developed and established an electronic 
``diversity'' website that proclaims to the public DOI's 
various nondiscrimination policies including requirements of 
the Act. The Department's website address is as follows: 
``http://www.doi.gov/diversity/.''
    DOI has taken steps to develop a new civil rights assurance 
form. In part, the assurance form covers the nondiscrimination 
requirements of the Act. This civil rights assurance form will 
be more comprehensive than DOI's current civil rights 
assurance. DOI's new civil rights assurance form, for the first 
time, will require DOI's applicants and recipients of Federal 
assistance to collect and maintain ``age'' data on potential 
and actual program beneficiaries. This information is being 
sought from federally assisted entities to enhance DOI's 
capabilities in more readily identifying instances of 
noncompliance with the Act. A draft version of DOI's new 
assurance form was submitted to the U. S. Department of Health 
and Services for review and comment purposes.
    The Secretary of the Interior's ``Zero Tolerance Policy'' 
regarding discriminatory practices throughout DOI's operations 
remains in effect. The policy addresses, among other concerns, 
the elimination of discrimination based on age in DOI's 
federally assisted programs.
    DOI had a total of three (3) age discrimination complaints 
in 1998, in its complaints inventory. One of the three 
complaints was received in FY 1998, the other two were carry 
over complaints from previous fiscal years. To date, two of the 
three age complaints that were in DOI's complaints inventory 
have been closed. The complaints in question were filed against 
federally assisted fish and wildlife management programs that 
are carried out by State governments. DOI did not refer any of 
the three complaints to the Federal Mediation and Conciliation 
Service because each of them merely required an interpretation 
of the requirements of the Act.

                     U.S. Fish and Wildlife Service

    The U.S. Fish and Wildlife Service (Service) provides 
opportunities for all employees regardless of their age and 
ensures that older individuals participate in special programs, 
volunteer programs, and employment opportunities. The following 
are the Service reports on aging for 1997 and 1998.
    Calendar Year 1997.--The Service employed a total of 6,987 
individuals. There were 4,851 (69%) of Service employees over 
the age of 40, which was an increase of 303 employees from the 
previous year. Of the Service employees over the age of 40, 280 
(6%) were over the age of 60; a increase of 50 employees from 
the previous year.
    The majority of the Service's mission related occupations, 
which include biologists, was in professional positions. 
Demographic information regarding Service employees over the 
age of 40 is as follows:
           2,228 (46%) were in professional positions, 
        83 (4%) of whom were over the age of 60;
           974 (20%) were in administrative positions; 
        48 (5%) of them over the age of 60;
           688 (14%) were in technical positions; 49 
        (7%) of them over the age of 60;
           380 (8%) were in clerical positions; 38 
        (10%) of them over the age of 60;
           22 (4%) were in other positions; none of 
        them over the age of 60;
           559 (12%) were in wage grade positions; 62 
        (11%) of them over the age of 60.
    In 1997, there were 38 employment related discrimination 
complaints filed Servicewide. Of those, 10 were filed alleging 
discrimination on the basis of age (40 and above). 
Additionally, the Service had 25 federally assisted program 
related complaints filed during Fiscal Year 1976. Of those, 
three were filed alleging discrimination on the basis of age 
(40 and above).
    A total of 8,000 Golden Age Passports were issued 
Servicewide in 1997. The Golden Age Passport Program provides 
free entrance or lower entrance fees to most national parks, 
monuments, historic sites, recreation areas and national 
wildlife refuges for any individual over the age of 62.
    The Service utilized numerous individuals in its volunteer 
program. There were more than 30,000 volunteers Servicewide 
including 4,148 individuals over the age of 61.
    There were 97 Service employees over the age of 40 who were 
recognized for their exceptional contributions through the 
Service's Outstanding Performance Awards Program during Fiscal 
Year 1997. Additional 14 Service employees over the age of 40 
were recognized for their outstanding commitment to the 
Service's Human Resources Program through the Director's Equal 
Employment Opportunity Awards during Fiscal Year 1997.
    Calendar Year 1998.--The Service employed a total of 7,390 
individuals. There were 5,103 (69%) Service employees over the 
age of 40, which is an increase of 252 employees from the 
previous year. Of the Service employees over the age of 40, 
there were 302 (6%) over the age of 60; an increase of 22 
employees from the previous year.
    The majority of the Service's mission related occupations, 
which include biologists, continues to be professional 
positions. Demographic information regarding Service employees 
over the age of 40 is as follows:
           2,351 (32%) were in professional positions; 
        84 (4%) of them over the age of 60;
           1,055 (21%) were in administrative 
        positions; 56 (5%) of them over the age of 60;
           717 (7%) were in technical positions; 55 
        (8%) of them over the age of 60;
           372 (7%) were in clerical positions; 39 
        (10%) of them over the age of 60;
           22 (4%) were in other positions; none of 
        them over the age of 60;
           586 (11%) were in wage grade positions; 68 
        (12%) of them over the age of 60.
    During Fiscal Year 1998, there were 36 employment related 
discrimination complaints filed Servicewide. Of those, 22 were 
filed alleging discrimination on the basis of age (40 and 
above). Additionally, the Service had 32 Federally Assisted 
Program related complaints filed during Fiscal Year 1998. Of 
those, one was filed alleging discrimination on the basis of 
age (40 and above).
    A Total of 8,237 Golden Age Passports was issued 
Servicewide in 1998. The Golden Age Passport Program provides 
free or lower entrance fees to most national parks, monuments, 
historic sites, recreation areas and national wildlife refuges 
for any individual over the age of 62.
    The Service utilizes numerous individuals in its volunteer 
program. There were more than 321,000 volunteers Servicewide, 
including 40,995 individuals over the age of 61.
    The Service recognizes the numerous contributions of older 
individuals through various awards programs. There were 146 
Service employees over the age of 40 who were recognized for 
their exceptional contributions through the Service's 
Outstanding Performance Awards during Fiscal Year 1998. 
Additionally, nine Service employees over the age of 40 were 
recognized for their outstanding commitment to the Service's 
Human Resources Program through the Director's Equal Employment 
Opportunity Awards Program during Fiscal Year 1998.

                         Bureau of Reclamation

    Human Resources.--The Bureau of Reclamation conducts many 
activities throughout the year that affect and benefit aged 
individuals. Personnel Offices maintain contacts and provide 
services to many retirees who need advice or have questions 
concerning their retirement and health benefits. In addition, 
retirees and their spouses attend annual health insurance fairs 
where representatives from insurance carriers are available to 
discuss the provisions of, or changes to their respective 
medical plans. Several of Reclamation's regional offices 
continue to mail out a monthly newsletter to all retirees. The 
newsletter contains information on Reclamation's, current 
employees, past employees, and is highly regarded by retirees 
as a way to keep in touch. Additionally, pre-retirement 
briefings and seminars are held for all interested employees as 
part of retirement planning.
    The Bureau of Reclamation established a Work and Family 
Team (WAFT) in September 1995 to implement the President's 
directive on Family-Friendly Federal Work Arrangements. 
Initiatives taken on behalf of older Americans and their 
families are principally addressed in this arena. The 
alternative work schedules in place throughout Reclamation 
allow employees to construct their work schedules to 
accommodate family needs. This is in addition to its 
telecommuting initiative already in place and vigorous support 
of the Family and Medical Leave Acts.
    Employment and Job Corps Centers Opportunities.--Reemployed 
annuitants are hired to perform special projects or provide 
assistance in specialized technical areas of work since they 
are able to offer invaluable experience and expertise to these 
assignments.
    Reclamation's Weber Basin Job Corps Civilian Conservation 
Center in Ogden, Utah, continued its agreement with the U. S. 
Forest Service, consistent with Title V of the Older Americans 
Community Service Employment Act of 1973. The purpose of this 
agreement is to foster and promote useful part-time work 
opportunities in community service activities for unemployed 
low-income persons who are 55 years of age or older. During 
1997 and 1998 Weber Basin employed four older Americans under 
this agreement in positions as teachers' aides, warehouse 
workers, drivers, maintenance helpers, and clericals.
    An established Host Agency Agreement between Green Thumb, 
Inc., and the Bureau of Reclamation's Collbran Job Corps 
Civilian Conservation Center, Collbran, Colorado, continued to 
be utilized to employ older Americans at the Center. Green 
Thumb, Inc., administers a Senior Community Service Employment 
Program by virtue of a grant with the U. S. Department of 
Labor. During 1997 and 1998, Collbran Job Corps Center hired 
two employees to perform clerical and warehouse duties.
    Accessibility.--The Architectural Barriers Act of 1968 and 
section 504 of the Rehabilitation Act of 1973, as amended, 
require the provision of accessible facilities, programs and 
services to the persons with disabilities. This effort directly 
benefits all people, including the elderly, providing improved 
access to Reclamation facilities and programs.
    Reclamation has actively pursued compliance with the 
Architectural Barriers Act of 1968 and section 504 of the 
Rehabilitation Act of 1973, as amended, since 1990 and is in 
the process of evaluating all of its facilities, services and 
programs. The following chart illustrates the total number of 
Reclamation sites and components that were evaluated for 
accessibility purposes, as of January 11, 1999.

                  TOTAL SITE AND COMPONENT EVALUATIONS RECLAMATION-WIDE AS OF JANUARY 11, 1999
----------------------------------------------------------------------------------------------------------------
                                                               Sites                        Components
                     Region                      ---------------------------------------------------------------
                                                    Inventoried      Evaluated      Inventoried      Evaluated
----------------------------------------------------------------------------------------------------------------
Great Plains....................................             110              28            4495            4486
Lower Colorado..................................              56               9             326             221
Mid-Pacific.....................................             174               0               0               0
Pacific NW......................................             224              73            2170            1400
Upper Colorado..................................             216              31            1696             786
                                                 ---------------------------------------------------------------
      Totals....................................             800             141            8685            2893
----------------------------------------------------------------------------------------------------------------

    In addition, progress toward full accessibility has 
resulted in modification of Reclamation offices, visitor 
facilities, restrooms, campgrounds, administrative offices, 
boating facilities, and picnic areas to provide access for 
people with disabilities and older Americans who experience 
some degree of disability.
    These modifications provide structural access elements, 
which include: (1) access ramps; (2) handrails; (3) alteration 
of walkways and trail gradients; and (4) restroom and doorway 
modifications. In addition, modifications to Reclamation 
programs have resulted in captioned videos, brochures with 
large point print, audio description of videos and films and 
the use of graphics to identify restroom locations and 
information retrieval from brochures and displays.
    These changes provide the elderly easier access to 
Reclamation facilities and greatly improved information about 
the availability and location of Reclamation programs, 
activities, facilities and services. In 1998, Reclamation 
evaluated 62 of a total of 213 work sites to determine whether 
or not they were readily accessible to people with 
disabilities, older employees and visitors. The following chart 
illustrates, by region, the total places of employment 
evaluated Reclamationwide:

                              TOTAL PLACES OF EMPLOYMENT EVALUATED RECLAMATION-WIDE
----------------------------------------------------------------------------------------------------------------
                                                               Sites                        Components
                     Region                      ---------------------------------------------------------------
                                                    Inventoried      Evaluated      Inventoried      Evaluated
----------------------------------------------------------------------------------------------------------------
Great Plains....................................              40              10             489             105
Lower Colorado..................................              21               6             239             145
Mid-Pacific.....................................              67               0               0               0
Pacific NW......................................              32              11             344             177
Upper Colorado..................................              56              10             501             285
                                                 ---------------------------------------------------------------
      Totals....................................             213              62            1573             712
----------------------------------------------------------------------------------------------------------------

    The Great Plains Region.--The Region continues to conduct a 
program which considers the potential employment contributions 
of older citizens and continues to work to make facilities 
accessible to those having physical limitations, many of whom 
are senior citizens. The following activities are 
representative of actions taken in 1998.
    1. In 1998, the Great Plains Region employed a total of 257 
employees over 50 years of age. Of those employees, 15 were 62 
years or older. A breakdown by age group is shown below:
        Age Group                                    Number of Employees
51-54 years.......................................................   149
55-59 years.......................................................    80
60-70 years.......................................................    15

    In addition, in 1998, the Region employed one reemployed 
annuitant who was still employed at the end of the fiscal year.
    2. Efforts continue with regard to enhancing recreational 
opportunities at many reservoirs and recreational areas which 
have traditionally attracted many senior citizens and retired 
individuals.
    3. Many of the Bureau of Reclamation's volunteers from the 
outside public are retirees who wish to enhance their skills in 
various areas, and therefore, gain some experience through the 
volunteer program.
    4. The Region has accessibility coordinators in each area 
office to assure compliance with the American Disabilities Act. 
There have been few, if any, complaints concerning reasonable 
accommodations.
    Lower Colorado Region.--Hoover Dam has a Visitor Center 
Volunteer Program with a staff of 40 to 50 volunteers, most of 
whom are from the local senior population. The volunteers' 
contributions include monitoring the three-way revolving 
theater, helping visitors find their way around, answering 
questions about Dam tours and escorting groups from the parking 
area. Volunteers are given opportunities to go on tours, enjoy 
a walk across the Dam, view the new exhibits, and socialize 
with fellow volunteers.
    During the reporting period, the Boulder Canyon Operations 
Office developed ``WEB'' pages for the benefit of older 
Americans including individuals with hearing impairments who 
need special equipment to obtain information about Lake Mead 
and the Colorado River. This information resource is used for 
general information purposes and/or for determining a good time 
to go fishing.
    The Bolder Canyon Operations Office contracted with a 
retired employee to utilize his vast knowledge about the 
Colorado River which he had gained over a 30 year career.
    Mid-Pacific Region.--The Mid-Pacific Region continues to 
make use of the Senior Community Service Employment Program 
(SCSEP). The program provides temporary work experience for 
people aged 55 and older with limited financial resources. It 
is sponsored by the American Association of Retired Persons. 
SCSEP gives clients the opportunity to sharpen and develop 
skills while searching for a permanent job.
    The Mid-Pacific Region has an employee organization called 
the Federal Reclamation Employees' Association (FREA). It was 
formed to maintain and advance the general and social welfare 
of the employees, foster unity, cooperation, and advance the 
public regard and respect for the personnel activities of the 
Mid-Atlantic Region. Employees who are members of FREA at the 
time of retirement are granted an Honorary Lifetime Membership. 
This affords the retirees the opportunity to attend all 
functions held throughout the year, which hopefully give them a 
sense of belonging to the Mid-Atlantic Region.
    The Federal building which houses the Mid-Atlantic Region 
office employees has gone through a major retrofit. These 
modifications provide structural access elements, which 
include: access ramps, handrails, alteration of walkways, and 
restrooms and doorway modifications. These changes provide the 
elderly easier access to the facilities.
    Pacific Northwest Region.--The Region continues to utilize 
older and retired citizens as Camp or Park Hosts each year.
    An Area Office hired an elderly volunteer in one office to 
help set up files in several program areas. She was eventually 
hired on a temporary appointment to continue that effort.
    The Memorandum of Agreement with the State of Idaho, 
Department of Health and Welfare remains current, however it 
was not utilized during 1998.
    The Upper Colorado Region.--The Upper Colorado Region 
utilized two senior volunteers from the Green Thumb, Inc., 
organization during 1997 and 1998. In addition, the Region 
utilized four older Americans through SCSEP (Senior Community 
Service Employment Program) to work in the Weber Basin Job 
Corps (24 hours weekly).
    Recreation facilities in the Upper Colorado Region continue 
to be upgraded to improve accessibility to those with physical 
impairments due to disabilities and aging. This past year the 
following facilities have been renovated or constructed to 
improve access: Crawford Reservoir, Colorado; Navajo Reservoir, 
New Mexico; Deer Creek Reservoir, Utah; and Scofield Reservoir, 
Utah.
    Reclamation will continue its efforts to improve access for 
the elderly and disabled through an ongoing program established 
to provide access for all individuals.

                        Bureau of Indian Affairs

    During the reporting period, Calendar Years 1997 and 1998, 
the Bureau of Indian Affairs continued to administer 
initiatives and programs to benefit older American Indian and 
Alaskan Native citizens. The Bureau's Division of Social 
Services has provided and financed adults with custodial and 
protective care services. These services have been provided in 
homes, group homes and nursing care facilities for elderly 
persons who lack financial and physical and/or mental 
capability to care for themselves. Other aging citizens have 
received protective and counseling services without custodial 
care payments. They coordinate intensive skill nursing needs 
for aging residents through referrals to other Federal, State 
or local agencies. The Bureau of Indian Affairs is currently 
establishing standards that will upgrade custodial care 
facilities making them eligible to receive Medicare/Medicaid 
payments and provide better subsequent custodial care to 
eligible aging American Indian and Alaskan Native citizens. The 
Division administers a Housing Improvement Program that makes 
existing housing repairs and renovations and some new home 
constructions on Indian communities. This program is a grant 
program designed to improve housing standards for citizens who 
are not qualified/eligible under conventional housing 
assistance activities. Program recipients are selected from 
weighted variables that favor low income persons with 
disabilities and elderly applicants; many program recipients 
include elderly persons. Further, Tribal entities are using 
``638 Contracts'' to meet specific housing needs with emphasis 
on elderly residents.
    The Bureau of Indian Affair's Office of Indian Education 
Programs, in concert with other associations (local and 
national) has developed and administers a Family and Child 
Education Program, a family literacy program, that serves young 
children and their parents, which often includes elderly 
American Indian and Alaskan Native guardians with 
responsibility for minor children. The program includes early 
childhood, parent and child time, parenting skills and adult 
education activities in their home and a center provided by 
local schools. These services enable elderly guardians to 
become more efficient in providing parenting skills to children 
in their custody. The Bureau's Office for Equal Employment 
Opportunity Programs continues to vigorously enforce the Age 
Discrimination in Employment Act to eliminate age 
discrimination throughout the Bureau of Indian Affairs. These 
efforts ensure that elderly employees may continue in their 
careers, uninhibited, until they decide to retire.

                       Mineral Management Service

    The Minerals Management Service (MMS) continues to work to 
support programs for older Americans. MMS's work force 
statistics show that:
           Eight-one percent of the MMS's work force is 
        comprised of employees that are age 40 and over (1,388 
        of 1,719).
           Older employees are well represented in a 
        variety of occupations within the MMS, including 
        accountants, auditors, computer specialists, engineers, 
        geologists, geophysicists, and physical scientists,
           The MMS has implemented and continues to 
        implement effective personnel management policies to 
        ensure that equal opportunity is provided to all 
        employees and applicants including the aged. Older 
        workers are a source of valuable knowledge and 
        experience and a significant factor in the success of 
        the MMS's mission.
    The MMS continues to explore and implement initiatives to 
assist employees to care for elderly parents. Examples of 
recent innovations are the establishment of family support 
rooms in the Herndon, Virginia, and Lakewood, Colorado offices. 
Rooms are available for employees to bring their elderly 
parents for short term care on an occasional basis when 
necessary, in order to facilitate such events as ease in 
keeping medical appointments. Other family friendly initiatives 
such as leave share and the Family and Medical Leave Act, have 
been implemented and used to benefit workers who have older 
relatives with medical situations.
    The MMS continues to perform its mission related functions 
with diligence and appreciation of the importance of its 
actions. A major mission responsibility affecting large numbers 
of citizens is the approval of mineral royalty payments to 
various landholders, including numerous older Americans who 
often depend heavily on these payments to meet their basic 
human needs and rely on the ability of the MMS to effectively 
discharge their financial responsibilities.
    The MMS offshore mission has the ultimate objective of 
increasing domestic mineral (oil and gas) production through 
offshore resources, thereby decreasing the dependence on 
foreign imports. Such activities have a significant effect on 
the economic well-being of all Americans, especially older 
Americans.

          Office of Surface Mining Reclamation and Enforcement

    The Office of Surface Mining Reclamation and Enforcement is 
committed to ensuring that all persons are provided equal 
opportunity in all employment matters. During calendar years 
1997 and 1998 a policy statement from the Director of the 
Office of Surface Mining Reclamation and Enforcement (OSM) was 
in effect which states that discrimination based on age, 40 and 
older, will not be tolerated. In addition, during calendar year 
1997 a Diversity Policy statement was issued committing OSM to 
creating and maintaining a diverse workforce that would be 
inclusive of elderly persons. Older workers are represented in 
most of OSM's occupational series. In fact, over half (59.5%) 
of OSM's workforce will be eligible to retire within the next 
10 years.
    In 1998, OSM opened a Family Support Room. This room was 
designed to give parents and primary care providers options in 
managing responsibilities of family and work. This room has 
been very helpful in assisting persons with elderly parents who 
were sick or had doctors appointments near the work site.
    Awards for 25, 30, and 35 years of service were given to 
many OSM employees in calendar years 1997 and 1998.

                    United States Geological Survey

    Geological Survey (USGS) provides opportunities to all 
individuals throughout its work force and ensures that the 
skills of older individuals are utilized through special 
programs, volunteerism, and employment opportunities.
    In 1997, USGS employed a total of 10,681 individuals in 
permanent and temporary jobs. There were 6,827 USGS employees 
age 40 and over. Of USGS employees age 40 and over, there were 
413 (7%) employees who were 60 years of age and older, and one 
employee over 80 years old.
    The majority of USGS' mission related occupations, which 
include occupations such as hydrologists, geologists, 
cartographers, and biologists are in the professional category. 
Of the 6,827 USGS employees age 40 and over, there were 3,546 
(52%) in professional positions, 240 (7%) of whom were age 60 
and over, and one employee over 80. Other demographic 
information regarding USGS employees age 40 and over was as 
follows:
           998 (15%) were in administrative positions 
        with 32 (3%) of them age 60 or over;
           1,763 (26%) were in technical positions with 
        93 (5%) of them age 60 or over;
           359 (5%) were in clerical positions with 44 
        (11%) of them age 60 or over;
           13 (0.2%) were in other positions with none 
        of them 60 or over;
           148 (2%) were in wage grade positions with 7 
        (5%) of them age 60 or over.
    In 1997, there were 14 equal employment complaints filed by 
USGS employees alleging discrimination based on age.
    In 1998, the USGS experienced a decrease in the number of 
people it employed. In, 1998, USGS employed a total of 10,486 
individuals in permanent and temporary jobs. There were 6,618 
(63%) USGS employees age 40 and over. Of USGS employees age 40 
and over, there were 426 (6%) employees who were 60 years of 
age and older, and there were two employees over the age of 80.
    USGS' mission related occupations include positions such as 
hydrologists, geologists, cartographers, and biologists, are in 
the professional category. Of the 6,618 USGS employees age 40 
and over, there were 3,515 (53%) in professional positions, 260 
(7%) of whom were age 60 and over, and two employees over the 
age of 80. Other demographic information regarding USGS 
employees age 40 and over was as follows:
           989 (15%) were in administrative positions 
        with 38 (4%) of them age 60 or over;
           1,657 (25%) were in technical positions with 
        94 (6%) of them age 60 or over;
           308 (5%) were in clerical positions with 31 
        (10%) of them age 60 or over;
           21 (0.3%) were in other positions with none 
        of them age 60 or over;
           127 (2%) were in wage grade positions with 3 
        (2%) of them age 60 or over.
    In 1998, there were 7 equal employment complaints filed by 
USGS employees based on age. In addition to the full time 
employees, USGS also has many volunteers. These individuals 
provide outstanding services to USGS and the public nationwide 
in a variety of capacities.
    The various types of volunteer opportunities and the number 
of individuals involved were:

------------------------------------------------------------------------
                       Categories                          1997    1998
------------------------------------------------------------------------
USGS Retirees...........................................      53      69
Other Retirees..........................................     310     320
Lecturers...............................................       6       7
Scientists Emeritus.....................................     255     260
                                                         ---------------
      Totals............................................     624     656
------------------------------------------------------------------------

    The USGS Scientists Emeriti are welcomed back to the USGS 
after retirement to continue important scientific research. The 
USGS benefits immeasurably from the accumulated knowledge, 
experience, and dedication of over 250 Scientists Emeriti.
    The following are examples of some of the activities in 
which USGS volunteers are involved:
          --Two retirees from outside the Federal sector donate 
        their time in Reston, Virginia, to provide critical 
        assistance to the development and management of the 
        USGS Earth Science Corps, a project that utilizes 
        hundreds of citizens across the country to update USGS 
        maps. It is estimated that within the Earth Science 
        Corps contingent, there are over 300 volunteers aged 60 
        and above. These volunteers make valuable contributions 
        to the USGS and the nation by providing accurate, up-
        to-date geographic information about their communities.
          --USGS retirees serve as lecturers in the National 
        Center Visitors Center, leading tours and providing 
        information about the USGS to groups from pre-school 
        age to senior citizens.
          --Scores of senior citizens volunteer nationwide for 
        the Water Resources Division collecting and analyzing 
        water quality data in their communities.
          --Two retirees served as volunteers on a special 
        project in Alaska to investigate the movement and 
        impact of the Bering Glacier. Working under rugged 
        conditions, the volunteers' help made it possible for 
        USGS scientists to complete numerous studies and 
        advance USGS' understanding of this significant 
        glacier.
          --Senior citizens and retirees with backgrounds in 
        mathematics and computer science volunteer to instruct 
        employees on software applications, enter data and 
        evaluate software and hardware upgrades.
    Summary of Contributions Made by Older Americans.--During 
the reporting period, older Americans made the following 
contributions to USGS operations:
           Worked on surface-water and quality-water 
        records;
           Compiled The Water Resources Division 
        History, Volume VII -1966-1979, and South Dakota 
        History, Volume 7;
           Reviewed sediment laboratories for the 
        Office of Surface Water, examining method consistencies 
        of Water Resources Division sediment laboratories, and 
        providing insight to the Sediment Action Laboratory 
        Subcommittee;
           Provided assistance in making discharge 
        measurements and checking gauges.
           Assisted USGS in accomplishing the ``Extreme 
        Storm Study;''
           Prepared information for and attended the 
        International Records annual meeting in Maple Creek, 
        Saskatchewan, Canada;
           Assisted with the collection of water 
        resources data and processing in the Data Unit;
           Consulted on sediment transport, data 
        collection and interpretation of data and on improved 
        instrumentation projects;
           Reviewed the proposal SC94K, Simulation of 
        Dissolved Oxygen in the Lower Catawba River;
           Assisted the Water Resources Division in the 
        development of the personnel history of the Hawaii 
        District Office and the collection of field data in 
        Hawaii and the Western Pacific;
           Performed stream flow analysis and reviewed 
        District and Pacific Northwest Area records; reviewed 
        international water records and other quality assurance 
        aspects pertaining to surface water;
           Reviewed reports, assisted as resources in 
        project planning, assisted in training workshops, 
        attended conferences for NAWQA Puget Sound, and as 
        needed for the Washington District;
           Helped USGS complete two reports for the 
        Washington District Office;
           Assisted in various activities pertaining to 
        field studies of juvenile fall and spring chinook 
        salmon, e.g., Radio telemetry activities included using 
        boats to track radio-tagged juvenile salmon in Lower 
        Granite and Little Goose Reservoirs, downloading fixed 
        radio telemetry receivers, collecting juvenile salmon 
        using trawls and purse seines in Snake River 
        Reservoirs, and collecting velocity and temperature 
        data. Near shore habitat activities included collecting 
        fish with beach seines and electrofishing, taking part 
        in surveys for stranded fish in the Handford Reach of 
        the Columbia River, and collecting physical habitat 
        data such as water velocity, temperature, turbidity, 
        light intensity, and substrate classification. General 
        duties include hauling live fish, transporting 
        equipment to study sites, and hauling travel trailers 
        to study sites;
           Reorganized a histology slide collection; 
        and
           Assisted in editing the second edition of 
        ``Fish Hatchery Management, the Encyclopedia of 
        Aquaculture,'' and the Second U.S.-USSR Symposium 
        Reproduction, Rearing and Management of Anadromous 
        Fish.

                     ITEM 9--DEPARTMENT OF JUSTICE

                              ----------                              


                 INITIATIVES RELATED TO OLDER AMERICANS

                              Introduction

    As the largest law firm in the nation, the Department of 
Justice (DOJ) serves as counsel for its citizens. Through its 
lawyers, investigators, and agents, the Department plays a key 
role in protecting the nation against criminals and subversion, 
ensuring healthy competition of business in our free enterprise 
system, safeguarding the consumer, and enforcing drug, 
immigration, and naturalization laws. The Department also plays 
a significant role in protecting citizens through its efforts 
to improve public safety.
    In addition, the Department conducts all suits in the 
Supreme Court in which the United States is concerned. It 
represents the Government in legal matters generally, rendering 
legal advice and opinions, upon request, to the President and 
to the heads of the executive departments. The Attorney General 
supervises and directs these activities, as well as those of 
the U.S. Attorneys and U.S. Marshals in the judicial districts 
around the country.
    Within the Department, the Civil Rights Division, the Civil 
Division, the Criminal Division and the Office of Justice 
Programs conduct activities related to older Americans.

                         Civil Rights Division

    The Civil Rights Division was established in 1957 to secure 
effective Federal enforcement of civil rights. The Division is 
the primary institution within the Federal Government 
responsible for enforcing Federal statutes prohibiting 
discrimination on the basis of race, sex, disability, religion, 
and national origin. In 1997, the Division created a Nursing 
Home Working Group to develop a coordinated approach and 
concerted effort within the Division to address a variety of 
civil rights violations that currently exist in the nation's 
nursing homes. Staff from the Criminal, Disability Rights, 
Housing, and Special Litigation Sections participate in the 
Working Group to combat abuse and discrimination in nursing 
homes and to raise public awareness about civil rights in these 
facilities. Listed below is an overview of the authority and 
recent activities of each Civil Rights Division Section to 
protect the rights of nursing home residents.
    Civil Rights of Institutionalized Persons Act (CRIPA) 
Enforcement.--The Division's Special Litigation Section has 
responsibility under CRIPA to investigate conditions in public 
facilities, including nursing homes, and to file suits where 
there is a pattern or practice of violation of the 
constitutional or Federal statutory rights of residents. During 
1997 and 1998, the Section was active in a number of CRIPA 
investigations and cases involving conditions in nursing homes 
across the nation, including some of the largest public nursing 
homes in the United States. As a result of the Section's CRIPA 
efforts, thousands of nursing home residents who were living in 
dire, often life-threatening, conditions now receive adequate 
care and services and are protected from harm. For example, 
during August 1998, the Section settled a CRIPA case involving 
unlawful conditions of confinement in a Pennsylvania nursing 
home. This settlement represents the first case stemming from a 
joint investigation under CRIPA and the False Claims Act. The 
settlement, which was a cooperative effort by the Special 
Litigation Section, the U.S. Attorney for the Eastern District 
of Pennsylvania, the Civil Division, and the Office of the 
Inspector General of the U.S. Department of Health and Human 
Services, covers both the injunctive relief necessary to remedy 
deficiencies in the nursing home, as well as monetary penalties 
to reimburse the Federal Government for fraudulent Medicare 
billings for inadequate care. The settlement requires 
improvements in conditions at the Pennsylvania nursing home to 
ensure that its elderly and disabled residents are free from 
abuse and neglect and that they receive adequate care and 
treatment. As a result of alleged false billing practices, the 
defendants agreed to pay civil monetary penalties to the 
Federal Government under the False Claims Act and restitution 
to the residents by establishing a fund for a special project, 
authorized by the United States, that will improve the quality 
of life for residents at the nursing home. In addition, the 
settlement provides for a Federal monitor who will oversee 
compliance with the terms of the agreement.
    During 1997, the Section settled another CRIPA case 
involving a Virginia nursing home for elderly persons with 
mental illness. Under the terms of the settlement, Virginia 
must take adequate steps to remedy deficiencies in medical 
care, psychiatric treatment, use of restraints, and protection 
from harm. The Section also brought another CRIPA case to a 
successful close involving a nursing home operated by the 
District of Columbia that housed elderly and chronically ill 
adults and physically and mentally disabled children. During 
the course of the litigation, the Section obtained court orders 
to remedy dire conditions at the nursing home, including 
inadequate food and medical supplies, untreated pressure sores 
resulting in death and amputation, and undue restraint. When 
the District decided to close the nursing home, the court 
required a court monitor to provide technical assistance and 
oversight to assess the needs of the residents and develop 
appropriate alternative placements for them. When the court 
monitor certified that all residents had been transferred to 
safe and appropriate alternative placements, the court 
dismissed the case in May 1997.
    Throughout 1997 and 1998, the Section also was active in 
public awareness and education activities to provide 
information about its nursing home activities. The Section 
organized meetings and participated in conferences with other 
Federal agencies and consumer groups to educate them about its 
CRIPA authority and activities.
    The Fair Housing Act.--The Housing Section is responsible 
for addressing discriminatory practices on the basis of race, 
color, religion, sex, national origin, familial status, or 
disability in private and public nursing homes and 
discriminatory practices in zoning practices that pose barriers 
to creating adult foster homes, group homes, and other 
community living arrangements for individuals who are 
inappropriately placed in nursing homes. During 1997 and 1998, 
the Housing Section brought several cases against nursing homes 
that discriminated on the basis of race and disability in their 
admissions policies. The Section also was active in using the 
Fair Housing Act to combat zoning ordinances that discriminate 
against adult foster care homes in residential areas.
     Americans with Disabilities Act (ADA).--The Division's 
Disability Rights Section implements and enforces the ADA. The 
ADA is a comprehensive civil rights law that prohibits 
discrimination on the basis of disability. The ADA affects six 
million businesses and nonprofit agencies, 80,000 units of 
state and local government, and 54 million people with 
disabilities. Census data indicate that more than half of the 
people who are over the age of 65 have disabilities. Thirty-
four percent of these individuals characterize their 
disabilities as ``severe.''
    The Division's responsibilities under the ADA are to 
publish, implement, and enforce the regulations that prohibit 
discrimination based on disability in the programs, activities, 
and services of state and local governments, and in the 
operations of places of public accommodation, such as hotels, 
restaurants, theaters, retail sales establishments, health care 
facilities, nursing homes, and social service providers. 
Through lawsuits and both formal and informal settlement 
agreements, the Division has achieved greater access for 
individuals with disabilities in hundreds of cases. During 1997 
and 1998, the Disability Rights Section investigated several 
complaints about practices in nursing homes that allegedly 
discriminated against residents based upon their disabilities.
    In addition, the Division has established a comprehensive 
technical assistance program to educate people with 
disabilities about their rights under the ADA and to assist 
covered entities to understand their responsibilities. The ADA 
Technical Assistance Program provides up-to-date information 
about the ADA and how to comply with its requirements. The 
Division also undertakes outreach initiatives to increase 
awareness and understanding of the ADA and operates an ADA 
technical assistance grant program to develop and target 
materials to reach specific audiences at the local level, 
including small businesses and other small entities. Each year 
more than one million people are assisted by the Division and 
its grantees.
    The technical assistance program includes an ADA homepage 
that permits members of the public to use the Internet to gain 
access to the Department's regulations, technical assistance 
materials, status reports, and settlement agreements. The ADA 
homepage receives 3 million ``hits'' per year. In addition, the 
technical assistance program operates a toll-free ADA 
information line (1-800/514-0301) that operates 24 hours-per-
day to allow members of the public to order ADA public 
information and educational materials. The ADA Information Line 
receives over 160,000 calls per year.
    Criminal Civil Rights Violations.--The Criminal Section has 
authority under criminal civil rights statutes to prosecute 
public servants--persons acting ``under color of law''--from 
intentionally violating the Federal constitutional or statutory 
rights of the individuals they serve. In the nursing home 
context, the Section can prosecute nursing home staff acting 
under color of law who willfully deprive residents of their 
civil rights.
    Further information about the activities of the Civil 
Rights Division is available online at www.usdoj.gov/crt or by 
calling the Department of Justice's Office of Public Affairs at 
202/514-2008.

              Civil Division--Commercial Litigation Branch

    The Civil Division represents the United States, its 
departments and agencies, Members of Congress, Cabinet 
officers, and other Federal employees. The Division confronts 
significant policy issues, which often rise to constitutional 
dimensions, in defending and enforcing various Federal programs 
and actions.
    Through its efforts to combat health care fraud, the 
Commercial Litigation Branch of the Civil Division each year 
returns significant funds to the Medicare Trust Fund for the 
benefit of elderly Americans. The chief legal tool used by the 
Commercial Litigation Branch in this area is the civil False 
Claims Act, which imposes treble damages and statutory 
penalties on those who knowingly submit false claims to the 
government, and provides for a private right of action for 
whistle blowers who may file actions on behalf of the United 
States and share in the United States' recovery.
    The Federal Government's resources to address health care 
fraud were considerably enhanced by the appropriations and new 
legal tools made available through Congress' enactment of the 
Health Insurance Portability and Accountability Act of 1996 
(HIPAA). In the two fiscal years since HIPAA, the Commercial 
Litigation Branch, together with the Offices of United States 
Attorneys, secured settlements and judgments of over $1.26 
billion in matters involving health care providers alleged to 
have violated the civil False Claims Act.
    Importantly, the Commercial Litigation Branch's successful 
use of the False Claims Act accomplishes much more for elderly 
Americans than simply restoring lost funds to the Medicare 
Trust Fund: it acts as a powerful deterrent against future 
financial fraud on Medicare and the provision of inadequate and 
harmful health care. For example, following several years of 
diligent efforts by the Department of Justice to pursue 
hospitals for false claims against Medicare, the Health Care 
Financing Administration in 1998 reported a first-time ever 
drop in the complexity of cases billed by hospitals 
participating in Medicare's prospective payment system (PPS). 
1998 is the first year that this ``case-mix index'' has dropped 
since the beginning of PPS in 1984, fourteen years ago, 
suggesting that hospitals are now less aggressive in billing 
Medicare.
    The civil False Claims Act was also used during the past 
year

in cases against nursing homes that defrauded Medicare by 
provid-

ing grossly inadequate nutrition and care, and against 
psychiatric

hospitals that arranged with nursing homes for the transfer of 
pa-

tients with Alzheimer's and other organic brain disorders so 
that

unnecessary psychiatric care could be billed to the Federal 
Govern-

ment. The Deputy Attorney General has made it well known to the 
health care industry at industry events that it is a top 
priority for the Department of Justice to use the False Claims 
Act to address the knowing denial of needed care by nursing 
homes and managed care organizations.
    Further information about the activities of the Civil 
Division is available online at www.usdoj.gov/civil or by 
calling the Department of Justice's Office of Public Affairs at 
202/514-2008.

                           Criminal Division

    The Criminal Division develops, enforces, and supervises 
the application of all Federal criminal laws except those 
specifically assigned to other divisions. The Criminal Division 
and the 93 U.S. Attorneys have the responsibility for 
overseeing criminal matters under the more than 900 statutes, 
as well as certain civil litigation. In addition to its direct 
litigation responsibilities, the Division formulates and 
implements criminal enforcement policy and provides advice and 
assistance.
    Since 1994, the Criminal Division has been responsible for 
conducting three initiatives relating to older Americans:
    National Telemarketing Fraud Initiative.--Established in 
1994, this initiative enabled the Criminal Division to provide 
nationwide coordination for the Department on two major 
undercover operations directed at telemarketing fraud. The 
first operation, Operation Senior Sentinel, involved the use of 
active-duty and retired Federal agents and senior volunteers, 
recruited through the American Association of Retired Persons, 
who tape-recorded telephone solicitations by fraudulent 
telemarketers. After the FBI and other agencies took over the 
telephone lines of a number of people who had been repeatedly 
victimized by telemarketing schemes, the agents and volunteers 
pretended to be the victims when telemarketers continued to 
call the victims' telephone numbers. From its early stages in 
1993 through July 1996, Operation Senior Sentinel resulted in 
the conviction of 598 individuals, the execution of 104 search 
warrants, and the investigation of 180 telemarketing ``boiler 
rooms.'' Leaders of telemarketing schemes who were federally 
prosecuted typically received multi-year prison sentences, and 
some received prison sentences exceeding 10 years.
    The second operation, Operation Double Barrel, built upon 
this undercover technique in expanding coordination on 
enforcement operations to include state attorneys general and 
Federal regulatory agencies. Operation Double Barrel, which 
Attorney General Janet Reno announced in December 1998, 
involved close cooperation between the FBI, 35 state attorneys 
general, and Federal prosecutors between July 1996 and December 
1998. During that 30-month period, Federal authorities charged 
795 individuals in 218 Federal criminal cases, and 14 state 
attorneys general charged 194 individuals in 100 state criminal 
investigations. In addition, 255 civil complaints were lodged 
against 394 individuals.
    International Telemarketing Fraud Initiative.--Created in 
1997, this initiative established a basis for the Criminal 
Division to provide nationwide coordination for the Department 
in implementing recommendations of the United States-Canada 
Working Group on Telemarketing Fraud. The Working Group, 
created in response to a directive by President Clinton and 
Canadian Prime Minister Jean Chretien, issued a report with a 
number of recommendations on legal structures, public education 
and prevention measures, and strategy and coordination 
approaches to combat cross-border telemarketing fraud more 
effectively. The initiative has also provided travel funding 
for U.S. victims of Canadian-based telemarketing schemes who 
are needed for testimony in Canadian criminal prosecutions of 
those schemes.
    Fraud Prevention Initiative.--Established by the Attorney 
General in May 1998, the Fraud Prevention Initiative is 
comprised of four components intended to improve the 
government's ability to prevent all major types of fraud (with 
the exception of health care fraud, which is already being 
addressed through the Department's existing healthcare 
enforcement efforts). First, the initiative has established a 
system of reporting for Federal prosecutors and agents to 
identify systemic weaknesses in Federal statutes, regulations, 
or policies that may adversely affect the prosecution of 
various types of fraud. Second, the Department will provide 
Federal law enforcement authorities with reference materials on 
``exemplary practices,'' such as fraud prevention and education 
projects and ``reverse boiler rooms'' that law enforcement can 
establish in various regions of the country to provide improved 
community outreach and education on fraud issues. Third, the 
Department is expanding its Website to include Webpages on all 
major areas of fraud, including frauds such as telemarketing 
and investment fraud that can have a major impact on older 
Americans. These Webpages are intended to inform the public 
about prevalent frauds and explain how they can report possible 
fraud schemes or learn how to handle such schemes. Fourth, the 
Department is establishing an annual award for fraud prevention 
to ensure that significant fraud prevention efforts by 
government and private-sector organizations can receive 
suitable public recognition.
    In addition to these initiatives, the Criminal Division 
also provides coordination for Federal and state agencies 
through interagency Working Groups that Criminal Division 
representatives chair. These include the Health Care Fraud 
Working Group, the Securities and Commodities Fraud Working 
Group, and the Telemarketing and Internet Fraud Working Group.
    Further information about the activities of the Criminal 
Division is available online at www.usdoj.gov/criminal or by 
calling the Department of Justice's Office of Public Affairs at 
202/514-2008.

                       Office of Justice Programs

    Since 1984, the Office of Justice Programs (OJP) has 
provided Federal leadership in developing the nation's capacity 
to prevent and control crime and delinquency, improve the 
criminal and juvenile justice systems, increase knowledge about 
crime and related issues, and assist crime victims. OJP is 
comprised of five program bureaus and six program offices. The 
five bureaus are:
    The Bureau of Justice Assistance (BJA) provides funding, 
training, and technical assistance to state and local 
governments to combat violent and drug-related crime and help 
improve the criminal justice system. Its programs include the 
Edward Byrne Memorial State and Local Law Enforcement 
Assistance formula and discretionary programs and the Local Law 
Enforcement Block Grants (LLEBG) program.
    The Bureau of Justice Statistics (BJS) collects and 
analyzes statistical data on crime, criminal offenders, crime 
victims, and the operation of justice systems at all levels of 
government. It also provides financial and technical support to 
state statistical agencies and administers special programs 
that aid state and local governments in improving their 
criminal history records and information systems.
    The National Institute of Justice (NIJ) supports research 
and development programs, conducts demonstrations of innovative 
approaches to improve criminal justice, develops new criminal 
justice technologies, and evaluates the effectiveness of OJP-
supported and other justice programs. NIJ also provides primary 
support for the National Criminal Justice Reference Service, a 
clearinghouse of criminal justice-related publications, 
articles, videotapes, and online information.
    The Office of Juvenile Justice and Delinquency Prevention 
(OJJDP) provides Federal leadership in preventing and 
controlling juvenile crime and improving the juvenile justice 
system at state and local levels. OJJDP also provides grants 
and contracts to states to help them improve their juvenile 
justice systems and sponsors innovative research, 
demonstration, evaluation, statistics, replication, technical 
assistance, and training programs to help improve the Nation's 
understanding of and response to juvenile violence and 
delinquency.
    The Office for Victims of Crime (OVC) provides Federal 
leadership in assisting victims of crime and their families. 
OVC administers two grant programs created by the Victims of 
Crime Act of 1984 (VOCA). The Victims Assistance Program gives 
grants to states to support programs that provide direct 
assistance to crime victims. The Victims Compensation Program 
provides funding to state programs that compensate crime 
victims for medical and other uncompensated expenses resulting 
from a violent crime. OVC also provides funding, training, and 
technical assistance to victim service organizations, criminal 
justice agencies, and other professionals to improve their 
response to crime victims and their families. OVC's programs 
are funded through the Crime Victims Fund, which is derived 
from fines and penalties collected from federal criminal 
offenders, not taxpayers.
    OJP's program office responsible for initiatives related to 
older Americans is:
    The Violence Against Women Office (VAWO) administers grant 
programs to help prevent, detect, and stop violence against 
women, including domestic violence, sexual assault, and 
stalking. VAWO is also responsible for coordinating the 
Department of Justice's public outreach and other initiatives 
relating to violence against women.
    The other five OJP program offices are: the Corrections 
Program Office (CPO), the Drug Courts Program Office (DCPO), 
the Executive Office for Weed and Seed (EOWS), the Office for 
State and Local Domestic Preparedness Support (OSLDPS), and the 
Office of the Police Corps and Law Enforcement Education 
(OPCLEE).
    Also within OJP, the American Indian and Alaska Native Desk 
(AI/AN) improves outreach to tribal communities. AI/AN works to 
enhance OJP's response to tribes by coordinating funding, 
training, and technical assistance and providing information 
about available OJP resources.
    The following describes OJP's major activities on behalf of 
older Americans:
    Focus Group on Crime Victimization of the Elderly.--In the 
spring of 1998, OJP's bureaus and offices sponsored a focus 
group on issues related to the crime victimization of older 
persons. Participants included representatives from: the 
Administration on Aging; the National Institute on Aging at the 
National Institute of Health; American Association of Retired 
Persons; National District Attorneys Association; National 
Association of Attorneys General; the National Sheriffs' 
Association; the National Association of Adult Protective 
Services; the National Committee for the Prevention of Elder 
Abuse; the National Indian Council on Aging; and state criminal 
justice and victims assistance agencies in California, 
Pennsylvania, and Florida.
    Participants cited three primary areas where states and 
local jurisdictions need more support: public education and 
awareness; training and technical assistance related to 
identifying and addressing elderly victimization for criminal 
justice and social service agencies, both within and across 
agencies and disciplines; and research. The recommendations of 
the focus group have guided planning for FY 1999.
    Telemarketing Fraud.--The goal of the Telemarketing Fraud 
Prevention and Public Awareness Program is to support federal, 
state, and local efforts among law enforcement, crime 
prevention, victim assistance, consumer protection, adult 
protective services, and senior citizen programs in 
implementing public education and training efforts. In December 
1997, OVC awarded four grants totaling $600,000 to the Oregon 
Senior and Disabled Services Division; the Baltimore County 
Department of Aging; the National Sheriffs' Association (NSA); 
and the National Hispanic Council on Aging. These funds were 
supported by a $600,000 transfer from BJA, as part of a 
$2,000,000 Congressional earmark to address elder abuse. 
Funding under this program enabled the grantees to do the 
following:
           The Oregon Senior and Disabled Services 
        Division provided training and information on fraud for 
        bank personnel throughout Oregon and created services 
        for senior fraud victims.
           The Baltimore County Department of Aging 
        produced and distributed a booklet aimed at preventing 
        telemarketing and telephone fraud. The booklet was also 
        used as an insert in a Sunday edition of the Baltimore 
        Sun, at the newspaper's expense.
           The National Sheriffs' Association used the 
        funds for ``Operation Fraudstop,'' a national, 
        coordinated public education and awareness and training 
        effort among NSA and a range of agencies and 
        corporations, including the American Association of 
        Retired Persons, the National Association of Attorneys 
        General, the National District Attorneys Association, 
        TRIAD, state sheriffs' associations, and Radio Shack. A 
        pilot will also be conducted in Maryland, Montana, 
        Virginia, and Washington, with replication planned 
        nationwide.
           The National Hispanic Council on Aging 
        funded a public education campaign to combat 
        telemarketing fraud in the Latino community, which 
        included distribution of material and meetings of small 
        groups of seniors in South Texas and the Washington, 
        D.C. area to discuss telemarketing fraud issues and the 
        development of a senior peer counseling program to 
        provide victim assistance.
    BJA's Telemarketing Fraud Curriculum Initiative is 
supported by a Congressional earmark for ``programs to assist 
law enforcement in preventing and stopping marketing scams 
against senior citizens.'' Under this initiative, the National 
District Attorneys Association's (NDAA) American Prosecutors 
Research Institute (APRI), in cooperation with the National 
Association of Attorneys General (NAAG), working with the 
American Association of Retired Persons (AARP), and the 
National White-Collar Crime Center (NWCCC), is developing a 
training curriculum for prosecutors and investigators to help 
address these crimes. With BJA funding, the AARP is working in 
coordination with the NAAG, APRI, and NWCCC to provide training 
and education to state and local investigators and prosecutors 
and other related professionals to prevent and effectively 
prosecute telemarketing fraud cases.
    Publications.--In April 1998, OJJDP released ``Guidelines 
for the Screening of Persons Working with Children, the 
Elderly, and Individuals with Disabilities in Need of 
Support.'' These guidelines, which were prepared by the 
American Bar Association's Center on Children and the Law under 
a grant from OJJDP, help different types of organizations 
screen caregivers by focusing on variables such as the type of 
contact the caregiver would have with the client, whether the 
care is supervised or unsupervised, and the age and condition 
of the client. The guidelines also provide recommendations for 
how states can strengthen their efforts by: encouraging abuse 
prevention training for all workers at service agencies, 
organizations, and facilities for children and dependent 
adults; allowing greater access to state criminal record and 
sex offender information; and creating central abuse and 
neglect registries for children and elderly or dependent 
adults.
    BJS is developing a statistical report on elderly 
victimization using data from the National Crime Victimization 
Survey for release in 1999. These statistics will include 
comparisons of victimization of senior citizens with that of 
other age groups, patterns of victimization that are different 
among the elderly than other groups in the population, and some 
statistics on violence committed against senior citizens by 
relatives and others who are well-known to the victim.
    In February 1999, the National Institute of Justice 
released its study, Fraud Control in the Health Care Industry: 
Assessing the State of the Art , which examines the policies, 
procedures, and control systems concerning the unusually high 
levels of criminal fraud within the health care industry. The 
NIJ study revealed the extent to which certain factors make 
controlling fraud and abuse in the health care industry 
particularly challenging, including the acceptability of 
government and insurance companies in our society as violators, 
and the level of trust given to health care providers. One 
factor highlighted in the study revealed that many fraud 
schemes deliberately target vulnerable populations, such as the 
elderly or Alzheimer's patients, who are less willing or able 
to complain or alert law enforcement. This study also focused 
on criminal fraud rather than abuse because fraud controls are 
aimed at an entirely different audience. For instance, controls 
may work well in revealing billing errors to well-intentioned 
doctors, but those same control systems may not offer an 
effective defense against skilled criminals. This report is 
available on the Internet at http://www.ojp.usdoj.gov/nij, or 
from the National Criminal Justice Reference Service (NCJRS) by 
calling toll-free, 1-800/851-3420.
    Criminal Justice System Responses to Senior Citizens.--BJA 
included a topic area, ``Criminal Justice System Responses to 
Senior Citizens,'' in its FY 1998 Open Solicitation, which 
invited communities to submit proposals for strategies to 
address issues presented by senior citizens as victims, 
witnesses, defendants, offenders, or volunteers. BJA received a 
total of 120 concept papers under this topic area and expects 
to make awards to the Spokane County Prosecuting Attorney's 
Office, Spokane, Washington, the City of San Juan, Puerto Rico, 
Riverside County District Attorney, Riverside, California, and 
the Illinois State Police, Springfield, Illinois. The grantees 
will do the following under this topic area:
           The Spokane County Prosecuting Attorney's 
        Office will develop an Elder Abuse Prosecution Team 
        (EAPT) to aggressively prosecute perpetrators of 
        physical abuse and neglect against elders; educate the 
        community to recognize signs and symptoms of abuse; and 
        increase response to reported crime with knowledgeable 
        investigators, who conduct intensive and professional 
        investigations and work in partnership with community 
        organizations to develop prevention strategies.
           The Municipality of San Juan, Office for the 
        Integral Development of Women will provide regularly 
        scheduled visits to elderly women living in rural and 
        marginal areas of San Juan. The visits will include 
        individual counseling, crisis intervention, and legal 
        orientation and assistance aimed to prevent crime, 
        discrimination, physical and emotional abuse, 
        abandonment, and other situations affecting elderly 
        women.
           The Riverside District Attorney's Office 
        will establish an Elder Abuse Prevention Unit (EAPU) 
        and participate in a multi-agency effort to 
        aggressively address incidents of elder abuse. The 
        project will serve as a national model for the role of 
        the district attorney in providing leadership in 
        addressing this issue. The EAPU will ensure the 
        prosecution of approximately 50 elder abuse cases and 
        provide supportive services to elder victims.
           The Illinois State Police will develop a 
        Financial Exploitation of the Elderly Unit to respond 
        to requests for assistance and provide training in the 
        investigation and prosecution of statewide financial 
        exploitation cases against the elderly.
    Home Improvement Fraud.--In 1998, BJA awarded a grant to 
the American Prosecutors Research Institute (APRI) for the Home 
Improvement Fraud Against Seniors Program. APRI provides 
training and technical assistance to local prosecutors to 
protect senior citizens from home improvement fraud through 
increased prosecution, prevention, and education. APRI also 
aids local prosecutors in their fight against home improvement 
fraud by showing them successful and cost effective ways to 
gain evidence needed, establish proof, communicate with other 
prosecutors, and develop education and prevention efforts to 
protect senior citizens.
    Grants to Encourage Arrest Policies and the Technical 
Assistance Program.--The VAWO FY 1998 applications for the 
Grants to Encourage Arrest Policies and the Technical 
Assistance Program included a number of special interest areas, 
one of which was ``community-driven initiatives to address 
violence against women among diverse, traditionally under-
served populations,'' including elderly women. Under its 
Technical Assistance Program, VAWO awarded a grant to the 
American Bar Association's Commission on Domestic Violence and 
Legal Problems of the Elderly to provide training and technical 
assistance on issues related to older battered women to current 
recipients of OJP grants under the Violence Against Women Act.
    TRIAD.--TRIAD is a national program cosponsored by the 
National Sheriffs' Association, the International Association 
of Chiefs of Police, and the American Association of Retired 
Persons. TRIAD combines the efforts and resources of law 
enforcement, senior citizens and organizations that represent 
them, and victim assistance providers. Activities include 
educating communities about elder abuse; strengthening the 
criminal justice system's process of prevention, detection, and 
assistance for elderly crime victims; implementing reassurance 
programs for homebound and isolated elders; and providing 
technical assistance for new and existing TRIADs. There are now 
436 TRIAD programs in 46 states, Canada, and England.
    In FY 1999, funds will be provided to adapt TRIAD for use 
in Indian country. OVC will provide funding for a demonstration 
program on one Indian reservation under federal criminal 
jurisdiction. The purpose of this program is to provide a 
coordinated response to crime against the elderly by adapting 
the TRIAD program approach to Indian country.
    American Bar Association.--OVC awarded two grants to the 
American Bar Association (ABA) in FY 1998. Funding from the 
first award went to the ABA's Commission on Domestic Violence 
and Commission on Legal Problems of the Elderly to jointly 
develop a curriculum for lawyers about domestic violence and 
elder abuse. The second grant was awarded to the ABA's 
Commission on Legal Problems of the Elderly to develop a 
curriculum on elder abuse for victim assistance professionals.
    For More Information about OJP programs or activities on 
behalf of older Americans, contact OJP's Office of 
Congressional and Public Affairs at 202/307-0703 or access the 
OJP homepage at www.ojp.usdoj.gov. Funding information is 
available from the Department of Justice Response Center at 1-
800/421-6770. OJP and other criminal and juvenile justice-
related publications are available from the National Criminal 
Justice Reference Service by calling toll-free, 1-800/851-3420, 
or online at www.ncjrs.org.

                      ITEM 10--DEPARTMENT OF LABOR

                              ----------                              

    The welfare of our Nation's older citizens is a matter of 
substantial concern to the Department of Labor. The Department 
of Labor is pleased to provide this summary of the programs it 
administers which can provide helpful assistance to older 
citizens. These include--job training and related services, 
dislocated worker services, and other employment services, 
under programs administered by the Department of Labor's 
Employment and Training Administration; a public information 
and assistance program on matters relating to certain pension 
and welfare plans under programs administered by the Pension 
and Welfare Benefits Administration; the Bureau of Labor 
Statistics' statistical programs providing employment and 
unemployment data for older persons; protection for certain 
employees to take unpaid, job-protected leave to provide care 
for sick, elderly parents under a program administered by the 
Employment Standards Administration; and a Clearinghouse 
administered by the Women's Bureau which provides information 
and resources to workers and employers interested in developing 
or implementing family-friendly policies such as elder care and 
child care. These programs and services are addressed more 
fully in the following discussion.

                 EMPLOYMENT AND TRAINING ADMINISTRATION

                              introduction

    The Department of Labor's (DOL's) Employment and Training 
Administration (ETA) provided a variety of training, employment 
and related services for the Nation's older individuals during 
Program Years 1996 (July 1, 1996-June 30, 1997) and 1997 (July 
1, 1997-June 30, 1998) through the following programs and 
activities: the Senior Community Service Employment Program 
(SCSEP); programs authorized under the Job Training Partnership 
Act (JTPA); and the Federal-State Employment Service system.

              senior community service employment program

    SCSEP, authorized by Title V of the Older Americans Act, 
employs low-income persons age 55 or older in a wide variety of 
part-time community service activities such as health care, 
nutrition, home repair and weatherization, child care, and in 
beautification, conservation, and restoration efforts. Program 
participants work an average of 20 hours per week in schools, 
hospitals, parks, community centers, and in other government 
and private, non-profit facilities. Participants also receive 
personal and job-related counseling, are offered annual 
physical examinations, job training, and in many cases, 
referral to private sector jobs.
    About 80 percent of the participants are age 60 or older, 
and about 60 percent are age 65 or older. Almost three-fourths 
are female; about 40 percent have not completed high school. 
All participants are economically disadvantaged.
    Table I below shows SCSEP enrollment and participant 
characteristics for the program year July 1, 1996, to June 30, 
1997, in Column 1 and July 1, 1997, to June 30, 1998, in Column 
2.

 TABLE 1.--SENIOR COMMUNITY SERVICE EMPLOYMENT PROGRAM (SCSEP): CURRENT
 ENROLLMENT AND PARTICIPANT CHARACTERISTICS--PROGRAM YEARS JULY 1, 1996,
   TO JUNE 30, 1997, (PY96) AND JULY 1, 1997, TO JUNE 30, 1998 (PY97)
------------------------------------------------------------------------
                                                        Program years
                                                   ---------------------
                                                       1996       1997
------------------------------------------------------------------------
Enrollment:
    Authorized positions established..............     60,500     61,307
    Unsubsidized employment rate (Percent)........       26.1       29.7
Characteristics (Percent):
    Sex:
        Male......................................       27.2       26.9
        Female....................................       72.4       73.0
    Educational status:
        8th grade and less........................       18.3       17.5
        9th grade through 11th grade..............       19.1       18.6
        High School graduate or equivalent........       39.3       39.9
        1-3 years of college......................       15.9       16.4
        4 years of college or more................        7.3        7.3
    Veterans......................................       12.9       12.4
    Ethnic Groups: \1\
        White.....................................       59.6       58.8
        Black.....................................       24.6       25.0
        Hispanic..................................        9.8        9.9
        American Indian/Alaskan Native............        1.8        1.9
        Asian/Pacific Island......................        4.1        4.2
    Economically disadvantaged....................      100.0      100.0
    Poverty level or less.........................       85.7       86.0
    Age groups: \1\
        55-59.....................................       17.0       16.7
        60-64.....................................       22.9       22.8
        65-69.....................................       24.8       24.4
        70-74.....................................       19.8       19.7
        75 and over...............................       15.5      16.1
------------------------------------------------------------------------
\1\ Figures may not add to 100% due to rounding.
 Source: U.S. Department of Labor, Employment and Training
  Administration.

                 Job Training Partnership Act Programs

    The Job Training Partnership Act (JTPA) provides job 
training and related assistance to economically disadvantaged 
individuals, dislocated workers, and others who face 
significant employment barriers. The ultimate goal of JTPA is 
to move program participants into permanent, self-sustaining 
employment. Under JTPA, Governors have the approval authority 
over locally developed plans and are responsible for monitoring 
local program compliance with the Act. JTPA functions through a 
public/private partnership which plans, designs and delivers 
training and other services. Private Industry Councils (PICs), 
in partnership with local governments in each Service Delivery 
Area (SDA), are responsible for providing guidance for, and 
oversight of, job training activities in the area.
    Amendments to JTPA became effective July 1, 1993. These 
amendments target program services to those with serious skill 
deficiencies; and individualize and intensify the quality of 
services provided. Five percent of the funds appropriated for 
the adult program (Title II-A) must be used by States in 
partnership with SDAs for older workers. The amendments also 
require Governors to ensure that services under the adult 
program are provided to older workers on an equitable basis.

                           Basic JTPA Grants

    Title II-A of JTPA authorizes a wide range of training 
activities to prepare economically disadvantaged adults for 
employment. Training and training-related services available to 
eligible older individuals through the basic Title II-A grant 
program include vocational counseling, jobs skills training 
(either in a classroom or on-the-job), literacy and basic skill 
training, job search assistance, and job development and 
placement. Table 2 below shows the number of persons 55 years 
of age and over who terminated from the Title II-A program 
during the period July 1, 1996, through June 30, 1997, and 
during the period July 1, 1997, through June 30, 1998. (The 
data do not include the 5 percent set-aside for older 
individuals, which is discussed separately.)

             TABLE 2.--JTPA DATA JULY 1, 1996--JUNE 30, 1998
                              [Title II-A]
------------------------------------------------------------------------
                                             Number served
                  Item                  ----------------------  Percent
                                            PY96       PY97
------------------------------------------------------------------------
Total Adult Terminees..................    151,155    198,033        100
55 years and over......................      3,054      3,067         2
------------------------------------------------------------------------
 Source: U.S. Department of Labor, Employment and Training
  Administration.

                         Section 204 Set-Aside

    The 1992 JTPA amendments require 5 percent of the Title II-
A allotment of each State to be made available for the training 
and placement of older individuals in private sector jobs. Only 
economically disadvantaged individuals who are 55 years of age 
or older are eligible for services under this State set-aside.
    Governors have wide discretion regarding use of the JTPA 5 
percent set-aside. Two basic patterns have evolved. One is 
adding set-aside resources to Title II-A to ensure that a 
specific portion of older persons participates in the basic 
Title II-A program. The other is using the resources to 
establish specific projects targeted to older individuals which 
operate independently of the basic job training program for 
disadvantaged adults. Likewise, States are required to provide 
``equitable services to older individuals throughout the State, 
taking into consideration the incidence of such workers in the 
population.'' Some States distribute all or part of the 5 
percent set-aside by formula to local SDAs; other States retain 
the resources for State administration or model programs.
    Governors are expected to coordinate services as much as 
possible with those provided under Title V of the Older 
Americans Act--Senior Community Service Employment Program. 
There are two separate provisions for older individual programs 
as they relate to Title V of the Older Americans Act. First, 
under the Title II-A program, up to ten percent of the 
participants may be individuals who are not economically 
disadvantaged, but who have a serious barrier to employment. 
Second, when a JTPA grantee and Title V sponsor establish joint 
projects, individuals eligible under Title V of the Older 
Americans Act ``shall be deemed to satisfy the requirements'' 
of JTPA. These joint (JTPA-SCSEP) projects may include co-
enrollment of Title V participants in Title II-A activities. 
Joint programs must have a written agreement, which may be 
financial on nonfinancial in nature, and may include a broad 
range of activities. For Program Year 1996 (July 1, 1996, 
through June 30, 1997), 14,587 participants were enrolled in 
the State set-aside program for economically disadvantaged 
individuals 55 years of age and older. For Program Year 1997 
(July 1, 1997, through June 30, 1998), 13,204 participants were 
enrolled in the State set-aside program for economically 
disadvantaged individuals 55 years of age and older.

                    Programs for Dislocated Workers

    Title III of JTPA authorizes a State and locally-
administered dislocated worker program that provides retraining 
and readjustment assistance to workers who have been, or have 
received notice that they are about to be, laid off due to a 
permanent closing of a plant or facility; laid off workers who 
are unlikely to be able to return to their previous industry or 
occupation; and the long-term unemployed with little prospect 
for local employment or reemployment. Those older dislocated 
workers eligible for the program may receive such services as 
job search assistance, retraining, pre-layoff assistance and 
relocation assistance. During the period July 1, 1996, through 
June 30, 1997, approximately 28,351 individuals 55 years of age 
and over exited the program (10 percent of the program 
terminations). During the period July 1, 1997, through June 30, 
1998, approximately 26,544 individuals 55 years of age and over 
left the program (8 percent of the program terminations).

              The Federal-State Employment Service System

    The State-operated public employment service (ES) offices 
offer employment assistance to all job seekers, including 
middle-aged and older persons. A full range of basic labor 
exchange services are provided, including counseling, testing, 
job development, job search assistance and job placement. In 
addition, labor market information and referral to relevant 
training and employment programs are also available.
    Federal reporting requirements for State employment service 
agencies (SESAs) were revised effective July 1, 1992, to 
capture additional information on applicant characteristics, 
including data on the age of all ES applicants and those placed 
in employment. During the period July 1, 1996 through June 30, 
1997 over 1,206,000 ES applicants were age 55 and over. 
Approximately 84,000 of the ES applicants age 55 and over were 
placed in jobs during this period. During the period July 1, 
1997 through June 30, 1998 over 1,200,000 ES applicants were 
age 55 and over. Approximately 83,000 of the ES applicants age 
55 and over were placed in jobs during this period.

              PENSION AND WELFARE BENEFITS ADMINISTRATION


                              Introduction

    The Pension and Welfare Benefits Administration (PWBA) is 
responsible for enforcing the Employee Retirement Income 
Security Act (ERISA). PWBA's primary responsibilities are for 
the reporting, disclosure and fiduciary provisions of the law.
    Employee benefit plans maintained by employers and/or 
unions generally must meet certain standards, set forth in 
ERISA and the Internal Revenue Code, designed to ensure that 
employees actually receive promised benefits. Employee benefit 
plans exempt from ERISA include church and Government plans.
    The requirements of ERISA differ depending on whether the 
benefit plan is a pension or a welfare plan. Pension plans 
provide retirement benefits, and welfare plans provide a 
variety of benefits, such as employment-based health insurance 
and disability and death benefits. Both types of plans must 
comply with provisions governing reporting to the government 
and disclosure to participants (Title I, Part 1) and fiduciary 
responsibility (Title I, Part 4). Pension plans must comply 
with additional ERISA and Internal Revenue Code standards 
(contained in both Title I, Parts 2 and 3, and Title II), which 
govern membership in a plan (participation); nonforfeitability 
of a participant's right to a benefit (vesting); and financing 
of benefits offered under the plan (funding). Welfare plans 
providing medical care must comply with ERISA continuation of 
coverage requirements and medical child support orders (Title 
I, Part 6).
    The Departments of Labor and Treasury have responsibility 
for administering the provisions of Title I and Title II, 
respectively, of ERISA. The Pension Benefit Guaranty 
Corporation (PBGC) is responsible for administering Title IV, 
which established an insurance program for certain benefits 
provided by specified ERISA pension plans. On a regular basis, 
PWBA meets and coordinates closely with the Internal Revenue 
Service (IRS) and PBGC on matters concerning pension issues.
    PWBA emphasized its commitment to customer service by 
increasing the resources devoted to this area. The number of 
inquiries it handled increased to over 155,000 for FY 1998. 
Through these effort staff increased its recoveries to over $42 
million in this year.
    In FY 1996, PWBA worked to advance the Health Insurance 
Portability and Accountability Act (P.L. 104-91), enacted 
August 21, 1996, which amended ERISA to provide increased 
access to health care benefits, to provide increased 
portability of health care benefits, and to provide increased 
security of health care benefits. The Newborns' and Mothers' 
Health Protection Act and the Mental Health Parity Act, enacted 
on September 26, 1996 (P.L. 104-204), added to ERISA mental 
health parity provisions and provisions regarding minimum 
mandatory hospital stays for newborns and mothers. 
Implementation of these laws requires PWBA's continuing 
attention.
    In FY 1997, PWBA worked to advance the Taxpayer Relief Act 
(P.L. 105-33), and the Savings Are Vital to Everyone's 
Retirement Act (``Saver'') (P.L. 105-92). The Taxpayer Relief 
Act provided incentives for and thus encouraged the 
establishment and maintenance of qualified pension plans. 
``Saver'' emphasized the importance of retirement planning, and 
the government's role in helping to educate consumers on this 
important issue.
    PWBA also worked to advance the Administration's Retirement 
Savings and Security Act. Many of its provisions were 
incorporated in the Small Business Jobs Protection Act (P.L. 
104-188) (SBJPA) enacted on August 20, 1996. The SBJPA created 
a new simplified retirement plan for small businesses, and 
simplified plan distribution and nondiscrimination rules.
    ERISA's rules concerning how a claim for benefits must be 
processed were put in place in 1977, prior to the advent of 
managed care. In order to assess whether it should revisit 
these rules, PWBA published a notice in the Federal Register in 
September 1997, requesting information from the public 
concerning whether the claims rules are still functioning 
appropriately. After reviewing the many comments received, PWBA 
issued a notice of proposed rulemaking regarding these rules.
    Because of the risk of abuse or loss (e.g., from employer's 
bankruptcy), many employees have raised questions about the 
time period during which employers must transmit participant 
contributions to employee benefit plans. To address their 
concerns, PWBA issued a rule under Title I of ERISA which 
substantially shortens the time period during which covered 
private sector employers may hold employees' contributions to 
pension plans, including 401(k) plans, before depositing the 
funds in the plans. Under the new rule, for example, an 
employer that sponsors a 401(k) plan must deposit its 
employees' contributions in the plan as soon as the 
contributions can reasonably be segregated from the employers' 
general assets, but not later than 15 business days following 
the month in which the employer withholds the money from 
employees' paychecks, or receives employees' checks for the 
amount of the contributions.
    With the growth of participant-directed individual account 
pension plans, more employees are directing the investment of 
their pension plan assets and, thereby, assuming more 
responsibility for ensuring the adequacy of their retirement 
income. In order to help employers address the need of 
participants for more investment information, PWBA issued an 
interpretive bulletin providing guidance to plan sponsors, 
fiduciaries, participants and beneficiaries concerning the 
circumstances under which the provision of investment related 
educational information, programs and materials to plan 
participants and beneficiaries will not give rise to liability 
under ERISA.
    Another critical factor which affects the amount an 
employee has at retirement are the fees charged to 401(k) 
plans. In order to increase employees' awareness, and to 
encourage plan sponsors to more closely examine such fees, PWBA 
held a hearing on 401(k) fee practices and subsequently 
published a booklet which answers commonly asked questions 
regarding plan fees.
    In fiscal year 1998, PWBA continued its program of research 
directed toward improving the understanding of the employment-
based pension and health benefit systems. PWBA published 
comprehensive statistics on private pension participation, 
finances and investments in its annual ``Private Pension Plan 
Bulletin.'' It published ``Health Benefits and the Workforce, 
Volume 2,'' a compendium of sixteen major PWBA-funded research 
studies. PWBA also completed new major research projects on 
topics including 401(k) fees, small-group health insurance 
markets, and health plan liability under ERISA, and funded 
eight new small research projects.

                               Inquiries

    PWBA publishes literature and audio-visual materials which, 
in some depth, explain provisions of ERISA, procedures for 
plans to ensure compliance with the Act and the rights and 
protections afforded participants and beneficiaries under the 
law. In addition, PWBA maintains a public information and 
assistance program, which responds to many inquiries from older 
workers and retirees seeking assistance in collecting benefits 
and obtaining information about ERISA. Further, PWBA 
established an 800 number to facilitate distribution of 
publications, and implemented an intense outreach program which 
disseminated information utilizing the various media. Among the 
publications disseminated, the following are designed 
exclusively to assist the public in understanding the law and 
how their pension and health plans operate: Top Ten Ways to 
Beat the Clock and Prepare for Retirement; Women and Pensions--
What Women Need to Know and Do; What You Should Know About Your 
Pension Rights; Protect Your Pension--A Quick Reference Guide; 
How to File a Claim for Your Benefits; How to Obtain ERISA Plan 
Documents from the Department of Labor; Handling Inquiries on 
Pension and Welfare Benefits; Guide to Summary Plan Description 
Requirements; Reporting and Disclosure Guide for Employee 
Benefit Plans; Trouble Shooter's Guide to Filing the ERISA 
Annual Report; Exemption Procedures under Federal Pension Law; 
Health Benefits under COBRA; Multiple Employer Welfare 
Arrangements under ERISA (MEWAs); Customer Service Standards--
Our Commitment to Quality; How Did We Measure Up; Questions and 
Answers on Recent Changes in Health Care Law; Can the Retiree 
Health Benefits Provided by your Employer Be Cut; A Look at 
401(k) Plan Fees; QDROs: The Division of Pensions Through 
Qualified Domestic Relations Orders.

                  EMPLOYMENT STANDARDS ADMINISTRATION

    The Family and Medical Leave Act of 1993 became effective 
on August 5, 1993, for many employers. This statute provides 
potential benefit to the elderly in that it empowers eligible 
employees of covered employers to take up to 12 weeks of 
unpaid, job-protected leave in any 12-month period to provide 
care for a parent who has a serious health condition. In the 
past, the employee had to make a decision in many instances of 
whether or not to give up their job to provide care to a sick, 
elderly parent.

                       BUREAU OF LABOR STATISTICS

    The Department of Labor's Bureau of Labor Statistics (BLS) 
regularly issues a wide variety of statistics on employment and 
unemployment, prices and consumer expenditures, compensation 
including wages and benefits, productivity, economic growth, 
and occupational safety and health. Data on the labor force 
status of the population, by age, are prepared and issued on a 
monthly basis. Data on consumer expenditures, classified by age 
groupings, are published annually. In 1994 BLS published the 
first results of the redesigned survey of occupational injuries 
and illnesses; these data are now available by age, race, and 
gender, providing important new information on this aspect of 
the labor market experiences of older Americans. In addition to 
regularly recurring statistical series, BLS undertakes special 
studies as resources permit. In May 1994 BLS published a report 
on an experimental series that reweighted the official Consumer 
Price Index using expenditure data for older Americans. This 
report updated a portion of a study originally performed by BLS 
in response to the Older Americans Act Amendments of 1987. BLS 
continues to compute the reweighted index each month.

                           THE WOMEN'S BUREAU


   The Women's Bureau National Resource and Information Center (NRIC)

              (Formerly the Women's Bureau Clearinghouse)

    Established by the Women's Bureau of the U.S. Department of 
Labor in 1989, the Clearinghouse is a computerized database and 
resource center responsive to dependent care and women's 
workplace issues. Services help employers and employees make 
informed decisions about which programs and services help in 
balancing work and family. The NRIC offers information in five 
broad option areas for child care and elder care services: 
direct services, information services, financial assistance, 
flexible leave policies, and public-private partnerships.
    The workforce quality component of the NRIC offers 
information and guidance on the rights of women workers in such 
matters as age and wage discrimination, the Family and Medical 
Leave Act (FMLA), pregnancy discrimination, and sexual 
harassment. In addition, information is available about the 
Federal agencies that enforce laws covering these topics. 
Within each of these areas customers can be provided with model 
programs from other companies, implementation guides, national 
and State information sources and bibliographic references.
    The NRIC continues to receive requests for information on 
work-site elder care program options. Information provided 
included flexible work schedules, adult day care, case 
management, decision making, information and referral, respite 
care, and transportation services.
    The NRIC can be accessed through 1-800-827-5335.

                     Work and Elder Care Fact Sheet

                Facts for Caregivers and Their Employers

    Published in May 1998, this fact sheet gives an 
introduction which discusses statistics on the aging 
population, women workers, and elder care.
    The second section discusses the types of elder care 
assistance: geriatric care managers; homemakers and home health 
aides; companions/friendly visitors; telephone reassurance 
systems; respite care; daily money managers; home-delivered 
meals; chore and repair; legal assistance or resources; family 
and medical leave; and assistance with financing care.
    The third section discusses ways employers/labor 
organizations are helping/can help employees with elder care: 
needs surveys; elder care resource and referral; seminars; 
support groups; employee assistance programs; caregiver fairs; 
counseling; long-term care insurance; visiting nurse services; 
adult day care, including intergenerational day care; emergency 
care; elder care pager programs; flexible spending or dependent 
care accounts; flexible schedules and leaves of absence; case 
management; and transportation.

                      ITEM 11--DEPARTMENT OF STATE

                              ----------                              

    The Department is pleased to report that we continue to 
expand services for aging Americans. Not only are employees 
working longer (the mandatory retirement age for Foreign 
Service is 65, and there is no mandatory retirement age for 
Civil Service), but employee responsibilities for caring for 
aging family members have grown significantly. In recognition 
of this, in 1995 the Office of Medical Services, Education and 
Wellness Programs, conducted a panel discussion on a variety of 
topics focused on older persons. That office hosted a health 
fair and offered several medical tests aimed at identifying 
diseases found primarily in older persons, such as prostate, 
cholesterol, and blood pressure screenings. The Office of 
Medical Services also hosted a panel of experts from the 
Washington metropolitan area to describe long-term care 
programs in local jurisdictions. Seminars were offered on 
Alzheimer's disease, living wills, osteoporosis and menopause. 
The Office of Employee Consultation Services, staffed by 
licensed clinical social workers, arranged support groups and 
special presentations on topics such as caring for elderly 
parents and dementia.
    The Office of Work and Family Programs in the Bureaus of 
Personnel was established in 1995 as a focal point for work and 
family programs. This office assists employees with questions 
on locating elder care services and recently hosted a monthly 
series of noontime sessions on family related topics, including 
elder care. The Work and Family Program Coordinator represented 
the Department on the Office of Personnel Management's 
Interagency Working Group on Adult Dependent Care.
    In support of the Foreign Service's employees based 
overseas, the family Liaison Office continued to provide 
Foreign Service families with oral and written information on 
caring for elderly parents, medical insurance, and procedures 
for taking an elderly relative to overseas posts. In addition, 
they make referrals, upon request for information on payment 
options for long-term care and legal issues.
    In 1996, the Department's Work and Family Programs office 
expanded its outreach efforts. It held seminars for 
grandparents who are primary caretakers for their grandchildren 
and repeated its most popular seminar topics, i.e., caring for 
aging parents and the diseases most common in the elderly. In 
addition, the Office of Employee Consultation Services hired an 
additional clinical social worker who had a specialty in 
geriatrics.
    Thank you for your continuing interest in this issue. The 
Department continues to identify ways to adapt or expand our 
current elder care services to help employees balance their 
work and family responsibilities.

                 ITEM 12--DEPARTMENT OF TRANSPORTATION

                              ----------                              


   SUMMARY OF ACTIVITIES TO IMPROVE TRANSPORTATION SERVICES FOR THE 
                              ELDERLY \1\
---------------------------------------------------------------------------

    \1\ ``Prepared for the U.S. Senate Special Committee on Aging--
February 1999.
---------------------------------------------------------------------------

                              Introduction

    The following is a summary of significant actions taken by 
the U.S. Department of Transportation during calendar years 
1997 and 1998 to improve transportation for elderly persons.\2\
---------------------------------------------------------------------------
    \2\ Many of the activities highlighted in this report are directed 
toward the needs of persons with disabilities. However, one-third of 
the elderly are persons with disabilities and thus will be major 
beneficiaries of these activities.
---------------------------------------------------------------------------

                           Direct Assistance

                 federal railroad administration (fra)

    The National Railroad Passenger Corporation (Amtrak) 
continued throughout calendar years 1997 and 1998 to provide 
discounted fares, accessible accommodations, and special 
services, including assistance in arranging travel for older 
citizens and passengers with disabilities. These passengers 
continue to represent a substantial part of Amtrak's 
ridership--in recent years, 28 percent of long-distance 
passengers were 62 or older.
    Discounted Fares.--Amtrak has a systemwide policy of 
offering to elderly persons and persons with disabilities a 15 
percent discount on one-way ticket purchases. This 15 percent 
discount cannot be combined with any other discounts.
    Accessible Accommodations.--Amtrak provides accommodations 
that are accessible to elderly persons and passengers with 
disabilities, including those using wheelchairs, on all of its 
trains. Long-distance trains include accessible sleeping rooms. 
Short-distance trains, including Northeast Corridor trains, 
have accessible seating and bathrooms. Many existing cars are 
being modified to provide more accessible accommodations and 
all new cars will provide enhanced accessibility for 
passengers, with mobility and other types of disabilities.
    Mechanical lifts operated by train or station staff provide 
passengers with access to single-level trains from stations 
with low platforms and short plate ramps provide access to bi-
level equipment. An increasing number of Amtrak stations are 
fully accessible, particularly key intermodal stations that 
provide access to commuter trains and other forms of 
transportation.
    Special On-Board Services.--Amtrak continues to provide 
special on-board services to elderly persons and passengers 
with disabilities, including aid in boarding and deboarding, 
special food service, special equipment handling, and 
provisions for wheelchairs. Amtrak has also improved training 
of its employees to enable them to respond better to passengers 
with special needs. It is recommended that passengers advise 
Amtrak of any special needs they may have in advance of their 
date of departure.
    Assistance in Making Travel Arrangements.--Persons may 
request special services by contacting the reservations office 
at 1-800-USA-Rail. This office is equipped with text telephone 
(TTY) service for customers who are deaf or hard of hearing. To 
ensure that passengers receive the assistance they need, Amtrak 
maintains a Special Services Desk, which supports its 
reservations agents seven days a week. This desk has completed 
successful responses to nearly 100,000 requests for special 
services. Passengers may also inform their travel agent or the 
station ticket agent of their assistance requirements when 
making travel reservations.

                  federal transit administration (fta)

    Under 49 USC 5310, the FTA provides assistance to private 
non-profit organizations and certain public bodies for the 
provision of transportation services for the elderly and 
persons with disabilities. In FY 1997, $55.3 million was used 
to assist 1,250 local providers purchase 1,635 vehicles, and in 
FY 1998, $62.2 million was used to assist 1,400 local providers 
purchase approximately 1,850 vehicles for the provision of 
transportation services for the elderly and individuals with 
disabilities. Most of the agencies funded under this program 
are either disability service organizations or elderly service 
organizations, and service provided under the program is nearly 
equally divided between the two. Those agencies serving the 
elderly are, however, more dependent on funding from the 
elderly and persons with disabilities program as 53 percent of 
their vehicles are purchased with Section 5310 funds compared 
to 42 percent of vehicles purchased by agencies serving persons 
with disabilities. Vehicles purchased with these funds may also 
be used for meal delivery to the homebound as long as such use 
does not interfere with the primary purpose of the vehicles.
    Under 49 USC 5311, the FTA obligated $115.1 million in FY 
1997 and $134.1 million in FY 1998. These funds were used for 
capital, operating, and administrative expenditures by state 
and local agencies, nonprofit organizations, and operators of 
transportation systems to provide public transportation 
services in rural and small urban areas (under 50,000 
population). The nonurbanized area program funds are also used 
for intercity bus service to link these areas to larger urban 
areas and other modes of transportation. An estimated 36 
percent of the ridership in nonurbanized systems is elderly, 
which represents nearly three times their proportion of the 
rural population.
    Under 49 USC 5307, the FTA obligated $2.5 billion in FY 
1997 and $2.4 billion in FY 1998. These funds were used for 
capital and operating expenditures by transit agencies to 
provide public transportation services in urbanized areas. 
While these services must be open to the general public, a 
significant number of passengers served are elderly.

                                Research

                    department-wide aging initiative

    National Agenda for the Transportation Needs of an Aging 
Society.--As a follow-up to its January 1997 study of how well 
the Nation's transportation system will accommodate the growing 
cohort of older adults, and its proposed theme of Safe Mobility 
For Life, the Department has initiated a project to structure a 
National Agenda for the Transportation Needs of an Aging 
Society. This will include a national dialogue on the 
transportation needs of older adults, where the system is 
falling short, and what remedial measures are viable. Included 
in this dialogue will be practitioners and authorities as well 
as older people and their advocacy groups such as the AARP, the 
AAA, and the private sector. The effort is in three parts:
    (1) Developing with the Transportation Research Board a 
plan for necessary future research on the transportation 
problems of the elderly, reflecting the research that has been 
accomplished, the new safety needs that have been identified, 
and the new priorities that should be established. That report 
will be published in the year 2000.
    (2) Conducting a series of seminars on the special needs of 
older persons, with transportation professionals, planners, 
social service and medical providers--followed up by focus 
group sessions with older persons and their lay care-givers on 
how they see their transportation needs, and
    (3) Taking the results of (1) and (2) to develop a National 
Agenda for the next decade and beyond for meeting the needs of 
the coming surge in aging Americans. Included in this work will 
be an international conference on these issues in November 
1999.

                 federal aviation administration (faa)

    The Office of Aviation Medicine's Civil Aeromedical 
Institute has contributed to the following research related to 
the needs and concerns of the aging population in aviation 
transportation.
    Cognitive Function Test.--An automated cognitive function 
test (CogScreen) was developed to permit the more sensitive and 
specific evaluation of pilots after brain injury and disease. 
Administration of CogScreen to groups of pilots led to the 
establishment of a database that could be used to assess 
fitness to perform flying duties in relation to the age of the 
subject being evaluated. A report describing age-related 
changes in CogScreen for non-pilots has been completed. 
Throughout repeated administrations of selected components of 
the CogScreen test battery, the performance of older subjects 
remained slower and poorer than that of subjects in the 
youngest age group.
    Flight Deck-Related Human Factors Research.--Two phases of 
a three-phase study have been completed to assess age-related 
changes in pilots' auditory thresholds compared to non-pilots 
and determine the effects of those differences on the ability 
to detect and respond to auditory alarms in flight simulations. 
Threshold data were collected from 150 non-pilots and 150 
pilots using stratified age samplings. The usual high-frequency 
decrements attributable to aging and general environmental 
exposure were found in both samples. Significant differences 
were found between the non-pilots and pilot samples, with 
greater threshold shifts between 2 and 6 kHz in evidence among 
pilots. The second phase involved the detection and 
identification of conventional and novel auditory warning 
sounds during exposure to simulated aircraft engine noise. 
Assessments of pilot responses to different types of auditory 
alarms in the general aviation simulator will be assessed this 
year.
    Air Traffic Control.--Issues associated with the selection 
and training of air traffic personnel along with the 
introduction of new technologies has maintained interest in the 
role of age on performance. A study was completed to develop a 
systematic projection of the aging of the current air traffic 
control workforce and retirement eligibility in order to model 
recruitment, hiring, and training requirements for the future. 
Based on these projections, the annual retirement rate is 
projected to slowly rise from about 1.4 percent in FY 1999 to a 
peak of about 6.1 percent in FY 2012, and then decline to about 
1.7 percent in FY 2020. These data suggest that the majority of 
controllers will continue to work through at least the initial 
modernization of the National Air Space, represented by Free 
Flight Phase I. As part of the validation of a new computerized 
selection instrument for air traffic controllers, a study was 
conducted to determine the relationship between age and 
performance on both the selection tests and on the criterion 
measures of controller performance. The two criteria measurers 
used in the study were ratings (both peer and supervisor) and 
score on a newly developed computer-based performance measure. 
Results show a curvilinear relationship between age and both 
test scores and criterion measures, with performance declining 
for controllers over the age of 42. A draft report describing 
outcomes for the study has been completed.

                 federal highway administration (fhwa)

    Beginning in 1989, a High Priority Area for research was 
established to address the needs of older drivers with respect 
to the roadway environment. Research under this program started 
as problem identification, and quickly moved to focus on the 
specific areas, which cause the greatest problems for older 
drivers and pedestrians. The activities described below were 
ongoing during the calendar years 1997 and 1998. It should be 
noted that all human factors research, including Intelligent 
Transportation Systems initiatives, conducted by FHWA includes 
an older driver component to ensure the system's utility for 
all potential users.
    A research study, titled, Synthesis of Research Findings on 
Older Drivers, gathered all available research and synthesized 
it into a report of major replicable findings regarding older 
drivers. This research was then incorporated into an Older 
Driver Highway Design Handbook (FHWA-RD-97-135) which became 
available in January 1998. The handbook serves as an important 
resource for traffic engineers in assuring that highways meet 
the needs and capabilities of older drivers and pedestrians. 
The handbook has been widely distributed and extremely well 
received. A condensed version, titled Older Driver Highway 
Design Handbook: Recommendations and Guidelines (FHWA-RD-99-
045), became available in December of 1998.
    As a companion to the Handbook, the FHWA has initiated a 
workshop for traffic engineers and highway designers. The 
workshop educates practitioners about the needs and 
capabilities of older road users, reviews the recommendations 
of the Handbook in detail, and presents case studies as 
learning exercises. Six workshops have been presented, in 
Florida, Texas, Iowa, and Pennsylvania, and more are planned.
    The FHWA is also currently in the process of fulfilling a 
mandate issued by Congress that requires public agencies to 
maintain pavement markings to minimum levels of brightness. In 
the process of establishing these minimum guidelines, research 
has been conducted to determine the brightness of pavement 
markings necessary for older drivers to drive safely and 
comfortably at night. FHWA is also investigating a new type of 
automobile headlight system, which has the potential to 
drastically improve the visibility of pavement markings and 
pedestrians at night. Older drivers have been included in the 
field experiments of the ultraviolet headlamp technology, and 
results indicate a favorable response both subjectively and 
objectively. Another ongoing study will identify optimum 
lighting design for older drivers.
    The results of these studies and other research will be 
incorporated into the next generation of the Handbook, which is 
under development. Besides including the most recent research 
findings, this document will address a wider range of highway 
design areas. It will be produced in electronic as well as 
traditional paper media.

            national highway traffic administration (nhtsa)

    Vehicle Design for Crash Avoidance. NHTSA's crash avoidance 
research program addresses the relationship between vehicle 
design and driver performance and behavior. New vehicle 
technologies could help reduce older driver crashes and enhance 
their mobility. For example, in-vehicle navigation systems may 
allow drivers to concentrate on watching for dangerous traffic 
conflicts instead of being distracted while searching for road 
signs. Collision avoidance systems may alert drivers to 
potential crash situations. Additional research in this area 
could provide useful information regarding the acceptability of 
technology-based innovations designed to help older, 
functionally less able people continue to drive. The focus is 
to determine how the design and function of vehicle systems 
need to be adapted to the unique capabilities and needs of 
older drivers.
    During 1998, research was completed regarding the possible 
benefits and drawbacks of Head-Up Displays (HUD). HUDS are 
small windshield-projected displays of information that may 
provide benefits to older drivers, as well as younger drivers, 
because they present information closer to the driver's line of 
sight than instrument panel displays.
    A pilot effort was completed that identified an 
experimental test protocol to evaluate the performance of 
drivers using infrared night vision enhancement systems (VES). 
VES may help alleviate one of the common complaints of older 
persons--night driving. The VES technology displays a high 
contrast image of the forward scene on a head-up display.
    Occupant Protection.--One of the most significant reasons 
for elderly drivers over-involvement in fatal crashes is the 
inability of their bodies to absorb crash forces. What would be 
a survivable crash for a younger person is often a fatal crash 
for an older person. Current occupant-protection standards do 
not specifically address the frailty of older occupants. More 
information is needed to establish the feasibility of improving 
the protection of older people when they are in a crash. NHTSA 
is collecting detailed data for research on injuries, 
treatments, outcomes, and costs for the older population.
    NHTSA, with the Volpe Transportation Systems Center, is 
using computer simulation and experimental work to improve 
belt/air bag systems for vehicle occupants. Particular 
attention is being paid to possible approaches to improving 
alternate restraint designs or requirements for elderly vehicle 
occupants. It is expected that this work will be of particular 
value to older vehicle occupants and to women, who due to their 
more fragile bone structure can benefit most from improved 
belt/air bag designs.
    In addition, NHTSA's new side impact standard provides a 
higher level of protection to older occupants in vehicles 
meeting the standard. The new standard is based on a dynamic 
crash test which incorporated age effects for the first time 
and, thus, will provide better protection to older vehicle 
occupants. It was phased in beginning with 1994 model year cars 
such that all cars by the 1997 model year had to meet the 
requirement. Starting with the 1999 model year, trucks, buses, 
and multipurpose passenger vehicles less than or equal to 2,721 
kg (6,000 lbs.) must meet the dynamic part of this standard.
    NHTSA's current efforts related to advanced frontal crash 
protection, which will usher in a new generation of safer air 
bags, will result in systems which will provide improved safety 
benefit to all age groups.
    Pedestrian Safety Issues.--Older pedestrians, 65 and over, 
account for a smaller proportion (7.7 percent) of all 
pedestrian crashes than would be expected by their numbers in 
the population (12.8 percent). However, they account for almost 
one quarter (22.4 percent) of all pedestrian fatalities. In 
response to this problem, NHTSA and FHWA are continuing work 
aimed at preventing crashes involving older pedestrians. A 
joint research initiative was conducted in Phoenix and Chicago 
that involved a demonstration program of behavioral safety 
information, combined with traffic engineering applications, in 
selected zones of the cities that have been shown to have a 
high incidence of older pedestrian crashes. An impact 
evaluation of the Phoenix initiative revealed that, while both 
the overall population and pedestrian crashes increased over 
the study period, older adult crashes decreased 13.7 percent. 
More impressive, there were fewer crashes in each of the 
pedestrian zones, amounting to an overall 46.3 percent decrease 
in pedestrian crashes. Crashes in comparable areas outside the 
safety zones increased 9.9 percent. These changes were 
statistically significant. Upon completion of this activity, a 
``how to'' Zone Guide was prepared which explains how to design 
and use pedestrian safety zones. A copy of the report, 
Development, Implementation and Evaluation of a Pedestrian 
Safety Zone for Elderly Pedestrians, is available from the 
Office of Research and Traffic Records, NHTSA, NTS-31, 400 
Seventh Street, S.W., Washington, D.C. 20590, or send a FAX to 
(202) 366-7096.
    Older Driver Safety.--The majority of older drivers do not 
constitute a major safety problem. Research has indicated that 
most older drivers adjust their driving practices to compensate 
for declining capabilities. They reduce or stop driving after 
dark or in bad weather and avoid rush hours, and unfamiliar 
routes. Men appear to be somewhat more reluctant than women to 
stop driving and, consequently, are at a higher risk of 
crashing than women of comparable age. Conditions, such as 
memory loss, glaucoma, and antidepressant use, appear to be 
related to increased crash risk.
    Some older persons are not aware of their changing 
conditions, most notably, those with cognitive disorders, such 
as Alzheimer's disease, and certain visual problems. These 
drivers may not self regulate and, as a result, pose an 
increased risk of crash involvement. Such individuals may 
require outside intervention to remove them from traffic. 
Unfortunately, research suggests that most family members, 
social service agencies, and health care professionals are 
either not sufficiently aware or choose not to provide 
assistance in making driving related decisions to those who 
need it. For a variety of reasons, many appear hesitant to get 
involved with this issue. Most older drivers prefer to decide 
for themselves when it is time to stop.
    In 1998, NHTSA worked with the State of Maryland to develop 
a consortium comprised of national, Federal, state, and local 
groups to develop and implement programs to encourage safe 
mobility for life.
    Driver Assessment Activities.--Those elderly drivers who 
remain a problem are not easily detected with standard 
licensing procedures. Further, there is some doubt as to 
whether most licensing staff have the skills necessary to 
detect these problem drivers, even with training and state-of-
the art testing techniques. Diagnostic tests currently in use 
have not been shown to be effective in identifying those older 
drivers who are at increased crash risk, but some recently 
developed tests of ``speed of attention'' and ``visual 
perception'' may have such potential.
    Several long-term efforts are now approaching conclusion. 
These developmental projects include: (1) procedures to help 
elderly drivers make better decisions about adapting their 
driving to accommodate their changing abilities are being 
developed in a joint project with the Federal Highway 
Administration and the Commonwealth of Pennsylvania; (2) 
procedures for family members, friends, social service 
agencies, physicians, and other health care providers to 
recognize when an older person needs to adjust his or her 
driving to adapt to functional limitations; (3) model screening 
and assessment procedures to help driver licensing agencies 
deal with those who do not appropriately restrict their 
driving; and (4) model programs for medical and social service 
agencies to help older people to make appropriate decisions 
about driving while maintaining their mobility. Current efforts 
also include a survey to determine societal perceptions and 
willingness to assist older drivers to better regulate their 
driving.
    Mobility Issues.--One factor that must be considered with 
regard to interventions is the fact that elderly people who 
give up driving often lose mobility. For many, the automobile 
is their primary mode of transportation and acceptable 
alternatives are simply not available. Decreased mobility is 
frequently followed by decreased quality of life as elderly 
people are cut off from the social events, family visits, 
medical attention, and opportunities for worship that are 
critical in maintaining their sense of well being. These issues 
are being studied in a joint project with the Department of 
Health and Human Services and in a separate project with the 
Federal Transit Administration.

                  federal transit administration (fta)

    Funded under a $700,000 FTA grant in 1997, the Independent 
Transportation Network (ITN) in Portland, Maine, provides 
convenient and affordable transportation for seniors who have 
chosen to reduce or totally eliminate driving their own cars. 
Service is provided by a fleet of standard size sedans driven 
by four paid drivers and over 95 volunteer drivers using their 
own vehicles. The service provided by ITN allows seniors to 
live independently in their own homes. The project's strategy 
is to: (1) develop a prototype, financially self-sufficient 
operation without tax subsidy in Portland; (2) incorporate ITS 
technology in dispatching, ridesharing, and fare collection; 
(3) implement and operate a satellite ITN at another location 
in Maine to demonstrate the integration of multiple service 
units under a centralized management structure; and (4) develop 
tools for national replication in other areas with high 
concentrations of seniors. The project offers a number of 
payment options including credits earned from trading in 
seldom-used vehicles, payments debited from an individual's ITN 
account, and gift certificates. In addition to assistance from 
FTA, ITN has received corporate support, foundation awards, and 
funding from American Association of Retired Persons among 
others. The ITN has demonstrated that its type of membership-
oriented, community supported transportation service combining 
volunteer drivers, merchant participation, corporate support, 
and local and national fund raising can be the solution to the 
isolation and lack of mobility experienced by millions of 
elderly Americans who can no longer drive their own cars.

          research and special programs administration (rspa)

    As revised and expanded in the Transportation Equity Act 
for the Twenty-First Century (TEA-21), RSPA manages the 
Department's University Transportation Centers Program.
    Each center focuses its research on a specific theme or 
interest area. Several of these themes are linked in whole or 
in part with improving mobility for elderly citizens:
          University of Arkansas: Rural Transportation
          University of California--Berkeley: Improving 
        Accessibility for All
          Marshall University: Economic Growth and Productivity 
        in Rural Appalachia Through Transportation
          Montana State University: (Western Transportation 
        institute): Rural Travel and Transportation
          Morgan State University: Transportation--A Key to 
        Human and Economic Development
          University of Nebraska--Lincoln: Improved Design and 
        Operation of Transportation Facilities and Services in 
        Mid-America
          North Carolina A&T State University: Urban Transit
          University of Southern California and California 
        State/Long Beach: Solutions to Transportation Issues in 
        Major Metropolitan Areas
          University of South Florida: Urban Transit
          North Dakota State University: Rural and Non-
        Metropolitan Transportation

                       Information Dissemination

                 federal railroad administration (fra)

          Information about Amtrak accessibility is available 
        to senior citizens and passengers with disabilities in 
        a brochure entitled ``Access Amtrak'' which can be 
        obtained by calling 1-800-USA-RAIL. Amtrak also works 
        directly with a number of organizations each year on 
        moving groups of passengers needing assistance and 
        traveling together.

         national highway traffic safety administration (nhtsa)

    A Pedestrian and Bicyclist Safety and Accommodations 
course, funded by NHTSA and FHWA, was completed. This course 
was designed to address the pedestrian and bicyclist traffic 
safety needs of highway safety specialists, police, traffic 
engineers, and other professionals. A resource guide was 
prepared which provides information about traffic safety 
problems and ways to avoid them for all pedestrians, including 
older pedestrians. Also, as a countermeasure to the hazards 
that older Hispanic pedestrians face, materials were prepared 
for Hispanic senior citizens. These materials include a report, 
slide show, a presenters guide, brochure, and a video 
``novela.''

          research and special programs administration (rspa)

    RSPA continues to disseminate technical reports describing 
the mobility needs of senior citizens, and alternative ways to 
meet them. Documents are available in hard copy from the 
Department at no charge, and may be ordered on the INTERNET at 
the Technology Sharing Program home page: http://
www.tsp.dot.gov
    RSPA provides staff support to the National Science and 
Technology Council's (NSTC's) Committee on Technology, 
including its subcommittee on Transportation R&D. In September 
1997 the NSTC Transportation Science and Technology Strategy 
was released, which included recommendations for several 
government-wide strategic partnership initiatives to promote 
technology application and implementation. One of these 
initiatives deals specifically with ``Accessibility for Aging 
and Transportation Disadvantaged Populations.'' A goal of this 
initiative is to ``create seamless regional alternative 
transportation systems serving the needs of the elderly and the 
transportation-disadvantaged while optimizing the existing 
human and capital investment in paratransit.'' Implementation 
activities are defined in the NSTC Transportation Technology 
Plan, which is now being prepared for release.
    To facilitate communication and information-sharing on 
technology issues and support the NSTC, RSPA has brought a 
science and technology INTERNET home page on line. The element 
deal with the accessibility partnership is located at http://
scitech.dot.gov/partech/accage/accessaging.html. It includes 
background information on the need, links to selected on-line 
manuals and technical reports, and announcements of upcoming 
conferences and events.
    The University Transportation Centers Program integrates 
its products in a directory of University Research Results on 
its INTERNET Home Page at http://educ.dot.gov. The directory 
includes the title of each report and a contact who can provide 
further information on the research and the availability of 
documentation from it. In addition, program staff is exploring 
making key UTC products available on-line as volumes in the 
National Transportation Library at (http://www.bts.gov/NTL).

                    ITEM 13--DEPARTMENT OF TREASURY

                              ----------                              


    U.S. TREASURY ACTIVITIES IN 1997-1998 AFFECTING OLDER AMERICANS

    The Treasury Department recognizes the importance and the 
special concerns of older Americans.

                      social security trust funds

    The Secretary of the Treasury is the Managing Trustee of 
the Social Security trust funds. The short- and long-run 
financial status of these trust funds is presented in annual 
reports issued by the Trustees. The April 1998 report, covering 
calendar year 1997, estimated that the combined Old Age and 
Survivors Insurance and Disability Insurance (OASDI) benefits 
can be paid on time for about the next 34 years. The OASDI 
cost-of-living increase was 2.1 percent for 1997 and 1.3 
percent for 1998. The taxable base for OASDI was increased to 
$65,400 in 1997 and $68,400 in 1998. The amount a 65- to 69-
year-old beneficiary could earn before OASDI benefits were 
reduced was $13,500 in 1997 and $14,500 in 1998.

                          medicare trust funds

    The Secretary of the Treasury is also the Managing Trustee 
of the Federal Hospital Insurance (HI) and Supplementary 
Medical Insurance (SMI) trust funds. In their April 1998 report 
covering calendar year 1997, the trustees estimated that the HI 
trust fund would be exhausted in 2008. The Supplementary 
Medical Insurance Program is primarily financed by transfers 
from the general fund of the U.S. Treasury and by monthly 
premiums paid by beneficiaries. The Balanced Budget Act of 1997 
permanently established SMI premiums at 25 percent of program 
expenditures. The SMI trust fund is expected to remain 
adequately financed into the indefinite future because current 
law provides for the establishment of program financing each 
year based on an updated calculation of expected cost per SMI 
beneficiary.

                          personal income tax

    Each year, pursuant to statute, the width of the income tax 
brackets and the personal exemption and standard deduction 
amounts are increased to reflect the effects of inflation 
during the preceding year.
    The personal exemption allowed for each taxpayer and 
dependent increased from $2,550 in 1996 to $2,650 in 1997 and 
to $2,700 in 1998.
    Taxpayers age 65 or over (and taxpayers who are blind) are 
entitled to larger standard deductions than other taxpayers. 
Each single taxpayer who is at least 65 years old was entitled 
to an extra standard deduction of $1,000 in 1996 and 1997, and 
$1,050 in 1998. Each married taxpayer age 65 or over was 
entitled to an extra standard deduction of $800 in 1996 and 
1997, and $850 in 1998. Thus, a married couple both of whom 
were over age 65 were entitled to extra standard deduction 
amounts of $1,600 in 1996 and 1997, and $1,700 in 1998. 
Including the extra standard deduction amounts and the basic 
standard deduction amounts, taxpayers over age 65 were entitled 
to the following standard deductions for tax years 1994 through 
1998:

------------------------------------------------------------------------
             Filing Status                  1996       1997       1998
------------------------------------------------------------------------
Single.................................     $5,000     $5,150     $5,300
Unmarried Head of Household............      6,900      7,050      7,300
Married Filing Jointly:
    One spouse age 65 or older.........      7,500      7,700      7,950
    Both spouses age 65 or older.......      8,300      8,500      8,800
------------------------------------------------------------------------

    The tax credit for the elderly (and permanently disabled) 
was retained throughout the period.
    Prior to mid-1997, an individual over age 55 was generally 
entitled, on a one-time basis, to exclude from income subject 
to tax up to $125,000 of gain from the sale of a principal 
residence. The Taxpayer Relief Act of 1997 (TRA97) replaced 
that $125,000 one-time exclusion with a $250,000 exclusion 
($500,000 exclusion for married taxpayers filing a joint 
return) for gain realized on the sale of a principal residence. 
Taxpayers, regardless of age, may use the new exclusion each 
time a residence is sold, but generally not more frequently 
than once every two years.
    Beginning for tax year 1998, TRA97 provides that the de 
minimis exception from having to pay estimated taxes is 
increased from $500 to $1,000 of unpaid tax liability. (The 
other exceptions, relating to prior year liability and 
percentages of current year liability, were not changed.)
    Effective in 1997, the 15 percent excise taxes on excess 
accumulations in, and excess distributions from, qualified 
retirement plans, tax-sheltered annuities, and IRAs was 
eliminated. The separate limits on contributions and benefits 
applicable to each type of retirement saving vehicle remain.
    Two provisions of the Health Insurance Portability and 
Accountability Act of 1996 (HIPAA) are particularly relevant to 
the aged. Both provisions became effective for tax year 1997. 
HIPAA provides that accelerated death benefits received under a 
life insurance contract or from a viatical settlement provider 
are generally excluded from income subject to tax. Also, 
qualified long-term care insurance premiums and the 
unreimbursed expenses for the care of a chronically ill 
individual may be deductible, but only as part of the itemized 
deduction for medical expenses. Employer-paid long-term care 
premiums are excludable from the employee's income subject to 
taxation. Long-term care premiums paid by self-employed workers 
are partially deductible in the calculation of adjusted gross 
income, to the same extent as other health insurance premiums. 
(The Taxpayer Relief Act of 1997 accelerated the increases, and 
ultimately raised to 100 percent, the deductibility of health 
insurance premiums for a self-employed individual and the 
individual's spouse and dependents if neither the individual 
nor spouse is eligible for health insurance coverage as 
employees. The changes are phased in beginning in tax year 2000 
.)
    The Balanced Budget Act of 1997 permits Medicare-eligible 
individuals to choose either the traditional Medicare program 
or Medicare Plus Choice, which may include a medical savings 
account (MSA). The option will be available beginning in 1999. 
Under the Medicare Plus Choice MSA, limited contributions will 
be made to the individual's MSA, and those contributions and 
the earnings on balances in the MSA account will not be subject 
to tax. Withdrawals used to pay for qualified medical expenses 
will not be subject to tax. Withdrawals used for other purposes 
will be included in income subject to tax, and, if they exceed 
certain limits, will also be subject to penalties.
    A gift tax is imposed on lifetime transfers by gift, and an 
estate tax is imposed on transfers at death. A unified credit 
applying to both the gift and estate taxes permits a certain 
amount to be transferred before gift or estates taxes are 
imposed. TRA97 increased the unified credit from an effective 
exemption of $600,000 to an effective exemption of $625,000 for 
1998 and to higher amounts in subsequent years. (The unlimited 
exemption for transfers to spouses was retained.) TRA97 also 
provides, beginning in 1998, that estates may elect special 
estate tax treatment for certain qualified family-owned 
business interests; the elected exclusion for family-owned 
business interests together with the general effective 
exemption may not exceed $1.3 million.

                        internal revenue service

    The Internal Revenue Service (IRS) recognizes the 
importance and special concerns of older Americans, a group 
that will comprise an increasing proportion of the population 
in the years ahead. Major programs and initiatives of the 
Office of the Chief, Operations that are of interest to older 
Americans and to others are described below:
    The following publications, revised annually, are directed 
to older Americans:
    Publication 524, Credit for the Elderly or Disabled, 
explains that individuals 65 and older may be able to take the 
Credit for the Elderly or Disabled, reducing taxes owed. In 
addition, individuals under age 65 who retire with a permanent 
and total disability and receive taxable disability income from 
a public or private employer because of that disability may be 
eligible for the credit.
    Publication 554, Older Americans' Tax Guide, explains the 
income conditions under which single taxpayers aged 65 or 
older, and married taxpayers filing jointly if at least one of 
the spouses is 65 or older, are generally not required to file 
a Federal income tax return. The publication also advises older 
taxpayers about possible eligibility for the earned income 
credit. The taxpayer may be eligible for a credit based on the 
number of qualifying children in the home or a smaller credit 
if the taxpayer has no qualifying children.
    Publication 721, Tax Guide to U.S. Civil Service Retirement 
Benefits, and Publication 575, Pension and Annuity Income, 
provide information on the tax treatment of retirement income.
    Publication 907, Tax Highlights for Persons with 
Disabilities is a guide to issues of particular interest to 
persons with handicaps or disabilities and to taxpayers with 
disabled dependents.
    Publication 915, Social Security and Equivalent Railroad 
Retirement Benefits, assists taxpayers in determining the 
taxability, if any, of benefits received from Social Security 
and Tier I Railroad Retirement.
    All publications are available free of charge. They can be 
obtained by using the order forms found in the tax forms 
packages or by calling 1-800-TAX-FORM (1-800-829-3676.) Many 
libraries and post offices stock the most frequently requested 
forms, schedules, instructions, and publications for taxpayers 
to pickup. Also, many libraries stock a reference set of IRS 
publications and a set of reproducible tax forms.
    Most forms and some publications are on CD-ROM and are on 
sale to the general public through the National Technical 
Information Service. Information about ordering can be obtained 
by calling 1-877-233-6767. Forms, instructions, and tax 
information are available by fax by calling 703-363-9694 using 
the phone attached to your fax machine.
    Taxpayers may obtain most forms, instructions, 
publications, and other products via the IRS's Internet Web 
Site at www.ustreas.gov.
    The 1990 tax year was the first year older American could 
use the expanded Form 1040A to report income from pensions and 
annuities, as well as other items applicable to older 
Americans, such as estimated tax payments and the credit for 
the elderly or the disabled. More than half the potential 
filing population eligible to use this simpler, shorter form 
made the switch from the much longer Form 1040.
    Responding to requests from the public for such a product, 
the Tax Forms and Publications Division developed large-print 
versions of the Form 1040 and Form 1040A packages earmarked for 
older Americans. These packages (designated as Publication 1614 
and 1615, respectively) are newspaper-size and contain both the 
instructions and the forms (for use only as worksheets, with 
the amounts to be transferred to regular-size forms for 
filing).

                   irs volunteer & outreach programs

    The Volunteer Income Tax Assistance (VITA) Program offers 
FREE tax help to people who cannot afford paid professional 
assistance. Volunteers help prepare basic tax returns for 
taxpayers with special needs, including persons with 
disabilities, non-English speaking persons, those with low 
income, and elderly taxpayers. Assistance is provided at 
community and neighborhood centers, libraries, schools, 
shopping malls, and other convenient locations across the 
nation. Many sites provide free electronic filing of tax 
returns. Volunteers generally include college students, law 
students, members of professional, business and accounting 
organizations, and members of retirement, religious, military 
and community groups.
    In 1997, more than 40,000 volunteers assisted more than 1.7 
million taxpayers at nearly 8,300 sites across the nation 
through the VITA Program. In 1998, more than 39,000 volunteers 
assisted more than 1.8 million taxpayers at nearly 6,100 sites 
across the nation through the VITA Program.
Tax Counseling for the Elderly (TCE) Program
    Tax Counseling for the Elderly (TCE) Program was first 
authorized by Congress in 1978 as part of the Revenue Act of 
1978. The Revenue Act authorizes an appropriation of special 
funds, in the form of grants, to provide free income tax 
assistance to individuals 60 years of age or older. TCE 
sponsors recruit volunteers trained by the Service to provide 
income tax assistance to older individuals. TCE volunteer sites 
can be found in retirement homes, neighborhood sites, and 
shopping malls. Many sites provide free electronic filing of 
income tax returns. Volunteers also travel to the private 
residences of the homebound. In 1997, 31,000 volunteers 
assisted 1.6 million taxpayers at nearly 10,500 sites. In 1998, 
32,000 volunteers assisted 1.7 million taxpayers at nearly 
10,600 sites.
Community Outreach Tax Education Program
    The Community Outreach Tax Education Program provides 
individuals with group Income return preparation assistance and 
tax education seminars. IRS employees and trained volunteers 
conduct these seminars which address a variety of topics. They 
are tailored for groups and individuals with common tax 
interests, such as groups of older Americans. These seminars 
are conducted at convenient community locations.
    In 1997, more than 800 volunteers assisted more than 
470,000 taxpayers in more than 4,900 sessions across the nation 
through this program. In 1998, almost 970 volunteers assisted 
more than 430,000 taxpayers in more than 5,000 sessions.
Post Offices and Library (POL) Program
    During 1997 and 1998, the Post Offices and Library Program 
(POL) provided approximately 46,500 post offices, libraries, 
and other sites with free tax preparation materials such as tax 
forms and publications that can assist older Americans in 
preparing forms 1040, 1040A, 1040EZ, and related schedules. IRS 
provided volunteers in some libraries to answer tax questions 
and direct taxpayers to the correct tax forms.
Small Business Tax Education Program (STEP)
    The Small Business Tax Education Program (STEP) provides 
information about business taxes and the responsibilities of 
operating a small business. During 1997 and 1998, small 
business owners and other self-employed persons had an 
opportunity to learn what they needed to know about business 
taxes through a partnership between IRS and approximately 2,000 
community colleges, universities and business associations. 
Assistance was offered at convenient community locations and 
times. Many elderly persons, such as those beginning second 
careers, availed themselves of this program.

                      financial management service

    The Financial Management Service (FMS) makes more than 700 
million payments annually, including Social Security, 
Supplemental Security Income, and Veterans benefits. Working 
under the mandate of the Debt Collection Improvement Act signed 
by President Clinton on April 26, 1996, Federal Departments and 
agencies are on the fast track to convert Federal payments to 
electronic funds transfer (EFT). The law requires most payments 
to be made electronically by January 2, 1999, but also gives 
the Secretary of the Treasury broad authority to grant waivers. 
EFT significantly improves the certainty of payments reaching 
the intended recipients on a timely basis, and improves the 
ability of recipients to use those payments safely and 
conveniently. Payment inquiries and claims are significantly 
reduced under EFT.
    Payment by EFT has substantial benefits in terms of 
reliability, safety, and security that are especially important 
for the elderly. Recipients are twenty times more likely to 
have a problem with a paper check than with an EFT transaction, 
and in FY 1998 Treasury replaced more than 600,000 checks that 
were lost, stolen, delayed, or damaged during delivery. Waiting 
days for a replacement check is an inconvenience and a burden 
on recipients, especially elderly persons living on low 
incomes. EFT payments are much more convenient and secure--
misrouted EFT payments are never lost, and, if misrouted, the 
payments are typically routed to the correct bank account 
within 24 hours.
    During the past three years, Treasury has been overseeing 
government-wide implementation of the Debt Collection 
Improvement Act of 1996 by working with Federal agencies to 
identify and resolve the major issues confronting stakeholders. 
Significant progress has been made by Federal agencies to 
convert payments to EFT (EFT' 99). The percentage of Treasury-
disbursed payments made electronically has increased from 53 
percent in FY 96 to 63 percent in FY 98, and as of November 
1998, 71 percent of Treasury-disbursed payments were made by 
EFT. More than 74 percent of Social Security payments were made 
electronically as of November 1998, an increase of more than 15 
percentage points since FY 96. Other Federal benefit agencies 
show similar increases in EFT payments.
    Four public hearings and numerous meetings with 
stakeholders were held in 1997 and 1998 prior to issuance of 
the final rule. On September 25, 1998, Treasury published its 
final regulation, 31 Code of Federal Regulations (CFR) 208, 
which prescribed policies relating to the circumstances under 
which waivers are available from the EFT requirement, 
requirements for sending Federal EFT payments to accounts, and 
the responsibilities of Federal agencies and recipients. This 
regulation reflects the many comments and input from Federal 
agencies, consumer and community organizations, financial 
services trade associations, and other key stakeholders 
received during the public comment period.
    The final rule allows recipients choices in selecting a 
payment method, depending on their circumstances, and permits 
individuals to continue to receive checks in situations where 
electronic payment presents a hardship. Specifically, the EFT 
requirement is waived if the individual determines, at his or 
her sole discretion, that payment by EFT would impose a 
hardship due to a physical or mental disability, or a 
geographic, language or literacy barrier, or if EFT would 
impose a financial hardship.
    Federal payment recipients who elect to receive their 
payments via Direct Deposit enjoy the benefits of this simple, 
safe, and secure payment mechanism. Recipients who have not 
signed up for Direct Deposit do have choices, as described in 
31 CFR 208. Federal check recipients receiving salary, wage, 
benefit or retirement payments can choose to: (1) receive 
payment via Direct Deposit through a financial institution, (2) 
wait for the low-cost Electronic Transfer Account 
(ETASM) to become available or, (3) continue to 
receive a paper check, if receiving payment by Direct Deposit 
would cause the recipient a hardship.
    In 1999 Treasury will develop a basic, low-cost account 
called the ETA SM, which will be available to 
individuals who receive Federal benefit, wage, salary, or 
retirement payments. Federally insured financial institutions 
will be encouraged to offer the ETA SM on a 
voluntary basis, subject to soon-to-be published standards and 
terms set forth in an agreement between Treasury and the 
financial institution. These low-cost accounts are designed to 
meet the statutory mandate that recipients have access to an 
account at a reasonable cost and with consumer protections, 
comparable to other accounts at the same financial institution. 
Treasury issued a Federal Register notice for public comment on 
November 23, 1998 regarding the attributes of such an account. 
Treasury is now evaluating those comments and will issue the 
final notice in the spring of 1999. The ETA SM is 
expected to be available to individual recipients during 1999.
    The Financial Management Service and Treasury have been 
conducting a massive public education campaign on both a 
national and regional basis, seeking involvement of national, 
regional, and local consumer and community-based organizations, 
financial trade associations, and Federal regulatory agencies 
to distribute materials and to conduct ``in touch'' programs 
with Federal recipients to educate them about their choices 
under the law. Public Service Announcements for television, 
radio, and print ads were produced, as well as posters, 
brochures, and other educational materials.
    FMS continues to support the implementation of a nationwide 
program to make Electronic Benefits Transfer (EBT) a viable 
electronic payment option. Geared toward those individuals 
without a bank account, EBT is an electronic benefit delivery 
mechanism that enables recipients to use plastic cards to 
access their benefits at automated teller machines or point-of-
sale terminals. Forty-seven states have some type of EBT 
program which provides electronic access to benefits for 
recipients; twenty-nine of these and the District of Columbia 
are full-fledged, statewide programs, and others are either in 
the pilot phases, expanding statewide, or in the process of 
being awarded to providers. In 1996, FMS partnered with the 
Southern Alliance of States (SAS) to deliver Federal and State 
benefits through EBT to recipients in an eight-state area. In 
the SAS, recipients of Federal and State benefits can access 
their benefits using the same EBT card. All 50 States expect to 
be operating statewide EBT systems by 2002, and Treasury will 
work with individual states at their request to allow both 
State and Federal benefits to be accessed through the State EBT 
card where feasible.
    A variety of information on EFT '99 is available on the FMS 
Web site describing products and services offered by the 
agency. Information available includes recent FMS activities 
related to EFT '99, publications, statistics, and contact 
information. The EFT Web site includes topics on General 
Information, Regulations and Policy, Agency Assistance, News 
and Media, Education and Marketing, Vendor Information, and the 
ETA SM. The site can be accessed at 
www.fms.treas.gov/eft.
The Check Forgery Insurance Fund
    The Check Forgery Insurance Fund (CFIF) legislation was 
enacted into law on April 26, 1996 as part of the Debt 
Collection Improvement Act of 1996.
    The Check Forgery Insurance Fund (CFIF) is a revolving fund 
established to settle payee claims of non-receipt where the 
original check has been fraudulently negotiated. FMS uses the 
Fund to ensure that innocent payees, whose Treasury Checks have 
been fraudulently negotiated, are promptly issued replacement 
checks. Reinstitution of the CFIF relieves the burden for 
recipients of forged checks by providing funding for 
expeditious issuance of replacement checks.
    Check forgery is a concern of FMS and individuals who 
receive paper check payments. FMS continues to consider and 
address this concern. On March 26, 1998, various Treasury 
Systems were enhanced to comply with the legislation and to 
modify both internal and external operational and system 
procedures required to process check forgery claims timelier 
utilizing the CFIF. Reinstituting the CFIF relieves the burden 
for recipients of forged checks, especially the elderly.
    The CFIF is a Fund which benefits all payees of forged 
checks after the forgery has been substantiated. Although 
payment by electronic funds transfer (EFT) has substantial 
benefits, paper checks continue to be the desired method of 
payment by recipients of various Federal payments. The elderly, 
who represent a large portion of this group, continue to 
receive payments by check. Because of continued check issuance, 
forgery of these items is highly probable. Those elderly 
individuals affected by forgeries are largely low-income, 
unbanked and rely on the monthly payment for their basic 
subsistence. The CFIF allows for immediate relief to the 
elderly and other payees after the claim of forgery has been 
substantiated.
    Implementation of the CFIF benefits The Federal Program 
Agencies (FPAs) by relieving the FPAs of the responsibility for 
issuing replacement checks out of their appropriations on 
forgery claims. Typically, the FPAs would not issue a 
replacement check on a forgery claim until after FMS had 
recovered the forged amount from the financial institution (FI) 
and credited the agency with the check amount. The FI has 60 
days to respond to FMS' request for refund. The CFIF provides 
for expeditious processing of these cases and does not make 
issuance of the replacement check contingent on whether 
recovery on the forgery is delayed or unsuccessful.
    FMS is continuing to use the CFIF to facilitate the timely 
issuance of replacement checks to the elderly and all check 
recipients on substantiated forgery claims.

                           united states mint

    The U.S. Mint continues to consider the needs and concerns 
of older Americans in delivery of our programs.
    The Exhibits and Public Affairs staff of the Philadelphia 
Mint are available to help older persons and people with 
special needs who wish to take the Mint self-guided tour. A 
wheelchair is also available for those wishing to take the 
tour. Additionally, benches are strategically placed along the 
tour route to provide resting areas for visitors.
    The Denver Mint continues to provide public tours conducted 
by Mint personnel that are considerate of the needs and 
concerns of older persons. Tour Guides request that if any 
member of the public requires special assistance; ascending 
stairs, etc., that requests for such assistance are made at the 
beginning of the tour. Additional assistance that may be needed 
during the tour can also be requested of the Tour Guides as 
well.
    U.S. Mint facilities at both Denver and Philadelphia will 
continue to explore how such assistance can be enhanced in 1999 
and 2000.

                    bureau of engraving and printing

    The National Academy of Sciences conducted a study on ways 
to assist the blind and visually impaired with currency 
transactions. Based on that study, the Bureau of Engraving and 
Printing (BEP) unveiled the new $20 design on May 20th 1998 
with several features to assist the elderly and visually 
impaired population. In addition to several counterfeit 
deterrent features, the note contained a large high contrast 
numeral in the back lower right of the note. The large high 
contrast numeral is designed to assist the more than 23 million 
mostly elderly Americans with varying degrees of vision 
impairment.
    In addition, based on discussions with the American Council 
for the Blind, the BEP incorporated a machine-readable feature 
to the new $20 bill. This feature is intended to facilitate the 
development of convenient scanners for the blind and people 
with low vision. The BEP intends to add this feature in all 
future redesign of currency.

                      office of thrift supervision

    During 1997 and 1998, OTS continued its Community Affairs 
Program, designed to provide outreach and support to the thrift 
industry's efforts to meet housing and other community credit 
and financial services needs. A primary objective of the 
program is to serve as a liaison between the thrift industry 
and consumer and community groups on housing and community 
development issues. Most of the groups with which OTS interacts 
represent low- and moderate-income individuals, including older 
persons.
    Our Community Affairs staff, along with senior management, 
participated in meetings with hundreds of thrifts and community 
organizations across the country, including groups with 
particular emphasis on older persons, such as those that 
provide affordable housing for senior citizens. During those 
meetings, information was shared on affordable housing, 
financial services and economic development needs; on thrifts' 
authorities and abilities to meet those needs; and on 
opportunities for collaborative partnerships.
    OTS continued to publish its Community Liaison newsletter 
and distribute the newsletter to all thrifts and to several 
hundred community and consumer organizations. The newsletter 
spotlights achievements in affordable housing and community 
development, many of which have benefitted older Americans. 
During 1998, the newsletter included several articles 
pertaining to EFT99 which can significantly affect many older 
Americans.
    For many years, OTS has maintained an active program for 
addressing complaints that consumers may have against the 
thrifts that OTS regulates. We provide a free nationwide 
consumer hotline and a TDD line, and professional staff is 
available to help people evaluate whether their concerns are 
addressed by OTS regulations. Senior citizens are frequent 
users of this service.
    OTS has also issued a Customer Service Plan for consumer 
complaints and urged the institutions it regulates to give high 
priority to consumer relations. Of approximately 12,500 
complaints filed with OTS in 1997 and 1998, 23 complaints 
alleged credit discrimination based on age. OTS investigated 
each of the complaints in accordance with its expanded 
procedures for discrimination complaints, which call for 
interviewing the complainant and reviewing the complainant's 
loan file. None of the complaints led to a finding of 
discrimination.

                       BUREAU OF THE PUBLIC DEBT

    The Bureau of Public Debt continues to make improvements in 
its programs to better serve all investors. The following 
improvements to simplify access to Treasury securities are of 
particular benefit to the elderly investor.

Marketable securities

    Treasury marketable securities provide a safe investment 
and interest income, features that are popular with older 
Americans. The latest survey of investors using the 
TreasuryDirect service indicated that 67 percent were age 65 or 
older. Therefore, our recent improvements to TreasuryDirect 
will benefit older Americans.
            Electronic services
    In 1997 and 1998 Public Debt made it more convenient for 
TreasuryDirect customers to invest by introducing a variety of 
electronic services. These services benefit older Americans 
since they can now conduct a wide variety of transactions from 
home.
           Pay Direct allows existing customers to pay 
        for their securities by authorizing Treasury to debit 
        their bank account on the day the security is issued. 
        Prior to this, investors had to pay for their 
        securities when they submitted their tender. Pay Direct 
        eliminates a trip to the bank by a customer to obtain a 
        cashier's or certified check for Treasury bill 
        investors.
           Reinvest Direct allows customers to reinvest 
        maturing securities by phone 24 hours a day, 365 days a 
        year. When investors get a reinvestment notice in the 
        mail from Public Debt, all they need to do is call a 
        toll-free number on a touch-tone phone from anywhere in 
        the U.S.
           Sell Direct allows customers to authorize 
        Public Debt to sell their securities rather than first 
        having to transfer them to a bank or brokerage firm.
           Buy Direct gives current TreasuryDirect 
        customers an easy way to purchase securities by using 
        the Internet. To purchase and authorize Public Debt to 
        charge their bank account for the purchase price, a 
        customer visits Public Debt's ``virtual lobby,'' and 
        indicate which security they wish to purchase. 
        Investors can purchase securities by calling a toll-
        free number and following a simple interactive menu 
        authorizing Public Debt to charge their bank account on 
        issue day.
            Other services
    TreasuryDirect customers can check their account balance, 
order a statement of account, or request a duplicate interest 
income statement (1099-INT) on a touch-tone phone. Customers 
having Internet access can go to our website 
(www.publicdebt.treas.gov) and perform the same functions. The 
website offers the additional features of providing detailed 
account information and allows customers to change address and 
phone number information in their account. The website provides 
a wealth of information about Treasury marketable securities 
and the TreasuryDirect service. Current or potential customers 
can obtain information, order forms and publications, and send 
electronic mail inquiries directly to Public Debt.
            $1,000 minimums
    In August 1998, the Treasury Department took steps to 
demonstrate its commitment to encourage all Americans to save 
and invest by reducing the minimum amounts needed to purchase 
all marketable Treasury bills, notes and bonds to $1,000. 
Previously, Treasury bills were available in minimum purchase 
amounts of $10,000 and notes with maturities of four years or 
less required a minimum purchase of $5,000. Notes with longer 
maturities and 30-year bonds were already available in $1,000.
            Uniform-price auction
    In November 1998, Treasury decided to expand the use of 
uniform-price auctions to the sale of all marketable Treasury 
securities. Prior to this, and since 1992, only the 2-year and 
5-year notes were sold using this technique. Most 
TreasuryDirect customers buy their securities on a 
noncompetitive basis. The uniform price auction assures these 
investors the same yield as larger bidders.
    Public Debt continues to encourage owners of registered and 
bearer securities to convert these certificates to book-entry 
form in TreasuryDirect. Holding securities in book-entry form 
provides a much safer and more convenient method than holding 
certificates.
    Public Debt will continue to seek opportunities to improve 
customer service for its TreasuryDirect investors through 
expanded electronic information and transaction services.

Savings securities

            Series I bonds
    In September 1998, Series I Bonds, accrual savings bonds 
indexed to inflation, were added to the line of savings 
instruments we offer our customers. Along with the usual 
features which attract mature, conservative investors--tax 
benefits if used for education, exemption from state and local 
income taxes, federal income tax deferral, replacement in the 
event of loss, theft, or destruction, etc.--I Bonds ensure a 
real rate of return over and above inflation.
            Home banking
    Many banks have expanded their home banking services, which 
allows customers to conduct many transactions from their homes. 
We are working with banks and software providers to include a 
savings bond module in their home banking packages. The 
convenience of home banking extends to all, but particularly to 
senior citizens, who may be unable to visit the bank to buy 
savings bonds.
            Direct deposit for series HH interest payments
    We are working to encourage all Series H and HH bond 
holders to use Direct Deposit for their interest payments. Now, 
some 85 percent of Series H and HH investors receive their 
interest by Direct Deposit. They enjoy timely payment of 
interest and don't have to make trips to the bank to deposit 
interest checks.
            EasySaver
    In November 1998, we created the EasySaver Plan for 
purchasing U.S. Savings Bonds. Now, millions of Americans, 
particularly the elderly, who do not have access to payroll 
savings plans, can buy bonds automatically for themselves or 
their families. All the customer needs to do is complete an 
order form authorizing Treasury to charge their bank account 
for the price of the bond and choose the date to charge their 
account for their savings bond purchases.
            Customer service improvements
    Public Debt continues to improve customer service through 
increased use of information technology and streamlined 
operating procedures. Since a substantial number of savings 
bonds are held by older Americans, it can be expected that 
these customers will be involved in a proportionate number of 
the transactions handled by the Bureau. Service improvements 
should be welcomed and keenly felt among the group.
    In May of 1999, we will offer for sale two new I Bonds. 
They are a $200 denomination featuring Chief Joseph of the Nez 
Perce, one of the greatest Native American leaders, and a 
$10,000 I Bond with a portrait of Spark Matsunaga, a former 
U.S. Senator and Congressman and World War II hero. The new 
denominations will offer investors, including the elderly, more 
flexibility.
    In the coming years, we intend to continue to work with 
financial institutions and financial software companies in 
order to promote and expand our home banking program which 
allows for customers to purchase savings bonds on-line. We also 
hope to conduct many more transactions related to savings bonds 
via the Internet.

                      UNITED STATES SECRET SERVICE

Senior Citizen Employment Program (SCEP)

    In 1998, the Secret Service implemented a senior citizen 
employment program (SCEP) which is designed to provide older, 
economically disadvantaged seniors with an opportunity to 
upgrade outdated skills and develop new skills which may 
enhance future employment opportunities. Seniors hired under 
this program provide administrative clerical support to Secret 
Service offices. The Secret Service works closely with 
organizations such as the American Association of Retired 
Persons and other community associations to identify eligible 
seniors.

Advanced fee fraud schemes

    Advanced fee fraud schemes result in reported financial 
losses exceeding a hundred million dollars annually. The true 
losses are much higher as many victims fail to report their 
losses due to fear or embarrassment. The elderly population is 
especially susceptible. The Secret Service has received scores 
of reports from the elderly indicating they have lost their 
life savings through this type of fraudulent scheme. In 
conjunction with the local Department's of State and Commerce, 
the Secret Service has reached out to organizations that are 
associated with the principal targets of this scam, namely 
small businesses and the elderly. The Better Business Bureau, 
the American Bankers Association, and the AARP have assisted 
the Secret Service in publishing articles designed to educate 
the public to these schemes and hopefully prevent them from 
falling prey to these frauds.

Government benefits

    The Secret Service continues to protect the nation's 
elderly recipients from fraud perpetrated against their 
government benefits. The Secret Service is committed to 
investigating all fraud related to government benefits. During 
Fiscal Year 1997-1998, the Secret Service received and 
investigated 18,233 cases relating to U.S. Treasury check 
violations (which includes among other Social Security 
benefits, Railroad Retirement, and Office of Personnel 
Management). Additionally, the Secret Service received and 
investigated 4,225 cases involving the illegal diversion of 
funds through the Direct Deposit/Electronic Funds Transfer 
process during Fiscal Year 1997-1998.

White House tours

    The Secret Service gives White House tours for over one 
million visitors a year. In an effort to provide better 
customer service to the elderly and physically disabled, the 
Secret Service now provides escorted wheelchair tours of White 
House areas open to the public. Past procedures only provided 
for tours of the State Floor. Additionally, upon request, sign 
language tours are made available for the hearing impaired and 
touch tours are provided for the visually impaired.

                              U.S. CUSTOMS

    U.S. Customs Service's major activities affecting older 
Americans include the following:
    The Customs Service offers special treatment for the aging, 
the handicapped, the ill, and those who are unable to wait in 
line when arriving from abroad. Such travelers can speak with a 
Customs supervisor upon arrival in the Customs processing area 
of the airport or other Customs port of entry. The supervisor 
is able to facilitate the traveler's Customs clearance.
    Customs strives to treat all travelers entering and leaving 
the United States with professionalism and courtesy. In 
addition, Customs works to ensure that Federal inspection 
facilities, such as restrooms, etc., facilitate the movement of 
the elderly or handicapped who must rely on a wheelchair or 
walker.
    In addition, the Customs Service has a number of programs 
supporting Customs employees. For example, the Employee 
Assistance Program encourages elderly employees to seek 
additional assistance if needed. The Customs Health Enhancement 
Program offers activities and classes to Customs employees, 
including the elderly, in areas such as fitness, CPR/first aid, 
stress management, conflict resolution, defense tactics, 
allergy and asthma inoculations, nutrition, and health 
screening. In addition, special seminars and video broadcasts 
are offered throughout Customs on eldercare. Topics include 
long-term health care, legal issues, caregiver issues, nursing 
homes, etc. and are available for the elderly as well as 
younger employees who may have older relatives and friends. The 
Customs Service also offers retirement seminars several times 
each year to all employees who are eligible to retire within 
the succeeding 5 years. These seminars cover retirement 
benefits, legal matters and financial planning.

                 OFFICE OF COMPTROLLER OF THE CURRENCY

    During 1997 and 1998 the Office of the Comptroller of the 
Currency (OCC) continued to enforce fair lending laws relating 
to age discrimination. Continued emphasis was also placed on 
evaluating performance of national banks with respect to the 
Community Reinvestment Act (CRA). During 1998, the OCC created 
a new bank supervision division specifically focused on 
consumer compliance, CRA, and fair lending. The new division is 
to support the OCC's consistent enforcement of compliance laws 
by providing a direct link between policy makers and compliance 
examiners in the field.
    OCC examiners are alert to the potential for discrimination 
on the basis of age (as well as the other bases covered by ECOA 
and Reg. B) when conducting fair lending examinations. In 1997, 
the OCC found evidence of age discrimination during two fair 
lending exams and referred both cases to the Department of 
Justice (DOJ) for action; the OCC found evidence of age 
discrimination during one exam in 1998 and forwarded that case 
to DOJ. DOJ returned all three cases to the OCC for 
administrative action. The three aforementioned cases bring the 
total number of OCC cases involving age discrimination to nine 
since 1993.
    During 1997 and 1998, Comptroller Eugene A. Ludwig and 
Acting Comptroller Julie A. Williams met ten times with 
representatives from national community and consumer 
organizations, including representatives of senior 
organizations, at the OCC's Washington, DC headquarters. They 
also met six times with representatives of local community and 
consumer organizations from five of six OCC regional districts. 
The purpose of these outreach sessions was to share information 
about OCC policy and national bank examination practices with 
bank customer organizations, and to learn first-hand about the 
concerns these organizations had about the activities of 
national banks, as well as about the OCC's supervision of the 
national banking system. Topics discussed typically included 
community reinvestment, fair lending, community development, 
and access to financial services for the ``unbanked'', 
including elderly individuals, who do not have a relationship 
with a depository financial institution.
    The OCC is responsible for resolving consumer complaints 
against national banks, including those complaints made by 
older Americans. During 1997, the OCC received 40,000 total 
telephone complaints and 33,084 total written complaints. 
During 1998, we received over 85,322 total telephone complaints 
and 71,000 total written complaints. In a continuing effort to 
improve our assistance to customers, the complaint processing 
was consolidated into the OCC's Ombudsman's Office in April, 
1998. The new Customer Assistance Group was formed with the 
hiring of compliance professionals and state of the art 
telephone equipment. The toll-free national consumer complaint 
telephone number was maintained (800-613-6743).

                  ITEM 14--COMMISSION ON CIVIL RIGHTS

                              ----------                              

    During calendar years 1997 and 1998 the Commission 
continued to process complaints received from individuals 
alleging denials of their civil rights. Specifically, in 1997 
23 complaints alleging discrimination on the basis of age were 
received by the Commission and referred to the appropriate 
agency for resolution. In 1998, the Commission referred 22 
complaints alleging age discrimination.




              ITEM 15--CONSUMER PRODUCT SAFETY COMMISSION

                              ----------                              


       Report on Activities To Improve Safety for Older Consumers

    Each year, according to estimates by the U.S. Consumer 
Product Safety Commission (CPSC), nearly one million people age 
65 and older are treated in hospital emergency rooms for 
injuries associated with products they live with and use every 
day. The death rate for older people is almost 7 times that of 
the younger population for unintentional injuries involving 
consumer products. Consumer products used in and around the 
home are associated with over 40 deaths per 100,000 persons 65 
and older, and over 6 deaths per 100,000 persons under 65.
Fires and burns in the home
    Burns from fires in the home are a significant source of 
injury to older Americans. In fact, adults age 65 and over are 
twice as likely to die in fires as all ages combined. There are 
a number of steps older Americans can take to protect 
themselves.
    CPSC recommends the installation and maintenance of smoke 
detectors on every floor of the home. Older consumers should 
look for nightwear that will resist flames, such as heavy 
weight fabric or tightly woven fabrics such as polyester, 
modacrylics, or fabrics made from wool.
    Cooking fires also cause injury and death to older 
consumers. CPSC urges consumers to keep pot handles turned 
inward, and keep cooking surfaces and surrounding areas free 
from clutter and grease build-up. Also, CPSC advises consumers 
to avoid wearing loose clothing with flowing sleeves while 
cooking. CPSC is evaluating the feasibility of technologies to 
detect a pre-fire condition and shut the burner off before a 
fire occurs.
    Older consumers are at greater risk of dying from fires 
involving upholstered furniture, mattresses, and bedding than 
the general population. To prevent such fires, CPSC cautions 
consumers to never smoke in bed, while drowsy, or while under 
the influence of medication or alcohol. Further, consumers are 
advised to use large, deep ashtrays for smoking debris and to 
let the contents cool before disposing of them. CPSC is 
currently considering ways to address upholstered furniture and 
mattress and bedding flammability.
    Burns from hot tap water are another cause of injury to 
many older Americans. CPSC recommends that consumers turn down 
the temperature of their water heater to 120 degrees Fahrenheit 
to help prevent scalds.
    In 1997 and 1998, CPSC distributed approximately 147,000 
copies of ``Safety for Older Consumers--Home Safety Checklist'' 
(English and Spanish). The checklist is a room-by-room check of 
the home, identifying hazards and recommending ways to avoid 
injury. Consumers may order a free copy by sending a postcard 
to ``Home Safety Checklist,'' CPSC, Washington, D.C. 20207. 
This checklist is posted on the CPSC Web site at www.cpsc.gov 
under ``Consumer-Publications.''
    CPSC, in partnership with the American Association of 
Retired Persons (AARP) and the National Association of State 
Fire Marshals, distributes another booklet to consumers, ``Fire 
Safety Checklist for Older Consumers'' (English and Spanish). 
In 1997 and 1998, CPSC distributed almost 21,000 copies of this 
publication. Consumers may request a free copy by sending a 
postcard to ``Fire Safety Checklist,'' CPSC, Washington, D.C. 
20207.
    CPSC also contributed to the publication ``What Smart 
Shoppers Know About Nightwear Safety.'' This brochure was 
developed by a group of experts in apparel flammability and 
distributed by the American Association of Retired Persons 
(AARP). The brochure encourages older consumers to look for 
sleepwear that is flame resistant. Consumers may request a copy 
by sending a postcard to AARP, 601 E Street, N.W., Washington, 
D.C. 20049.
Electrical wiring in older homes
    In 1994-95, CPSC conducted a study of electrical wiring 
fires in older homes. This is a subject of particular 
importance to senior citizens, since they frequently live in 
older homes, which are especially vulnerable to electrical 
wiring fires. Based on this study, CPSC produced a video 
entitled ``Wired for Safety,'' emphasizing hazards with old 
electrical wiring and safety measures to prevent fire and 
electric shock. About 3,000 copies of the video are distributed 
to electrical safety inspectors, code officials, and others 
nationwide.
    CPSC launched this campaign to help prevent the estimated 
40,000 home electrical wiring fires each year. These fires 
claim 400 lives and cost society $2.2 billion annually. Working 
with fire departments, electrical safety experts, and building 
code officials, CPSC encourages electrical reinspections and 
upgrades to home electrical wiring.
    CPSC continues to distribute copies of its publication, 
``CPSC Guide to Home Wiring Hazards,'' and in 1997-98, 
distributed almost 10,000 copies. Consumers may obtain a free 
copy of this publication by sending a postcard to ``Home Wiring 
Hazards,'' CPSC, Washington, D.C. 20207.
Grandchild safety
    The role of grandparents may range from occasional 
babysitting to primary caregiving. A recent U.S. Census Bureau 
study states that 1.3 million children are entrusted to 
grandparents every day. In the years since grandparents were 
raising their own children, many safety issues have arisen or 
drastically changed. As more and more grandparents have become 
caregivers for American children, it became clear there was a 
need to reach them with critical child development and safety 
information.
    In 1997, CPSC Chairman Ann Brown and noted pediatrician T. 
Berry Brazelton, M.D., head of Pampers Parenting Institute, 
unveiled the booklet, ``A Grandparents Guide for Family 
Nurturing & Safety.'' This easy-to-read booklet contains 
important child care and nurturing information for 
grandparents. It also features a safety checklist with 
potentially life saving tips for childproofing homes and 
protecting grandchildren, from newborns to five-year-olds.
    The booklet is available free of charge through the 
Consumer Information Center. The toll-free number to call is 1-
888-8-PUEBLO. The booklet is posted on both the Pampers 
Parenting Institute Web site at www.pampers.com and the CPSC 
Web site at www.cpsc.gov. To date, over 84,000 copies have been 
distributed.
Adult-friendly poison prevention packaging
    Older consumers are involved in the childhood poisoning 
issue because many young children are poisoned when they 
swallow grandparents' medicine. In fact, about 20% of 
prescription medicines ingested by children under age 5 belong 
to grandparents or other relatives. Child-resistant (CR) 
packaging has saved children's lives. CPSC has data estimating 
that the widespread use of child-resistant closures on aspirin 
and oral prescription medicines saved the lives of at least 800 
children under age five since 1974 (about 35 or more children 
saved annually). Net societal savings from this action are 
estimated at more than $150 million annually, due to prevented 
deaths. This savings is more than 3 times CPSC's 1999 budget of 
$47 million.
    However, CR packaging can only work if people choose it and 
use it properly. Many older consumers find it difficult to open 
CR packaging and may not replace the caps or use the packaging 
at all. To make it easier for all adults, especially older 
ones, to use child-resistant packaging, CPSC in 1995 adopted a 
change in its rules for testing packaging under the Poison 
Prevention Packaging Act. The new regulation requires that 
packaging be tested by panels of adults 50 to 70 years of age 
rather than 18 to 45 years old, as was previously the case. 
This change--effective for packaging marketed after January 
1998--assures that child resistant packaging is more ``adult-
friendly.'' The change has encouraged the industry to develop 
innovative closures that rely on older people's ``cognitive 
skills'' instead of their physical strength. CPSC expects the 
new packaging to help prevent more child poisonings. In 
addition, CPSC reminds all adults to keep medicines locked up 
and out of reach of children.
    In 1994, Chairman Ann Brown awarded commendations to two 
companies for safety innovations in child-resistant packaging 
that were especially useful for older consumers. Procter and 
Gamble received an award for marketing a major product in 
adult-friendly child-resistant packaging and Sunbeam Plastics 
was recognized for developing an entire line of adult-friendly 
child-resistant packaging.
Sports safety for seniors
    A recent CPSC study shows a 54% increase in the number of 
sports-related injuries suffered by persons 65 years of age and 
older between 1990 and 1996--from 34,400 to 53,000. The report 
shows that most of these increases in injuries to older persons 
are in connection with more active sports, such as bicycling, 
weight training and skiing. In 1998, the CPSC and the American 
Academy of Orthopaedic (AAOS) Surgeons teamed up to help 
reverse this trend.
    In a brochure they developed jointly, CPSC and AAOS give 
older Americans important tips for remaining safe while 
enjoying the many benefits of exercise. Exercise is beneficial 
for most people of all ages, and Americans are remaining more 
physically active into their 70s, 80s, and 90s. Studies cited 
by the AAOS show that exercise can result in a longer, 
healthier life, while building stronger bones and reducing 
joint and muscle pain. Exercise improves mobility and balance, 
and reduces the risk of falls and serious injuries like hip 
fractures. However, many injuries can occur while people 
exercise.
    The CPSC/AAOS brochure strongly recommends the use of 
proper safety gear when exercising or participating in sports. 
Safety gear is the best way to reduce or eliminate injuries 
while exercising. For example, bicycling injuries to older 
Americans increased 75% from 1990 to 1996. Most bicycling 
injuries result from falls. Head injuries accounted for 21% of 
the injuries. Virtually none of the fall victims was wearing a 
bike helmet. The brochure recommends that bikers always wear a 
helmet. Injuries associated with exercise activity (aerobics, 
weight training, etc.) increased 173% between 1990 and 1996. 
The most common types of injuries were falls and strains. The 
brochure recommends that persons using exercise equipment 
should read instructions carefully and, if needed, ask someone 
qualified to help.
    During 1998, CPSC distributed over 3,500 copies of this 
brochure, ``Keep Active and Safe at Any Age.'' Consumers may 
order a copy of the brochure by calling toll-free at (800) 824-
BONES or send a self-addressed, stamped business-size envelope 
to, ``Keep Active'' brochure, American Academy of Orthopaedic 
Surgeons, P.O. Box 1998, Des Plaines, IL 60017. Copies of the 
brochure and the CPSC report can be accessed at the CPSC web 
site at: http//www.cpsc.gov.
International Year of Older Persons 1999
    The United Nations (UN) General Assembly recognized 
``humanity's demographic coming of age'' by adopting 1999 as 
the International Year of Older Persons (IYOP). The UN is 
encouraging countries, organizations and governments at all 
levels to observe the IYOP. In 1998, CPSC joined the Federal 
Committee to prepare for the International Year of Older 
Persons. This Committee, comprised of 12 cabinet agencies and 
15 other federal agencies, commissions, and councils, will work 
throughout 1999 and beyond to assure that the federal 
government is prepared for the aging of our society.
    The CPSC is participating on both working subcommittees of 
the Federal Committee: the Media and Conference Subcommittees. 
The Media Subcommittee is assembling a number of activities 
that will be undertaken by members of the Federal Committee 
throughout 1999 and beyond. These activities include public 
awareness campaigns and media forums on aging issues. Execution 
of these activities will extend from programs and activities at 
the national level to grassroots community partnerships.
    CPSC developed a media sheet that summarizes agency 
programs and activities supporting IYOP. On October 19, 1998, 
this media sheet was included in the Federal Committee's IYOP 
launch event press kit. The media sheet, CPSC publications and 
technical reports have been and will be used in a number of 
CPSC exhibits/ displays and other CPSC supported programs 
around the country as IYOP activities continue. When 
appropriate, CPSC's Chairman Ann Brown will be involved in the 
Federal Committee's media activities at the national level, 
increasing public awareness of the many safety programs CPSC 
offers older consumers.
    The CPSC is contributing to the development of the Federal 
Committee's conference scheduled for June 1 and 2, 1999. Top 
experts in the field of gerontology will be panelists at the 
conference, and federal agencies and other professionals in the 
field will develop recommendations for continued initiatives. 
CPSC will contribute its own safety related programs to the 
conference agenda.

               ITEM 16--CORPORATION FOR NATIONAL SERVICE

                              ----------                              

    On September 21, 1993, the President signed into law the 
National and Community Service Trust Act, which created the 
Corporation for National Service (Corporation). The 
Corporation's mission is to engage Americans of all ages and 
backgrounds in community-based service. This service addresses 
the Nation's unmet education, public safety, human and 
environmental need to achieve direct and demonstrable results. 
This commitment to ``get things done'' is honored by the 
Corporation's three national service initiatives: The National 
Senior Service Corps (Senior Corps), AmeriCorps, and Learn and 
Serve America.

 NATIONAL SENIOR SERVICE CORPS: A THIRTY YEAR HISTORY OF LEADERSHIP IN 
                    SENIOR VOLUNTEERISM AND SERVICE

    Senior Corps is comprised of three seasoned programs 
previously supported by the Federal agency ACTION and its 
predecessors:
         The Foster Grandparent Program enables seniors 
        to provide individual support to children and youth 
        with special and exceptional needs.
         The Retired and Senior Volunteer Program 
        (RSVP), volunteers perform a myriad of services, 
        including organizing neighborhood block watches, 
        identifying sources of groundwater contamination, 
        teaching computer classes, and participating in natural 
        disaster recovery.
         The Senior Companion Program supports older 
        volunteers who provide assistance that allow frail 
        individuals to continue living independently and with 
        enhanced quality of life.
    In 1997, nearly half a million Senior Corps volunteers 
contributed their time, skills, wisdom and experience to 
addressing unmet community needs, while emphasizing the impact 
on both the individuals and the communities served.

                          TABLE 1.--NATIONAL SNAPSHOT OF THE SENIOR CORPS PROGRAMS \1\
----------------------------------------------------------------------------------------------------------------
                                              Number of local       Number of      Volunteer hours of service to
                  Program                         projects          volunteers      communities (million hours)
----------------------------------------------------------------------------------------------------------------
FGP........................................                305             25,300  23.8
RSVP.......................................                751            453,300  80
SCP........................................                191             13,900  11.8
                                            --------------------------------------------------------------------
      Totals...............................              1,247            492,500  115.6
----------------------------------------------------------------------------------------------------------------
\1\ Source for all Senior Corps program and volunteer related data: 1997 Annual Project Profile of Volunteer
  Activities (PPVA), Corporation for National Service, National Senior Service Corps.


                                TABLE 2.--SENIOR CORPS PROGRAMS IN THE COMMUNITY
----------------------------------------------------------------------------------------------------------------
                                                                                          Number of local public
                                                    Number of local    Number of census   and nonprofit agencies
                     Program                            projects       districts served     with senior corps
                                                                                                volunteers
----------------------------------------------------------------------------------------------------------------
FGP..............................................                305                826                    8,410
RSVP.............................................                751              1,416                   70,500
SCP..............................................                191                603                    3,200
                                                  --------------------------------------------------------------
      Totals.....................................              1,247              2,845                   82,110
----------------------------------------------------------------------------------------------------------------

  FUNDING THE NATIONAL SENIOR SERVICE CORPS--A COST-EFFECTIVE FEDERAL 
                INVESTMENT TO BENEFIT LOCAL COMMUNITIES

    The total federal funding for National Senior Service Corps 
programs in fiscal year 1998 was $163,240,000, apportioned 
among each of the three programs as follows:

   TABLE 3.--NATIONAL SENIOR SERVICE CORPS FY '98 FEDERAL FUNDING \2\
                          [Dollars in millions]
------------------------------------------------------------------------
                                                                FY '98
                    Senior Corps Program                       funding
------------------------------------------------------------------------
Foster Grandparent Program.................................        $87.6
Retired and Senior Volunteer Program (RSVP)................        $40.3
Senior Companion Program...................................        $35.4
      Total................................................      $163.3
------------------------------------------------------------------------
\2\ Source for fiscal data: FY '98 federal appropriation, Corporation
  for National Service, National Senior Service Corps.

    Senior Corps projects are locally sponsored and 
administered. Within the broad framework of its legislation, 
service activities grow out of agreements among the 
participants, funded projects, and the communities served. As a 
result, these activities reflect a mix of needs unique to each 
community.
    The community-driven focus is, in large part, a reason for 
the local non-federal support enjoyed by Senior Corps programs.

                       TABLE 4.--SENIOR CORPS PROGRAMS AND NON-FEDERAL LOCAL CONTRIBUTIONS
----------------------------------------------------------------------------------------------------------------
                                                   FY '98     Non-federal
             Senior Corps Program                 federal        local     Percentage of non-federal support for
                                                 investment  contribution           every federal dollar
----------------------------------------------------------------------------------------------------------------
Foster Grandparent Program....................        $87.6         $34.8  40 percent
                                                   40 cents
                                                 per dollar
Retired and Senior Volunteer Program (RSVP)...         40.3          42.4  105 percent
                                                  $1.05 per
                                                     dollar
Senior Companion Program......................         35.4          21.8  61 percent
                                                   61 cents
                                                 per dollar
                                               ---------------------------
      Total...................................        163.3            99  .....................................
----------------------------------------------------------------------------------------------------------------

    Senior Corps programs allow local agencies to provide 
greater levels of service within their relatively small 
operating budgets and demands placed on them as community 
service providers. The monetary value of the volunteer services 
provided by Senior Corps volunteers exceeds one billion 
dollars.\3\
---------------------------------------------------------------------------
    \3\ Based on the 1996 Biannual Report, Giving and Volunteering in 
the United States, Independent Sector, which assigned a comparable 
value of $13.24 per hour to volunteer service.

                      TABLE 5.--SENIOR CORPS PROGRAMS AND RETURN ON THE FEDERAL INVESTMENT
----------------------------------------------------------------------------------------------------------------
                                       FY '97 annual volunteer                              Return on federal
         Senior Corps Program               service hours           Value of service            investment
----------------------------------------------------------------------------------------------------------------
Foster Grandparent Program...........  23.8 million hours.....  $315 million...........  4-fold return
Retired and Senior Volunteer Program   80 million hours.......  $1.1 billion...........  31-fold return
 (RSVP).
Senior Companion Program.............  11.8 million...........  $156 million...........  5-fold return
                                      --------------------------------------------------
      Total..........................  115.6 million hours....  $1.5 billion...........  .......................
----------------------------------------------------------------------------------------------------------------

   VOLUNTEER OPPORTUNITIES FOR OLDER ADULTS: AMERICA'S MOST ABUNDANT 
                            NATURAL RESOURCE

    Twice as many older adults live in the United States today 
as 30 years ago and the number of persons over age 55 will 
double again by 2025. Three factors make older persons the 
nation's best increasing natural resource:
         Good Health--More than 80 percent of Americans 
        age 65 and over report no difficulties with activities 
        of daily living. Less than 5 percent are 
        institutionalized.
         More Time--Americans are now spending a third 
        of their lives in retirement, freeing an average of 
        more than 20 hours a week to engage in additional 
        activities.
         High Interest--According to the Independent 
        Sector, a Washington, D.C.-based organization that 
        studies American volunteerism, when persons 55 and 
        older are asked to volunteer, over 70 percent do.
    Service by seniors is changing the definition of 
satisfaction and success in post-retirement, and is 
increasingly regarded as an essential ingredient in productive 
aging. For example, in a 2.5-year follow-up of the MacArthur 
Successful Aging study, participation in volunteer activities 
was predictive of improved functioning in older adults, with 32 
percent lower risk of poor physical function in those so 
involved, independent of the effects of being physically 
active. There is preliminary evidence from the same study that 
the amount of time one is involved in formal volunteering 
activities is important in conferring health benefits, with 
greater time involvement predictive of the level of physical 
functioning two years later. Finally, there is evidence that 
organized and structured roles and behavior are among the best 
predictors of survival (Fried, Freedman, et al., 1997). It 
follows, therefore, that public investment in volunteer service 
by seniors is not only prudent, but that it has multiple 
benefits.

    NATIONAL SENIOR SERVICE CORPS-SIGNIFICANT ACTIVITIES, 1997-1998

            Senior Corps Volunteers: Meeting Community Needs

    As a new millennium approaches, the Senior Corps is at an 
unprecedented juncture. On one hand, a new generation of older 
Americans--more healthy, educated, and numerous than any before 
it--will provide tremendous energy and resources to the senior 
service movement. On the other hand, economic realities and 
funding cutbacks at all levels require increased innovation in 
the delivery of volunteer services.
    In this new environment, it is anticipated that funding 
must go to those programs that can distinguish themselves among 
competitors by demonstrating value, cost-effectiveness, and 
significant results in solving critical community needs. Thus, 
the Senior Corps is aggressively moving beyond talking about 
``how much time and how many seniors we provide'' to answering 
the question ``what difference do we make?''
    Senior Corps' evolution in vision requires programming 
focused on outcomes. Programming for Impact is the framework 
that was developed by the Senior Corps in 1996 to facilitate 
this evolution. It advocates an approach to service programming 
that integrates community need, accomplishment and impact into 
station and volunteer assignment development, planning and 
reporting. It also measures responsiveness to the community and 
thereby fosters recognition of seniors as a vital, invaluable 
resource.
    As a vehicle to achieve accomplishment and outcome based 
programming, Programming for Impact will also position Senior 
Corps to meet Government Performance and Results Act (GPRA) 
requirements. As a result of the 1993 Government Performance 
and Results Act, appropriation decisions will now be based on 
performance and results of Federal agencies. Adding an outcome 
based focus, Programming for Impact is one of the Performance 
Indicators for Senior Corps' GPRA goals.
    Some key components of the Programming for Impact 
initiative in 1997 included state impact conferences involving 
key stakeholders in dialogue and consensus building, and 
development and dissemination of technical assistance 
guidebooks and project management tools.

                         demonstration programs

    Senior Corps tests new models for mobilizing older persons 
in service through its demonstration authority, which builds on 
the effective practices and lessons learned through RSVP, the 
Foster Grandparents Program, and the Senior Companion Program 
and positions Senior Corps to tap the vast civic potential of 
the aging baby boom generation.
    In the Fall of 1997, the Corporation launched the 2-year 
Seniors for Schools initiative in nine communities. This 
initiative built on and refined the core elements of the 
Experience Corps model, and narrowed the focus by adopting the 
goals of ``America Reads'' which focuses on literacy for young 
children in grades K-3. The Seniors for Schools program 
effectively enlisted men and women over the age of 55 to serve 
in teams and make a significant commitment to help children 
learn and read.
    Seniors for School completed its first full year of 
operation in summer of 1998. During this first year the nine 
projects developed partnerships with AmeriCorps*VISTA, RSVP and 
FGP projects and 27 Title I elementary schools. They trained 
and placed a total of 250 senior volunteers in these 27 schools 
and served more than fifteen hundred children with 
substantially below-average reading skills in kindergarten 
through grade three. In year two (1998-1999 school year), the 
majority of Seniors for Schools volunteers are expected to 
continue in the program. Several sites will expand to new 
schools and reach more children.
    The Corporation for National Service and the American 
Association of Retired Persons (AARP) are working together to 
implement the new Experience Corps for Independent Living in 
six communities.
    The purpose of the Experience Corps for Independent Living, 
funded in FY '98 to begin operation in FY '99, is to develop 
and test innovative approaches to using the time, talents, 
experience and resources of volunteers over 55 to significantly 
expand the size and scope of volunteer efforts on behalf of 
independent living services for frail elders and their 
caregivers in specific communities.

           senior corps volunteers: supporting america reads

    Reading is a key to success in education and in life. 
Unfortunately, many children fall behind their classmates 
because they do not learn to read early and read well. The 
America Reads initiative calls on all Americans to help ensure 
that every child can read well and independently by the end of 
third grade. The National Senior Service Corps, with its strong 
track record of effective service in tutoring and literacy, is 
playing an important role in this initiative.
    Senior Corps devoted 100 percent of new Foster Grandparent 
and Retired and Senior Volunteer Program funds available for 
program expansion in FY 1998 to America Reads activities.
           Nine Seniors for Schools projects recruited 
        and placed 243 senior volunteers who helped 1,570 
        children with literacy activities at 27 schools.
           Through Programs of National Significance 
        grant augmentations to existing Senior Corps projects, 
        a total of $5.5 million (RSVP and FGP) was awarded to 
        support child literacy.
                  RSVP: $2.2 million was awarded to 222 RSVP 
                projects supporting up to 24-26 volunteers per 
                project (5,500 new volunteers).
                  FGP: $3.3 million was awarded to 87 existing 
                FGP projects supporting approximately 790 new 
                Volunteer Service Years.
           Nine new RSVP projects were funded in late 
        FY '98, which will recruit and place approximately 
        1,200 RSVP volunteers to focus on America Reads 
        activities in the first year, beginning operation in FY 
        '99.
           Eleven new Foster Grandparent projects were 
        funded, in late FY '98, which will create opportunities 
        for approximately 680 new Volunteer Service Years; 
        volunteers will focus on America Reads activities in 
        the first year, beginning operation in FY '99.

                    national organization initiative

    The purpose of the National Organization Initiative is to 
expand Senior Corps Programs through an approach that taps the 
expertise of national nonprofit organizations and builds on 
their existing networks of affiliates who operate programs at 
the local level. National organizations will explore ways to 
strengthen the role of senior volunteerism throughout their 
organizations and will support networking among their local 
affiliates selected as Senior Corps project sites.
    In July 1998, the Corporation for National Service selected 
the following six national organizations to receive grants to 
promote senior service as a strategy within their organizations 
and support networking among designated local affiliates who 
will operate new Senior Corps projects:
           Big Brothers Big Sisters of America
           Child Welfare League of America/Generations 
        United
           Lutheran Services in America
           Points of Light Foundation
           Save the Children Federation
           Volunteers of America

                         evaluation activities

           The Retired and Senior Volunteer Program 
        Study was conducted by Westat, Inc in 1995-96, and was 
        the first large-scale study of the program in over a 
        decade. The study helped to clarify a number of 
        challenges to be addressed as RSVP moves forward, of 
        which 8 were selected as highest priority.
          To position RSVP for the future, sustain its best 
        features and respond to the critical issues raised in 
        the Westat study, the Senior Corps convened focus 
        groups of stakeholders in FY 98 regarding the 8 
        priority challenges. Focus group members explored 
        challenges and made recommendations. A follow up report 
        will be released to RSVP stakeholders that will also 
        include suggested next steps to address the challenges 
        and move forward.
           The Foster Grandparent Program Study, 
        conducted by Westat, Inc in 1997, sought to learn about 
        what Foster Grandparents actually do in Head Start 
        centers and how their contributions benefit the 
        children they serve. The findings show that the 
        majority of Foster Grandparents engage in a wide range 
        of activities and interactions that contribute 
        positively to children, classrooms and stations.
          The final report, ``Effective Practices of Foster 
        Grandparents in Head Start Centers: Benefits for 
        Children, Classrooms and Centers'' will be disseminated 
        to Foster Grandparent projects nationwide in the first 
        quarter of FY 1999.

                       FOSTER GRANDPARENT PROGRAM

    In 1997-1998, more than 25,000 Foster Grandparents gave 
care and attention to 175,500 children and youth with special 
and exceptional needs.

                            Program Overview

    The Foster Grandparent Program began in August 1965 as a 
national demonstration effort. Since its inception, the Foster 
Grandparent Program has provided young and old the chance to 
grow together. Today, nearly 25,000 older Americans serve as 
Foster Grandparents. They give care and attention every day to 
175,500 children and youth with special and exceptional needs. 
In improving the lives of children they serve, Foster 
Grandparents also profoundly enrich their own lives.
    Foster Grandparents volunteer in schools, hospitals, drug 
treatment centers, correctional institutions, and Head Start 
and day care centers. They offer emotional support to children 
who have been abused and neglected, mentor troubled teenagers 
and young mothers, care for premature infants and children with 
physical disabilities or severe illnesses, including AIDS. This 
special care helps young people grow, gain confidence, and 
become more productive citizens. In the process, Foster 
Grandparents strengthen communities by providing personalized 
services to special needs children that community budgets 
cannot afford and by building strong bridges across 
generations.
    Foster Grandparents must be at least 60 years of age and 
meet certain income eligibility requirements. They serve 20 
hours per week and receive pre-service orientation, training 
throughout their service, and a modest stipend to offset the 
cost of volunteering. They receive reimbursement for 
transportation, some meals during service, an annual physical, 
and accident and liability insurance while on duty.

          non-federal support and return on federal investment

    Foster Grandparent projects are jointly funded by federal, 
state, and local governments, with significant support from the 
private sector. The federal budget to support these projects 
was $77.8 million in fiscal year 1997 and $87.6 million in 
fiscal year 1998. The non-federal local contribution averaged 
$34.8 million annually or 40 cents for every federal dollar 
invested--well above the 10 percent match required by law and 
attesting to the success of Foster Grandparents in the 
communities they serve.
    In 1997-1998, 25,000 Foster Grandparents served through 305 
projects sponsored by local nonprofit agencies.
    The 23.8 million hours of service provided annually by 
Foster Grandparents was worth over $315 million, according to a 
study by the Independent Sector. This represented more than a 
four-fold return on the federal dollars invested in these 
projects.

            NATIONAL PROFILE OF FOSTER GRANDPARENT VOLUNTEERS
------------------------------------------------------------------------
                      Characteristics                          Percent
------------------------------------------------------------------------
Distribution by Gender:
    Female.................................................           90
    Male...................................................           10
Distribution by Age:
    60-69 years............................................           31
    70-79 years............................................           51
    80-89 years............................................           13
    85 and over............................................            5
Distribution by Ethnicity:
    White..................................................           48
    African American.......................................           37
    Hispanic/Latino........................................           10
    Asian/Pacific Islander.................................            4
    American Indian/Alaskan Native.........................            2
Population Served:
    Urban..................................................           60
    Rural..................................................           40
------------------------------------------------------------------------
 The federal cost of a Foster Grandparent serving 20 hours a week is
  $3,670 annually.

                  Foster Grandparent Project Examples


Helping Teen Mothers and Their Babies--Wayne Action Group For Economic 
          Solvency Foster Grandparent Program, North Carolina

    Foster Grandparents serving with the Wayne Action Group for 
Economic Solvency (WAGES) project provide support for teenage 
mothers and their children. They go to the mothers homes, 
mentoring the mothers in home management and parenting skills, 
while providing nutritional and nurturing support for their 
babies. Last year, four Foster Grandparents served five teen 
mothers who have a total of seven children.
    The teen moms are making responsible decisions and getting 
their lives, and those of their babies, on track, thanks to the 
guidance and support of the Foster Grandparents. Four of the 
mothers went back to school and three have already earned their 
GED certificates. These achievements were possible because the 
Foster Grandparents cared for the babies while their moms were 
in school. Four of the mothers are now employed. None have 
become pregnant since they were served by a Foster Grandparent.
    In-home placement of Foster Grandparents has proven a 
positive response to the challenges created by the growing 
number of teen mothers in Goldsboro and Wayne County, North 
Carolina.

     Enhancing Child Literacy and Reading Skills--Southeast Foster 
               Grandparent Program--Monticello, Arkansas

    Four elementary schools in southeast Arkansas began 
utilizing Foster Grandparents as literacy and reading tutors 
the fall of 1997. Teachers from each of the four schools 
referred children whose total reading scores were in the bottom 
of the lowest 25 percent on the Stanford 9, a national norm-
based test. The lowest scoring 64 children were assigned to 16 
Foster Grandparents. All Foster Grandparents have been trained 
in caregiving, reading and helping children to stay on task. 
Students were pre-tested in the fall and will be post-tested at 
the end of the school year to determine progress. According to 
teacher evaluations collected in January 1998, all students are 
reading with more confidence after just a few months with a 
Foster Grandparent, and 77 percent of the teachers reported 
that the children were making excellent progress.

 Mentoring Juvenile Offenders Toward Rehabilitation Foster Grandparent 
             Program of Sacramento--Sacramento, California

    The rate of juvenile offenders in Sacramento County has 
grown 16.5 percent in the last six years. Most of these 
offenders, according to the Probation Department and the 
Sacramento County Office of Education, are reading below grade 
level or have dropped out of school. Seven Foster Grandparents 
were placed in units with children and youth providing one-to-
one mentoring and support, as well as in a school setting 
working on reading and math skills. The Foster Grandparents 
helped their assigned youth increase reading levels by 1-2 
grade levels, study for and pass GED, and help develop 
proficiency for post-placement college enrollment.

Helping Students Overcome Learning Disabilities--Siete del Norte Foster 
               Grandparent Program--Fairview, New Mexico

    At the Espanola Elementary School, eight Foster 
Grandparents volunteers tutored 32 students with learning 
disabilities and/or attention deficit disorders. According to 
school officials, Foster Grandparents presence at the Espanola 
Elementary School helped to improve language and reading 
skills, and increased school attendance by 50 percent among 
students with special needs. It is also noted that children 
assisted by Grandparents improved more rapidly than non-
assigned students in behavioral and study habits.

Academic Tutoring for Students in Need of Extra Assistance--Hall/Adams/
       Buffalo Foster Grandparent Program--Grand Island, Nebraska

    Foster Grandparents were placed in 16 elementary schools to 
provide one-to-one tutoring with 96 second grade students who 
scored lowest on Basic Skills test. Foster Grandparents spend 
an average of four hours a week with each child tutoring him or 
her in reading, spelling and word recognition. Midway through 
the school year, the second grade students were retested using 
the same test, and results substantiated that children tutored 
by the Foster Grandparents recognized more words, performed 
better on spelling tests and raised their reading levels higher 
than the children who did not receive any extra attention or 
tutoring.

                        SENIOR COMPANION PROGRAM

    In 1997-1988, almost 13,900 Senior Companion volunteers 
served 48,900 frail older persons.

                            Program Overview

    The Senior Companion Program awarded funds to its first 
projects in August 1974. This program recruits low-income 
persons age 60 and over to provide assistance and friendship to 
frail adults, mostly the elderly who are homebound and living 
alone. The services Senior Companions provide help others to 
live independently in their own homes instead of moving to 
expensive institutional care. Senior Companions also provide 
respite care for short periods of time to relieve live-in 
caretakers.
    By assisting clients with simple chores, providing 
transportation to medical appointments, and offering needed 
contact to the outside world, Senior Companions often provide 
the supportive services that the frail need to continue to live 
independently. Because Senior Companions spend significant 
amounts of time with their clients, they are often a critical 
part of the client's ``care team.'' Senior Companions alert 
doctors and family members of potential health problems, 
allowing them to provide immediate care to the client.
    Senior Companions serve three to four clients in an average 
week, predominately in the client's own homes. Community 
organizations that address health needs of the elderly such as 
home health care agencies, hospitals, or centers on aging serve 
as volunteer stations. These organizations identify individuals 
who need assistance and then work with Senior Companion 
projects to match them with available Senior Companions.
    Like Foster Grandparents, Senior Companions serve 20 hours 
per week. They also receive pre-service orientation, training 
throughout their service, and a modest stipend to offset the 
cost of volunteering. They are provided transportation, some 
meals during service, an annual physical, and accident and 
liability insurance while on duty.
    Compared with the average cost of nursing home care, which 
exceeds $38,000 annually, the annual cost for Senior Companion 
services is $4,000. This is a very cost-effective way to 
provide supportive services to an average of five frail adults 
per Senior Companion, who might otherwise be at risk for 
premature institutionalization.

          Non-Federal Support and Return on Federal Investment

    In 1997-1998, almost 14,000 Senior Companions served over 
49,000 frail adults annually through 191 projects sponsored by 
local public and private nonprofit agencies. These projects are 
jointly funded by the federal government, state and local 
governments, and the private sector. The federal budget for 
Senior Companions was $35.4 million in fiscal year 1998. The 
non-federal local contribution to these projects was $21.8 
million. This non-federal contribution represented a support of 
61 percent, or 61 cents for every federal dollar invested--well 
above the 10 percent match required by law.
    In fiscal year 1997, the 11.8 million hours of service 
provided annually by Senior Companions was estimated to be 
worth $156 million, according to a study by the Independent 
Sector. This represents almost a five-fold return on the 
federal dollars invested in the program.

             NATIONAL PROFILE OF SENIOR COMPANION VOLUNTEERS
------------------------------------------------------------------------
                      Characteristics                          Percent
------------------------------------------------------------------------
Distribution by Gender:
    Female.................................................           85
    Male...................................................           15
Distribution by Age:
    60-69 years............................................           35
    70-79 years............................................           51
    80-89 years............................................           10
    85 and over............................................            4
Distribution by Ethnicity:
    White..................................................           51
    African American.......................................           33
    Hispanic/Latino........................................           11
    Asian/Pacific Islander.................................            4
    American Indian/Alaskan Native.........................            2
Population Served:
    Urban..................................................           63
    Rural..................................................           37
------------------------------------------------------------------------
 The federal cost of a Senior Companion serving 20 hours a week is
  $4,000 annually.

                   Senior Companion Project Examples


Helping Clients With Alzheimer's Disease.--Senior Companion Program of 
                  Kankakee County--Kankakee, Illinois

    Statistics provided by the Illinois Department on Aging, 
based on 1990 census information, indicate that approximately 
3,027 persons residing in Kankakee and Iroquois county 
communities, age 65 and over, are afflicted with Alzheimers or 
a related disease. The average cost of nursing home care for 
one person exceeds $30,000 annually. Three Senior Companions 
who received specialized training in Alzheimers care provide 
respite care to 5 clients--reducing the possibility of 
premature nursing home placement for conditions that limit 
activities of daily living. It is anticipated that the Senior 
Companions' assistance will allow 4 of the 5 clients to remain 
at home for a minimum of 8 months. The cost savings of delaying 
nursing home placement is anticipated at $1,690 per month. An 
overall savings of $54,096 for 4 clients is projected.

  Providing non-skilled medical care to adults with AIDS--New Orleans 
   Council on Aging Senior Companion Program--New Orleans, Louisiana

    Two Senior Companions were assigned to the Shelter 
Resources, Inc., a residential care facility for adults living 
with AIDS. They received 20 hours of pre-service training and 
20 hours of orientation from the ``House'' Personal Care 
Attendant. They also attended meetings at the end of the month 
with the station supervisor. The Companions provided non-
skilled medical care to selected residents needing extra care. 
They prepared meals, escorted clients to the doctor or to 
social activities, assisted with personal care and room 
cleanliness. The Companions, each serving 20 hours per week, 
are surrogate ``family'' to those without family support.

 Serving Frail Tribal Seniors on Native American Reservations.--Senior 
          Companion Program of Minnesota--Red Lake, Minnesota

    Many elders of the Red Lake Indian Reservation have no 
transportation or telephone, little income, and few family 
members nearby. Four Senior Companions serve 40 home bound 
elders, providing them with rides to the grocery store, medical 
appointments and elder nutrition sites for meals. The Senior 
Companions report that their clients are now eating better and 
more regularly. Companions also have been instrumental in 
obtaining emergency medical care for clients when needed, in 
addition to helping to link them to other community services.

  Helping Older Russian Immigrants Acclimate To A New Culture--SCP of 
                    Franklin County--Columbus, Ohio

    Senior Companions are helping 57 older Russian refugees 
become familiar with their new home by providing English 
tutoring, translation, obtain housing, food, and other living 
necessities, and accompanying clients to appointments. Twenty-
four clients gained proficiencies to allow independence; 33 
improved their English skills and understanding of culture, and 
4 clients passed the citizenship test to become new United 
States citizens.

Providing Quality Services to Homebound Clients--Florida Department of 
          Elder Affairs Senior Companion Program, Tallahassee

    Florida continues to lead the nation in proportion of older 
persons comprising its general population. The fastest growing 
segment of its older population are those ages 80 and older, 
leading to a high incidence of Alzheimer's and other chronic 
illnesses. In the Tallahassee area, 141 Senior Companion 
volunteers provided services to 618 frail and chronically ill 
seniors, of which 110 were diagnosed with Alzheimer's. Senior 
Companions provide essential services to frail clients who 
require extra assistance to maintain independence, including 
light chore services, companionships, and transportation.

              RETIRED AND SENIOR VOLUNTEER PROGRAM (RSVP)

    In 1997-1998, RSVP volunteers provided over 31.9 million 
hours of service to individuals needing assistance with health 
and nutritional concerns. The volunteers helped individuals who 
are mentally, developmentally and physically disabled; 
rehabilitating from alcoholism and drugs; and those suffering 
from HIV/AIDS. The volunteers also provided health education, 
nutritional support, and in-home care for those needing peer 
support and meal preparation.

                            Program Overview

    The Retired and Senior Volunteer Program (RSVP) was 
launched in 1971. RSVP matches the personal interests and 
skills of seniors age 55 and older with opportunities to help 
solve the problems in their communities and meet the needs of 
their fellow citizens. RSVP volunteers choose how and where 
they want to serve--from a few to over 40 hours a week in a 
wide range of community organizations such as hospitals, youth 
recreation centers, schools, and local police stations.
    RSVP volunteers provide hundreds of community services. 
They tutor at-risk youth, computerize information systems for 
community health organizations, get children immunized, teach 
parenting skills to teen parents, provide respite care for 
caregivers of Alzheimer's victims, establish neighborhood watch 
groups, plan community gardens, and a myriad of other community 
services. Through such efforts, RSVP is meeting community needs 
that strained local budgets cannot afford to address.
    In 1997-1998, over 453,300 RSVP volunteers served through 
751 projects sponsored by local public and private nonprofit 
agencies. RSVP volunteers contributed over 80 million hours of 
service to their communities annually in approximately 1,416 
counties nationwide.
    RSVP projects are jointly funded by the federal government, 
state and local governments, and the private sector. RSVP's 
federal budget was $40.3 million in fiscal year 1998. The non-
federal local contribution to RSVP projects was $42.4 million, 
demonstrating broad support for RSVP across the country. For 
every federal dollar invested, $1.05 was contributed from non-
federal sources in 1998.
    Of the combined RSVP cost, federal funding provided 49 
percent, while 51 percent of the costs were borne by local 
funding sources.
    According to the study conducted by the Independent Sector, 
the over 80 million hours of service provided annually by RSVP 
volunteers had an estimated worth of over $1.1 billion. This 
represented approximately a 31-fold return on the federal 
dollars invested in RSVP.

                   NATIONAL PROFILE OF RSVP VOLUNTEERS
------------------------------------------------------------------------
                      Characteristics                          Percent
------------------------------------------------------------------------
Distribution by Gender:
    Female.................................................           75
    Male...................................................           25
Distribution by Age:
    55-59..................................................            4
    60-64 years............................................           13
    65-74 years............................................           41
    75-84 years............................................           33
    85 and over............................................           10
Distribution by Ethnicity:
    White..................................................           86
    African American.......................................            9
    Hispanic/Latino........................................            4
    Asian/Pacific Islander.................................            1
    American Indian/Alaskan Native.........................            1
Population Served:
    Urban..................................................           54
    Rural..................................................           46
------------------------------------------------------------------------
The federal cost of an RSVP volunteer serving is approximately 40 cents
  per hour of service.

                         RSVP Project Examples


Helping Domestic Violence Victims--Miles City RSVP--Miles City, Montana

    There were 224 new cases of domestic abuse reported in 
Custer

County. Determined to rid their community of domestic violence,

the Custer Network Against Domestic Abuse (CNADA) sought

RSVP volunteers to work in public education and victim counsel-

ing. The volunteers also trained 22 school teachers on how to 
help

children who either are abused themselves or who witnessed 
abuse

in the home and established an awareness program at the local

high school. These education efforts have contributed to 
additional arrests in their County and fewer victims being 
returned to their abusers.

 Creating a Safer Environment Through Recycling Efforts--North Platte 
                      RSVP--North Platte, Nebraska

    RSVP volunteers participated in a countywide goal to reduce 
the tonnage of phone books entering the city's landfill. RSVP 
volunteers collected and counted books from elementary schools, 
then transported them to a storage facility. Wal-Mart stores 
provided trucks to transport the books to a recycling facility. 
A total of seven RSVP volunteers spent 74 hours collecting and 
transporting 20,000 telephone books, representing 8.5 tons of 
paper waste that was recycled, thus kept out of the North 
Platte landfill.

 Providing Tax Assistance For Low-Income Residents--City of Las Cruces 
                      RSVP--Las Cruces, New Mexico

    The Department of Human Services estimates that there are 
31,770 household in Dona Ana County who live under the poverty 
level, and that at least 20 percent of those households failed 
to file their taxes and receive a tax refund. The goal of the 
Volunteer Income Tax Assistance Program (VITAP) is to enable 
senior volunteers to provide free income tax services to the 
low-income and elderly population. Forty-five RSVP volunteers 
assisted more than 2,400 low-income and elderly households to 
prepare their taxes, and provided over 2,409 hours of income 
tax service. Calculated at the average commercial filing fee of 
$90 per household, the volunteers saved their clients a total 
of more than $216,000 in 1997. Each household received a refund 
of approximately $100 each.

    Helping to Keep Communities Safe--Mandan Golden Age Club RSVP--
                         Bismarck, North Dakota

    The Mandan Golden Age Club, Retired and Senior Volunteer 
Program utilized a ``Summer of Safety'' demonstration grant to 
revitalize the Bismarck Police Department's Neighborhood Watch 
program. Although the police had originally estimated it would 
take eight years to accomplish an effective Neighborhood Watch 
program, the RSVP volunteers had organized Watch areas for 
every street in the city (about 600 separate Neighborhood Watch 
areas) within several months. Comparing data over the years, 
Officer Dwight Offerman of the Bismarck Police Department 
estimated that RSVP efforts had directly contributed to a 27 
percent reduction in residential burglaries. The categories of 
theft and vandalism also were reduced by 15 and 23 percent 
across the same period.

   Working to Build a Community Kitchen Project--Cache County Senior 
              Citizens Center Kitchen Project--Logan, Utah

    Since 1973, the Cache County Senior Citizens Center were 
providing congregate meals for senior citizens and all 
delivered meals to homebound senior citizens of Cache County. 
With the growth of the aging population, it was determined that 
a larger kitchen and service area at the Center was needed. A 
team of volunteers including Retired and Senior Volunteer 
Program volunteers were recruited for the ``Kitchen Project,'' 
which included research and work on facility design, staffing 
costs, nutritional requirements and meal planning, raw foods 
vs. prepared food cost comparison, land requirements, building 
permit requirements, community support, and fund-raising. Over 
the past several years, more than 80 RSVP volunteers, along 
with other community volunteers, raised more than $600,000 
needed to build the new kitchen facility. The chairman, an RSVP 
Volunteer, alone donated over 900 recorded hours to the 
project. In addition to research and fund-raising, the 
volunteers also contributed ``hands-on'' work in the building 
and ground preparation. Relationships were developed between 
local food businesses and the Community Food Pantry who offered 
to provide ongoing food donations to the ``Kitchen.'' The new 
state of the art kitchen facility opened for business in July 
of 1997.

 Helping to Rid Communities of Hazardous Waste--Area I Agency of Aging/
                  Volunteer Center--Eureka, California

    A large freighter ran into a dock in November 1997, causing 
4,500 gallons of crude oil to spill in to the bay. This 
hazardous waste disaster was a threat to the wildlife and 
marine life. The Volunteer Center/Retired and Senior Volunteer 
Program acted as the disaster volunteer management center, 
recruiting community assistance by preparing public service 
announcements for radio and television. The Volunteer Center/
RSVP and the State Department of Fish and Game and the County 
Office of Emergency Services worked together to ascertain 
immediate cleanup needs and mobilize resources. The result of 
the volunteers work shows that 200 shore birds were saved, 79 
volunteers in total were successfully recruited from the 
community, 40 volunteers helped at the Marine Wildlife 
Facility, and 12 volunteers were recruited to join the 
Volunteer Center/RSVP program to serve as disaster preparedness 
volunteers.

 Helping to Immunize Children--RSVP of Southeastern Wyoming--Cheyenne, 
                                Wyoming

    The required State Of Wyoming vaccinations for seventh 
graders include Hepatitis B series, Measles, Mumps, Rubella and 
a tetanus booster. It is estimated that 30,000 children in 
Wyoming need the immunization series. To date, 4 RSVP 
volunteers have contributed 288 hours of service to a school 
clinic set up by the City/County Health Department. With the 
help of RSVP volunteers, the school clinic immunized 1,020 
students this past year. ``The City County Health Department 
values the time and talent provided by the RSVP volunteers,'' 
states Connie Diaz, Director of City/County Health Department 
in Cheyenne.




               ITEM 19--FEDERAL COMMUNICATIONS COMMISSION

                              ----------                              


     Summary of 1997 and 1998 Activities Affecting Older Americans

    This report summarizes the major 1997-1998 activities of 
the Federal Communications Commission (``FCC'' or ``the 
Commission) affecting older Americans.
    A number of these actions were taken to implement statutory 
requirements or Commission policies on behalf of the general 
public and all telecommunications consumers, including the 
millions of Americans with some kind of hearing, vision, speech 
or other disability. rather than specifically on behalf of 
older Americans. However, since many older Americans may be in 
declining health, e.g., losing hearing or vision, or be 
especially vulnerable to unscrupulous business practices in 
telecommunications services, older Americans have benefited 
from the various disability-related and consumer protection 
activities describedbelow.
Disabilities Issues Task Force
    The Disabilities Issues Task Force was formed in March 1995 
to serve as the agency's main point of contact and coordination 
on all disability access initiatives. The Task Force works to 
ensure that the Commission promotes access to 
telecommunications by individuals with disabilities, including 
many older Americans.
    In the past two years, the Commission has made significant 
efforts to strengthen the cross-agency Disabilities Issues Task 
Force in order to highlight, among other things, the importance 
of making technology available to everyone. The Task Force was 
central in providing advice and expertise on major rulemaking 
proceedings, including proceedings that did the following: 
strengthened closed captioning rules so that persons who are 
deaf or hard-of-hearing will have access to more programs on 
television; proposed new rules for telecommunications relay 
services and proposed to require the provision of speech-to-
speech relay service; advocated that industry provide solutions 
to the problem of compatibility between digital wireless phones 
and TTYs; and proposed rules to make telecommunications 
services and equipment accessible to persons with disabilities.
    The Task Force has worked to raise the profile of the needs 
of persons with disabilities in the telecommunications area 
through organizing speeches, statements, and demonstrations at 
the FCC of equipment and how persons with disabilities would 
benefit from it. We have also sought to ensure that the voices 
of people with disabilities and their advocates are heard at 
the FCC.
    The Disabilities Issues Task Force is also working toward 
proper implementation and compliance with Section 508 of the 
Rehabilitation Act, which imposes accessibility requirements on 
electronic and information technology developed, maintained, 
procured, or used by federal agencies. The Task Force also is 
making efforts to improve the Commission's compliance with 
Section 504.
Section 255 (Access to Telecommunications)
    Section 255 of the Communications Act, added by the 
Telecommunications Act of 199 provides that telecommunications 
equipment manufacturers and service providers must make their 
equipment and services accessible to those with disabilities, 
to the extent that it is readily achievable to do so. The 
Commission proposed rules to implement this section in 1998. We 
expect final rules to be adopted in 1999.
Common Carrier Bureau (CCB)
    Some of the most important policy actions of the FCC 
affecting older Americans have been initiated by 
theCommission's CCB. This bureau regulates wireline 
communications in the telecommunications industry.
    Hearing Aid Compatibility.--An example of a CCB issue that 
affects senior citizens is hearing aid compatibility and volume 
control (HAC/VC). This subject is of special relevance to older 
Americans because many people who lose their hearing later in 
life depend on HAC telephone with VC to be able to use the 
telephone.
    The Hearing Aid Compatibility Act of 1988 required the 
Commission to establish rules that ensure reasonable access to 
telephone service by persons with hearing disabilities, and to 
seek to eliminate the disparity between hearing aid users and 
non-users in obtaining access to the telephone network.
    To resolve various compliance issues, and recommend new 
rules to replace original rules suspended in 1993, the 
Commission in the spring of 1995 established a 19-member 
Hearing Aid Compatibility Negotiated Rulemaking Committee. Its 
members represented all interested parties, including the 
Commission, telephone equipment manufacturers, employers, 
hospitals, nursing homes, hotels and motels and persons with 
disabilities, including some older Americans.
    On July 3, 1996, the Commission adopted final rules, many 
of which were recommended to it by the rulemaking committee in 
its report to the FCC of August, 1995. In general, the FCC's 
final rules required eventually all wireline telephones in 
workplaces, in confined settings (e.g., hospitals and nursing 
homes) and in hotels and motels to be hearing aid compatible 
according to certain timelines. In addition, telephones that 
are newly acquired or are replacement telephones eventually 
will have to have volume control features. Workplaces with 
fewer than 15 employees were exempted, except for telephones 
provided directly for employees with hearing disabilities. 
Finally, the date of November 1, 1998, adopted by the FCC in 
July 1996 for implementation of the volume control features in 
all telephones manufactured or imported for use in the United 
States, was later extended on reconsideration to January 1, 
2000.
    Slamming and Cramming.--``Slamming'' is the practice of 
switching a person's long distance telephone company without 
the customer's permission. ``Cramming'' is the inclusion of 
unauthorized or unexplained charges on a person's phone bill. 
Older Americans are especially vulnerable to such anti-consumer 
activity. In 1998, the Commission proposed new rules to ensure 
that carriers do not use misleading or confusing forms that 
consumers sign to change their long distance service, to ensure 
that consumers do not pay any charges to a slamming company. 
These rules will be effective in May, 1999. CCB has 
significantly stepped up enforcement actions against slamming 
and cramming. With over $8.4 million of fines assessed and 
another $8 million pending.
    Truth In Billing.--To further protect customers, the Common 
Carrier Bureau has initiated a rulemaking to require telephone 
bills to be clearer and better organized, and to highlight new 
charges. This will give customers the tools they need to make 
sure they have not been improperly charged.
    Consumer Information. The bureau continues to produce 
customer information to help all customers better understand 
and make choices regarding phone service. Information is 
available on how to select a carrier, how to get the best 
rates, and on which companies have the worst complaint records.
    Universal Services.--The Telecommunications Act of 1996 
established certain principles for the Commission to follow in 
revising and expanding the scope and definition of ``universal 
service'' in telecommunications services for all Americans, 
including older Americans. Among the explicit provisions 
established by this landmark legislation were financial support 
in access to advanced telecommunications services for health 
care providers, including hospitals, health clinics, and 
libraries, all of which serve many older Americans.
    Lifeline/Link Up Services.--The Commission has made 
significant changes to its Lifeline and Link Up programs. The 
federal lifeline program provides between $3.50 and $7 per 
month to reduce low-income consumers' monthly telephone bills. 
The amount of federal support will vary depending on decisions 
made by the local state commission. All eligible low-income 
consumers receive at least a $3.50 reduction on their telephone 
bill from the federal universal service program. The reduction 
applies to a single telephone line at a qualifying consumer's 
residence.
    Lifeline consumers also can receive toll blocking (which 
prevents the placement of any long-distance calls) or toll 
control (which limits the amount of long-distance calls to a 
pre-set amount selected by the consumer).
    Link Up offers eligible low-income consumers a reduction in 
the local telephone company's charges for starting telephone 
service (the reduction is one-half of the telephone company's 
charge, or $30, whichever is less); and a deferred payment plan 
for the remaining charges.
Wireless Telecommunications Bureau
    In 1997-98, the Wireless Telecommunications Bureau 
undertook a number of activities that affected older Americans:
    Wireless Enhanced 911.--In 1997, the Commission reaffirmed 
its commitment to the rapid implementation of the technologies 
needed to bring emergency assistance to wireless callers 
throughout the United States, and modified its wireless 911 
rules to require covered wireless carriers to transmit all 
wireless 911 calls to public safety authorities without respect 
to a carrier's call validation process. In addition, the 
Commission has been working with individuals representing the 
wireless industry (carriers and manufacturers), manufacturers 
of Text Telephone (TTY) equipment, emergency and relay service 
providers, and consumer organizations that represent 
individuals who are deaf or hard-of-hearing, to develop 
solutions so that digital wireless systems will be able to 
comply with the Commission's requirement that wireless carriers 
have thecapability of transmitting 911 calls from individuals 
using TTYs.
    Spectrum for Public Safety.--The Wireless Bureau authored a 
number of items to promote the use of radio by public safety 
entities. The primary item was a Report and Order which adopted 
service rules for the new 700 MHz public safety band. The 
bureau also has chartered a public safety advisory committee to 
assist the Commission in working with public safety agencies at 
all levels on matters of equipment upgrading and compatibility.
    Universal Licensing Service.--The bureau is in the process 
of adopting a universal licensing system, which will greatly 
enhance the ability of the public to file applications and 
access licensing data remotely.
    Billing and Disabilities Access Issues.--The bureau's 
Enforcement Division has resolved numerous complaints and 
inquiries of interest to older Americans, including wireless 
billing issues and disabilities access issues.
Cable Services Bureau
    Video Accessibility.--Older Americans with hearing and 
sight disabilities can now be helped by a number of 
technologies related to television, especially closed 
captioning and video description. These two technologies are 
designed to increase ``video accessibility.'' Closed captioning 
provides important benefits primarily for individuals with 
hearing disabilities by displaying the audio portion of a 
television signal as printed words on the television screen. 
Video description benefits individuals with visual disabilities 
by providing audio descriptions of a program's key visual 
elements that are inserted during the natural pauses in the 
program's dialogue.
    In the 1996 Act, Congress directed the Commission to ensure 
that closed captioning is available to persons with hearing 
disabilities and to assess the appropriate method for phasing 
video description in the marketplace to benefit persons with 
visual disabilities. As a first Step, Congress required the 
Commission to submit a report addressing these issues. The 
Commission submitted its Report to Congress on July 29, 1996.
    Closed Captioning.--The 1996 Act also directed the 
Commission to prescribe rules and implementation schedules for 
the closed captioning of video programming, regardless of the 
entity that provides the programming to consumers or the 
category of programming. In August 1997, the Commission 
established rules to ensure that video programming is made 
accessible through closed captioning. In September 1998, in 
response to petitions for reconsideration, the Commission 
modified and clarified the closed captioning rules to better 
comply with the statutory mandate to provide accessibility to 
persons with hearing disabilities. The rules establish 
timetables that gradually increase the amount of closed 
captioning provided on programs. For programming first 
published or exhibited on or after January 1, 1998, the 
effective date of the rules, the Commission established 
benchmarks to be met every two years until 100% of such 
programming is required to be captioned as of January 1, 2006. 
For programming first published or exhibited prior to -January 
1, 1998 (``pre-rule programming''), mandatory captioning is 
phased-in over a ten year. As of January 1, 2008, the end of 
this transition period, 75% of the pre-rule programming on each 
channel must include closed captioning. The rules also require 
video programming distributors (e.g., television station 
operators or cable operators) to generally pass through to 
consumers any captions they receive with the programming they 
distribute. Video programming distributors also must continue 
to provide captioned programming at substantially the same 
level as the average level of captioning that they provided 
during the first six months of 1997, even if that amount of 
captioning exceeds the requirements under the transition 
schedules.
    Video Description.--The 1996 Act required the Commission to 
report to Congress on appropriate methods and schedules for 
phasing video description into the marketplace and other 
technical and legal issues related to the widespread deployment 
of video description. Video description is a method of making 
video programming accessible to persons with visual 
disabilities. It adds narration about actions taking place or 
other aspects of a program (e.g., a description of the set), 
that are not obvious from the existing dialogue. The 
descriptions are inserted during pauses in the dialogue.
    In the July 1996 Report to Congress, the Commission 
indicated that there is a lack of experience with developing 
and assessing the best means for promoting its use since it is 
a newer service. Since the record on video description before 
the Commission at the time of the 1996 Report was insufficient 
to assess appropriate methods and schedules for phasing in 
video description, the Commission sought additional information 
and comment in the context of the 1997 Annual Report to 
Congress on the Status of Competition in Markets for the 
Delivery of Video Programming. With respect to video 
description, in the 1997 Annual Competition Report, the 
Commission found that the most widespread video 
descriptiontechnology uses the second audio programming 
(``SAP'') channel, a subcarrier that allows each video 
programming distributor to transmit a second soundtrack. 
Continued public funding could foster the development of video 
description services to the point where widespread 
implementation of video description could become feasible, and 
could ultimately create a commercial market for video 
description. The advances of digital technology may allow the 
development and expansion of video description to occur more 
quickly than occurred in the case of closed captioning.
    Senior Citizen Discounts.--Senior citizen discounts benefit 
older Americans who often have limited incomes. By enacting 
Section 623(e)(1) into its system of rate regulation pursuant 
to the 1992 Cable Act, Congress intended to encourage cable 
operators to offer, and to continue to offer through existing 
franchise agreements, reasonable discounts to senior citizens 
or other economically disadvantaged groups. In response to a 
recent Petition for Declaratory Ruling, the Commission upheld a 
previously issued informal letter ruling stating that it would 
not interfere with senior citizen discounts previously allowed 
for in local franchise agreements.
Office of Engineering and Technology (OET)
    OET has taken action to prevent radio frequency 
interference to medical telemetry devices from digital 
television and land mobile services. Medical telemetry devices 
are typically used in health care institutions to monitor the 
vital signs of critically ill patients, many of whom are 
elderly. OET worked closely with the Federal Drug 
Administration (FDA), the medical community and equipment 
manufacturers to identify new, interference- free spectrum for 
the next generation of medical telemetry devices.
    OET is in the process of considering steps that may be 
necessary to ensure that personal computers equipped with TV 
tuners, and new digital television receivers, are capable of 
displaying closed captions. If appropriate, rule making to 
address these matters may be initiated in the future.
    OET continues to assist other Commission offices on issues 
of particular interest to the elderly. OET has, for example, 
provided extensive engineering support to the Wireless 
Telecommunications Bureau in the effort to ensure that wireless 
radio services are compatible with TTY services. OET also has 
provided engineering support for the Commission's task force 
addressing implementation of Section 255 of 
theTelecommunications Act of 1996, which requires that 
telecommunications services are accessible to the disabled.
Office of Managing Director/Personnel
    As part of the Commission's ongoing efforts to recruit from 
many diverse sources, the Commission does seek out older 
Americans by, for example, sending vacancy announcements to 
organizations whose membership consists of older Americans.
Office of Public Affairs (OPA)
    OPA continued during 1997-98 to expand its outreach to 
older Americans, particularly its effort to help older 
Americans participate in the expanding telecommunications 
revolution, while protecting themselves against fraudulent 
activity that occurs.
    OPA has an aggressive campaign to distribute print 
literature and videos, instructing all Americans, including 
senior citizens, on how to avoid misleading schemes, and what 
to do if one becomes a victim of these schemes. OPA makes 
available information about the Commission's National Call 
Center, and on how to file a complaint with the Commission. 
This material is distributed to senior citizen organizations, 
so that those organizations can, in turn, redistribute it to 
their members. This information also is directly distributed to 
senior citizens through the community meetings on telephone-
related topics in which OPA participates, and through the 
Commission's web site.
    For example, information about the Cable Consumer Bill of 
Rights has been distributed by OPA to senior citizen 
organizations, as has information to help seniors protect 
themselves against slamming and cramming. OPA also distributes 
information in multiple languages, to reach senior citizens 
from various cultures that make up the American fabric.
Additional Information
    Anyone who wishes more information on any of these 
activities can contact the Commission through the Office of 
Public Affairs at 202/418-0500, the Commission's National Call 
Center at 1-888-CALL-FCC (225-5322), or the Commission's web 
site on the Internet at www.fcc.gov. For more information about 
this report, feel free to contact Greg Lipscomb at the 
Commission's Office of Legislative and IntergovernmentalAffairs 
(OLIA), 202/418-1900, fax 202/418-2806.

                   ITEM 20--FEDERAL TRADE COMMISSION

                              ----------                              


                            1997-1998 REPORT

 Staff summary of Federal Trade Commission activities affecting older 
                               Americans

    The Federal Trade Commission strives to protect the ability 
of consumers to make informed choices from a competitive range 
of goods and services. Consumers lose the ability to make fully 
informed choices when they are deceived, strong-armed or given 
only half of the truth about a product or service. They may 
lose a competitive range of options through the interference of 
things like price-fixing agreements or anticompetitive mergers. 
Some of the Commission's work has involved particular practices 
or industries that are of special significance to older 
consumers. This report describes those aspects of our work from 
calendar years 1997 and 1998. The first section of the report 
describes Commission efforts to eliminate frauds that target 
older consumers. The second section reports Commission 
activities relating to the health concerns of senior citizens, 
since older Americans often face increased health problems and 
therefore may be vulnerable to injury from misleading health 
claims made about products or services or from anticompetitive 
conduct by companies in the health care markets. The third 
section discusses Commission law enforcement activities of 
particular importance to older consumers in other areas. The 
final section of the report addresses the Commission's consumer 
education initiatives that may be of particular benefit to 
older consumers.

                           fraud initiatives

    In 1997 and 1998, the frauds that most affected older 
Americans included telemarketing fraud generally, bogus prize 
promotions, investment frauds, charitable solicitations, 
recovery rooms, credit fraud, cross-border fraud and internet 
fraud. This Report discusses each below.
Telemarketing fraud
    The ``Script'': Well, isn't that a coincidence, Mrs. 
________[Name]________. My grandmother lives in 
________[City]________, too! Now I'm earning money for college 
by selling magazines. If you would just give me your checking 
account number, then I'll send you complimentary copies of your 
favorite magazines to try.
    Deceptive telemarketing continues to plague the elderly. 
The FTC has taken an international and collaborative approach 
to attacking this problem. First, as described in more detail 
later in this report, the Commission took strides toward an 
ambitious goal--a telemarketing database collecting complaint 
data from law enforcement and consumer protection offices in 
the United States and Canada. ``Consumer Sentinel'' now 
contains approximately 150,000 complaints contributed by more 
than 150 law enforcement offices. The FTC and others can 
identify high impact law violations, and target law enforcement 
efforts accordingly. This enhances our ability to protect the 
elderly, who are often the intended targets of fraudulent 
telemarketers.\1\ Telemarketers find older citizens to be 
attractive targets, knowing that older persons may have 
significant assets from a lifetime of saving, including self-
directed retirement accounts. These telemarketers also know 
that the victim may be ashamed of falling for a scam, and often 
will not tell friends and family about their losses and will be 
desperate to make the money back. The telemarketers then have 
other con artists ``reload'' the victim with more offers until 
the victim has no more to give, monetarily or psychologically.
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    \1\ Consumers complaining to the FTC about telemarketing activity 
often indicate that they are older consumers. Older Americans account 
for 60 percent of the fraud victims who call the National Consumers 
League's National Fraud Information Center. The FBI estimates that as 
many as 80 percent of the victims are older consumers.
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    The Telemarketing Sales Rule (TSR), 16 CFR Part 310, was 
promulgated by the FTC as directed by Congress in the 
Telemarketing Consumer Fraud and Abuse Prevention Act of 1994, 
15 U.S.C. Sec. 6101. The TSR imposes general requirements for 
all telemarketers and addresses specific fraudulent practices. 
Under the TSR, telemarketers must promptly disclose certain 
information in telephone calls to consumers, including their 
identities, the fact that they are making a sales call, and the 
nature of the goods or services they are offering. The Rule 
also prohibits telemarketers from misrepresenting the services 
or products they sell and from debiting a consumer's checking 
account without the consumer's express authorization. The TSR 
also outlaws a number of telemarketing practices such as credit 
card laundering. In addition to addressing the conduct of 
telemarketers, the TSR also bars third parties from providing 
substantial assistance to telemarketers--specifically, 
assistance such as providing consumer lists, marketing 
materials, or appraisals of investment offerings--when the 
person ``knows or consciously avoids knowing'' that the 
telemarketer is engaged in unlawful conduct. Violations of the 
TSR may result in civil penalties of as much as $11,000 per 
violation, and consumers who have lost over $50,000 are able to 
sue under the TSR to recoup their losses.
    Using the Telemarketing Sales Rule and the data from 
Consumer Sentinel, the FTC and state Attorneys General continue 
to bring individual fraudulent telemarketers into federal court 
to face a variety of allegations. In addition, the Commission 
continues to use both the Rule and its FTC Act authority to 
conduct coordinated law enforcement ``sweeps,'' working with 
state Attorneys General, state securities officials, the FBI, 
the U.S. Postal Service, and other agencies. The Commission 
continues to forge new alliances to coordinate actions against 
fraudulent telemarketers. In many cases, once the FTC concludes 
its civil case against telemarketers, state and federal 
criminal prosecutors bring criminal charges against the FTC 
defendants.\2\ During 1997 and 1998, the Commission brought 
over 110 federal court actions stopping fraudulent operations 
that cost consumers almost $450 million a year and over $1.2 
billion over the lives of these schemes.
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    \2\ Following the Commission's civil action against a nest of 
fraudulent business opportunity sellers in FTC v. Southwest 
Necessities, Inc., No. 94-6848-Civ (Hurley) (SD Fla.), the U.S. 
Attorney for the Southern District of Florida brought criminal charges 
against the same defendants and their cohorts, including ``singers'', 
paid references, who hooked victims into this scam. The same one-two 
punch resulted following our case against deceptive timeshare reseller 
Ernie Taft. FTC v. Gold Crown Express, 4:97-0532-12 (D. S.C.). The FTC 
action resulted in a judgment of more than $3 million against the 
defendant. Following the filing of our suit, the U.S. Attorneys in 
South Carolina and Colorado each also obtained convictions under mail, 
wire and bank fraud statutes, leading to the incarceration of Mr. Taft.
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Prize promotions
    Older Americans are often the targets of prize promotions, 
an egregious type of fraud usually conducted through 
telemarketing or direct mail. In 1997, more than 42% of the 
complaints logged into Consumer Sentinel pertained to prize 
promotions, sweepstakes, and gifts. In response to numerous law 
enforcement actions by the FTC and its partners against 
deceptive direct mail promotions, the percentage of complaints 
about prize promotions dropped in 1998 to 24% of the complaints 
in Consumer Sentinel. In a typical scheme, telemarketers make 
unsolicited calls or mail notification cards to consumers 
stating that they have won a valuable prize, such as a 
vacation, car, cash or jewelry. Consumers are told that they 
should purchase some product such as vitamins, cosmetics or 
magazine subscriptions and they will then receive the prize.\3\ 
The TSR requires that, in any prize promotion, telemarketers 
must disclose that no purchase or payment is required to win a 
prize, and must provide information about the odds of winning 
the prize and how to participate in the promotion at no cost. 
16 CFR Sec. 310.3(a)(1)(iv).
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    \3\ Commission records indicate that some consumers have actually 
lost tens of thousands of dollars to prize promotion telemarketers.
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    In both 1997 and 1998, the FTC led a broad based coalition 
of private and public sector partners in an unprecedented law 
enforcement initiative cracking down on companies that used 
deceptive mailpieces, e-mails, and unsolicited faxes to obtain 
payment for prize promotions from duped consumers, many of whom 
were senior citizens. The Commission's partners included the 
U.S. Postal Inspection Service, the American Association of 
Retired Persons, the National Association of Attorneys General, 
the Council for Better Business Bureaus, the Yellow Pages 
Publishers Association, and all 50 states. The consumer and 
business education campaign featured a bandit-in-the-mailbox 
logo, with the message ``Boot the Bandit From the Mailbox.'' 
More than one hundred law enforcement actions were brought by 
the law enforcement entities as part of Project Mailbox.

Investment frauds

    Telemarketer: You're investing in the latest technology for 
the future of America. It's simple: you invest today and I 
guarantee a 100% return in six months or you get your money 
back.
    Fraudulent telemarketers are eager to cheat senior citizens 
out of lifetime savings or to make false promises of 
exceptionally high investment returns. Older Americans who are 
anxious about financing their retirement are particularly 
vulnerable to these investment pitches. The stock market boom 
of the mid-1990's also led many investors to seek and expect 
high returns. Fraudulent telemarketers were only too happy to 
respond to these desires, peddling bogus investment 
opportunities ranging from gemstones, gold and silver mining, 
and oil drilling investments to telecommunications, 
entertainment industry and Internet related businesses. The 
telemarketers invariably assured consumers that they would 
realize a substantial return on their investment, usually in a 
short period of time and with minimal risk. The amounts of 
individual losses often were quite high, sometimes $5,000 to 
$20,000 or more per person. In one case, an 83 year old widow 
lost over $70,000 to a scam hawking investments in 
infomercials. Older citizens taken by these scams often are not 
in a position to recoup their losses.
    ``Field of Schemes'' Investment Fraud Sweep--In 1997, the 
Commission brought coordinated actions against nine alleged 
purveyors of investment and pyramid frauds who touted 
everything from gold-silver mines to Internet ``virtual 
shopping malls.'' In addition to the FTC actions, the North 
American Securities Administration (NASAA), state securities 
regulators in 21 states, the SEC and CFTC, brought over sixty 
law enforcement actions. The FTC actions stopped over $150 
million in fraudulent sales from these bogus offerings. Two of 
the FTC cases involved supposed profits to be made through 
alleged pyramid schemes. In one case, Rocky Mountain 
International Silver and Gold, Inc., the alleged scheme 
masqueraded as a multi-level marketing operation selling silver 
and gold coins through direct mail and then the Internet. In 
the other case, JewelWay, the defendants made deceptive 
earnings claims inducing an estimated 150,000 consumers to 
invest an average of $1,000 with a chance to earn up to $2,250 
a week in an illegal multi-level marketing plan to sell fine 
jewelry. In the FTC's case Intellicom Services, Inc., 12 
corporate defendants and 10 individual defendants promised 
enormous profits from Internet access businesses and Internet 
shopping malls. The FTC alleged that the telemarketers sold 
over $30 million in this scheme. In the Dayton Film matter, the 
FTC alleged misrepresentations in the sale of movie production 
investments with a claim of profits of 500 percent on the 
films. Another case, Coastal Gaming, involved investment in a 
casino gambling ship venture with expected returns of 100 to 
300 percent. Other cases involved the sale of investments in 
gold and silver mines (Tippecanoe), gemstones (Windsor & 
White), and oil and gas drilling (Gulfstar) and rare stamps 
(Equifin). The courts in eight of the cases issued injunctive 
relief that included asset freezes and the appointment of 
receivers. Final court orders for permanent injunctions and 
consumer redress have been entered against defendants in the 
Dayton Films, JewelWay, Tippecanoe, Coastal Gaming, Equifin, 
and Gulfstar matters, the Windsor & White and Intellicom 
matters are partially settled with permanent injunctions 
against some defendants, and the Rocky Mountain matter is still 
pending.
    Operation Risky Business.--In August 1998, the Commission, 
together with the SEC and North American Securities 
Administrators Association, coordinated a federal and state 
initiative aimed at entertainment and media scam promoters 
peddling movie, gambling, infomercial, and Internet business as 
investments. The Commission, SEC, and 20 states filed over 60 
law enforcement actions against telemarketing companies. These 
companies had taken in more than $100 million from consumers 
touting bogus investments. As a result of Operation Risky 
Business, the FTC and its partners launched an intensive 
consumer education effort and received extensive nationwide 
press coverage of this operation.
    Miscellaneous Investment Frauds.--The Commission followed 
through on cases reported in 1995 and 1996 with settlements in 
several telecommunication fraud cases. In Falconcrest, the FTC 
obtained a permanent injunction and over $1.2 million in 
consumer redress orders. In Metropolitan Communications, the 
Commission obtained a permanent injunction and over $1.7 
million in redress judgments. In our Operation Roadblock cases 
against purveyors of investments in Federal Communication 
Commission wireless licenses, we have obtained permanent 
injunctions and over $5.8 million in redress judgments against 
six sets of defendants. Finally, the Commission obtained a 
settlement in an earlier case against National Art Publishers, 
a movie poster investment case, for a permanent injunction and 
redress in the amount of $150,000.

Charitable solicitations

    In April 1997, the Commission announced the most 
comprehensive action ever taken against charity fraud--
``Operation False Alarm.'' In this sweep, the Commission and 
officials from all 50 states conducted a law enforcement sweep 
and public educational campaign targeting ``badge fraud.'' In 
this type of scam, telemarketers (also known as ``telefunders'' 
in the nonprofit sector) call senior citizens and other 
consumers to solicit donations in the name of some real or 
fictitious charity. The schemers often misrepresent that they 
are local police officers or fire fighters, when in fact they 
are professional solicitors. Also, the telemarketers frequently 
misrepresent where consumers' donations will be used and state 
that donations will go toward local causes or benefits like 
bullet proof vests for the local police force. Donations seldom 
make it to these causes. Rather, most donations are taken by 
the solicitors themselves. Overall, ``Operation False Alarm'' 
included 57 law-enforcement or regulatory actions against 
various telefunders. The Commission itself filed five cases in 
federal court and settled one administrative action.
    In the fall of 1998, the Commission followed ``Operation 
False Alarm'' with another comprehensive sweep, ``Operation 
Missed Giving.'' This sweep targeted not only ``badge fraud,'' 
but also misleading solicitations made on behalf of purported 
veterans groups, children's health organizations, and other 
charitable causes. ``Operation Missed Giving'' involved 39 law-
enforcement or regulatory actions aimed at fraudulent 
fundraising, including five federal court actions filed by the 
FTC. The Commission and its partners timed the project to 
precede the holiday season when many consumers receive requests 
for money, and the project included a campaign to educate the 
public about wise giving.
    On the day that ``Operation Missed Giving'' was announced, 
AARP also coordinated and conducted a ``reverse boilerroom.'' 
Volunteers from AARP and representatives from the FTC, the 
Department of Justice, the FBI, and the National Association of 
Attorneys General called previous victims of telemarketing 
fraud throughout the day. Working from a prepared script, they 
gave tips about how to avoid certain types of charity fraud and 
what to do to make the most of charitable donations. 
Participants in the ``reverse boilerroom'' made over 4500 phone 
calls in the span of nine hours and reached more than 1100 
telemarketing fraud victims.

Recovery rooms

    In a particularly insidious type of telemarketing, 
``recovery room'' con artists prey on persons who have already 
been victimized by telemarketers. Telemarketers obtain the 
names and addresses of these victims by purchasing, or trading 
for, lists of victims from other fraudulent operations. The 
recovery room salesperson then falsely promises the victims 
that, for a fee, the telemarketer can help them obtain the 
promised prize or money lost in a previous telemarketing scam. 
Often, telemarketers represent themselves as governmental 
entities or as agents hired to locate victims and distribute 
money back to them. After the consumer sends in the requested 
fee, the company invariably fails to deliver the refund or 
prize, thereby exacerbating the victim's losses. In past 
Commission recovery room cases, older consumers are frequently 
specific targets. In one case, 81% of the consumers were at 
least 65 years of age and 23% were at least 80 years old. In 
another case, 82% were at least 65 and 32% were at least 80 
years old.
    In a case begun in 1995, the defendant, Meridian Capital 
Management, allegedly made unsolicited telephone calls to 
consumers who had been victims of various investment frauds, 
often involving Federal Communications Commission wireless 
telecommunications licenses. For a fee of 10% of the consumer's 
previous investment, Meridian claimed it could recover all or a 
substantial portion of the money invested. In 1996-1997, the 
Commission obtained default judgments for $1.6 million against 
Meridian and several individual defendants, and stipulated or 
court-ordered permanent injunctions were entered against all 
defendants. With Commission staff acting as Special Assistant 
U.S. Attorneys, the U.S. Department of Justice in 1998 obtained 
indictments charging 17 defendants involved in the Meridian 
scam with the crimes of conspiracy, mail fraud, and wire fraud. 
In addition, seven of the defendants were charged with money 
laundering. Eleven of these defendants have pled guilty and are 
awaiting sentencing.
    Our law enforcement efforts and the deterrent effect of the 
TSR have paid off with respect to the incidence of this type of 
conduct. The volume of consumer complaints concerning recovery 
rooms logged into Consumer Sentinel in 1998 dropped to 187, 
dramatically less than the 869 complaints regarding this 
conduct recorded in 1995, despite the fact that the complaint 
system now contains complaints from far more law enforcement 
entities.

Credit fraud

    Credit-related scams also claim hard earned dollars of 
older American who get taken in by bogus credit repair services 
and advance fee loan schemes.
    Bogus credit repair firms promise that, for a fee, they 
will remove negative, though accurate, information contained in 
consumers' credit reports. Since credit reporting bureaus 
legally may include verifiable, negative information in 
consumers' reports for a period of seven years, and 
bankruptcies for ten years, credit repair companies cannot 
deliver the service they promise. The TSR prohibits credit 
repair companies from obtaining payment until six months after 
they have, in fact, fulfilled their promise to clean up credit 
histories. This year the Commission continued its efforts 
against credit repair schemes, announcing a nationwide 
crackdown called ``Operation Eraser.'' In this joint federal/
state effort legal action was taken against 31 different 
companies. The FTC itself handled cases against 20 companies. 
This law enforcement effort also served as the platform for a 
consumer education program on how to avoid such scams which is 
detailed at the end of this report.
    In 1998, the Commission also brought complaints against two 
different companies, alleging that the companies advertised low 
interest rate debt consolidation loans and in return provided 
minimal bill paying services in return for advance fees.

Cross-border fraud

    ``Cooperative and successful law enforcement activities 
with our Canadian colleagues in the past few years are 
encouraging. Nevertheless, cross-border scams seem to be a 
growth industry.'' Commissioner Orson Swindle, November 10, 
1998 speech.
    In the mid-1990's, senior citizens in the U.S. began to 
receive a growing number of solicitations from fraudulent 
telemarketers operating out of Canada. Between 1996 and 1997, 
complaints about Canadian telemarketers rose from 7% to 23% as 
a proportion of the total number of telemarketing complaints 
received by the FTC. In 1998, complaints about Canadian 
companies rose to 30% of the total complaints in Consumer 
Sentinel. In the last two years, the Commission has redoubled 
its efforts to fight cross-border telemarketing fraud and raise 
the profile of the problem. During high-level diplomatic 
meetings, the Commission was instrumental in putting 
telemarketing fraud on the agenda of Prime Minister Chretien 
and President Clinton during their meeting in the spring. 
Commission staff then actively participated in the U.S.-Canada 
Bilateral Working Group on Cross-Border Telemarketing Fraud, a 
task force formed at the direction of the two leaders.
    The Bilateral Working Group met in June and September of 
1997, and discussed issues ranging from extradition and mutual 
legal assistance treaties, to legal reforms and information-
sharing. Over that same period, Commission staff discussed 
enforcement and diplomatic goals with U.S. counterparts at the 
State Department, the Justice Department, the FBI, the Federal 
Communications Commission, the U.S. Postal Inspection Service, 
U.S. Customs, and the National Association of Attorneys 
General. During the summer of 1997 Commission staff also joined 
small U.S. delegations traveling to meet federal and provincial 
law enforcement officials in Canada. In November 1997, the 
Bilateral Working Group issued a comprehensive report entitled 
``United States-Canada Cooperation Against Cross-Border 
Telemarketing Fraud.'' The report was drafted with significant 
input from the FTC and outlined the scope of cross-border 
telemarketing fraud, as well as a number of solutions and 
policy recommendations.
    Among its findings, the Bilateral Working Group emphasized 
the need to share more information among U.S. and Canadian law 
enforcement officials. Quickly addressing this need, the 
Commission constructed Consumer Sentinel, the first electronic 
fraud database available to law enforcement on both sides of 
the border. Announced in December of 1997, Consumer Sentinel 
allowed law enforcement officials to access consumer complaints 
quickly and easily through a secure Internet connection.\4\ 
Complaints came from a variety of organizations including the 
FTC, the National Fraud Information Center (a project of the 
U.S. National Consumers League) and PhoneBusters, a Canadian 
project operated by the Royal Canadian Mounted Police and the 
Ontario Provincial Police.
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    \4\ Consumer Sentinel is not open to the general public. Access to 
the web site is limite authorized law enforcement members who are given 
unique user names, passwords, and robust encryption software.
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    Throughout 1998, Consumer Sentinel expanded rapidly. The 
database now contains almost 150,000 fraud complaints, 
including thousands of new complaints contributed by local 
Better Business Bureaus from across the country.\5\ Over 150 
law enforcement offices from across the U.S. and Canada are now 
members of Consumer Sentinel, including the Department of 
Justice, numerous U.S. Attorney offices, the FBI, the U.S. 
Postal Inspection Service, state Attorneys General and state 
securities offices, local prosecutors and sheriffs, as well as 
the Royal Canadian Mounted Police, and other Canadian law 
enforcement. Besides complaint data, Consumer Sentinel has 
expanded to include law enforcement ``Alerts,'' a library of 
sample pleadings to use in fraud cases, lists of law 
enforcement contacts, law enforcement publications like 
``FraudBusters,'' and a database listing 12,000 undercover 
tapes collected by the San Diego Boiler Room Task Force.
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    \5\ To date, over 30 local Better Business Bureaus have agreed to 
contribute their complaints to Consumer Sentinel, including the BBB's 
from Seattle, Chicago, Dallas, and Washington, DC.
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    In addition to building and maintaining Consumer Sentinel, 
the Commission has taken a number of law enforcement actions 
against cross-border telemarketing fraud in 1997 and 1998. The 
Commission continued to attack the problem of advanced fee 
loans, and in January 1998, announced actions brought by the 
Commission and several state agencies against 37 more 
perpetrators of this type of fraud. Later that year, the 
Commission obtained a settlement against Tracker Corporation of 
North America over allegations that they had operated out of 
the U.S. and Canada and misrepresented their credit card 
protection services.
    In 1997 and 1998, the Commission also targeted the growing 
problem of illegal foreign lottery solicitations. Not only did 
the Commission sue peddlers of foreign lottery tickets 
directly,\6\ but the Commission also targeted U.S. card 
processors alleged to have provided assistance to lottery 
ticket traffickers.\7\ Realizing the need for criminal as well 
as civil law enforcement in this area, the Commission's Seattle 
Regional Office now has a staff member prosecuting lottery 
scams as an appointed Special Assistant U.S. Attorney.
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    \6\ FTC v. Win USA Services Ltd., et al., C98-1614Z (W.D. WA) and 
FTC v. Pacific Rim Pools International, C97-1748R (W.D. Wash. 1997).
    \7\ FTC v. Woofter Investment Corporation and Patsy M. Barbour, (D. 
Nevada) CV-S-97-00515-HDM (RLH)) (D. Nevada).
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    Cross-border health fraud is another growing problem that 
affects millions of people, especially senior citizens, in this 
country and abroad. To address this type of fraud, the 
Commission, in 1997, led a ``North American Health Claim Surf 
Day'' and was joined by the FDA and CDC, the FCC, health and 
consumer agencies from Canada and Mexico, the Attorneys General 
of 18 states, and several nonprofit groups. In just a few hours 
of searching the Internet, the group found over 400 sites that 
promoted questionable treatments or cures for heart disease, 
cancer, AIDS, diabetes, arthritis, and multiple sclerosis. The 
next year the Commission focused on claims related to these six 
diseases in a Surf Day conducted on a broader scale. The 1998 
``International Health Claim Surf Day'' included participants 
from 80 agencies and organizations from 25 countries that 
``surfed'' the Internet looking for potentially false or 
deceptive claims about the treatment, prevention, or cure of 
the same six serious illnesses. This international team found 
more than 1,200 offending sites and sent them warning messages. 
The Task Force also kicked off Campana Alerta I and II, two 
sweeps targeting deceptive Spanish-language ads for health care 
products that included a total of seven FTC enforcement 
actions, four Spanish-language radio public service 
announcements, and a Spanish-language television public service 
announcement jointly-released in the U.S. and Mexico. In 
addition, the Task Force participated in a crackdown on Mexican 
border clinics offering ``cures'' for cancer, AIDS, and 
multiple sclerosis.
    Building on these actions, the Commission, FDA, Health 
Canada, and the Secretaria de Salud of Mexico announced the 
adoption of an agreement on Joint Strategies to Combat Health 
Fraud on December 10, 1998. The agreement provides a formal 
framework for cooperation and states that the participating 
agencies will: (1) cooperate in the detection of cross-border 
health fraud; (2) inform counterpart foreign agencies as soon 
as practicable of significant investigations involving 
activities in their country; (3) consider counterpart agency 
requests to investigate domestic activities and to coordinate 
related enforcement activities; and (4) work to develop and 
disseminate joint consumer and business education messages 
about health fraud.

Internet fraud

    Seniors are joining the Internet community at a rapid pace. 
An estimated 40% of Americans over the age of 50 have personal 
computers, and of these, 72% have Internet access.\8\ Senior 
citizens communicate with children and grandchildren through e-
mail, peruse web sites for news and entertainment, and use the 
Internet to research travel and business opportunities.\9\ 
Although the Internet offers new ways to communicate, invest, 
and shop, unfortunately it also provides a new haven for scam 
artists. To ensure that the fraud does not undermine consumer 
confidence and weaken the online marketplace, the Commission 
has attacked Internet fraud through both aggressive law 
enforcement and public education.
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    \8\ In contrast, computer ownership among people over 50 was only 
29% three years ago. See statistics on ``The Graying of the Internet,'' 
a report published by Charles Schwab & Co., Inc. and SeniorNet.org, 
reported at http://www.headcount.com/globalsource/profile/
index.htm?choice=ussenior&id=144''.
    \9\ 72% of Internet users over the age of 50 regularly use e-mail 
to communicate with friends and family; over 50% use the Internet to 
research topics and read the news; and approximately 40% frequently use 
the Internet to pursue hobbies, explore travel options, or research 
investments. See ``The Graying of the Internet,'' above.
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    The Commission has brought over forty federal actions 
against Internet fraud, twenty-four cases in 1997 and 1998 
alone. Most of these actions have targeted traditional types of 
fraud that have moved online--pyramid schemes, credit repair 
fraud, deceptive investments and business opportunities, etc. 
However, a few actions have targeted scams that could only have 
arisen from new technology, such as ``modem hijacking.''
    Although many Internet schemes target the general 
population, some online scams hit senior citizens especially 
hard. Fraudulent online health claims are an example. The 
Commission has brought several actions against marketers of 
dubious health products, including a company, American 
Urological Clinic and David Brady, that advertised an herbal 
impotence remedy called ``Vaegra'' and a company, TrendMark 
International, that made unsubstantiated weight loss claims.
    Surf Days, such as those targeting fraudulent health 
claims, have become part of a broader attempt by the Commission 
to protect the public through education. Surf Days enable the 
Commission to contact businesses that may be injuring 
consumers, not out of malice, but out of ignorance over what 
the law requires. In an effort to reach out and educate online 
business, the Commission has led or conducted over a dozen Surf 
Days in 1997 and 1998, covering topics ranging from online 
privacy to coupon fraud. In addition, the Commission has 
published a set of online advertising guidelines for new and 
small businesses entitled, ``The Rules of the Road.''

                       Health-Related Activities

    It is critical that all consumers have accurate information 
about the costs and benefits of health care services, devices, 
drugs and related products. While health care is a subject of 
concern for all of our citizens, it is of disproportionate 
concern to the aging. The Commission works to ensure that 
consumers are not harmed by deceptive claims about the health 
benefits of products or services. In addition, the Commission's 
antitrust law enforcement activity targets unlawful activity 
that decreases competition among providers of health care goods 
and services. Older Americans (along with their younger 
counterparts) benefit from lower costs and higher quality 
health care services as a result of robust competition.

             Consumer Protection in Health-Related Matters

Health claims for OTC drugs, devices, foods, and dietary supplements

    Advertising for any product must be truthful, not 
misleading, and substantiated. . . .
    Accurate information about the safety and health benefits 
of over-the-counter drugs, devices, foods, and dietary 
supplements are particularly important to older consumers who 
may have specific nutritional needs or suffer from medical 
conditions associated with aging. The Commission is responsible 
for making sure that advertising about the health benefits of 
these products is truthful, not misleading and substantiated by 
solid scientific support and coordinates closely with the Food 
and Drug Administration, which has primary responsibility for 
the safety and labeling of these products.\10\
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    \10\ Both advertising and labeling of prescription drugs fall 
within FDA's area of jurisdiction, although the FTC has provided input 
to FDA on certain aspects of the advertising of these products.
---------------------------------------------------------------------------
    In a case currently on appeal, the Commission successfully 
challenged misleading representations that Doan's Pills, a 
national advertised analgesic, is more effective in relieving 
back pain than other over-the-counter pain relievers. 
Continuing to attack deceptive claims in the multi-million 
dollar ``hair restoration'' industry, the Commission concluded 
two successful actions against marketers of nationally 
advertised baldness products. The Commission also took action 
against the marketer of eyeglasses that misleadingly claimed to 
improve users' vision when driving at night.
    The Commission has also continued to pursue false or 
unsubstantiated advertising claims relating to the nutrient 
content and health benefits of foods. For example, the 
Commission settled charges over a national advertising campaign 
for Promise margarine that focused on consumers' heart health 
concerns with its ``Get Heart Smart'' slogan. In that case, the 
FTC challenged, as unsubstantiated, claims that Promise 
margarine spreads help reduce the risk of, heart disease, as 
well as false low-fat and low-saturated-fat claims. In 
addition, the FTC settled charges with the nationwide Pizzeria 
Uno restaurant chain regarding false claims touting a line of 
thin-crust pizzas as ``low fat.'' Finally, the FTC entered a 
consent agreement with Abbott Laboratories for claims relating 
to their Ensure nutritional beverage. The complaint in that 
case challenged claims that doctors recommend Ensure for 
healthy, active people, and claims that Ensure would provide 
vitamins in an amount comparable to a typical multi-vitamin 
supplement.
    The most dramatic growth in health-related marketing has 
been in the dietary supplement industry, a category that 
includes vitamins, minerals, herbs and hormones. It is 
estimated that more than 100 million U.S. consumers use 
supplement products for a wide variety of health-related 
benefits. The elderly may be particularly vulnerable to false 
or misleading claims, since supplement marketing often relates 
to conditions associated with aging. The Commission has 
undertaken a number of initiatives over the past two years to 
ensure that consumers are presented with truthful and accurate 
information about the health benefits of supplement products.
    The Commission continues to maintain an active enforcement 
presence in this area. Since 1996 the Commission has taken 
action against several dietary supplement advertisers for 
making a wide variety of health claims, including claims 
relating to medical conditions and diseases that afflict the 
elderly. Most recently, the Commission obtained a court order 
temporarily halting the marketing operations of the American 
Urological Corp. and other related parties for false claims 
about the effectiveness of its impotence treatment products. 
The matter is currently pending in federal district court and 
involves various multiple ingredient supplement products, 
including a product called ``Vaegra,'' the name of which 
closely resembles the prescription drug Viagra.
    Other Commission actions include a consent agreement with 
MegaSystems International, Inc. and related parties settling 
charges about false and unsubstantiated claims for a variety of 
products concerning health and weight loss. The MegaSystems 
consent required that the respondents pay a total of $1.1 
million, including $500,000 into an escrow account to repay 
consumers. The Commission also settled charges against Bogdana 
Corp. relating to Cholestaway, a calcium carbonate supplement. 
Among other things, the company claimed the supplement would 
lower blood cholesterol and blood pressure and treat heart 
disease. The Bogdana consent also settled charges relating to 
another supplement, Florasource, which was touted to reduce the 
risk of and treat chronic fatigue syndrome, AIDS and other 
diseases.
    Since 1996 the Commission has brought a number of actions 
to curb fraudulent advertising directed at Spanish-speaking 
consumers. A number of these actions involved supplement 
products being promoted to treat health conditions associated 
with aging. For example, a recent consent agreement settled 
charges against Nutrivida, Inc. and Frank Huerta involving a 
Spanish language informercial promoting Cartilet, a shark 
cartilage supplement, for treatment of cancer, rheumatism, 
arthritis, diabetes, fibroids, bursitis, circulatory problems, 
and cysts. A consent agreement with Venegas Inc. addressed FTC 
charges of unsubstantiated claims for a multiple ingredient 
supplement ``Alen,'' purported to delay the aging process, 
eliminate anemia, and help diabetics produce insulin. Other 
actions include a settlement with Efficient Labs for the 
charges relating to the marketing of ``Venoflash'' to remove 
clogs in the circulatory system and treat varicose veins and 
hemorrhoids, and a settlement with Mountain Springs L.L.C. for 
the marketing of a cat's claw supplement to strengthen the 
immune system and treat a wide variety of ailments.
    Most recently, the Commission issued a business guide for 
the dietary supplement industry to provide clear and detailed 
guidance on how to comply with the requirement that advertising 
claims relating to health and safety must be substantiated by 
competent and reliable scientific evidence. The guide provides 
specific examples to illustrate longstanding FTC advertising 
principles on how to develop adequate scientific support for 
the benefits of supplements and how to describe those benefits 
fairly and accurately. As additional guidance to industry, the 
Commission simultaneously released a report on the results of 
an FTC staff consumer research project that examined a number 
of issues relating to consumer understanding of disclosures in 
food and supplement advertising. The results of this Food Copy 
Test indicate, among other things, that qualifying information 
about the health benefits of these products must be presented 
in strong and direct language.

Other health-related services

    Older consumers make up a large part of the market for a 
variety of health-related services and, as a result, are 
vulnerable to fraudulent practices and misleading claims from 
some bad actors in this industry. The Commission in 1997-1998 
took numerous law enforcement actions in the area of health-
related services.
    In 1998, the Commission accepted for comment a consent 
agreement that prohibits the American College for Advancement 
in Medicine (ACAM) from making unsubstantiated and false 
advertising claims that non-surgical, EDTA ``chelation 
therapy'' is effective in treating atherosclerosis, and that 
the effectiveness of the therapy has been proven by scientific 
studies.
    The Commission in 1998 also obtained a consent order 
against Eye Care Associates and its owner, Sami El Hage, O.D., 
primary sources of an orthokeratology service called 
``Controlled Kerato-Reformation'' orthokeratology (CKR). Under 
the consent order, the respondents are prohibited from claiming 
that CKR or any similar procedure corrects nearsightedness and 
astigmatism. In addition, the final order requires Dr. El Hage 
to have competent and reliable scientific evidence before 
making any health benefit claims about the procedure.
    In a similar case, in 1997, the Commission obtained a 
consent order against Mid-South PCM Group and its owner, J. 
Mason Hurt, O.D., a leading marketer of an eye care treatment 
called ``recise Corneal Molding'' orthokeratology (PCM ortho-
k). PCM ortho-k uses a series of special contact lenses 
purportedly to reduce or eliminate dependence on eyeglasses and 
contact lenses. The service is marketed as a non-surgical 
alternative to laser PRK (photorefractive keratectomy) and RK 
(radial keratotomy). The consent order prohibits Dr. Hurt from 
claiming that orthokeratology can cure vision deficiencies 
permanently, and requires Dr. Hurt to possess competent and 
reliable scientific evidence for any success or efficacy 
claims.
    Finally, in 1997, Commission staff provided substantial 
assistance to the American Academy of Ophthalmology in 
developing its industry ``Guidelines for Refractive Surgery 
Advertising,'' which were issued that same year. The Guidelines 
set voluntary standards for advertising claims regarding the 
safety, efficacy and success of refractive surgery services, 
including radial keratotomy (RK), photorefractive keratectomy 
(PRK), and LASIK (laser assisted in-situ keratomileusis).

Diet and weight loss products and services

    New Triple Medical Breakthrough: ``Blast'' 49 pounds off in 
only 29 days . . . ``Obliterate'' 5 inches from your waistline 
. . . .
    The quest to lose weight, cut fat, and gain muscles 
continues to lure the investment of older consumers. The 
Commission in 1997-1998 has been active in this area, and has 
taken numerous actions involving diet and weight-loss products, 
programs, and services. As part of its continuing effort to 
ensure that consumers get accurate and reliable information 
about weight loss products and programs, the Commission 
initiated ``Operation Waistline,'' a coordinated, long-term 
consumer education and law enforcement program. The goals of 
this program were to alert consumers to misleading and 
deceptive weight loss claims, to steer them to accurate 
information about healthy weight loss, and to continue to bring 
law enforcement actions against those in the industry who 
violate the law.
    As part of this coordinated effort, in March 1997 the 
Commission announced settlements in seven law enforcement 
actions focusing on advertisements promoting quick and easy 
weight loss for products ranging from fat burning dietary 
supplements to skin patches and shoe insoles.
    In addition, the Bureau of Consumer Protection sent letters 
to more than 100 publications that ran the weight loss 
advertisements challenged in the Commission's complaints. The 
letters called on these publications to step up their 
advertising review efforts to prevent blatantly deceptive 
weight loss ads from reaching consumers.
    Three additional consent settlements involving promotions 
for weight loss and purported health benefits of chromium 
picolinate were finalized and announced earlier in 1997: 
Nutrition 21, Universal Merchants, Inc., and Victoria Bie, 
doing business as Body Gold.
    In a separate law enforcement action, Commission attorneys 
completed the trial phase in the case against Slim America, 
Inc., a seller of over $11 million in bogus weight loss 
products. The defendants' ads and product literature featured 
Super-Formula as a ``New Triple Medical Breakthrough'' 
consisting of three different ``weight loss weapons.'' The 
advertisements, published in magazines such as Ladies Home 
Journal, stated that Super-Formula could effectuate dramatic 
weight loss and remove inches from a user's body size in a 
short period of time. Ads boasted that Super-Formula could 
``blast'' up to 49 pounds off user in only 29 days, 
``obliterate'' 5 inches from waistlines, and ``zap'' 3 inches 
from thighs, without dieting or exercising. In 1997, the 
federal district court granted a temporary restraining order, 
asset freeze, and appointment of receiver, pending the court's 
final decision. The decision on the Commission's petition for a 
permanent injunction and consumer redress is pending.
    In addition to weight-loss products, many older consumers 
purchase services from diet clinics. The Commission, having 
obtained fourteen consent orders against such firms in 1992-
1996, continued this program in 1997 by announcing settlements 
of administrative complaints, issued in 1993, against Weight 
Watchers International, Inc., and Jenny Craig, Inc. Weight 
Watchers International, Inc. agreed to settle a case concerning 
the substantiation for advertising claims made by the company. 
The proposed settlement covers future claims, including 
testimonial claims, about weight loss and weight loss 
maintenance. The Commission also obtained a settlement 
agreement from Jenny Craig, Inc. to resolve deceptive 
advertising charges relating to the program's weight loss, 
weight loss maintenance, price and safety claims, as well as 
its use of consumer testimonials and endorsements.
    Finally, in October, 1997, the Commission's Bureau of 
Consumer

Protection spearheaded a major consumer protection effort by

bringing together representatives from science, academia, the

health care professions, state and federal agencies, commercial 
pro-

viders of weight loss products and services, and organizations 
pro-

moting the public interest to discuss how providers could 
improve

the quality and quantity of information consumers receive about 
weight loss products and services. This seminal event has 
resulted in agreement among a broad-based coalition on 
voluntary guidelines for consumer disclosures by providers of 
weight loss products and services as well as new consumer 
education initiatives. The coalition, to be called the 
``Partnership for Healthy Weight Management,'' looks forward to 
a formal public launch in early-1999.

          Antitrust Law Enforcement In The Health Care Sector

    Antitrust enforcement in the health care area, while 
infinitely varied in detail, tends to fall into one of four 
general categories. Most of our cases involve: (1) 
anticompetitive agreements among health care providers; (2) 
agreements to restrict advertising of health-related services; 
(3) hospital mergers; or (4) mergers among pharmaceutical 
companies. All of these activities are of particular importance 
to older consumers, because their health care needs tend to be 
greater than those of other age groups, as is the percentage of 
their income that they devote to this purpose.

Anticompetitive agreements

    In January of 1998, Mylan raised the wholesale price of 
clorazepate from $11.36 to approximately $377.00 per bottle of 
500 tablets.
    One of the core areas of antitrust enforcement is against 
anticompetitive agreements. These are agreements among the 
providers of a good or a service, to increase prices or to 
decrease product quality, or to in some other way artificially 
reduce the level of competition between them. Such agreements 
may deprive consumers of the ability to obtain goods of 
competitive price and quality in a free market economy.
    An example is the Commission's ongoing litigation against 
four pharmaceutical firms involved in the sale of anti-anxiety 
drugs that are prescribed over 20 million times a year. One of 
the defendants in this action is Mylan, the nation's second 
largest maker of generic drugs. Mylan produces, among other 
products, the drugs lorazepam and clorazepate, which are widely 
prescribed to the elderly to treat anxiety and hypertension. 
According to the Commission's complaint filed in federal court, 
Mylan entered into exclusive agreements with the principal 
manufacturer of the active ingredients used in the drugs. These 
agreements meant that other, competing drug companies were 
unable to obtain new supplies or to increase their rate of 
production. As a result, Mylan allegedly attained monopoly 
power and was able to dramatically increase its prices without 
fear of competitive consequences. In January of 1998, the 
company raised the wholesale price of clorazepate from $11.36 
to approximately $377.00 per bottle of 500 tablets. And, in 
March, Mylan raised the wholesale price of lorazeparn from 
$7.30 for a bottle of 500 tablets to approximately $190.00. The 
complaint alleged that as a result of the price increases, some 
consumers had to stop taking these drugs or to reduce the 
quantity they take.
    The remedy being sought in the Mylan litigation will make 
this case particularly important to consumers. The usual FTC 
antitrust remedy is an injunction that brings the improper 
conduct to a halt and restores competition from that point 
forward. Here, however, the conduct is particularly egregious, 
and the harm to consumers is particularly great. Mylan's price 
increases cost consumers at least $120 million in higher 
prices--prices paid in part by elderly and infirm patients who 
can afford them least. Therefore, the Commission has asked the 
federal district court to order disgorgement, under which 
Mylan's improper profits must be repaid.
    In addition to the litigated case in Mylan, the Commission 
obtained at least nine consent agreements during the years 
1997-1998, under which health care providers agreed to cease 
using a variety of anticompetitive practices.
    In RxCare of Tennessee, a consent order settled charges 
that a leading provider of pharmacy network services in that 
state, which was owned and operated by pharmacists, used a 
``most favored nation'' clause (MFN) in order to discourage 
member pharmacies from discounting, and to limit price 
competition in their dealings with pharmacy benefits managers 
and third-party payors. The MFN clause at issue required that 
if a pharmacy in the RxCare network accepted a reimbursement 
rate from any other third-party payor that is lower than the 
RxCare rate, the pharmacy must accept that lower rate for all 
RxCare business in which it participates. In light of RxCare's 
market power (the network includes 95% of all chain and 
independent pharmacies in Tennessee and accounts for a 
substantial portion of business volume) the MFN clause made 
pharmacies risk substantial losses in their core business if 
they granted special discounts to patients covered by other 
plans, and thereby tended to discourage such discounts. The 
order bars RxCare from having the MFN clause in its pharmacy 
participation agreements. C-3662 (consent order) 62 Fed. Reg. 
4769 (January 31, 1997).
    In Montana Associated Physicians, a physician association 
(MAPI) and a physician-hospital organization (BPHA) in 
Billings, Montana signed a consent order in which they agreed, 
for a 20 year period, not to: (1) boycott or refuse to deal 
with third-party payors such as insurance companies or HMOs; 
(2) collectively determine the terms upon which the member 
physicians would deal with such payors; or (3) fix the fees 
charged for any physician services. MAPI also is prohibited 
from advising physicians to raise, maintain, or adjust the fees 
charged for their medical services, or creating or encouraging 
adherence to any fee schedule. The order does not prevent these 
associations from entering into legitimate joint ventures that 
are non-exclusive (that is, that do not restrict to rights of 
participants to take part in other networks as well) and 
involve the sharing of substantial financial risk. Other types 
of joint ventures are subject to prior approval of the 
Commission. The order settles complaint charges that MAPI 
blocked the entry of an HMO into Billings, obstructed a PPO 
that was seeking to enter, recommended physician fee increases, 
and later acted through BPHA to maintain fee levels. C-3704 
(consent order) 62 Fed. Reg. 11,201 (March 11, 1997).
    In Mesa County Physicians, the complaint alleged that the 
Mesa County IPA, an organization whose members include 85% of 
all physicians and 90% of primary care physicians in Mesa 
County, Colorado, acted to restrain trade by combining to fix 
prices and other competitively significant terms of dealing 
with payors, and by collectively refusing to deal with some 
third party payors, such as new health-care plans. This conduct 
hindered the development of alternative health care financing 
and delivery systems, and resulted in higher prices for 
physician services. The complaint alleged that the IPA, through 
its alliance with the Rocky Mountain Health Maintenance 
Organization, created a substantial obstacle to the ability of 
other payers to establish physician panels in Mesa County. The 
complaint also alleged that the IPA's Contract Review Committee 
negotiated collectively on behalf of the IPA's members with 
several third party payers using a set of guidelines and fee 
schedule that had been approved by the IPA Board. The consent 
agreement that has been accepted subject to public comment 
prohibits the Mesa County IPA from: (1) engaging in collective 
negotiations on behalf of its members; (2) collectively 
refusing to contract with third party payers; (3) acting as the 
exclusive bargaining agent for its members; (4) restricting its 
members from dealing with third party payers through an entity 
other than the IPA; (5) coordinating the terms of contracts 
with third-party payers with other physician groups in Mesa 
County or in any county contiguous to Mesa County; (6) 
exchanging information among physicians about the terms upon 
which physicians are willing to deal with third-party payers; 
or (7) encouraging other physicians to engage in activities 
prohibited by the order. The order also requires the Mesa IPA 
to notify its members and certain third parties about the 
order, amend its ``Physician Manual'' to bring it into 
compliance with the order, and abolish the Contract Review 
Committee. The IPA is also required to publish and distribute 
copies of the complaint and order to its members. The proposed 
order, however, allows the respondents to engage in: (1) any 
``qualified clinically integrated joint arrangement'' (with 
prior notice to the Commission); and (2) conduct that is 
reasonably necessary to operate any ``qualified risk-sharing 
joint arrangement'' as set forth in the DOJ/FTC Statements of 
Antitrust Enforcement Policy in Health Care. D-9284 (proposed 
consent order) 63 Fed. Reg. 9549 (February 25, 1998).
    In College of Physicians-Surgeons of Puerto Rico, the 
Federal Trade Commission and the Commonwealth of Puerto Rico 
filed a final order and a stipulated permanent injunction in 
federal court against the College (a group of 8,000 physicians) 
and three physician independent practice associations. The 
complaint charged that the defendants attempted to coerce the 
Puerto Rican government into recognizing the College as the 
exclusive agent for bargaining with the public corporation 
responsible for administering a health insurance system that 
provides medical and hospital care to indigent residents. The 
complaint also charged that to achieve their goals, members of 
the College called for an eight day strike during which they 
ceased providing non-emergency services to patients. The order 
prohibits the defendants from boycotting or refusing to deal 
with any third party payer, refusing to provide medical 
services to patients of any third party payer, or jointly 
negotiating prices or other more favorable economic terms. The 
order also calls for the College to pay $300,000 to the 
catastrophic fund administered by the Puerto Rico Department of 
Health. The order does not prevent the defendants from 
participating in joint ventures that involve financial risk-
sharing or which receive the prior approval of the Commission, 
from petitioning the government, or from communicating purely 
factual information about health plans. FTC File No. 97 10011, 
Civil No. 97-2466-HL (District of Puerto Rico) (October 2, 
1997).
    In Urological Stone Surgeons, the consent order settled 
charges that three companies (Urological Stone Surgeons, Inc., 
Stone Centers of America, L.L.C., and Urological Services, 
Ltd.) and two doctors providing lithotripsy services at 
Parkside Kidney Stone Centers illegally fixed prices for those 
services. The centers were owned by a large proportion of the 
urologists practicing in the Chicago metropolitan area, and the 
urologists using the Parkside facility account for 
approximately 65% of urologists in the area. The complaint 
alleged that the proposed respondents agreed to use a common 
billing agent (Urological Services, Ltd.), established a 
uniform fee for lithotripsy professional services, prepared and 
distributed fee schedules for services, and billed a uniform 
amount either from the fee schedule or as an amount negotiated 
on behalf of all urologists at Parkside. The complaint also 
alleged that the billing agent contracted with third party 
payors based on a uniform percentage discount off the 
urologist's charge for professional services, or a uniform 
global fee that included professional services, charges for the 
lithotripsy machine, and anesthesiology services. According to 
the complaint, the collective setting of fees for lithotripsy 
services was not reasonably necessary to achieve efficiencies 
from the legitimate joint ownership and operation of the 
lithotripsy machines, nor were the urologists sufficiently 
integrated so as to justify the agreement to fix prices for 
their professional services. The final consent order prohibits 
the proposed respondents from fixing prices, discounts, or 
other terms of sale or contract for lithotripsy professional 
services, requires the proposed respondents to terminate third-
party payer contracts that include the challenged fees at 
contract-renewal time or upon written request of the payor, and 
requires the respondents to notify the FTC at least 45 days 
before forming or participating in an integrated joint venture 
to provide future services. C-3791 (final consent order issued 
April 10, 1998).
    In Institutional Pharmacy Network, the complaint alleged 
that five institutional pharmacies in Oregon unlawfully fixed 
prices and restrained competition among themselves, leading to 
higher reimbursement levels for serving Medicaid patients in 
long-term care institutions. The five pharmacies are Evergreen 
Pharmaceutical, Inc., NCS Healthcare of Oregon, Inc., NCS 
Healthcare of Washington, Inc., United Professional Companies, 
Inc., and White, Mack & Wart, Inc. They compete to provide 
prescription drugs and services to patients in long term care 
institutions, and provide institutional pharmacy services for 
80% of the patients in Oregon receiving such services. 
According to the complaint, the pharmacies formed IPN to offer 
their services collectively to managed care organizations that 
provide health care services to Medicaid recipients, and to 
maximize their leverage in bargaining over reimbursement rates, 
but did not share risk or provide new or efficient services. 
The final order prohibits IPN and the institutional pharmacy 
respondents from entering into similar price fixing 
arrangements. The order, however, allows the respondents to 
engage in: (1) any ``qualified clinically integrated joint 
arrangement'' (with prior notice to the Commission); and (2) 
conduct that is reasonable necessary to operate any ``qualified 
risk-sharing joint arrangement'' as set forth in the DOJ/FTC 
Statements of Antitrust Enforcement Policy in Health Care. File 
No. 961-0005 (final order issued August 21, 1998).
    In M.D. Physicians of Southwest Louisiana, the consent 
order settled charges that a physician group, composed of a 
majority of the physicians in the Lake Charles area of 
Louisiana, fixed the prices and other terms on which it would 
deal with third party payors, collectively refused to deal with 
third party payors, and conspired to obstruct the entry of 
managed care. According to the complaint, the group was formed 
in 1987 as a vehicle for its members to deal concertedly with 
the entry of managed care, and until 1994 the members of MDP 
dealt with third party payors only through the group. As a 
result of this conduct, the complaint alleged, MDP restrained 
competition among physicians, increased the prices that 
consumers paid for physician services and medical insurance 
coverage, and deprived consumers of the option of managed care. 
The order prohibits MDP from engaging in collective 
negotiations on behalf of its members, orchestrating concerted 
refusals to deal, fixing prices or terms on which its members 
deal, or encouraging or pressuring others to engage in any 
activities prohibited by the order. The order does allow MDP to 
operate any ``qualified risk-sharing joint arrangement'' or, 
upon prior notice to the Commission, any ``qualified clinically 
integrated joint arrangement,'' as reflected in the 1996 FTC/
DOJ Statements of Antitrust Enforcement Policy in Health Care. 
C-3824 (final consent order issued August 31, 1998).
    In Dentists of Juana Diaz, a group of dentists, 
constituting a majority of the practitioners in Juana Diaz, 
Coamo, and Santa Isabel, Puerto Rico, signed a proposed consent 
order prohibiting them from fixing prices and engaging in an 
illegal boycott of a government program that provides dental 
care for indigent patients. According to the complaint, the 
dentists threatened a boycott of the program if they were not 
reimbursed at certain prices, and then in fact boycotted the 
program. After several months, the dentists' price demands were 
met and they agreed to participate. The order prohibits the 
dentists from jointly boycotting or refusing to deal with third 
party payers, or collectively determining any terms or 
conditions for dealing with third party payers. The order does 
allow the dentists to operate any ``qualified risk-sharing 
joint arrangement'' or, upon prior notice to the Commission, 
any ``qualified clinically integrated joint arrangement,'' as 
reflected in the 1996 FTC/DOJ Statements of Antitrust 
Enforcement Policy in Health Care. FTC File No. 981-0154 
(proposed consent order issued September 16, 1998).
    In Puerto Rican Pharmacy Association, the Asociacion de 
Farmacias Region de Arecibo (AFRA) and Ricardo Alvarez Class 
agreed to settle Federal Trade Commission charges that they 
fixed prices and engaged in an illegal boycott in order to 
obtain higher reimbursement rates for pharmacy goods and 
services under Puerto Rico's government managed care plan for 
the indigent. AFRA is an association of approximately 125 
pharmacies operating in northern Puerto Rico, and Alvarez is a 
pharmacy owner in Manati, Puerto Rico, and one of AFRA's 
officers. Under the settlement, AFRA's members would be 
prohibited from jointly negotiating prices or other economic 
terms for pharmacies and jointly boycotting, threatening to 
boycott, or refusing to provide pharmacy goods and services to 
any payer or provider. FTC File No. 981-0153 (provisionally 
accepted December 14, 1998).

Restraints on advertising

    Without the ability to advertise low prices, members of a 
profession have less incentive to offer such prices in the 
first place, and less ability to communicate them effectively 
even if they are offered.
    One particular type of anticompetitive agreement calls for 
separate mention. This is the agreement among members of a 
professional association that they will cease or restrict the 
use of advertising. Such agreements raise particular 
difficulties for antitrust enforcers, because they involve, not 
only the issue of an agreement to restrict competition, but 
also other issues involving consumer information and consumer 
protection problems. But it is clear that a raw case of 
advertising restraints can have strongly adverse effects for 
consumers. Without the ability to advertise low prices, members 
of a profession have less incentive to offer such prices in the 
first place, and less ability to communicate them effectively 
even if they are offered.
    An example of this type of case is the case against the 
California Dental Association (CDA), which the Commission is 
currently litigating before the Supreme Court. The Commission 
originally issued a complaint charging that the CDA had 
unreasonably restricted its dentist members' truthful and 
nondeceptive advertising of the price, quality, and 
availability of their services. One part of this conduct 
effectively prohibited advertising of senior-citizen discounts. 
In March, 1996, the Commission issued an opinion and order 
affirming an ALJ's decision finding that the California Dental 
Association's rules violated Section 5 of the FTC Act. The 
Commission's order required CDA, among other things, to cease 
and desist from restricting truthful, nondeceptive advertising 
(including truthful, nondeceptive superiority claims, quality 
claims, and offers of discounts); to remove from its Code of 
Ethics any provisions that include such restrictions; and to 
contact dentists who have been expelled or denied membership in 
the last 10 years based on their advertising practices and 
invite them to re-apply. The order also requires CDA to set up 
a compliance program to ensure that its constituent societies 
interpret and apply CDA's rules in a manner that is consistent 
with the order.
    The Commission's order was upheld by the Ninth Circuit 
Court of Appeals in California Dental Assn. v. FTC, 128 F.3d 
720 (9th Cir. 1997), but the CDA has obtained review in the 
Supreme Court. The Commission's brief there was filed on 
December 11, 1998, and the case was argued on January 13, 1999.

Anticompetitive mergers

    Recent changes in the structure of the health care system, 
including the growth of HMOs, have resulted in increased 
pressure for cost containment. These pressures have been felt 
throughout the health care system, which has responded with 
efforts to decrease costs and to improve efficiency. Mergers 
have been one tool for reducing costs. While such efforts are 
generally beneficial to consumers, they can be harmful if they 
lead to an anticompetitive outcome in a particular market.
    One such merger was challenged by the Commission in the 
Mediq case. This case involved Mediq's proposed $100 million 
acquisition of Universal Hospital Services. The transaction 
would have combined the nation's two largest firms that rent 
movable medical equipment--such as respiratory, infusion, and 
monitoring devices--to hospitals, and would have given Mediq a 
dominate share of the rental markets both nationally and in 
many major metropolitan areas across the nation. Many hospitals 
and their group purchasing organizations expressed concern that 
the merger would have led to higher rental prices because 
hospitals and hospital chains would not switch from renting to 
buying expensive equipment that may sit idle for long periods, 
even in the face of a significant price increase. The FTC filed 
a complaint seeking a preliminary injunction to block the 
merger pending an administrative trial, and the parties then 
abandoned the transaction. (D. D.C., Civ. Action. No. 97-1916)

Hospital mergers

    As in other industries, the Commission approaches hospital 
mergers in a cautious and considered way.
    Among other mergers in the health care industry, we have 
seen an increasing number of hospital mergers. As in other 
industries, the Commission approaches those mergers in a 
cautious and considered way. The Commission has found that the 
vast majority of hospital mergers pose no competitive problems; 
only a relative handful of them are investigated. The agency 
challenges only those specific mergers that it has reason to 
believe are likely to have anticompetitive results, and it 
seeks a remedy that is carefully tailored to eliminate only the 
anticompetitive part of the transaction while allowing the 
remainder to proceed.
    Enforcement actions are taken when the circumstances 
warrant, however. In Tenet Healthcare the agency secured a 
preliminary injunction against the proposed merger of the only 
two commercial acute care hospitals in Butler County, Missouri. 
The FTC was joined by the Attorney General of Missouri in 
challenging this merger. The case had particular significance. 
It broke a string of five consecutive losses in government 
challenges to hospital mergers. ``This shows that the antitrust 
laws do apply to local hospital markets,'' agency officials 
noted at the time, ``and it also shows that we and the 
Department of Justice remain committed to litigating these 
complex and difficult cases where the facts warrant it.'' The 
case is now on appeal to the Eighth Circuit Court of Appeals.
    In another case the agency was able to obtain the necessary 
divestiture through a negotiated consent agreement. In OrNda 
Healthcorp, the Commission reached an agreement settling 
charges that the acquisition of the firm, coincidentally by 
Tenet Healthcare as well, would substantially lessen 
competition for general acute care services in the San Luis 
Obispo, California area in violation of Section 7 of the 
Clayton Act and Section 5 of the FTC Act. Tenet and OrNda were 
the second and third largest chains of general acute care 
hospitals in the nation, and the two leading providers of acute 
care hospital services in San Luis Obispo County. Tenet owns 
195-bed Sierra Vista Regional Medical Center in San Luis 
Obispo, and 84-bed Twin Cities Community Hospital in Templeton; 
OrNda owned 147-bed French Hospital Medical Center in San Luis 
Obispo. OrNda also owned 70-bed Valley Community Hospital in 
Santa Maria, about 30 miles south of the city of San Luis 
Obispo and just south of San Luis Obispo County. According to 
the complaint, the combination of the three largest of the five 
hospitals in San Luis Obispo County would eliminate competition 
between Tenet and OrNda, significantly increase the high level 
of concentration for acute care hospital services, and increase 
the market share of Tenet to over 71%. The consent order 
required Tenet to divest French Hospital Medical Center and 
other related assets in San Luis Obispo County, to an acquirer 
approved by the Commission, by August 1, 1997. That divestiture 
has been completed, to a small non-profit hospital system. See 
Tenet Healthcare Corporation/OrNda Healthcorp, C-3743 (consent 
order) (January 26, 1998).
    During the past two years the Commission has also taken an 
important step to ensure the integrity of its remedial orders 
(whether litigated or consent) involving hospital mergers. In 
Columbia/HCA Healthcare the Commission put additional teeth in 
its program by obtaining a $2.5 million civil penalty to settle 
charges that the firm violated a 1995 order to divest hospitals 
in Utah and Florida in a timely manner. This was the second 
largest penalty ever imposed for failure to divest within 
contemplated time periods.

Pharmaceutical mergers

    Pharmaceutical prices are particularly important to older 
consumers. It has been reported that the roughly 13 percent of 
our population that is over the age of 65 consumes more than 
one-third of all prescription drugs dispensed, and that this 
percentage is increasing. Excluding insurance premiums, 
medicines account for 34% of the health-care costs paid by 
older people--a larger share than goes for doctor visits (31%) 
or for hospital stays (14%). Pharmaceutical costs must be 
frequently paid out of pocket: about 19 million elderly people 
have little or no insurance coverage for drug purchases. All 
these figures confirm that antitrust enforcement in the 
pharmaceutical industry will have a disproportionate benefit 
for older citizens. The Commission was accordingly active 
during 1997 and 1998 in the role of protecting competition in 
this area, focusing on oversight of merger activity in both the 
manufacturing and distribution sectors.
    One of our largest cases involved distribution of drugs. 
The Drug Wholesalers matter was striking for the sheer number 
of consumers protected. In this case, the FTC secured a 
preliminary injunction in federal district court, preventing 
the proposed mergers of the nation's four largest 
pharmaceutical wholesalers into two companies. The agency 
challenged McKesson Corp.'s acquisition of AmeriSource Health 
Corp., and Cardinal Health, Inc.'s acquisition of Bergen 
Brunswig Corp. The four firms together hold approximately 80 
percent of the wholesale pharmaceutical market. In court, the 
agency argued, successfully, that the two mergers might 
substantially reduce competition for drug wholesaling 
services--a market that is important to virtually every 
consumer in the country. The Commission believes that its 
action in this one case has saved consumers more than $ 100 
million per year.
    In 1998 the FTC also announced an agreement with Merck and 
Co., Inc. (Merck), a leading pharmaceutical manufacturer, and 
its subsidiary, Merck-Medco Managed Care, LLC (Medco), 
resolving antitrust concerns resulting from Merck's acquisition 
of Medco. The Commission had alleged that Merck's acquisition 
of Medco, the largest pharmacy benefits manager (PBM) in the 
United States, might substantially lessen competition in the 
manufacture and sale of pharmaceuticals, and in the provision 
of PBM services, leading to higher prices and reduced quality. 
PBMs serve as middlemen in the provision of prescription drugs 
to managed care plans. The settlement required Medco to take 
steps to diminish the effects of any unwarranted preference 
that might be given to Merck's drugs over those of Merck's 
competitors in connection with the pharmacy benefit management 
services that it provides.
    The agency also monitors mergers among the actual 
manufacturers of pharmaceuticals. A particularly important case 
of this type involved the merger of Ciba-Gigy Ltd. and Sandoz 
Ltd. to form a new pharmaceutical firm called Novartis. On 
reviewing the merger the Commission became concerned that it 
might reduce competition in one area where the two firms had 
previously been the leading forces. This involved the 
development and commercialization of gene therapy products, 
which are expected to begin offering significant improvements 
in the treatment of cancer and other diseases and medical 
conditions by the year 2000. Before approving the merger, 
therefore, the Commission negotiated a consent agreement 
requiring licensing of certain specified gene therapy 
technology and patent rights. This was designed to restore 
competition in the development and commercialization of gene 
therapy treatments for cancer and graft-versus-host disease 
research and treatment. That agreement was made final in April, 
1997, and the required divestitures were approved in September 
of the same year.

                   COMMISSION ACTION IN OTHER FIELDS

Funeral services: Consumer protection

    This is one time when consumers are easy prey for the less 
than forthright. The Funeral Rule helps you avoid overpaying. . 
. .
    On average, a funeral costs in excess of $4,000, and can 
easily cost $10,000 or more. It is among the most expensive of 
consumer purchases, and it typically comes at an emotionally 
difficult time, and often is a first-time purchase. To make 
informed choices under these circumstances, consumers need 
ready access to accurate information about the range of funeral 
goods and services offered and the prices charged. The 
Commission's Funeral Industry Practices Rule, 16 CFR Part 453, 
is designed to ensure that the need for this kind of 
straightforward information is met, by requiring providers of 
funeral goods and services to provide itemized price 
information and other material disclosures to consumers 
initiating discussions about funeral arrangements. This Rule is 
of considerable importance to older Americans and their 
families.
    In the first decade after the Rule became effective, the 
Commission pursued a conventional enforcement approach, 
investigating complaints from consumers and competitors, and, 
where violations were found, bringing law enforcement actions 
for civil penalties. From 1984 through 1994, this approach 
resulted in 43 enforcement actions against funeral homes for 
failing to comply with the Rule. These enforcement efforts, 
however, were not effective to bring the industry into 
compliance with the Rule. Surveys showed that about two-thirds 
of industry members failed to comply with the ``core'' Rule 
requirements--i.e., failed to provide itemized price lists of 
available goods and services to consumers seeking to arrange a 
funeral.
    Realizing that a new strategy was needed to improve this 
situation, the Commission staff implemented a more proactive 
``sweeps'' approach based upon test shopping large numbers of 
funeral homes in selected regions. A key element in planning 
and executing the sweeps was to partner with the Commission's 
consumer protection law enforcement counterparts at the state 
and local level. After an initial pilot sweep by FTC staff 
alone in Florida, FTC staff joined with the Attorneys General 
of Tennessee, Mississippi, and Delaware, conducting four sweeps 
in 1995 and 1996. Investigators posing as consumers test 
shopped funeral homes in those states for Rule compliance. 
Eighty-nine funeral homes were test shopped in the course of 
those sweeps, and 20 homes were found not to be in compliance; 
enforcement actions were brought against each of those 20 
homes. Thus, in a little more than a year the Commission 
brought nearly half as many enforcement actions as had been 
filed in the entire first decade of Rule enforcement.
    The Commission's initiation of the sweeps enforcement 
approach produced a strong impact upon the funeral industry, 
prompting the National Funeral Directors Association (NFDA), in 
September 1995, to submit a proposal to the Commission for 
bolstering the level of industry compliance through a self-
certification and training program. The Commission agreed to 
this proposal in January 1996. The first component of this 
innovative program is the Funeral Rule Offenders Program 
(FROP), which offers a non-litigation alternative to bring 
homes found to be in violation rapidly into compliance with 
``core'' Rule requirements violations of the Rule. Under FROP, 
if a funeral home is identified by investigators as having 
failed to provide the required price lists, the home may, at 
the Commission's discretion, be offered the choice of a 
conventional investigation and potential law enforcement action 
resulting in a federal court order and civil penalties as high 
as $11,000 per violation, or participation in FROP. Violators 
choosing to enroll in FROP make voluntary payments to the U.S. 
Treasury or state Attorney General, but those payments 
generally are less than the amount the Commission would seek as 
a civil penalty. NFDA attorneys then review the home's 
practices, revise them so they are in compliance with the 
Funeral Rule, and then conduct on-site training and testing.
    The Commission, in cooperation with state Attorneys 
General,

continued to conduct Funeral Rule sweeps, providing non-comply-

ing homes with the choice of enrollment in FROP or a 
conventional

law enforcement proceeding. The first round of sweeps conducted

after initiation of FROP were conducted in Massachusetts, 
Oklahoma, Ohio, Colorado, and Illinois. The results of those 
sweeps indicated that compliance among funeral homes had 
improved significantly since 1994. Specifically, nearly 90 
percent of funeral homes subjected to test shopping in 1996 
were found to be in compliance with the core Rule requirements. 
In 1997 and 1998, the Commission and its state partners 
conducted sweeps in New Jersey, Arkansas, California, 
Washington, Pennsylvania, Georgia, Texas, Iowa, Florida, 
Minnesota, Michigan, Louisiana, and Utah, among others. These 
enforcement activities resulted in test shopping of over 600 
funeral homes across the country, and 72 violators have been 
offered an opportunity to enroll in FROP in lieu of litigation.
    The integrated approach of massive sweeps combined with the 
FROP option for identified violators appears to be effective in 
sharply raising and maintaining the level of industry 
compliance. Continuing to pursue this approach is a high 
priority for the Commission. In addition, the Commission will 
shortly initiate a periodic regulatory review of the Funeral 
Rule to assess whether the continuing need for the Rule, and 
whether it could be modified to increase its effectiveness in 
protecting consumers or reducing industry compliance costs.

Competition activities involving funeral homes and cemeteries

    We review mergers to ensure that every local market retains 
enough funeral providers to give consumers a competitive range 
of alternatives. The Commission is also active in watching for 
antitrust problems in the funeral and cemetery industries. 
Where mergers take place between two chains providing such 
services, examine them for overlaps in particular local 
markets, in order to ensure that every local market retains 
enough providers to give consumers a competitive range of 
alternatives.
    As part of this program, the Commission recently 
investigated a large proposed acquisition. This acquisition 
would have involved possibly significant consolidations of 
funeral homes in at least 42 communities, and possibly 
significant consolidations of perpetual care cemetery services 
in at least seven communities. The proposed acquisition was 
eventually abandoned, in part, according to the companies 
involved, because of the pending investigation.

Living trusts

    In 1997, cease and desist orders were made final against 
two companies, The Administrative Company and Pre-Paid Legal 
Services, who misled elderly consumers regarding the benefits 
and appropriateness of living trusts and the specific living 
trusts that the companies sold. In the order settling the 
allegations with the FTC, the companies are prohibited from 
making misrepresentations about living trusts, required to make 
certain disclosures and one company was required to make a 
partial reimbursement to consumers.

Mail or telephone order merchandise

    The Commission's Mail or Telephone Order Merchandise Rule, 
16 CFR Part 435, requires a seller of merchandise ordered by 
mail, telephone or computer to ship goods within the time 
promised or within 30 days, notify consumers of delays, and 
give consumers the option to cancel an order and receive a 
refund. In issuing the original Mail Order Rule in 1975, the 
Commission noted that consumers with mobility problems, 
including older consumers, frequently order by mail and may 
also find it difficult to return merchandise. On March 1, 1994, 
the Commission amended the Rule to include telephone sales. 
Supporting this amendment was evidence submitted by the AARP 
indicating that a significant percentage of persons age 65 and 
older order products by telephone.
    The Commission staff works closely with industry members 
and trade associations to obtain compliance with the Rule, and 
it initiates law enforcement actions where appropriate. During 
1997 and 1998, the FTC obtained eight consent decrees resolving 
alleged Rule violations, resulting in judgments for civil 
penalties totaling $1,894,186, and consumer redress totaling 
$440,643. Two of these civil penalty judgments, against Dell 
Computer Corporation for $800,000 and Iomega Corporation for 
$900,000, are the largest non-fraud penalties ever imposed 
under the Rule.

``Made in USA'' claims

    Many Americans prefer to purchase products made in the 
United States and are interested in the country of origin of 
the products they buy. According to recent survey data, older 
Americans are especially interested in this information. In 
December 1997, the Commission concluded a comprehensive review 
of ``Made in USA'' and other U.S. origin claims in product 
advertising and labeling, and determined to continue to hold 
``Made in USA'' advertising and labeling claims to the ``all or 
virtually all'' standard that the Commission has traditionally 
applied. As part of the review, the Commission received more 
than one thousand written comments, the majority of which 
strongly supported the Commission's traditional standard.
    The Commission also issued an Enforcement Policy Statement 
outlining the factors the Commission will consider in 
determining whether a U.S. origin claim is ``deceptive.'' Under 
the Commission's standard, voluntary, unqualified U.S. origin 
claims must be supported by evidence that a product is ``all or 
virtually all'' made in the United States. The policy further 
states that a ``product that is all or virtually all made in 
the United States will ordinarily be one in which all 
significant parts and processing that go into the product are 
of U.S. origin. In other words, where a product is labeled with 
an unqualified `Made in USA' claim, it should contain only a de 
minimis, or negligible, amount of foreign content.''

Door-to-door sales

    The Cooling-Off Rule, 16 CFR Part 429, requires that 
consumers be given a three-day right to cancel certain sales 
occurring away from the seller's place of business (often known 
as ``door-to-door sales''). In addition, the Commission, in 
some administrative cease and desist orders against companies 
engaged in door-to-door sales, has required companies to allow 
consumers the right to cancel purchases not covered under the 
Rule. The Rule and these orders can particularly benefit older 
Americans who are retired and at home, and who may be exposed 
more frequently to high pressure sales tactics by door-to-door 
or other sellers.
    In 1998, the Commission, with the National Association of 
Consumer Agency Administrators and the National Association of 
Home Builders Remodelers Council, announced a joint consumer 
education campaign to provide consumers with a tool kit to 
protect themselves from home improvement fraud. The kit, ``Home 
Improvement: Tools You Can Use,'' offers tips consumers can use 
to head off problems in advance. It is described in more detail 
in the Consumer Education section of this report. In the 
materials, consumers are advised to make sure the three-day 
right to cancel is included in home improvement contracts 
signed in the consumer's home or at a location other than the 
contractor's permanent place of business. This right to cancel 
can help older Americans, who AARP has noted are most 
vulnerable to unscrupulous door-to-door sellers, cancel ill-
considered financial commitments that would otherwise result in 
financial liens against their homes.

Credit and other financial issues

    Whether consumers are in the red or in the black, they must 
be alert to the possibility of credit fraud. . . . It's 
hazardous to financial health and well-being . . . .
    The Commission responds to numerous credit and related 
financial issues affecting virtually every consumer. The impact 
of being harassed about a debt, denied for a loan or subject to 
credit fraud can be particularly devastating to seniors who may 
have limited choices for credit and limited resources to 
informed and objective financial advice.
    Debt Collection Practices.--Each year, the Commission 
receives thousands of consumer complaints regarding harassing 
and abusive behavior by debt collectors. Many of these letters 
and telephone calls come from senior citizens. In 1997 and 
1998, the Commission brought a number of actions and resolved 
several actions initiated in prior years, against debt 
collectors for violations of the Fair Debt Collection Practices 
Act (FDCPA), 15 U.S.C. Sec. Sec. 1692-1692o.
    In October 1998, one of the largest collection agencies in 
the country, Nationwide Credit, Inc., agreed to pay a $1 
million civil penalty to settle allegations that the company 
had violated the FDCPA by harassing consumers, making false and 
misleading representations to consumers, impermissibly 
contacting third parties about consumers' debts, failing to 
send required validation notices, and failing to verify debts 
when requested to do so by consumers. Other actions in 1997 and 
1998 against National Financial Services, Lundgren & 
Associates, P.C., Trans-Continental Affiliates, and United 
Compucred Collections yielded similar settlements of alleged 
harrassment, abuse and misrepresentation against debtors.
    Equal Credit Opportunity Act.--Among other things, the 
Equal Credit Opportunity Act (ECOA), 15 U.S.C. Sec. 1691 et 
seq., prohibits creditors from discriminating based on age in 
determining whether or not to extend credit. The ECOA's 
implementing Regulation B prohibits creditors from discounting 
or refusing to consider an applicant's income from a pension or 
other retirement benefit or from denying credit because an 
applicant, on the basis of age, does not qualify for credit-
related insurance. The ECOA also prohibits discrimination based 
on the fact that an applicant's income is derived from a public 
assistance source, including Social Security, which is more 
likely to be received by the elderly. To help detect 
discrimination in mortgage credit based on age or other 
prohibited factors (such as sex or race), Regulation B requires 
mortgage lenders to take written applications for credit and to 
record the race/national origin, sex, marital status, and age 
of applicants. The ECOA also requires written notice to 
consumers of the reasons for a denial of credit. The Truth in 
Lending Act (TILA), a related statute, requires that all 
borrowers receive accurate disclosure of the cost of credit.
    In 1997, the Commission entered into two separate but 
related settlement agreements with The Money Tree, Inc. (Money 
Tree), a Georgia-based lender and its president. The complaint 
in the first action charged that Money Tree violated the ECOA 
by discriminating against elderly consumers and those who 
received income from public assistance. The complaint alleged 
that Money Tree discriminated against elderly applicants by 
discouraging them from applying for credit, denying their 
applications if they did apply, or offering them credit on less 
favorable terms than younger applicants because credit-related 
insurance was not available due to the applicants' age. The 
complaint alleged that Money Tree discriminated against 
applicants who received income from public assistance, 
including Social Security, by imposing stricter loan terms on 
those applicants than on employed applicants, regardless of 
income level, and by collecting, or trying to collect, loan 
payments from public assistance customers before they were due. 
Further, the complaint alleged that Money Tree required, as a 
condition of the extension of credit, that applicants who 
received public assistance participate in a program in which 
their public assistance payments were deposited into a bank 
designated by Money Tree while employed applicants were not 
required to participate in such a program. Under the agreement 
to settle the ECOA charges, Money Tree paid $75,000 in civil 
penalties and was barred from discrimination in the future 
against elderly applicants and applicants who receive public 
assistance.
    The second agreement involving Money Tree settled charges 
that Money Tree violated the TILA by requiring applicants to 
purchase some combination of credit-related insurance or auto 
club membership in order to obtain a loan. These ``extras'' 
cost consumers who borrowed $150 to $400 an estimated 
additional $80, plus interest. The TILA and its implementing 
Regulation Z require that such mandatory charges be included in 
the finance charge and annual percentage rate (APR) disclosed 
to the consumer. According to the complaint, Money Tree failed 
to do this, and instead, wrongfully included the extras in the 
amount financed in violation of the TILA and Regulation Z. The 
complaint also alleged that Money Tree engaged in unfair 
practices in violation of the FTC Act by inducing consumers to 
sign statements asserting that they had voluntarily purchased 
the extras, when in fact, they were required to pay for the 
extras as a condition of receiving the loan. The redress plan 
under the second agreement required Money Tree to offer all of 
its current customers the opportunity to cancel the credit-
related insurance and to obtain cash refunds or credits.
    In 1998, the Commission filed suit against a Washington, 
D.C. area mortgage lender for violations of the ECOA and 
Regulation B, among other charges. The complaint against 
Capital City Mortgage Corporation (Capital City) states that, 
``[i]n many instances, defendants's borrowers are minority and/
or elderly persons living on fixed or low incomes in 
Washington, D.C., Maryland, and Virginia, who borrow primarily 
for personal, family, or household purposes.'' The complaint 
alleges that Capital City makes high interest rate (20 to 24 
percent) loans to those borrowers and that the loans are often 
interest-only balloon loans in which a borrower, after making 
payments for the term of the loan, still owes the entire amount 
of the loan principal. These loans are often secured by the 
borrowers' homes and typically are made based on the worth of 
the home rather than on the borrower's creditworthiness or 
income.
    The Commission complaint alleged that this company and its 
president violated the ECOA and Regulation B by failing to take 
written applications for mortgage loans; failing to collect 
required information about the race/national origin, sex, 
marital status, and age of applicants; failing to provide 
written notice of adverse action; or when providing notice of 
adverse action, failing to provide the applicant with: (1) the 
correct principal reason for the action taken or (2) the 
correct name and address of the Federal Trade Commission, the 
federal agency that administers compliance with the ECOA with 
respect to Capital City. The Commission is seeking civil 
penalties and injunctive relief for violations of the ECOA.
    Home Equity Lending Abuses.--The Commission is taking a 
variety of steps to address reported abuses in the subprime 
home equity market, which may disproportionately affect elderly 
borrowers who are more likely to have equity in their homes. 
First, the Commission is increasing its enforcement activities 
to halt subprime lenders who are engaged in abusive lending 
practices. At the same time, the Commission has been working 
with states to increase and coordinate enforcement efforts. The 
Commission also is educating consumers in order to help them 
avoid potential home equity lending abuses.
    The Commission's complaint against Capital City alleged 
numerous violations of a number of federal laws resulting in 
serious injury to borrowers, including the loss of their homes. 
The Commission's complaint alleges that the defendants engaged 
in deceptive and unfair practices against borrowers at the 
beginning, during, and at the end of the lending relationship, 
in violation of Section 5 of the FTC Act. The complaint alleges 
that the defendants deceived borrowers about various loan 
terms; for example, by making representations that a loan was 
an amortizing loan that would be paid off by making payments 
each month. In fact, the loan was an interest-only balloon loan 
with the entire loan principal amount due after all of the 
monthly payments were made. The complaint also alleges that the 
defendants deceived borrowers during the loan period with phony 
charges of inflated monthly payment amounts, overdue balances, 
arrears, service fees, and advances. In addition, the complaint 
alleges that the defendants deceived borrowers regarding 
amounts owed to pay off the loans. Further, the complaint 
alleges that the defendants violated the FTC Act by: 
withholding some loan proceeds while requiring a borrower to 
make monthly payments for the entire loan amount; foreclosing 
on borrowers who were in compliance with their loan terms; and 
failing to release the company's liens on title to borrowers' 
homes even after the loans were paid off. The complaint states 
that, after foreclosing, Capital City would buy the properties 
at auction for prices much lower than the appraised value of 
the properties. In addition to the Commission's allegations of 
violations of the FTC Act, ECOA, and FDCPA discussed above, the 
Commission also charged Capital City with violations of the 
TILA.
    In addition to its casework and ongoing investigations of 
alleged home equity abuses by other lenders, the Commission is 
sharing its knowledge and experience with other enforcement 
agencies and with consumers. During 1997, the Bureau of 
Consumer Protection's Division of Credit Practices (now the 
Division of Financial Practices) held joint law enforcement 
sessions on home equity lending abuses with state regulators 
and law enforcers in six cities around the country. These 
training sessions were conducted to assist states in exercising 
their relatively new enforcement authority under the Home 
Ownership and Equity Protection Act (HOEPA) amendment to the 
TILA, a law intended to curb abuses in high rate, high fee 
mortgage lending, and to share information about recent trends.
    Jodie Bernstein, Director of the Commission's Bureau of 
Consumer Protection, testified before the Senate Special 
Committee on Aging on home equity abuses in the subprime 
lending market on March 16, 1998. The Commission recognizes 
that abuses in the home equity lending market are a serious 
national problem. Due to sharp growth in the subprime mortgage 
industry, it appears that the abuses by subprime lenders are on 
the rise. As a result of unfair and deceptive practices, and 
other federal law violations by certain lenders, vulnerable 
borrowers--including the elderly--are facing the possibility of 
paying significant and unnecessary fees and, in some cases, 
losing their homes. Using its enforcement authority, the 
Commission continues to work to protect consumers from these 
abuses.

        CONSUMER EDUCATION ACTIVITIES AFFECTING OLDER CONSUMERS

    In addition to its law enforcement activities, the 
Commission, through its Office of Consumer and Business 
Education (OCBE), is involved in preparing, promoting and 
distributing a variety of consumer publications and broadcast 
materials in print and on the Web. Many of the subjects are of 
significant interest to older consumers. In addition, in the 
past two years, staff members of the Commission and the 
Commission have spoken to news reporters \11\ and local groups 
such as the Pueblo Advisory Council on Aging and the Colorado 
Coalition for Elder Rights and Adult Protection on issues of 
particular interest to older adults.
---------------------------------------------------------------------------
    \11\ For example, staff in the Denver regional office participated 
with other law enforcement and the AARP in a television show on 
telemarketing fraud, which evoked more than 2,000 calls to the station.
---------------------------------------------------------------------------

Summary of 1997-1998 consumer education activities

    During calendar years 1997-1998, the Commission published 
more than 150 education materials covering a broad range of 
consumer protection topics. More than 45 are of special 
interest to older Americans. Most FTC consumer publications are 
not age-specific. However, publications on certain topics, such 
as telemarketing scams, health care, funeral services, 
investments, credit issues, and the Internet, highlight many of 
the needs and concerns of older citizens. In order to reach 
consumers, the message gets delivered through brochures, one-
page alerts, bookmarks, postcards, and public service 
announcements on the Web and in the classified ad sections of 
newspapers.

Elder care issues

    An estimated 22.4 million U.S. households--nearly one in 
four--now are providing care to a relative or friend aged 50 or 
older or have provided care during the previous 12 months, 
according to a recent survey by the National Alliance for 
Caregiving and the American Association of Retired Persons 
(AARP). Other surveys suggest that today's Baby Boomers--adults 
born between 1946 and 1965--likely will spend more years caring 
for a parent than for their children. A/PACT (``Aging Parents 
Adult Children Together'') is a series of 10 articles produced 
by the Federal Trade Commission in partnership with AARP that 
introduce elder care issues to aging parents and their adult 
children. The articles provide information and encourage 
families to explore options and make careful decisions that can 
help maximize independence, comfort and quality of life. The 
series begins with an article about protecting elders against 
fraud. Subsequent articles introduce care needs like daily 
money management services, making homes safe for elders, 
alternative living arrangements, and long-term care insurance. 
The articles are written by medical, legal, financial and 
gerontology experts, as well as caregiver support 
organizations. Each article includes a list of resources for 
more information. The series was distributed by the FTC, AARP, 
and a number of other private-sector partners.

Informing consumers about common frauds

    The FTC produced education pieces that focus on a variety 
of fraudulent enterprises and offer tips on how to recognize 
and avoid these scams. One offensive scheme involves fraudulent 
charitable fundraising. As part of Operations False Alarm and 
Missed Giving, the Commission published the following consumer 
materials with the National Association of Attorneys General 
(NAAG): Make Your Donations Count, Charitable Donations: Give 
or Take, and Dialing for Dollars: When Fund-raisers Call. The 
publications identify deceptive fundraising schemes and suggest 
ways to avoid becoming a victim.
    In connection with its efforts to inform consumers about 
fraudulent prize promotions, the Commission published materials 
with NAAG and the U.S. Postal Inspection Service: Is There a 
Bandit in Your Mailbox? Wanted: The Bandit in Your Mailbox, The 
Mailbox Bandit and How to Spot the Bandit in Your Mailbox. The 
materials tell consumers how to recognize and avoid mass mail 
scam artists who use direct mail, e-mail and illegal, 
unsolicited faxes to hype bogus sweepstakes, travel scams, 
chain letters, illegal foreign lotteries and sham prize offers.
    Additional telemarketing brochures issued during 1997-98 
include: Telemarketing Travel Fraud with the American Society 
of Travel Agents, Reloading Scams: Double Trouble for 
Consumers, Putting Cold Calls on Ice and Magazine Subscription 
Scams.
    At the local level, the elderly in many cultures and 
communities seek advice on business transactions from their 
religious leaders, particularly where they may not have adult 
children, lawyers, or accountants to consult. Commission staff 
continued the partnership, that began in 1995, with the Harlem 
Consumer Education Council and the Harlem Branch Office of the 
New York State Attorney General. Workshops were conducted at a 
Harlem church for ministers, priests, and rabbis on a wide 
range of consumer issues, including the continued victimization 
of older Americans via telemarketing fraud and door-to-door 
sales.
    Commission staff also continue to reach out to seniors 
through conferences, presentations and participation with 
various partner-led education efforts. For example, in Denver, 
Colorado, Commission staff continued to team with the Colorado 
Attorney General, the Denver District Attorney, the Better 
Business Bureau, and the American Association of Retired 
Persons (AARP) to sponsor a conference to educate seniors about 
all types of fraud, including telemarketing fraud, under the 
group name Seniors Against Fraud and Exploitation (SAFE). In 
the Seattle area, commission staff also continued to train 
student and senior volunteers to give presentations on 
telemarketing fraud to senior centers.
    Finally, Commission staff participated in two ``reverse 
boilerrooms'' coordinated by AARP: one in Illinois the other in 
Denver. The reverse boilerroom is a means of providing consumer 
education to persons whose names appear on lead, or ``mooch,'' 
lists and therefore are particularly likely to be contacted by 
fraudulent telemarketers. The volunteers in a reverse 
boilerroom call consumers on the lists, talk with them about 
the risks of telemarketing fraud, and inform them that their 
names and telephone numbers are circulating among real 
boilerroom scam artists.

Health

    Recent advances in treating impotence have opened the 
floodgates for bogus remedies for this condition. The 
Commission produced The Truth About Impotence Treatment Claims 
to help consumers evaluate claims that many want to believe but 
shouldn't.
    As part of Project Workout with the American College of 
Sports Medicine, the American Council on Exercise, the American 
Orthopaedic Society of Sports Medicine and Shape Up America!, 
the Commission published a series of materials on buying 
exercise equipment: Pump Fiction: Tips for Buying Exercise 
Equipment, The Muscle Hustle: Test Your Exercise I.Q. and 
Avoiding the Muscle Hustle.
    Other health-related publications produced during this 
period include: Sound Advice on Hearing Aids and Generic Drugs: 
Saving Money at the Pharmacy.

Funerals

    Consumers continue to request copies of Caskets and Burial 
Vaults and Funerals: A Consumer Guide which explain their 
rights under the FTC's Funeral Rule. During this period OCBE 
distributed more than 320,000 copies of the brochures and 
received nearly 14,000 hits on the FTC web site.

Credit and financial matters

    Credit and financial issues that have a direct impact on 
older consumers were among the topics of several publications 
distributed by the FTC in 1997-98. Getting Credit When You're 
Over 62, How to Dispute Credit Report Errors, Credit and ATM 
Cards: What To Do If They're Lost or Stolen, Fair Credit 
Reporting and Avoiding Credit and Charge Card Fraud emphasize 
and explain consumer rights under the law. 
    OCBE also participated in the Financial Services Education 
Coalition (FSEC) to produce Helping People In Your Community 
Understand Basic Financial Services: A Community Educators 
Guide. The Guide, which also contains a series of consumer fact 
sheets, is intended for use with a variety of audiences who do 
not have accounts with financial institutions or who need basic 
information about how to use accounts. The precipitating factor 
for the formation of the Coalition was the Department of the 
Treasury's EFT 99 initiative requiring Direct Deposit for most 
federal payments by January 2, 1999.
    On the ``homefront'' during 1997, OCBE worked with the D.C. 
Office of the Corporation Counsel and the D.C. Department of 
Consumer and Regulatory Affairs to produce, promote and 
distribute the Consumer Alert Thinking About a Home 
Improvement? Don't Get Nailed. This successful effort was 
expanded and taken nationwide in 1998 with the National 
Association of Home Builders RemodelerTM Council and 
the National Association of Consumer Agency Administrators. The 
consumer education kit, Home Improvement: Tools You Can Use, 
contains just about everything an organization needs to execute 
a community education campaign to help consumers learn about 
home improvements and how to avoid becoming a victim of 
fraudulent contractors. The kit includes: campaign 
backgrounder; instructions and content list; Home Sweet Home . 
. . Improvement--Facts for Consumers; two consumer quizzes: 
Test Your Skills at Hiring a Home Improvement Contractor; Test 
Your Skills at Avoiding a Home Repair Nightmare; bookmark--Home 
Improvement. Tips for Hiring a Contractor; two scripts for 
radio PSAs; a community forum script/presentation--Seven Key 
Words to Hammer Home the Message; sample proclamation; glossary 
of home improvement terms; sample press release--Local 
Officials on Home Improvement. Don't Get Nailed; newsletter 
article--Hiring a Home Improvement Contractor. Don It Get 
Nailed; sample editorial; and two sets of ``ads'' for the 
appropriate sections of the classifieds or phone directories--
home improvement and home repair and maintenance.
    The Commission also published High-Rate, High-Fee Loans 
(Section 32 Mortgages) to alert homeowners to their rights 
under the Home Ownership and Equity Protection Act (HOEPA). In 
conjunction with the filing of the Capital City complaint, the 
Commission put out two publications to help consumers recognize 
and avoid home equity scams and abuses: Avoiding Home Equity 
Scams and Home Equity Loans: Borrowers Beware.
    Additional housing-related brochures include: After a 
Disaster. Hiring a Contractor, Avoiding Home Equity Scams, Home 
Equity Loans: Borrowers Beware, Reverse Mortgages: Cashing in 
on Home Ownership and Home Equity Loans: The Three Day 
Cancellation Rule. 

Internet

    The Commission has worked hard to bring consumers up to 
speed about the Internet. The Commission recently posted the 
privacy information page, a one-stop site for consumers to find 
out how to protect their personal information. In cooperation 
with NAAG, the Commission issued Site-Seeing on the Internet: A 
Consumer's Guide to Travel in Cyberspace, highlighting the 
kinds of services available in cyberspace and offering tips on 
protecting personal information. Other Interned-related 
consumer publications include: Net-Based Business 
Opportunities: Are Some Flop-portunities?, Cybersmarts: Tips 
for Protecting Yourself When Shopping Online with American 
Express Company, Call For Action, and the Direct Marketing 
Association, Online Auctions: Going, Going, Gone and How to Be 
Web Ready. 
    The Commission is also attempting to use new technologies 
such as the internet to reach consumers who might get taken by 
the slick appeal of con artists on the internet. The FTC has 
posted eleven ``teaser'' sites. These are fake scam sites that 
contain solicitations and phrases like those found on 
fraudulent web pages. As a consumer clicks through a ``teaser'' 
site, he or she eventually arrives at a warning that states, 
``If you responded to an ad like this one, You Could Have Been 
Scammed!'' The consumer then receives some helpful tips and may 
link back to FTC.GOV for more information about how to avoid 
online fraud.

Access to FTC publications

    In addition to disseminating print versions of its 
materials through a well-developed distribution mechanism, all 
consumer publications produced by the agency are available 
online through FTC ConsumerLine at www.ftc.gov.
    In December 1997, the FTC debuted the U.S. Consumer Gateway 
at www.consumer.gov the first Internet site to provide ``one-
stop'' access to federal consumer information. The Gateway 
offers information from federal agencies arranged by subject. 
Each of the site's 10 major subject areas, including Food, 
Health, Money, Product Safety, and Technology, has 
subcategories allowing consumers to locate and link to 
appropriate and late-breaking information quickly and easily. 
The web site is a cooperative effort among federal agencies, 
including the Food and Drug Administration, National Highway 
Traffic Safety Administration, Securities and Exchange 
Commission, Department of Agriculture, Federal Deposit 
Insurance Corporation, Environmental Protection Agency, Federal 
Communications Commission, Treasury, Federal Reserve Board, 
Centers for Disease Control and Prevention, and the State 
Department Bureau of Consular Affairs. The initiative to 
develop consumer.gov was led by the FTC's Bureau of Consumer 
Protection. As the ``host'' agency, the FTC maintains the site 
server and provides technical support.

                               Conclusion

    This report summarizes Commission programs from 1997 and 
1998 that may be of particular interest or usefulness to older 
Americans. Through its law enforcement and consumer education 
efforts, the Commission strives to provide a fair and 
competitive marketplace where older consumers, and their 
younger counterparts, can make decisions and choose their 
purchases from a competitive range of options and on the basis 
of complete and truthful information.

                   ITEM 21--GENERAL ACCOUNTING OFFICE

                              ----------                              


   CALENDAR YEARS 1997 AND 1998 REPORTS AND CORRESPONDENCE ON ISSUES 
                       AFFECTING OLDER AMERICANS

    During calendar years 1997 and 1998, GAO issued 132 reports 
on issues affecting older Americans. Of these, 70 were on 
health, 3 on housing, 35 on income security, and 24 on the 
Department of Defense (DOD) and veterans.

                             Health Issues

Alzheimer's disease: Estimates of prevalence in the United States (GAO/
        HEHS-98-16, 01/28/98)
    At least 1.9 million Americans age 65 years or older 
suffered from Alzheimer's Disease in 1995, more than half of 
whom experienced moderate to severe cases of the illness. The 
prevalence of Alzheimer's increases sharply with age: Most of 
the estimated 1.9 million cases were among persons aged 75 to 
89. Projecting the number of persons with Alzheimer's Disease 
gives some indication of the long-term care and research 
challenges facing the United States as people grow older. On 
the basis of projections of longevity, GAO estimates that more 
than 2.9 million Americans will suffer from the disease by the 
year 2015; of these, more than 1.7 million will need active 
assistance in personal care. Because of the uncertainty 
surrounding current estimates of Alzheimer's Disease, several 
studies are now underway, supported by the National Institute 
on Aging, that should provide better estimates of the 
prevalence of Alzheimer's Disease among African-Americans, 
Hispanics, and other subpopulations.
California nursing homes: care problems persist despite Federal and 
        State oversight (GAO/HEHS-98-202, 07/27/98)
    Overall, despite federal and state oversight, some 
California nursing homes are not being monitored closely enough 
to guarantee the safety and welfare of their residents. 
Unacceptable care continues to be a problem in many nursing 
homes. GAO found that nearly one in three California nursing 
homes was cited by state surveyors for serious or potentially 
life-threatening care problems. Moreover, GAO believes that the 
extent of serious care problems portrayed in federal and state 
data is likely to be understated. Nursing homes generally could 
predict when their annual on-site reviews would occur and, if 
inclined, could take steps to mask problems. GAO also found 
irregularities in homes' documentation of the care provided to 
their residents, such as missing pages of clinical notes needed 
to explain a resident's injury later observed by a physician. 
Finally, GAO found many cases in which California Department of 
Health Services surveyors did not identify serious care 
problems, including dramatic weight loss, failure to prevent 
bed sores, and poor management of incontinence. Even when the 
state identified serious shortcomings, the Health Care Finance 
Administration's (HCFA) enforcement policies have not ensured 
that the deficiencies are corrected and stay that way. For 
example, California state surveyors cited about one in 11 
nursing homes in GAO's analysis--accounting for more than 
17,000 resident beds--for violations in both of their last two 
surveys that resulted in harm to residents. Yet HCFA generally 
took a lenient stance toward many of these facilities. GAO 
recommends a less predictable schedule of inspections for all 
nursing homes and prompt imposition of sanctions when 
violations are found. GAO summarized this report in testimony 
before Congress; see: California nursing homes: Federal and 
State oversight inadequate to protect residents in homes with 
serious care violations (GAO/T-HEHS-98-219, July 28, 1998)
Cancer clinical trials: Medicare reimbursement denials (GAO/HEHS-98-
        15R, 10/14/97).
    Pursuant to a congressional request, GAO determined the 
potential effect of the proposed Medical Cancer Clinical Trial 
Coverage Act by estimating the current rate at which Medicare 
carriers deny reimbursements for routine patient care costs 
when beneficiaries are enrolled in cancer clinical trials.
    GAO noted that: (1) its survey method did not allow it to 
give a precise national estimate of the rate at which 
reimbursement is denied for Medicare beneficiaries enrolled in 
cancer clinical trials; and (2) the results suggest that denial 
of reimbursement is relatively rare, given the populations and 
time period of its review.
Comments on H.R. 4229: A Proposal for a home health prospective payment 
        system (GAO/HEHS-97-144R, 05/28/97).
    Pursuant to a congressional request, GAO reviewed H.R. 
4229, introduced in the 104th Congress, which would require the 
Health Care Financing Administration (HCFA) to establish, after 
congressional approval, a prospective payment system (PPS) for 
Medicare home health care 4 years after enactment that would 
pay fixed rates for episodes of care.
    GAO noted that: (1) home health agencies (HHA) would be 
paid on a per visit basis with rates for each type of visit 
equal to the national average Medicare payment in 1994, 
adjusted for geographic wage differences and updated for 
inflation using the Medicare home health market basket index; 
(2) the transitional payment methods would give HHA incentives 
to reduce costs per visit, but would provide little if any 
incentive for many agencies to control the number of visits 
furnished; (3) Medicare's increased costs for home health have 
been driven much more by increased numbers of visits per 
beneficiary and more beneficiaries being served than by growth 
in cost per visit; (4) basing the limits on episodes in phase 
II would at best provide weak incentives to control the number 
of visits; (5) as GAO reported in 1996, the average number of 
visits is skewed by a substantial portion of patients who 
receive extraordinarily high numbers of visits and by the 
significant variation in the average number of visits supplied 
by different HHAs; (6) thus, while over time such a payment 
method might provide incentives to hold down the growth in 
visits per episode, the short-term effects are not likely to be 
significant; (7) a potential problem with an episode payment 
system with stronger cost control incentives is that HHAs might 
respond by reducing the number of visits during the episode, 
potentially lowering the quality of care; (8) another problem 
with the phase II proposal is that it uses the 18 case mix 
categories for HCFA's PPS demonstration project, which HCFA has 
stated are not sufficiently developed for general use and 
explain less than 10 percent of the variation in cost across 
patients; (9) efforts to identify fraud and abuse indicate that 
substantial amounts of noncovered care are likely to be 
reflected in HCFA's home health care utilization data; (10) 
similar concerns exist regarding the home health cost data 
base; (11) the percentage of HHAs subjected to field audits has 
generally decreased over the years, as has the extent of 
auditing done at the facilities that are audited; (12) for 
these reasons, there is little assurance that HCFA's cost data 
reflect only reasonable costs that are related to patient care, 
and using these data to set payment rates and determine extra 
payments to HHAs could result in windfall profits for them; 
(13) GAO believes that it is questionable whether savings would 
be realized by Medicare if H.R. 4229 was adopted; and (14) 
moreover, mechanisms do not exist to protect beneficiaries from 
potential quality of care problems that could arise from the 
incentives to shorten visit times and decrease the number of 
visits in an episode of care.
Federal health programs: Comparison of Medicare, the Federal Employees 
        Health Benefits Program, Medicaid, Veterans' Health Services, 
        Department of Defense Health Services, and Indian Health 
        Services (GAO/HEHS-98-231R, 08/07/98)
    GAO compared the Medicare program with five other federal 
health programs: the Federal Employees Health Benefits Program 
(FEHBP); the Medicaid and Department of Veterans' Affairs (VA) 
health programs; the Department of Defense's (DOD) TRICARE 
health program; and the Indian Health Service (IHS). GAO also 
compared key features of these programs, including: (1) 
administrative structures, including the number of pages of 
legislation and regulation; (2) benefit design, including 
benefits covered and out-of-pocket costs to beneficiaries; (3) 
costs, including per capita costs and growth rates; and (4) 
patient and provider satisfaction.
    GAO noted that: (1) the programs' approaches to financing 
health care for their eligible populations differ markedly; (2) 
these differences are generally attributable to the programs' 
serving different eligible populations and the programs' 
evolving relatively independently; (3) FEHBP serves as an 
insurance purchaser by contracting with several hundred private 
health plans to offer health benefits to nearly 9 million 
federal employees, retirees, spouses, and dependents; (4) FEHBP 
administrators negotiate premiums and benefits with 
participating health plans, but the program does not directly 
reimburse claims or directly provide health care services; (5) 
the largest federal health programs, Medicare and Medicaid, 
have traditionally acted as insurers for their beneficiaries by 
reimbursing private health care providers for a defined set of 
health care services; (6) thus, Medicare and Medicaid 
administrators directly perform or contract for many of the 
claims handling and health care provider relations 
responsibilities that private health plans provide for FEHBP; 
(7) both Medicare and Medicaid, however, have increasingly 
allowed or required their enrollees to choose alternative 
benefit packages offered by health maintenance organizations 
and other private managed care plans more closely resembling 
FEHBP by serving as insurance purchasers for at least a portion 
of their enrollees; (8) VA's and IHS' health programs are 
mainly direct health care providers that own hospitals and 
other health care facilities and employ or contract directly 
with physicians and other health care professionals to provide 
services to eligible beneficiaries; (9) DOD's TRICARE also 
mainly provides direct health care services but integrates its 
direct delivery system with private health plans and providers, 
thereby also serving as an insurance purchaser; (10) these 
direct care programs' approach involves the federal 
government's owning and operating a network of health care 
facilities and managing health care professionals as employees, 
a distinctly different approach to financing health care than 
that used by FEHBP, Medicare, or Medicaid; (11) in addition, 
several federal health programs perform a public role beyond 
financing health care services for their eligible populations; 
and (12) these roles include funding or conducting health care 
research or graduate medical education; providing additional 
funds to hospitals that serve large populations of low-income 
people; establishing physician and hospital payment systems 
that are adapted by other federal health programs and private 
health plans; and providing public health services.
Health care services: How continuing care retirement communities manage 
        services for the elderly (GAO/HEHS-97-36, 01/23/97)
    Continuing care retirement communities provide their 
residents with various services--from housing to long-term care 
to recreation--in an effort to bring the benefits of managed 
care to the elderly. About 350,000 residents live in 1,200 of 
these communities nationwide, most of which are private, 
nonprofit agencies, often with religious affiliations. The 
communities GAO report examined managed to meet the needs of 
both healthy residents and those with chronic conditions. They 
use active strategies to promote health, prevent disease, and 
detect health problems early by encouraging exercise, proper 
nutrition, social contacts, immunizations, and periodic medical 
exams. Many of these communities also have teams of nurses, 
social workers, rehabilitation specialists, doctors, and 
dieticians to plan and manage residents' care. Active 
monitoring of residents with chronic diseases, such as 
arthritis, hypertension, and heart disease, is an integral part 
of this coordinated, multidisciplinary approach to managing 
care. Although the health benefits of these practices are 
generally recognized, little evidence exists to demonstrate 
health care cost savings.
HCFA: Inpatient hospital deductible and hospital and extended care 
        services coinsurance amounts for 1999 (GAO/OGC-99-9, 11/05/98)
    Pursuant to a legislative requirement, GAO reviewed the 
Health Care Financing Administration's (HCFA) new rule on 
inpatient hospital deductible and hospital extended care 
services coinsurance amounts for 1999. GAO noted that: (1) the 
new rule would announce coinsurance amounts for services 
furnished in calendar year 1999 under Medicare's hospital 
insurance program; and (2) HCFA complied with applicable 
requirements in promulgating the rule.
HCFA: Medicaid Program--Coverage of personal care services (GAO/OGC-97-
        64, 09/30/97)
    Pursuant to a legislative requirement, GAO reviewed the 
Health Care Financing Administration's (HCFA) new rule on 
Medicaid coverage of personal care services. GAO noted that: 
(1) the rule would revise the requirements for Medicaid 
coverage of personal care services furnished in a home or other 
location as an optional benefit, effective for services 
furnished on or after October 1, 1994; and (2) HCFA complied 
with applicable requirements in promulgating the rule.
HCFA: Medicaid Program--State allotments for payment of Medicare part B 
        premiums for qualifying individuals in Federal fiscal year 1998 
        (GAO/OGC-98-28, 02/09/98)
    Pursuant to a legislative requirement, GAO reviewed the 
Health Care Financing Administration's (HCFA) new rule on the 
Medicaid program. GAO noted that: (1) the rule would announce 
the federal fiscal year 1998 state allotments that are 
available to pay Medicare Part B premiums for two new 
eligibility groups and describe the methodology used to 
determine each state's allotment; and (2) HCFA complied with 
applicable requirements in promulgating the rule.
HCFA: Medicare and Medicaid programs; hospital conditions of 
        participation; identification of potential organ, and eye 
        donors and transplant hospitals' provision of transplant-
        related data (GAO/OGC-98-58, 07/07/98)
    Pursuant to a legislative requirement, GAO reviewed the 
Health Care Financing Administration's (HCFA) new rule on 
Medicare and Medicaid programs' hospital conditions on 
participation, identification of potential organ, tissue, and 
eye donors, and transplant hospitals' provision of transplant-
related data. GAO noted that: (1) the rule would: (a) revise 
current hospital conditions of participation relating to organ 
procurement by modifying the relationship between hospitals and 
organ procurement organizations (OPOs) in order to increase the 
number of organs available for donation and transplantation; 
(b) require that a hospital have an agreement with an OPO, 
under which it will contact the OPO in a timely manner about 
individuals who die or whose death is imminent in the hospital; 
(c) require hospitals to have an agreement with at least one 
tissue bank and eye bank for referrals; (d) require hospitals 
to collaborate with the OPO in notifying families of potential 
donors of their donation options and work cooperatively with 
OPOs, tissue, and eye banks, in educating hospital staff on 
donation issues, reviewing death records to improve 
identification of potential donors, and maintaining potential 
donors while testing and placement of organs occurs; and (e) 
require transplant hospitals to provide organ-transplant-
related data as requested by the Organ Procurement and 
Transplantation Network, the Scientific Registry, and OPOs; and 
(2) HCFA complied with applicable requirements in promulgating 
the rule.
HCFA: Medicare and Medicaid programs--Salary equivalency guidelines for 
        physical therapy, respiratory therapy, speech language 
        pathology, and occupational therapy services (GAO/OGC-98-30, 
        02/23/98)
    Pursuant to a legislative requirement, GAO reviewed the 
Health Care Financing Administration's (HCFA) new rule on 
salary equivalency guidelines. GAO noted that: (1) the rule 
would revise the salary equivalency guidelines for Medicare 
payments for the reasonable costs of physical therapy, 
respiratory therapy, speech language pathology and occupational 
therapy services furnished under arrangements by an outside 
contractor; and (2) HCFA complied with applicable requirements 
in promulgating the rule.
HCFA: Medicare--Physician fee schedule for calendar year 1998 and 
        payment policies and relative value unit adjustments and 
        clinical psychologist fee schedule (GAO/OGC-98-10, 11/12/97)
    Pursuant to a legislative requirement, GAO reviewed the 
Health Care Financing Administration's (HCFA) new rule on 
changes affecting Medicare Part B payment. GAO noted that the 
rule: (1) implements changes relating to physician services, 
including geographic practice cost index changes, clinical 
psychologist services, physician supervision of diagnostic 
tests, establishment of independent diagnostic testing 
facilities, the methodology used to develop reasonable 
compensation equivalent limits, payment to participating and 
nonparticipating suppliers, global surgical services, caloric 
vestibular testing, and clinical consultations; (2) implements 
provisions in the Balanced Budget Act of 1997 relating to 
practice expense relative value units, screening mammography, 
colorectal cancer screening, screening pelvic examinations, and 
EKG transportation; and (3) finalizes the 1997 interim work 
relative value units and issues interim work relative value 
units for new and revised codes for 1998. GAO noted that HCFA 
complied with applicable requirements in promulgating the rule.
HCFA: Medicare Program: Changes to the hospital inpatient prospective 
        payment systems and fiscal year 1999 rates (GAO/OGC-98-70, 08/
        14/98)
    Pursuant to a legislative requirement, GAO reviewed the 
Health Care Financing Administration's (HCFA) new rule on 
changes to the hospital inpatient prospective payment systems 
and fiscal year 1999 rates. GAO noted that: (1) the final rule 
would revise the Medicare hospital inpatient prospective 
payment systems for operating costs and capital-related costs 
to implement applicable statutory requirements; (2) the final 
rule would implement applicable statutory requirements 
concerning the payment for the direct costs of graduate medical 
education; and (3) HCFA complied with the applicable 
requirements in promulgating the rule.
HCFA: Medicare Program--Establishment of the Medicare+Choice Program 
        (GAO/OGC-98-60, 07/13/98)
    Pursuant to a legislative requirement, GAO reviewed the 
Health Care Financing Administration's (HCFA) new rule on the 
establishment of the Medicare Plus Choice program. GAO noted 
that: (1) the rule would implement provisions of the Balanced 
Budget Act of 1997 which established a new Medicare Plus Choice 
program that significantly expands the health care options 
available to Medicare beneficiaries; (2) under the program, 
eligible individuals may elect to receive Medicare benefits 
through enrollment in one of an array of private health plan 
choices beyond the original Medicare program or the plans now 
available through managed care organizations; and (3) HCFA 
complied with applicable requirements in promulgating the rule 
with the exception of the 60-day delay in the effective date 
required by the Small Business Regulatory Enforcement Fairness 
Act of 1996.
HCFA: Medicare Program--Limited additional opportunity to request 
        certain hospital wage data revisions for FY 1999 (GAO/OGC-99-
        20, 12/08/98)
    Pursuant to a legislative requirement, GAO reviewed the 
Health Care Financing Administration's (HCFA) new rule on 
providing hospitals with a limited additional opportunity to 
request certain hospital wage data revisions for fiscal year 
(FY) 1999. GAO noted that: (1) the final rule would provide 
hospitals with a limited additional opportunity to request 
certain revisions to their wage data used to calculate the FY 
1999 hospital wage index; and (2) HCFA complied with applicable 
requirements in promulgating the rule.
HCFA: Medicare Program--Medicare coverage of and payment for bone mass 
        measurements (GAO/OGC-98-59, 07/09/98)
    Pursuant to a legislative requirement, GAO reviewed the 
Health Care Financing Administration's (HCFA) new rule on 
Medicare coverage and payment for bone mass measurements. GAO 
noted that: (1) the final rule with comment period would 
provide for uniform coverage of, and payment for, bone mass 
measurements for certain Medicare beneficiaries for services 
finished on or after July 1, 1998; (2) the rule would implement 
section 4106(a) of the Balanced Budget Act of 1997; and (3) 
HCFA complied with applicable requirements in promulgating the 
rule.
HCFA: Medicare Program--Prospective payment system and consolidated 
        billing for skilled nursing facilities (GAO/OGC-98-50, 05/27/
        98)
    Pursuant to a legislative requirement, GAO reviewed the 
Health Care Financing Administration's (HCFA) new rule on 
Medicare's prospective payment system and consolidated billing 
for skilled nursing facilities. GAO noted that: (1) the rule 
would implement provisions of the Balanced Budget Act of 1997 
related to Medicare payment for skilled nursing facility 
services; (2) these provisions would include the implementation 
of a Medicare prospective payment system for skilled nursing 
facilities, consolidated billing, and a number of related 
changes; (3) the retrospective payment system described in the 
rule replaces the retrospective reasonable cost-based system 
currently utilized by Medicare for payment of skilled nursing 
facility services under Part A of the program; and (4) HCFA 
complied with applicable requirements in promulgating the rule.
HCFA: Medicare Program--Revisions to payment policies and adjustments 
        to the relative value units under the physician fee schedule 
        for calendar year 1999 (GAO/OGC-99-15, 11/17/98)
    Pursuant to a legislative requirement, GAO reviewed the 
Health Care Financing Administration's (HCFA) new rule on 
payment policies and adjustments to the relative value units 
under the physician fee schedule for calendar year 1999. GAO 
noted that: (1) the rule would make several policy changes 
affecting Medicare Part B payments; (2) the changes that relate 
to physicians' services include: (a) resource-based practice 
expense relative value units; (b) medical direction rules for 
anesthesia services; and (c) payment for abnormal Pap smears; 
(3) the rule would also revise HCFA's payment policy for 
nonphysician practitioners, for outpatient rehabilitation 
services, and for some drugs and biologicals; (4) it further 
allows physicians, under certain circumstances, to opt out of 
Medicare and to provide covered services through private 
contractors and permits payment for professional consultations 
via interactive telecommunications systems; and (5) HCFA 
complied with applicable requirements in promulgating the rule.
HCFA: Medicare Program--Schedule of limits on home health agency costs 
        per visit for cost reporting periods beginning on or after 
        October 1, 1997 (GAO/OGC-98-25, 01/27/98)
    Pursuant to a legislative requirement, GAO reviewed the 
Health Care Financing Administration's (HCFA) new rule on the 
Medicare Program's schedule of limits on home health agency 
(HHA) costs per visit for cost reporting periods beginning on 
or after October 1, 1997. GAO noted that: (1) the notice sets 
forth a revised schedule of limits on HHA costs that may be 
paid under the Medicare Program for cost reporting periods 
beginning on or after October 1, 1997; (2) in addition, the 
notice provides, in accordance with the Balanced Budget Act of 
1997, that: (a) there be no changes in the home health per 
visit limits for cost reporting periods beginning on or after 
July 1, 1997, and before October 1, 1997; (b) the establishment 
of the cost per visit limitations for cost reporting periods 
beginning on or after October 1, 1997, be based on 105 percent 
of the median of the labor-related and nonlabor per visit costs 
for freestanding HHAs; (c) there be no updates in the home 
health costs limits for cost reporting periods beginning on or 
after July 1, 1994, and before July 1, 1996; and (d) the wage 
index value that is applied to the labor portion of the per 
visit limitations be based on the geographical area in which 
the home health service is located; and (3) HCFA complied with 
applicable requirements in promulgating the rule.
HCFA: Medicare Program--Schedule of per-beneficiary limitations on home 
        health agency costs for cost reporting periods (GAO/OGC-98-44, 
        04/24/98)
    Pursuant to a legislative requirement, GAO reviewed the 
Health Care Financing Adminstration's (HCFA) new rule on the 
schedule of per-beneficiary limitations on home health agency 
costs for cost reporting periods. GAO noted that: (1) the new 
rule would set forth a new schedule of limitations on home 
health agency costs under the Medicare program; and (2) HCFA 
complied with the applicable requirements in promulgating the 
rule.
HCFA: Medicare Program--Scope of Medicare benefits and application of 
        the outpatient mental health treatment limitation to clinical 
        psychologist and clinical social worker services (GAO/OGC-98-
        47, 05/08/98)
    Pursuant to a legislative requirement, GAO reviewed the 
Health Care Financing Administration's (HCFA) final rule on the 
scope of Medicare benefits and application of the outpatient 
mental health treatment limitation to clinical psychologist and 
clinical social worker services. GAO noted that: (1) the final 
rule would conform the requirements for Medicare coverage of 
services furnished by a clinical psychologist or as an incident 
to the services of a clinical psychologist and for services 
furnished by a clinical social worker with section 6113 of the 
Omnibus Budget Reconciliation Act of 1989, section 4157 of the 
Omnibus Budget Reconciliation Act of 1990, and section 147(b) 
of the Social Security Act Amendments of 1994 (SSA '94); (2) 
the rule would also address the outpatient mental health 
treatment limitation as it applies to clinical psychologist and 
clinical social worker services; (3) the final rule would also 
conform the Medicare program to section 104 of the SSA '94, 
which provides that a Medicare patient in a Medicare-
participating hospital who is receiving qualified psychologist 
services may be under the care of a clinical psychologist with 
respect to those services, to the extent permitted by state 
law; and (4) HCFA complied with applicable requirements in 
promulgating the rule.
HCFA: Monthly actuarial rates and monthly supplementary medical 
        insurance premium rate beginning January 1, 1999 (GAO/OGC-99-
        10, 11/05/98)
    Pursuant to a legislative requirement, GAO reviewed the 
Health Care Financing Administration's (HCFA) new rule on the 
Medicare Program monthly actuarial rates and monthly 
supplementary medical insurance premium rates. GAO noted that: 
(1) the rule would announce the monthly actuarial rates for 
aged (age 65 or over) and disabled (under age 65) enrollees in 
the Medicare Supplementary Medical Insurance (SMI) program; (2) 
it would also announce the monthly SMI premium rate to be paid 
by all enrollees during 1999; (3) the monthly actuarial rates 
for 1999 are $92.30 for aged enrollees and $103.00 for disabled 
enrollees; (4) the monthly SMI premium rate is $45.50; and (5) 
HCFA complied with the applicable requirements in promulgating 
the rule.
Health Care Financing Administration: Medicare Program--Changes to the 
        hospital inpatient prospective payment systems and fiscal year 
        1998 rates (GAO/OGC-97-62, 09/17/97)
    Pursuant to a legislative requirement, GAO reviewed the 
Health Care Financing Administration's (HCFA) new rule on the 
changes to Medicare hospital inpatient prospective payment 
systems. GAO noted that: (1) the rule would revise the Medicare 
hospital inpatient prospective payment systems for operating 
costs and capital-related costs to implement necessary changes 
resulting from the Balanced Budget Act of 1997, P.L. 105-33, 
and changes arising from HCFA's continuing experience with the 
system; (2) because of the recent enactment of the Balanced 
Budget Act of 1997 on August 5, 1997, the changes mandated by 
the act were not included in the notice of proposed rulemaking 
and, therefore, were not available for public comment; (3) HCFA 
has issued this final rule with a comment period on those 
changes so the public may submit comments until October 28, 
1997; and (4) HCFA complied with applicable requirements in 
promulgating the rule.
High-risk program: Information on selected high-risk areas (GAO/HR-97-
        30, 05/16/97)
    This report contains additional information on 12 areas 
included in GAO's list of government programs at high risk for 
waste, fraud, abuse, and mismanagement: defense inventory 
management, Medicare, supplemental security income, information 
security, contract management at the Department of Energy, 
student financial aid, air traffic control modernization, NASA 
contract management, Customs Service financial management, farm 
loan programs, National Weather Service modernization, and 
asset forfeiture programs. It includes descriptions of key open 
GAO recommendations relevant to each area, the implementation 
status of those recommendations, and remaining challenges to 
addressing these high-risk problems. Where possible, GAO has 
identified the federal dollars involved with each program and 
discusses federal dollars at risk from abusive or wasteful 
practices.
High-risk series: Medicare (GAO/HR-97-10, 02/97)
    In 1990, GAO began a special effort to identify federal 
programs at high risk for waste, fraud, abuse, and 
mismanagement. GAO issued a series of reports in December 1992 
on the fundamental causes of the problems in the high-risk 
areas; it followed up on the status of these areas in February 
1995. This, GAO's third series of high-risk reports, revisits 
these troubled government programs and designates five 
additional areas as high-risk (defense infrastructure, 
information security, the year 2000 problem, supplemental 
security income, and the 2000 decennial census), bringing to 25 
the number of high-risk programs on GAO's list. The high-risk 
series includes an overview, a quick reference guide, and 12 
individual reports. The high-risk series may be ordered as a 
full set, a two-volume package including the overview and the 
quick reference guide, or as 12 separate reports describing in 
detail these vulnerable government programs. GAO summarized the 
high-risk series in testimony before Congress (GAO/T-HR-97-22). 
Information on the challenges that the federal government faces 
in safeguarding Medicare is included in this high-risk report.
High-risk series: An overview (GAO/HR-97-1, 02/97)
    In 1990, GAO began a special effort to identify federal 
programs at high risk for waste, fraud, abuse, and 
mismanagement. GAO issued a series of reports in December 1992 
on the fundamental causes of the problems in the high-risk 
areas; it followed up on the status of these areas in February 
1995. This, GAO's third series of high-risk reports, revisits 
these troubled government programs and designates five 
additional areas as high-risk (defense infrastructure, 
information security, the year 2000 problem, supplemental 
security income, and the 2000 decennial census), bringing to 25 
the number of high-risk programs on GAO's list. The high-risk 
series includes an overview, a quick reference guide, and 12 
individual reports. The high-risk series may be ordered as a 
full set, a two-volume package including the overview and the 
quick reference guide, or as 12 separate reports describing in 
detail these vulnerable government programs. GAO summarized the 
high-risk series in testimony before Congress (GAO/T-HR-97-22, 
2/13/97). A separate high-risk report on Medicare issues (GAO/
HR-97-10) provides expanded information from the Medicare 
summary included in this overview report.
Long-term care: Consumer protection and quality-of-care issues in 
        assisted living (GAO/HEHS-97-93, 05/15/97)
    Several federal agencies have jurisdiction over consumer 
protection and quality of care in assisted living facilities. 
However, states have the primary responsibility for developing 
standards and monitoring care. State approaches to oversight 
vary: some states regulate these facilities under standards 
developed for the board and care industry, others have 
developed standards and licensing requirements specifically for 
assisted living facilities, and some are in the process of 
developing them. But little is known about the effectiveness of 
these state approaches or about the extent of problems that 
assisted living residents may be experiencing. Moreover, 
concerns have been raised that the rapid growth in the assisted 
living industry may be outpacing many states' ability to 
monitor and regulate care. According to some experts, consumers 
can find themselves in a facility unable to meet their needs. 
To determine whether an assisted living facility is appropriate 
for them, prospective residents rely on information supplied by 
the facility, including contracts that set forth residents' 
rights and provider responsibilities. However, one recent study 
found that contracts varied in detail and, in some cases, were 
vague and confusing. Overall, little is known about the 
accuracy and adequacy of information furnished to individuals 
and their families who are considering assisted living. GAO 
believes that further research may be needed on these consumer 
protection and quality-of-care issues.
Medicaid: Divestiture of assets to qualify for long-term care services 
        (GAO/HEHS-97-185R, 07/28/97)
    Pursuant to a congressional request, GAO reviewed the 
prevalence of asset transfers to qualify for Medicaid benefits. 
GAO also responded to specific questions regarding the new 
criminal provision of the Health Insurance Portability and 
Accountability Act.
    GAO noted that: (1) it is difficult to determine from 
available studies the prevalence of divestitures that are made 
with the purpose of becoming eligible for Medicaid; (2) several 
limited-scope studies, however, have shown that some 
individuals do shelter their assets--through transfers, 
conversions, and other divestitures--despite legislative 
efforts to discourage this type of activity; (3) for example, 
studies based on case file reviews in two states showed that 
from 13 to 22 percent of people who applied for nursing home 
and other long-term care benefits through Medicaid have 
transferred their assets; (4) however, the studies also found 
that divested assets often are not sufficient to pay for even 1 
year of nursing home coverage--in some cases, the assets that 
were transferred could not pay for a single month of such care; 
and (5) the law's implications for individuals who transfer 
assets with the purpose of becoming eligible for Medicaid--the 
only type of divestiture that is subject to criminal penalty--
are not clear in several respects.
Medicaid fraud and abuse: Stronger action needed to remove excluded 
        providers from Federal health programs (GAO/HEHS-97-63, 03/31/
        97)
    The Office of Inspector General (OIG) at the Department of 
Health and Human Services has excluded thousands of providers 
from participating in federal health care programs because of 
health care fraud, abuse, or quality-of-care problems. 
Weaknesses in the exclusion process, however, allow many 
unacceptable providers to remain on the rolls of federal health 
programs. These shortcomings include a lack of controls at OIG 
field offices to ensure that all state referrals are reviewed 
and acted on promptly, inconsistencies among OIG field offices 
as to the criteria for excluding providers, lack of oversight 
to ensure that states make appropriate exclusion referrals to 
the OIG, and problems that states experience in trying to 
identify and remove from their programs providers that appear 
on the OIG's exclusion list. These weaknesses place the health 
and safety of beneficiaries at risk and compromise the 
financial integrity of Medicaid, Medicare, and other federal 
health programs. OIG officials attribute many of these problems 
to repeated cutbacks in resources during the past several 
years. Recent legislation, however, addresses this concern by 
providing the OIG with extra funding, specifically for dealing 
with health care fraud. Officials said that some of this 
funding will be used to hire additional staff to process 
exclusion referrals. The legislation also includes tools and 
resources to facilitate the identification of unacceptable 
providers. These tools include a system of unique billing 
numbers for health care providers and an adverse action data 
bank, which will record information on any action taken against 
a health care provider.
Medicare: Application of the False Claims Act to hospital billing 
        practices (GAO/HEHS-98-195, 07/10/98)
    The Justice Department is using the False Claims Act, 
originally enacted during the Civil War to combat contract 
fraud, to deal with cases in which hospitals improperly bill 
Medicare. Justice's use of the False Claims Act includes two 
major multistate initiatives involving hospitals: the 72-Hour 
Window Project and the Lab Unbundling Project. The 72-Hour 
Window Project investigates whether hospitals have separately 
billed Medicare for outpatient services covered by the Medicare 
inpatient payment, such as preadmission tests done within 72 
hours of admission. Hospitals that do so are, in effect, 
double-billing Medicare. The Lab Unbundling Project 
investigates whether hospitals have billed Medicare separately 
for each blood test done concurrently on automated equipment or 
billed Medicare for medically unnecessary tests. Under the 72-
Hour Window Project, about 3,000 hospitals received demand 
letters for recovery of overpayments, and about $58 million had 
been recovered as of April 1998.
Medicare: Clarification of provisions regarding private contracts 
        between physicians and beneficiaries (GAO/HEHS-98-98R, 02/23/
        98)
    GAO reviewed information about section 4507 of the Balanced 
Budget Act of 1997 (BBA) and issues regarding beneficiaries' 
access to physicians and their options for private contracting.
    GAO noted that: (1) available information indicates that 
Medicare beneficiaries have ready access to physicians; (2) 
overall, about 96 percent of physicians accept and treat 
Medicare patients; (3) while 4 percent of beneficiaries report 
difficulty obtaining physician care, the amount that Medicare 
reimburses physicians does not appear to be the cause of this 
difficulty; (4) Medicare beneficiaries continue to be able to 
pay out of pocket whenever they do not want a claim submitted 
on their behalf or when they want to obtain services Medicare 
does not cover; (5) in addition, section 4507 of the BBA offers 
beneficiaries a new option for obtaining services from 
physicians willing to enter into private contracts; (6) 
however, much of the information that GAO reviewed on this 
topic contained inaccurate statements or omitted important 
details; and (7) for example, several documents falsely claimed 
that the private contracting provisions of the BBA limit, 
rather than expand, beneficiaries' options for seeking care 
from physicians.
Medicare: Comparison of Medicare and VA payment rates for home oxygen 
        (GAO/HEHS-97-120R, 05/15/97)
    Pursuant to a congressional request, GAO compared the rates 
paid for home oxygen by Medicare and the Department of Veterans 
Affairs (VA). GAO noted that: (1) Medicare's fee schedule 
allowances for home oxygen are significantly higher than the 
rates by VA, which uses competitive contracting arrangements; 
(2) Medicare's monthly rate, including allowances for portable 
units, was about $320 for each home oxygen patient for the 
first quarter of fiscal year (FY) 1996; (3) during that same 
period, VA paid about $155 per month for each patient, 
according to GAO's analysis of all oxygen supplies, services, 
and portable units provided to a nationwide sample of 5,000 VA 
patients; (4) GAO analyzed differences between the Medicare and 
VA oxygen programs that could make servicing a Medicare patient 
more costly than servicing a VA patient; (5) GAO's analysis 
included consideration of the administrative burden associated 
with filing Medicare claims; (6) on the basis of this analysis, 
GAO concluded that adding a 30-percent adjustment to VA's 
payment rates adequately reflects the higher costs suppliers 
incur when servicing Medicare beneficiaries; (7) the VA payment 
rate, after the 30-percent adjustment, was about $200 per 
month, or $120 less than Medicare; and (8) if Medicare had paid 
oxygen suppliers at the adjusted VA rates, the Medicare program 
would have saved over $500 million in FY 1996.
Medicare: Concerns with physicians at teaching hospitals (PATH) audits 
        (GAO/HEHS-98-174, 07/23/98)
    About 1,200 hospitals in the United States have graduate 
medical education programs to train doctors in medical 
specialties after they have completed medical school. In 
December 1995, the University of Pennsylvania, without 
admitting wrongdoing, entered into a voluntary settlement with 
the Justice Department, agreeing to pay about $30 million in 
disputed billings and damages for Medicare billings by teaching 
physicians. This settlement resulted from an audit done by the 
Department of Health and Human Services' Office of Inspector 
General (OIG). Concerned that such problems might be 
widespread, the OIG, in cooperation with the Justice 
Department, launched a nationwide initiative--now commonly 
known as Physicians at Teaching Hospitals (PATH) audits--to 
review teaching physician compliance with Medicare billing 
rules. As of April 1998, five additional PATH audits had been 
resolved, resulting in settlements, in three of these cases, 
totaling more than $37 million. The PATH initiative has 
generated considerable controversy. The academic medical 
community disagrees with the OIG about the billing and 
documentation standards that were in effect during the periods 
under review. The medical community also contends that the 
Justice Department is coercing settlements from teaching 
institutions through threats of federal lawsuits. This report 
determines (1) whether the Department of Health and Human 
Services' OIG has a legal basis for conducting PATH audits, (2) 
whether the OIG has followed an acceptable approach and 
methodology in conducting the audits, and (3) the significance 
of the billing problems cited in selected audits.
Medicare: Coverage of pumps used to administer intravenous drugs (GAO/
        HEHS-99-16R, 11/16/98)
    Pursuant to a congressional request, GAO reviewed the 
advantages and disadvantages of providing Medicare coverage for 
disposable infusion pumps, focusing on: (1) the clinical 
benefits and limitations of disposable infusion pumps; (2) the 
factors that affect whether a durable or disposable infusion 
pump is less expensive to use for home infusion; (3) some 
Medicaid and private insurance plans' home infusion therapy 
coverage policies; and (4) issues raised by Medicare's policy 
that links coverage of intravenous (IV) drugs to the use of 
durable infusion pumps.
    GAO noted that: (1) views on benefits and limitations of 
disposable infusion pumps vary across providers and by type of 
IV drug; (2) for example, most clinicians and pharmacists GAO 
interviewed said that disposable infusion pumps can be used to 
administer IV antibiotics and IV antivirals; (3) they also 
agreed that disposable pumps were not appropriate for IV pain 
medications; (4) however, there was no clear consensus on the 
use of disposable infusion pumps with other infusion drugs, 
such as certain chemotherapy drugs; (5) factors affecting the 
relative cost of disposable versus durable infusion pumps are 
the type of IV drug being administered and the frequency and 
duration of the patient's infusion therapy regimen; (6) private 
health insurers GAO contacted pay suppliers a per diem rate for 
home infusion therapy regardless of the type of pump used; (7) 
the per diem rate allows suppliers to choose the type of pump 
they believe will appropriately deliver the IV drugs at the 
lowest cost; (8) the IV drugs used with infusion pumps are paid 
for separately; (9) Medicare, on the other hand, generally does 
not cover self-administered drugs; (10) however, the Health 
Care Financing Administration's (HCFA) policy is to pay for IV 
drugs that must be administered with a durable infusion pump; 
(11) this raises several issues; (12) under current Medicare 
policy, if disposable infusion pumps become appropriate for a 
broader range of IV drugs, Medicare coverage of some IV drugs 
could be eliminated; and (13) if legislation expands Medicare 
coverage to include disposable infusion pumps, HCFA may need to 
reconsider its policy for determining which IV drugs to cover.
Medicare: Data limitations impede measuring quality of care in Medicare 
        ESRD Program (GAO/HEHS-97-137R, 07/11/97)
    GAO reviewed the quality of care provided to Medicare end-
stage renal disease (ESRD) patients, focusing on: (1) accepted 
performance standards for measuring quality of care provided to 
ESRD patients; and (2) the quality of care furnished to ESRD 
patients between providers such as chain-affiliated and 
unaffiliated dialysis facilities, and between health 
maintenance organizations (HMO) and providers paid through the 
standard Medicare ESRD program.
    GAO noted that: (1) most experts GAO interviewed and 
applica-

ble literature GAO reviewed agree that clinical indicators 
measur-

ing dialysis effectiveness, anemia, and nutritional status--
urea re-

duction ratio, hematocrit levels, and serum albumin levels, 
respec-

tively--are valid performance indicators for measuring the 
quality

of care ESRD patients receive; (2) these indicators are 
currently

used by the Health Care Financing Administration (HCFA) to

evaluate the care furnished to Medicare beneficiaries with 
ESRD;

(3) almost all experts GAO interviewed and applicable 
literature

GAO reviewed also agreed that these indicators were correlated

with morbidity and mortality, the ultimate outcome measures; 
(4)

GAO was unable, however, to evaluate the differences between 
the

quality of ESRD care furnished in chain-affiliated and 
unaffiliated

dialysis facilities or the care provided by HMOs and providers 
in

the standard Medicare ESRD program because of limitations with

data availability; (5) existing HCFA data about chain 
affiliation of

dialysis facilities is unreliable; (6) when GAO matched ESRD 
bene

ficiaries in HCFA's Core Indicators files with HCFA data on 
ESRD

beneficiaries who belong to HMOs, GAO found too few 
beneficiaries

belonging to HMOs in each annual sample to give GAO confidence

in the results; (7) even after GAO combined the three annual 
files,

the sample size was too small to permit GAO to make reliable 
in-

ferences about differences in quality of care between the HMO 
and

non-HMO ESRD populations when comparing beneficiaries with 
similar characteristics such as age, gender, race, 
socioeconomic status, and health conditions; (8) if HCFA 
maintained up-to-date information about the chain affiliations 
of dialysis facilities and included a larger sample of HMO 
enrollees in its Core Indicators Project, a comparison could be 
made of different types of providers and delivery systems that 
would give GAO confidence in the results; and (9) HCFA program 
officials agreed and said they would consider collecting data 
to perform these analyses.
Medicare: Effective implementation of new legislation is key to 
        reducing fraud and abuse (GAO/HEHS-98-59R, 12/03/97)
    Pursuant to a congressional request, GAO reviewed Medicare 
fraud and abuse in both fee-for-service and managed care 
programs, focusing on: (1) the impact of inadequate payment 
safeguard funding on efforts to combat abusive billing; (2) 
ineffective oversight of fee-for-service payments and 
operations and Medicare managed care plans; and (3) challenges 
that lie ahead for the effective implementation of recent 
legislation that addresses fraud and abuse.
    GAO noted that: (1) Medicare's size, complexity, and rapid

growth make it an attractive target for fraud and abuse; (2) 
efforts

by the Health Care Financing Administration (HCFA), the agency

responsible for administering the program, to improve the 
program

safeguards have not been adequate to prevent substantial 
losses, in

part because the resources available to avoid inappropriate 
pay-

ments have been underutilized or not deployed as effectively as

possible; (3) because of budget constraints, reviews of claims 
and

related medical documentation and site audits of providers' 
records

have become inadequate to keep up with the dramatic increases 
in

Medicare activity; (4) in addition, Medicare's information 
systems

and claims monitoring processes have not been uniformly 
effective

at spotting indicators of potential fraud, such as suspiciously 
large

increases in reimbursements, improbable quantities of services

claimed, or duplicate bills submitted to different contractors 
for the

same service or supply; (5) insufficient oversight has also 
resulted

in little meaningful action taken against Medicare health 
mainte-

nance organizations (HMO) found to be out of compliance with 
fed-

eral law and regulations; (6) although HCFA has required these

HMOs to prepare corrective action plans, it has not employed 
other

available remedies; (7) accumulated evidence of in-home sales

abuses coupled with high rates of rapid disenrollment for 
certain

HMOs also indicates that some beneficiaries are confused or are

being misled during the enrollment process and are dissatisfied

once they become plan members; (8) in addition, consumer 
informa-

tion that could help beneficiaries distinguish the good plans 
from

the poor performers has not been made publicly available, 
limiting

the ability of beneficiaries to make informed choices about 
compet-

ing plans; (9) this in turn limits the use of competition to 
drive out

poor quality; (10) recent legislation--the Health Insurance 
Port-

ability and Accountability Act of 1996 and the Balanced Budget 
Act

of 1997--refocuses attention on various aspects of Medicare 
fraud

and abuse through new program safeguard funding, new civil and

criminal penalties, and new program authorities; and (11) 
however,

while the implementation of these provisions offers the 
potential to

reduce Medicare losses attributable to unwarranted payments,

HCFA's history of lengthy delays in implementing legislation 
gives

rise to concern about whether the authorities granted will be 
de-

ployed promptly and effectively.
Medicare: Fraud and abuse control pose a continuing challenge (GAO/
        HEHS-98-215R, 07/15/98)
    Pursuant to a congressional request, GAO reviewed fraud and 
abuse in both Medicare's fee-for-service and managed care 
programs, focusing on: (1) the impact of inadequate program 
safeguard funding on efforts to combat improper Medicare 
payments; (2) ineffective management and oversight of fee-for-
service payments and operations; and (3) ineffective oversight 
of Medicare managed care plans.
    GAO noted that: (1) although the majority of health care 
providers participating in Medicare provide quality services 
and bill the program properly, its size, complexity, and rapid 
growth make it an attractive target for fraud and abuse; (2) 
more specifically, the Health Care Financing Administration's 
(HCFA) past program safeguard efforts have been hindered 
because budgetary constraints have reduced resources for these 
efforts as the number of claims has grown; (3) although the 
Health Insurance Portability and Accountability Act of 1996 
(HIPAA) provided HCFA an ensured and increasing funding source 
for program safeguard efforts, shortcomings in HCFA's 
management of these efforts have contributed to Medicare 
losses; (4) for example, HCFA has been slow to employ the funds 
Congress provided under HIPAA; (5) HCFA has agreed to set 
contractor program safeguard budgets in a more timely manner in 
the next fiscal year; (6) in addition, HCFA has not adequately 
screened providers before admitting them to the Medicare 
program but is beginning to take steps to tighten admission 
standards for home health agencies, a well-known problem area; 
(7) Medicare's managed care program is vulnerable to other 
forms of fraud and abuse that could be reduced through 
competition among health maintenance organizations (HMO); (8) 
HCFA's oversight of the Medicare HMOs has often been 
ineffective; and (9) furthermore, HCFA's efforts to comply with 
the Balanced Budget Act of 1997 and provide information about 
HMO performance to beneficiaries, so that they can make 
informed choices when selecting an HMO, have been slower than 
necessary.
Medicare: HCFA can improve methods for revising physician practice 
        expense payments (GAO/HEHS-98-79, 02/27/98)
    Medicare physician fee schedule sets forth payments to 
doctors for more than 7,000 services and procedures, ranging 
from routine office visits to surgery. Medicare's physician fee 
schedule payments, which totaled $43 billion in 1997, also 
influence physicians' non-Medicare income because many other 
insurers base their payments on Medicare's. The fee schedule 
was instituted in 1992 to link payments to the resources 
physicians use to provide a service, rather than to physicians' 
charges for a service. In June 1997, the Health Care Financing 
Administration (HCFA) published a notice of proposed rulemaking 
in the Federal Register describing proposed revisions to the 
fee schedule. HCFA estimated that the revision would generally 
increase Medicare payments to physician specialties that 
provide more office-based services. Some physician groups 
argued that HCFA based its proposed revisions on invalid data 
and that the reallocations of Medicare payments would be too 
severe. This report evaluates HCFA's proposed practice expense 
revisions and presents information on HCFA's ongoing efforts to 
refine its data and methodologies. GAO discusses (1) HCFA's 
approach to estimating the practice expenses directly 
associated with each medical service or procedure, (2) two 
methodologies HCFA used to adjust the direct expense estimates, 
(3) practice expenses excluded or limited by HCFA, (4) HCFA's 
method for assigning indirect practice expenses to each medical 
service or procedure, and (5) the potential impact of the new 
fee schedule allowances on beneficiary access to care.
Medicare: HCFA's use of anti-fraud-and-abuse funding and authorities 
        (GAO/HEHS-98-160, 06/01/98)
    Medicare, because of its size and mission, is an attractive 
target for exploitation. GAO included Medicare in its list of 
government programs at high risk for waste, fraud, and abuse. 
(See GAO/HR-97-10, Feb. 1997.) In addition, the Department of 
Health and Human Services (HHS) Office of Inspector General 
(OIG) recently estimated that in 1997, 11 percent, or $20 
billion, of Medicare fee-for-service payments were 
inappropriate. The Health Insurance Portability and 
Accountability Act of 1996 provides important new resources and 
tools to fight health care fraud, abuse, and inappropriate 
payments. These new resources include increased funding for 
anti-fraud-and-abuse activities for the HHS OIG, as well as for 
the Justice Department and the FBI. The act also established 
the Medicare Integrity Program, which ensures increasing 
funding for Medicare program safeguard efforts and authorizes 
the hiring of specialized anti-fraud contractors. This report 
assesses the Health Care Financing Administration's (HCFA) 
progress in implementing the Medicare Integrity Program. GAO 
provides information on (1) what additional resources and 
authorities Congress provided to HCFA through the program, (2) 
how HCFA has made use of these resources and authorities to 
better protect Medicare funds, and (3) how HCFA plans to use 
these authorities and resources in the future.
Medicare: Health Care Fraud and Abuse Control Program financial report 
        for fiscal year 1997 (GAO/AIMD-98-157, 06/01/98)
    The Health Care Fraud and Abuse Control (HCFAC) Program, 
which is administered by the Department of Health and Human 
Services' (HHS) Office of the Inspector General and the 
Department of Justice, established a national framework to 
coordinate federal, state, and local law enforcement efforts to 
detect, prevent, and successfully prosecute health care fraud 
and abuse. HHS and Justice are required to issue a joint annual 
report to Congress on the (1) amounts appropriated to the 
Federal Hospital Insurance Trust Fund and the source of such 
amounts and (2) amounts appropriated from the trust fund for 
the HCFAC Program and the justification for the expenditure of 
such amounts. The first report, issued in January 1998, covered 
fiscal year 1997 deposits to the trust fund and the allocation 
of the HCFAC appropriation. GAO must submit a report that 
identifies (1) the amounts deposited to the trust fund and the 
sources of such amounts, (2) the amounts appropriated from the 
trust fund for the HCFAC program and the justification for the 
expenditure of such amounts, (3) the expenditures from the 
trust fund for HCFAC activities not related to Medicare, and 
(4) any savings to the trust fund, as well as any other 
savings, resulting from expenditures from the trust fund for 
the HCFAC program.
Medicare: Home health agencies with high visit rates skew averages 
        (GAO/HEHS-97-139R, 06/02/97)
    Pursuant to a congressional request, GAO reviewed 
Medicare's reimbursement of home health agencies (HHA), 
focusing on whether: (1) there are reasons why proprietary HHAs 
provide more visits than voluntary and governmental agencies; 
(2) there is any justification for the extra visits; and (3) 
the skewing effect of the high visit rates by proprietary 
agencies could be removed when calculating the number of visits 
for purposes of devising a prospective payment system (PPS) for 
home health.
    GAO noted that: (1) its work and the work of others has 
consistently shown that proprietary agencies provide more 
visits per beneficiary than agencies of other types; (2) 
however, while an agency could provide more visits on average 
than other agencies for legitimate reasons, none of the factors 
GAO and others explored provided an explanation related to 
patient need for the differences in utilization among agency 
types; (3) in developing a PPS, one way to lessen the influence 
on visit rates of HHAs that consistently furnish more visits is 
to use the median number of visits, the point at which half of 
patient cases (or episodes of care) have fewer visits and half 
have more, rather than using the average number of visits to 
determine payment rates for episodes of care; (4) using the 
median could be combined with an ``outlier'' payment system for 
exceptional cases that justifiably have high numbers of visits 
so that HHAs are not financially disadvantaged by patients who 
need extraordinary care; (5) GAO also has concerns about the 
adequacy of the Health Care Financing Administration's (HCFA) 
current data on home health visit rates and costs for setting 
PPS rates; (6) GAO's concern stems from the low levels of 
medical reviews and cost report audits conducted by Medicare's 
intermediaries during the 1990s; and (7) thorough reviews and 
audits should be performed on a projectable sample of HHAs and 
the results used to adjust HCFA's data bases before PPS rates 
are set.
Medicare: Home oxygen program warrants continued HCFA attention (GAO/
        HEHS-98-17, 11/07/97)
    In fiscal year 1996, nearly 480,000 Medicare beneficiaries 
received supplemental oxygen at home at a cost of about $1.7 
billion. GAO found that Medicare pays about 38 percent more for 
home oxygen supplies than the competitive marketplace rates 
paid by the Department of Veterans Affairs (VA). In some cases, 
Medicare obtains even fewer oxygen benefits despite paying 
higher prices. The Balanced Budget Act of 1997 includes 
provisions that should bring Medicare's reimbursement rates 
more in line with the competitive marketplace rates paid by VA. 
The act also requires developing service standards for home 
oxygen suppliers that serve Medicare patients, as well as 
monitoring patient access to home oxygen equipment. However, 
concerns have been raised that these rate reductions could 
reduce Medicare beneficiaries' access to portable units, which 
do not offer suppliers the attractive profit margins associated 
with lower-cost oxygen concentrators.
Medicare: Impact of changing transportation policy for portable 
        equipment is uncertain (GAO/HEHS-98-82, 05/18/98)
    The Health Care Financing Administration (HCFA) has reduced 
payments to some providers who perform electrocardiogram (EKG) 
and ultrasound examinations in nursing homes and in 
beneficiaries' residences. In the past, Medicare had allowed 
these providers of portable diagnostic tests to receive, in 
addition to the fee for doing the test, a separate payment for 
transporting the necessary equipment. Effective January 1, 
1996, HCFA eliminated separate transportation payments for 
ultrasound services. HCFA also eliminated separate payments for 
EKG services effective January 1, 1997, but these payments were 
temporarily restored by the Balanced Budget Act of 1997. Some 
claim that eliminating separate transportation payments could 
ultimately increase Medicare outlays and adversely affect 
beneficiaries. They argue that providers will be less willing 
to provide EKG and ultrasound services without a separate 
transportation payment, forcing Medicare to pay for ambulances 
to transport homebound patients or nursing home residents to 
hospitals for these diagnostic tests. This report studies how 
changes to HCFA's payment policies would affect Medicare 
beneficiaries. GAO identifies and analyzes (1) the Medicare 
recipients, places of service, and providers who might be 
affected the most; (2) the numbers of services that would be 
affected by the change in policy; and (3) the effect on 
Medicare's program costs.
Medicare: Improper activities by Mid-Delta Home Health (GAO/OSI-98-5, 
        03/12/98)
    Mid-Delta Home Health is one of the largest home health 
care providers in Mississippi, employing more than 600 people 
who deliver home health care through 16 offices throughout the 
state. Medicare reimbursement to Mid-Delta for home health care 
and rural health clinic services from 1993 through 1996 totaled 
nearly $78 million. During this period, Medicare reimbursed 
Mid-Delta for payroll costs that, in GAO's opinion, were 
improperly claimed because they did not represent actual costs 
to the provider. The company's owner regularly asked employees 
to return to the company the cash value of unused leave and 20 
percent or more of bonuses received. The owner also maintained 
a list of ``special employees'' to whom she gave larger bonuses 
if they agreed in advance to return a portion of them to the 
company. Mid-Delta then billed Medicare for these costs. GAO 
also questions other costs submitted by Mid-Delta Home Health 
for Medicare reimbursement. For example, the owner's daughter 
was paid a salary as an executive even though she was attending 
school full-time. GAO also questions the reasonableness of the 
daughter's $65,000 bonus in 1996. Medicare also reimbursed Mid-
Delta for the payroll costs of some employees whose jobs 
involved marketing activities--a nonreimbursable expense under 
Medicare rules. In addition, nurses working for Mid-Delta Home 
Health have alleged that staff visited Medicare beneficiaries 
whose eligibility or need for visits was doubtful. GAO's review 
of 41 patient files found that 34 percent of the individuals' 
eligibility for Medicare-reimbursed services was questionable. 
GAO summarized this report in testimony before Congress; see: 
Medicare: Improper Activities by Mid-Delta Home Health (GAO/T-
OSI-98-6, Mar. 19, 1998).
Medicare: Many HMOs experience high rates of beneficiary disenrollment 
        (GAO/HEHS-98-142, 04/30/98)
    Included in the Balanced Budget Act of 1997 is a mandate 
that the Health Care Financing Administration (HCFA) make 
comparative information available to Medicare beneficiaries, 
including data on health plan disenrollment rates, so that they 
can make informed choices about health maintenance 
organizations (HMO). The disenrollment data will be required by 
the fall of 1999, but it is unclear whether HCFA must publish 
disenrollment data for HMOs in business less than two years. 
GAO evaluated the feasibility of computing voluntary 
disenrollment rates for HMOs from readily available data, and 
analyzed the extent to which these rates vary among plans. 
Disenrollment rates varied substantially; in many markets, the 
highest disenrollment rates exceeded the lowest by more than 
fourfold. Although the data indicates that competing plans vary 
widely in their ability to retain members, they do not reveal 
why.
Medicare: Most beneficiaries with diabetes do not receive recommended 
        monitoring services (GAO/HEHS-97-48, 03/28/97)
    At least 10 percent of Medicare beneficiaries are diagnosed 
with diabetes. Although experts agree that close medical and 
patient monitoring is important to slow or prevent 
complications of the disease, Medicare beneficiaries are not 
receiving recommended levels of physicals, eye exams, blood 
tests, and other screening services. Several factors may 
contribute to low use of monitoring services, including 
doctors' lack of awareness of the latest recommendations and 
patients' lack of motivation to maintain adequate self-
management care. Efforts by Medicare health maintenance 
organizations (HMO) to improve diabetes care have been varied 
but generally limited. The Health Care Financing Administration 
(HCFA) also has begun to test preventive care initiatives for 
diabetes and has targeted this area for special emphasis. But 
like the efforts of Medicare HMOs, HCFA's initiatives are quite 
recent, and the agency does not yet have results that would 
allow it to evaluate their effectiveness. GAO summarized this 
report in testimony before Congress; see: Medicare: Provision 
of Key Preventive Diabetes Services Falls Short of Recommended 
Levels (GAO/T-HEHS-97-113, Apr. 11, 1997).
Medicare: Need to hold home health agencies more accountable for 
        inappropriate billings (GAO/HEHS-97-108, 06/13/97)
    Despite many studies documenting inflated billings for home 
health care benefits, Medicare reviews of home health care 
claims have decreased in recent years. GAO tested 80 high-
dollar claims that had been processed without review and found 
that in 46 of the claims, 43 percent of the total charges--or 
more than $135,000--were later denied after being reviewed by a 
Medicare claims-processing contractor. The reasons for the 
denials included failure to substantiate medical necessity, 
noncoverage of services or supplies, and inadequate 
documentation, including the absence of physician orders. 
Private insurers use controls that, although not readily 
adaptable to Medicare's coverage terms or billing rules, are 
instructive regarding claims monitoring. For example, the 
insurers employ professional staff, such as nurses, to 
determine in advance the legitimacy of requests for home health 
services. Reduced funding for payment safeguards in recent 
years helps explain the marked absence of adequate claims 
reviews by Medicare contractors. Ten years ago more than 60 
percent of home health claims were reviewed. In 1996, Medicare 
reviewed only two percent of all claims. GAO suggests a plan 
that would identify habitual abusers of the system and make 
them bear the financial burden of investigative reviews.
Medicare: Need to overhaul costly payment system for medical equipment 
        and supplies (GAO/HEHS-98-102, 05/12/98)
    In 1996, Medicare part B (which generally covers non-
hospital-based care) paid over $4.6 billion for medical 
equipment, supplies, prosthetics, and orthotics--in other 
words, durable medical equipment (DME). Congress included 
provisions in the Balanced Budget Act of 1997 authorizing the 
Health Care Financing Administration (HCFA) to more quickly 
adjust Medicare's fee schedule allowances by up to 15 percent 
per year. This report reviews two problems that HCFA must 
overcome to use its new authority effectively. First, HCFA must 
better identify products billed to Medicare. The only product 
identifiers on the claims are HCFA billing codes that cover 
broad ranges of products, quality, and prices. For example, a 
single billing code is used for more than 200 different 
urological catheters, whose wholesale prices range from $1 to 
$18 each. The claim allowance is set at $11 for all catheters 
in this group; without better product identification, HCFA 
cannot know what it is paying for. The second problem with 
Medicare's DME payment system is that the fee schedule 
allowances are often out of line with current market prices. 
HCFA's new price-adjusting authority should help, but HCFA and 
its contractors do not have sufficient current product and 
price information for the thousands of DMEs covered. Another 
issue is that the fee schedule applies to individuals and to 
large institutional claimants, even though large institutions 
buy at significant discounts.
Medicare: Problems affecting HCFA's ability to set appropriate 
        reimbursement rates for medical equipment and supplies (GAO/
        HEHS-97-157R, 06/17/97)
    Pursuant to a congressional request, GAO reviewed the 
problems associated with setting appropriate Medicare 
reimbursement rates for medical equipment and supplies.
    GAO noted that: (1) the Health Care Financing 
Administration (HCFA) does not know specifically what products 
it is paying for when it pays Medicare claims for medical 
equipment and supplies, according to GAO's work to date; (2) 
HCFA does not require suppliers to identify specific products 
on their Medicare claims; (3) instead, suppliers use HCFA 
billing codes, some of which cover a broad range of products of 
various types, qualities, and market prices; (4) because 
Medicare pays suppliers the same amount for all the products 
covered by a billing code, the reimbursement system gives 
suppliers a financial incentive to provide Medicare patients 
with the least costly products covered by a billing code; (5) 
in addition, because Medicare claims do not identify the 
specific product provided, HCFA lacks the information it needs 
to ensure that each billing code is used for comparable 
products; (6) to identify specific medical equipment and 
supplies, the Department of Defense and some other major 
purchasers are beginning to require suppliers to use a 
universal product numbering system; (7) this system, which can 
also be used for bar coding the products, enables purchasers 
and insurers to identify specific products being used and track 
reimbursements for each product and groups of similar products 
as well as the market prices of specific products; (8) HCFA 
officials, on the other hand, have not begun exploring the 
possibility of using the universal product numbering system in 
the Medicare program; (9) Medicare reimburses large suppliers 
and individual beneficiaries the same amounts for medical 
equipment and supplies, even though large suppliers negotiate 
substantial discounts with manufacturers and wholesalers, while 
individual beneficiaries pay retail prices; (10) large 
suppliers provide some products, such as urological catheters 
and drainage bags, to nursing homes and home health agencies, 
which then provide them to individual Medicare beneficiaries; 
(11) in turn, the large suppliers can bill Medicare directly 
and get reimbursed at fee-schedule rates based on historical 
charges and catalog prices; and (12) HCFA has not considered 
establishing a separate fee schedule for products provided to 
nursing home and home health patients that accounts for their 
suppliers' substantially lower acquisition costs compared with 
the cost of products beneficiaries purchase directly.
Medicare billing: Commercial system could save hundreds of millions 
        annually (GAO/AIMD-98-91, 04/15/98)
    More than three years after GAO recommended that Medicare 
acquire commercial software to detect inappropriate billings--
which could save hundreds of millions of dollars each year--the 
Health Care Financing Administration (HCFA) has tested the 
software and plans to install it. Incorrect codings, fraudulent 
and otherwise, cost Medicare about $1.7 billion in improper 
payments in 1997. This report analyzes HCFA's progress in 
testing and acquiring a commercial system for identifying 
inappropriate Medicare bills, the consequences of HCFA's 
initial management decisions, and its current plans for 
immediate implementation. GAO summarized this report in 
testimony before Congress; see: Medicare Billing: Commercial 
System Will Allow HCFA to Save Money (GAO/T-AIMD-98-166, May 
19, 1998).
Medicare computer systems: Year 2000 challenges put benefits and 
        services in jeopardy (GAO/AIMD-98-284, 09/28/98)
    The Health Care Financing Administration (HCFA) and its 
contractors are severely behind schedule in repairing, testing, 
and implementing the mission-critical computer systems 
supporting Medicare. HCFA has recently begun to improve its 
management of Year 2000 issues, including establishing a Year 
2000 organization and hiring independent contractors to assist 
in overseeing the work. However, because of the complexity and 
magnitude of the problem and HCFA's late start, the repairs lag 
far behind schedule. Less than one-third of Medicare's 98 
mission-critical systems had been fully renovated as of June 
30, 1998, and none had been validated or implemented, according 
to HCFA. Compounding this difficult task is the absence of key 
management practices HCFA needs to adequately direct and 
monitor its Year 2000 project. HCFA also has not effectively 
managed the identification and correction of its electronic 
data exchanges. Because of the magnitude of the tasks ahead and 
the limited time remaining, it is unlikely that all of the 
Medicare systems will be compliant in time to guarantee 
uninterrupted benefits and services into the year 2000.
Medicare dialysis patients: Widely varying lab test rates suggest need 
        for greater HCFA scrutiny (GAO/HEHS-97-202, 09/26/97)
    Medicare is the leading payer for dialysis and other 
medical treatments for end-stage renal disease. Medicare 
enrollment by kidney patients more than doubled between 1984 
and 1994, while expenditures more than trebled--to $8.4 
billion. Medicare does not scrutinize the level of laboratory 
tests for patients on dialysis, and GAO found that similar 
patients received laboratory tests at widely different rates. 
At one extreme, Medicare may be paying for excessive tests, 
while at the other, patients may not be receiving the tests 
needed to monitor their condition. Fee-for-service 
reimbursement does not give physicians adequate incentives to 
order tests judiciously, and neither Medicare nor its claims 
processing contractors routinely analyze the kind of claims 
data that GAO reviewed when it found anomalies. GAO recommends 
that Medicare profile doctors ordering laboratory tests for 
Medicare dialysis patients and notify contractors of unusual 
test rates. In addition, Congress should consider holding 
physicians liable when they order excessive tests.
Medicare fraud and abuse: Summary and analysis of reforms in the Health 
        Insurance Portability and Accountability Act of 1996 and the 
        Balanced Budget Act of 1997 (GAO/HEHS-98-18R, 10/09/97)
    Pursuant to a congressional request, GAO: (1) summarized 
the anti-fraud and abuse reforms enacted in the Health 
Insurance Portability and Accountability Act (HIPAA) and 
Balanced Budget Act (BBA); and (2) determined whether and how 
the legislation responds to GAO recommendations and those of 
the Department of Health and Human Services' (HHS) Inspector 
General.
    GAO noted that: (1) the provisions in HIPAA and BBA offer 
the potential to improve program management significantly; (2) 
together they address Medicare's enforcement tools, payment 
safeguards, and pricing and payment method problems; (3) in 
addressing several aspects of waste, fraud, and abuse, the acts 
incorporate a substantial proportion of recommendations to the 
Congress and matters for congressional consideration; and (4) 
in many instances, the acts also address recommendations that 
GAO and the HHS Inspector General have made directly to the 
Department, by either emphasizing priorities or dispelling 
ambiguities about authority.
Medicare HMO enrollment: Area differences affected by factors other 
        than payment rates (GAO/HEHS-97-37, 05/02/97)
    Enrollment nationwide in the Medicare managed care program 
has more than tripled during the past decade--from about 1 
million enrollees in 1987 to 3.8 million in 1996--but 
differences in enrollment by state and by market area are 
striking. In such cities as Portland, Oregon, and Tucson, 
Arizona, health maintenance organizations (HMO) have enrolled 
more than 40 percent of the Medicare beneficiaries. By 
contrast, HMO enrollment in most rural areas is negligible. 
Although the linkage of payment rates to risk HMO enrollment 
may be important in some areas, dramatic differences in 
enrollment are often associated with other factors. The 
presence of HMOs, population density, and the number of 
Medicare beneficiaries, especially those familiar with managed 
health care, all spur enrollment growth--and their absence 
hinders it. In addition, the health care benefits provided by 
employers in a market area can affect beneficiaries' 
willingness to enroll in risk HMOs. The rapid growth in risk 
HMO enrollment is likely to continue as employers encourage 
retirees to join HMOs and as HMOs pursue various strategies for 
expanding their Medicare business.
Medicare HMO institutional payments: Improved HCFA oversight, more 
        recent cost data could reduce overpayments (GAO/HEHS-98-153, 
        09/09/98)
    A growing number of seniors--about 5 million out of 38 
million Medicare beneficiaries--receive care through health 
maintenance organizations (HMO) that participate in Medicare's 
risk contract program. Unlike fee-for-service providers, which 
are paid on a per-claim basis, these HMOs receive from Medicare 
a monthly fixed sum per enrolled beneficiary--a capitation 
rate--and assume the risk of providing beneficiary health care, 
regardless of the actual costs involved. The estimated 2.6 
million beneficiaries in nursing homes and other long-term care 
facilities often incur greater-than-average Medicare-covered 
expenses. Consequently, the ``institutional'' risk adjuster 
generally raises capitation payments for Medicare HMO enrollees 
in such facilities. However, some of the facilities GAO visited 
that HMOs had classified as institutional residences provided 
no medical care but rather offered recreational activities for 
seniors capable of living independently. The Health Care 
Financing Administration (HCFA) acted on this finding by 
narrowing the definition of eligible institutions, effective 
January 1, 1998. Even with more stringent criteria, however, 
HCFA relies on the HMOs to determine which beneficiaries 
qualify for institutional status. HCFA conducts only limited 
reviews, about every two years, to confirm the accuracy of HMO 
records. The task of ensuring accurate data may be further 
complicated by HCFA's policy allowing HMOs three years to 
retroactively change institutional status data in beneficiary 
records. HCFA generally waits two years to verify that HMOs 
have corrected inaccurate record-keeping systems, even when 
serious errors have been identified. Moreover, HCFA continues 
to use 20-year-old cost data to determine payment rates for 
institutionalized enrollees. As a result, HCFA overcompensates 
HMOs for their enrolled, institutionalized beneficiaries. 
Although HCFA has revised its definition of eligible 
institutions, concerns remain that HCFA's oversight of payments 
for institutional status is inadequate.
Medicare HMOs: HCFA can promptly eliminate hundreds of millions in 
        excess payments (GAO/HEHS-97-16, 04/25/97)
    Medicare's method for paying risk contract health 
maintenance organizations (HMO)--Medicare's primary managed 
care option--was designed to save the program five percent of 
the costs for beneficiaries who enrolled in HMOs. Contrary to 
expectations, however, these HMOs have not produced savings for 
Medicare. Research sponsored by Medicare and others have found 
that the program has actually spent more for HMO enrollees than 
if they had stayed in fee-for-service plans. Researchers 
attribute this outcome to ``favorable selection,'' or the 
tendency for healthier persons to enroll in HMOs. To reduce 
excess Medicare payments to HMOs by several hundred million 
dollars a year, the current Medicare HMO rate-setting formula 
should be modified to include cost data on HMO enrollees, who 
tend to be healthier as a group than other Medicare 
beneficiaries. The current formula relies on costs of fee-for-
service beneficiaries only.
Medicare HMOs: Potential effects of a limited enrollment period policy 
        (GAO/HEHS-97-50, 02/28/97)
    Congress has recently considered making Medicare's policies 
more consistent with those of other large health care 
purchasing organizations by establishing a limited time each 
year when Medicare beneficiaries could enroll in a particular 
plan and by restricting disenrollment outside that period. To 
assist Congress in considering the effects of such a policy 
change, this report assesses how a limited enrollment period 
would affect Medicare, private health plans, beneficiaries, and 
employers who provide Medicare supplemental benefits to 
retirees. GAO examines the potential effects of policy changes 
on (1) the growth of Medicare's managed care program, (2) 
employers' attempts to administer their respective benefits 
seasons, (3) taxpayer savings measured against beneficiary 
protections, and (4) the resources needed by the federal agency 
that runs Medicare's day-to-day operations.
Medicare HMOs: Setting payment rates through competitive bidding (GAO/
        HEHS-97-154R, 06/12/97)
    GAO reviewed the Health Care Financing Administration's 
(HCFA) proposed use of competitive bidding as an alternative 
method for setting Medicare health maintenance organization 
(HMO) payment rates, focusing on: (1) the potential advantages 
of competitive bidding in the Medicare HMO program; (2) the 
main features of HCFA's planned competitive bidding 
demonstration in Denver; and (3) HMO's key objections to it.
    GAO noted that: (1) Medicare's current system for setting 
HMO payment rates, which is based on local fee-for-service 
spending, generates excess payments to some health plans; (2) 
these excess payments are substantial, perhaps $2 billion 
annually, and are likely to grow as the managed care program 
grows; (3) alternative payment mechanisms could reduce excess 
HMO payments and help Medicare, and taxpayers, realize the 
savings potential of managed care; (4) competitive bidding is 
one such alternative mechanism that might be successfully 
employed in certain markets; (5) to succeed, a competitive 
bidding system must provide health plans an incentive to submit 
bids that reflect no more than the plans' expected costs and a 
reasonable profit; (6) allowing plans to choose to remain 
outside of the competitive bidding process and collect the 
adjusted average per capita cost-based rate, while other area 
plans submit competitive bids, would unravel the fundamental 
incentives of competitive bidding; (7) similarly, the plans 
that bid, but bid high relative to their competitors must face 
some consequence; (8) the mechanism proposed by HCFA for the 
Denver demonstration, and recommended by the Physician Payment 
Review Commission, is to require high bidders to charge 
beneficiaries a premium, making it harder for high bidders to 
gain market share; (9) this is a much weaker consequence than 
excluding high bidders from the marketplace, as is done in the 
Arizona Medicaid program; (10) however, HCFA's mechanism has 
the advantage of preserving the widest possible choice of plans 
for Medicare beneficiaries; (11) GAO recognizes that HCFA's 
legislative authority does not explicitly address the type of 
competitive bidding demonstration planned for Denver; and (12) 
HCFA may already possess the necessary authority, however, in 
the interest of facilitating demonstrations that test new 
methods of paying HMOs, including competitive bidding, GAO 
continues to believe, as it stated in its 1995 report, that the 
Congress should consider enacting legislation to give HCFA 
explicit authority to mandate HMO participation in 
demonstration projects.
Medicare home health: Differences in service use by HMO and fee-for-
        service providers (GAO/HEHS-98-8, 10/21/97)
    Health maintenance organizations (HMO) manage Medicare-
provided home health care more actively than do fee-for-service 
providers, emphasizing shorter-term rehabilitation goals. 
Differences between HMO and fee-for-service providers are most 
apparent in the use of home health aides. In the fee-for-
service programs, the use of home health aides to provide long-
term care for patients with chronic conditions is growing, 
whereas the six HMOs that GAO visited do not provide such 
services on a long-term basis. Although fee-for-service 
providers have less effective controls for preventing 
unnecessary services, the Medicare program lacks the data 
needed to determine if the chronically ill are adequately 
served by HMOs.
Medicare home health agencies: Certification process ineffective in 
        excluding problem agencies (GAO/HEHS-98-29, 12/16/97)
    Becoming a Medicare-certified home health agency is 
relatively easy--probably too easy, given the large number of 
problem agencies cited in various studies in recent years. If 
owners of home health agencies have not been previously barred 
from Medicare, they can obtain certification without having any 
health care experience. Although certified home health agencies 
must be periodically recertified, serious deficiencies in the 
process allow problems to go undetected. Once certified, home 
health agencies have little reason to fear that they will 
suffer serious consequences from failing to comply with 
Medicare's conditions of participation and associated 
standards. Few problem home health agencies are terminated from 
the program; instead, they are given repeated opportunities to 
correct their shortcomings, even if the same deficiencies occur 
from one survey to the next. Moreover, the Health Care 
Financing Administration has not implemented a range of 
penalties to sanction problem home health agencies, even though 
Congress gave it the authority to do so more than 10 years ago.
Medicare home health benefit: Impact of interim payment system and 
        agency closures on access to services (GAO/HEHS-98-238, 09/09/
        98)
    Until 1996, Medicare spending for home health care had been 
rising dramatically, consuming about $1 in every $11 of 
Medicare outlays in 1996, compared with $1 in every $40 in 
1989. To control this rapid cost growth, the Health Care 
Financing Administration was required to implement a 
prospective payment system that sets fixed, predetermined 
payments for home health services. Until that system is 
developed, home health agencies will be under an interim 
payment system that imposes limits on the cost-based payments 
they receive. The limits provide incentives to control per-
visit costs and the number and mix of visits for each user. 
Industry representatives claim that the system's new cost 
limits have caused some home health agencies to close or some 
beneficiaries, particularly those with high-cost needs, to have 
difficulty obtaining care. This report (1) identifies the 
potential impact of the interim payment system on home health 
agencies; (2) determines the number, distribution, and effect 
of recent home health agency closures; and (3) assesses whether 
the interim payment system could be affecting beneficiaries' 
access to services, particularly beneficiaries who are 
expensive to serve.
Medicare home health care benefit (GAO/HEHS-97-70R, 02/11/97)
    Pursuant to a congressional request, GAO reviewed: (1) the 
potential effects of shifting the Medicare home health care 
benefit from the part A trust fund to the part B trust fund; 
and (2) Medicare and Congressional Budget Office (CBO) 
projections of home health costs and utilization and made rough 
estimates of the dollar effects of the proposal.
    GAO noted that: (1) it found three potential effects from 
shifting most home health costs from part A to part B; (2) as 
expected, the depletion date for the part A trust fund would be 
extended because the majority of home health payments would no 
longer come from that fund; (3) CBO estimated last year that 
the shift would add about 3 years to the 2001 depletion date it 
then estimated; (4) the shift would result in the need for more 
general revenues to fund part B in direct proportion to the 
costs shifted from part A; (5) available information indicates 
about $95 billion would be needed over the fiscal year 1998 
through 2002 period, assuming no other changes to the home 
health benefit are made; (6) the administration and others also 
propose additional changes to the home health benefit designed 
to hold down its cost growth, and to the extent that such 
proposals are implemented, the amount shifted from part A to 
part B would be reduced; (7) the shift, however, would not 
affect the reported budget deficit amount because both funds 
are included in the unified budget, and the increase in general 
fund expenditures would be offset by an equal decrease in part 
A trust fund expenditures; and (8) Medicare beneficiaries would 
not be affected except that they would have less opportunity to 
appeal home health denials to administrative law judges because 
the dollar threshold for such appeals is $100 under part A but 
$500 under part B.
Medicare managed care appeal process for denials of care: A comparison 
        with recommendations from the President's Quality Commission 
        (GAO/HEHS-98-155R, 05/08/98)
    Pursuant to a congressional request, GAO reviewed 
information on Medicare managed care appeals to help Congress 
consider legislation on national appeal rights for private-
sector health care consumers, focusing on: (1) comparing the 
President's Advisory Commission on Consumer Protection and 
Quality in the Health Care Industry's recommended appeal 
process with that required by the Medicare program; and (2) 
describing the appeals reviewed by Medicare's external appeals 
contractor, the Center for Health Dispute Resolution (CHDR).
    GAO noted that: (1) the Quality Commission recommended an 
appeals process that is very similar in structure to the 
process used by the Medicare managed care program in that both 
require that individuals receive timely notification of appeal 
rights and appeal decisions and both require an expedient 
process for certain kinds of cases for internal and external 
appeals; (2) virtually all internal appeals that are not 
completely favorable to the beneficiary are automatically 
subject to Medicare's external review process, while the 
Quality Commission restricts external review to appeals that 
involve experimental issues, circumstances that jeopardize the 
health or life of the patient, or services that exceed a 
significant financial threshold that has not been specified; 
(3) the effect of these differences on the number and types of 
appeals seen in the Quality Commission's appeal process would 
depend on how its recommendations are implemented; (4) while 
appeals from fewer than three-tenths of one percent of Medicare 
managed care enrollees actually reach the external review 
process, GAO's review of CHDR appeals indicates that it 
provides an important protection for beneficiaries at a modest 
cost to the program; (5) the majority of CHDR's decisions 
uphold a managed care plan's denial of a service; (6) in about 
two-thirds of the overturned cases, CHDR found that the plans 
had made an inappropriate clinical decision and that the care 
involved in the appeal was medically necessary and met 
Medicare's clinical coverage criteria; (7) because of 
differences between Medicare enrollees and the commercially 
insured, Medicare's experience with external appeals may not 
apply to this population; (8) while Medicare enrollees can 
disenroll in any given month and therefore may choose to 
disenroll rather than appeal a dispute with their plan, many 
commercially insured managed care enrollees may not have this 
option; (9) the commercially insured population may also have 
fewer appeals per capita; and (10) these differences make it 
difficult to predict the volume or type of appeals that would 
be seen in the external appeals process for the commercially 
insured based on Medicare's experience.
Medicare managed care: Payment rates, local fee-for-service spending, 
        and other factors affect plans' benefit packages (GAO/HEHS-99-
        9R, 10/09/98)
    Pursuant to a congressional request, GAO provided 
information on Medicare's health maintenance organizations 
(HMO), focusing on: (1) the key differences between Medicare's 
traditional fee-for-service (FFS) and managed care programs; 
(2) how Medicare historically set the monthly capitation rates 
paid to managed care plans and why these rates varied among 
counties; (3) how the Balanced Budget Act of 1997 (BBA) 
affected rates and the rate-setting process; (4) how the Health 
Care Financing Administration (HCFA) approves managed care 
plans' benefits and premiums; and (5) what requirements HCFA 
places on plans to notify beneficiaries about impending benefit 
and premium changes.
    GAO noted that: (1) most Medicare beneficiaries can choose 
to receive health care services through a traditional FFS 
arrangement or a managed care organization; (2) there are 
several key differences between the two health care systems; 
(3) for beneficiaries, some of these differences involve trade-
offs; (4) for example, compared to Medicare FFS, managed care 
plans typically cover more services and impose lower out-of-
pocket cost; (5) however, a beneficiary in FFS can obtain care 
from any provider who receives Medicare payments, while a 
beneficiary in a managed care plan is typically limited to 
providers authorized by that plan; (6) another difference is 
how medical care is paid for; (7) in FFS, Medicare makes a 
separate payment for each covered service provided, while 
managed care plans receive a fixed monthly capitated payment 
for each beneficiary they enroll; (8) before 1998, payments to 
managed care plans were tightly linked to per capita Medicare 
FFS spending in each county to reflect the dramatic variation 
in health care costs and use; (9) as a result, capitation rates 
varied with the demographic characteristics of the beneficiary 
and his or her county of residence; (10) for example, in 1997, 
a managed care plan would receive $767 per month for serving a 
beneficiary in Richmond County (Staten Island), New York, 
compared to $221 for serving a similar beneficiary in Arthur 
County, Nebraska; (11) moreover, plans in relatively high-
payment counties tend to offer a richer benefit package 
compared to plans in low-payment counties; (12) BBA will likely 
gradually reduce the geographic variation in managed care 
payments and benefit packages; (13) at the same time, because 
the legislation was designed to slow the growth of Medicare 
spending, benefit packages offered by managed care plans may 
become less generous; (14) managed care plans must contract 
with HCFA before they can serve Medicare beneficiaries; (15) 
contracts normally begin in January and run for one year; (16) 
at a minimum, plans must provide all FFS-covered benefits; (17) 
if HCFA determines a plan's projected Medicare profits will 
exceed its normal profit level, the plan is required to enhance 
its benefit package, set aside funds for future use, or both; 
(18) although plans can increase benefits or reduce the fees 
they charge at any time, they do so only with HCFA approval; 
and (19) in addition, Medicare requires that all plans notify 
members 30 days before a change takes place.
Medicare transaction system: Success depends upon correcting critical 
        managerial and technical weaknesses (GAO/AIMD-97-78, 05/16/97)
    By the year 2000, Medicare, the nation's largest health 
insurer, expects to process more than 1 billion claims and pay 
$288 billion in benefits annually. To keep up, Medicare plans 
to spend $1 billion to replace nine separate automated 
processing systems with the Medicare Transaction System (MTS). 
MTS is intended to improve service; cut operating costs; 
improve contractor oversight; better protect against waste, 
fraud, and abuse; and accommodate managed care and other 
alternative payment methodologies. However, since GAO issued 
its first analysis in 1992, project costs have soared from $151 
million to $1 billion. GAO concludes that the benefits of MTS 
will not be realized unless the Health Care Financing 
Administration (HCFA) overcomes serious management and 
technical weaknesses in three areas. First, HCFA needs to 
greatly improve management of its interim Medicare processing 
environment. Second, MTS should be better managed as an 
investment. HCFA has not followed practices that are essential 
if management is to make informed technology investment 
decisions, including preparing a valid cost-benefit analysis 
and considering viable alternatives. Third, HCFA has not 
adequately applied sound systems development practices 
necessary to reduce risk. GAO summarized this report in 
testimony before Congress; see: Medicare Transaction System: 
Serious Managerial and Technical Weaknesses Threaten 
Modernization (GAO/T-AIMD-97-91, 5/16/97).
Medigap insurance: Compliance with federal standards has increased 
        (GAO/HEHS-98-66, 03/06/98)
    Millions of Medicare beneficiaries depend on private 
insurance to cover Medicare's deductibles and coinsurance. From 
1988 through 1995, the Medigap insurance market grew from $7 
billion to more than $12 billion, with most of the growth 
occurring before 1993. During this eight-year period, loss 
ratios--the percentage of premiums returned to policyholders as 
benefits--averaged 81 percent and ranged from a low of 76 
percent in 1993 to a high of 86 percent in 1995. Loss ratio 
standards are currently set at 65 percent for policies sold to 
individuals and 75 percent for policies covering groups. In 
1994 and 1995, more than 90 percent of the policies in effect 
for three years or more met these loss ratio standards. 
Although applicable law provides for refunds if loss ratio 
standards are not met, no refunds were required in 1994 and 
only two were required in 1995 because most of these policies' 
loss experience was based on too few policyholders to be 
considered credible. A primary reason for requiring refunds was 
to give insurers an incentive to meet loss ratio standards, and 
it appears that the incentive is working.
Private health insurance: Declining employer coverage may affect access 
        for 55- to 64-year-olds (GAO/HEHS-98-133, 06/01/98)
    Too young to qualify for Medicare, many near elderly (55- 
to 64-year-olds) are considering retirement or gradually moving 
out of the workforce. These events may be related to declining 
health, job displacement, or simply the desire for more leisure 
time. Because health insurance for most Americans is an 
employment-related benefit, retirement may necessitate looking 
for another source of affordable coverage. However, insurance 
bought directly in the individual market or temporary 
continuation coverage purchased through an employer are 
typically expensive and may not always be available. 
Affordability, moreover, may be exacerbated by both declining 
health and the reduction in income associated with retirement. 
For some near elderly, an alternative to retiring without 
insurance is simply to continue working. This report assesses 
the ability of Americans aged 55 to 64 to obtain health 
benefits through the private market--either employer-based or 
individually purchased. GAO discusses the near elderly's (1) 
health, employment, income, and health insurance status; (2) 
ability to obtain employer-based health insurance if they 
retire before becoming eligible for Medicare; and (3) use of 
and costs associated with buying coverage through the 
individual market or employer-based continuation insurance. GAO 
summarized this report in testimony before Congress; see: 
Private Health Insurance: Employer Coverage Trends Signal 
Possible Decline in Access for 55- to 64-Year-Olds (GAO/T-HEHS-
98-199, June 25, 1998).
Retiree health insurance: Erosion in employer-based health benefits for 
        early retirees (GAO/HEHS-97-150, 07/11/97)
    Health insurance coverage for retirees paid by former 
employers is steadily declining; some employers have stopped 
offering such coverage and others have raised the premiums paid 
by retirees. Reductions in employer-based private insurance 
afflict both early retirees and those who rely on it to fill 
gaps in Medicare and looms as a major issue for baby boomers 
nearing retirement. This report reviews (1) private sector and 
government surveys of changes in retiree access to and 
participation in employer-based health coverage; (2) the health 
benefit plan in effect at the Pabst Brewing Company during 1996 
(Pabst notified about 750 retirees of its Milwaukee plant that 
it planned to terminate their health benefits within a month); 
(3) data from health insurance carriers on the cost of 
alternative sources of coverage for early retirees in 
Wisconsin, where Pabst is located, and other selected states; 
(4) applicable federal and state laws and legal precedents; and 
(5) earlier GAO work.
Rural primary care hospitals: Experience offers suggestions for 
        Medicare's expanded program (GAO/HEHS-98-60, 02/23/98)
    To maintain health care services in rural communities, 
Congress authorized limited-service hospitals, known as rural 
primary care hospitals, to operate in seven states--California, 
Colorado, Kansas, New York, North Carolina, South Dakota, and 
West Virginia. In October 1997, Congress replaced rural primary 
care hospitals with critical access hospitals, which were 
authorized to operate nationally. Existing rural primary care 
hospitals were eligible to participate in Medicare as critical 
access hospitals. GAO found that rural primary care hospitals 
were an important source of inpatient and outpatient care for 
Medicare beneficiaries in rural areas. Medicare payments to 
these hospitals for inpatient stays were, however, somewhat 
higher than payments would have been to full-service rural 
hospitals. A chief reason for this was that about 21 percent of 
the inpatient cases had lengths of stays that exceeded the 72-
hour maximum in effect at the time, and eight percent would 
have exceeded the 96-hour limit for critical access hospitals. 
The Health Care Financing Administration (HCFA) has not 
established a way to enforce the length-of-stay limit, and GAO 
believes that one is needed to give critical access hospitals 
an incentive to adhere to the limit. For critical access 
hospitals and peer review organizations that are authorized to 
grant waivers to the 96-hour limit, HCFA also needs to define 
the conditions and the circumstances under which it would be 
appropriate to waive the requirement. HCFA also has not 
established a way to check compliance with the requirement that 
a doctor certify that patients admitted to rural primary care 
hospitals--now critical access hospitals--are expected to be 
discharged within the maximum allowed length-of-stay limit. 
Such a mechanism should underscore the importance of 
certification and its intent to ensure that only the 
appropriate kinds of patients are admitted.
Specialty care: Heart attack survivors treated by cardiologists more 
        likely to take recommended drugs (GAO/HEHS-99-6, 12/04/98)
    Pursuant to a congressional request, GAO reviewed the 
potential differences in treatment patterns for health 
maintenance organizations (HMO) patients treated by specialists 
and those treated by generalist physicians, focusing on: (1) 
the proportion of Medicare heart attack survivors enrolled in 
HMOs who take cholesterol-lowering drugs, beta-blockers, and 
aspirin; and (2) whether Medicare heart attack survivors in 
HMOs regularly treated by a cardiologist are more likely to 
take cholesterol-lowering drugs, beta-blockers, and aspirin 
than those who do not have regular cardiology appointments.
    GAO noted that: (1) the ongoing use of cholesterol-lowering 
drugs

and beta-blockers reported by Medicare heart attack survivors 
en-

rolled in HMOs generally parallels the patterns for heart 
attack

survivors in the U.S. health care system overall; (2) as others 
have

found for the general patient population, GAO found a much 
small-

er proportion of respondents reported taking cholesterol-
lowering

drugs (36 percent) or beta-blockers (40 percent) than would be 
ex-

pected if everyone who would benefit from using these drugs 
were

taking them; (3) Medicare HMO heart attack survivors with regu-

lar cardiology care--40 percent of GAO's survey respondents--
were more likely to take the recommended drugs than those 
without regular appointments with a cardiologist; (4) enrollees 
who saw cardiologists regularly for their cardiac care were 
approximately 50 percent more likely to take cholesterol-
lowering drugs and beta-blockers--a finding consistent with 
other comparisons of care provided by cardiologists and 
generalists; (5) although factors such as age, education, self-
reported health status, and the presence of other illnesses 
also influenced who took cholesterol-lowering drugs and beta-
blockers, they did not account for the higher use levels 
observed among patients who had routine cardiology 
appointments; (6) still, even patients of cardiologists often 
did not take one or both of these drugs; (7) by contrast, the 
overall use of aspirin was much higher--71 percent--and while 
regular patients of cardiologists were still more likely to 
take aspirin, the difference between them and other patients 
was smaller and not statistically significant (75 percent 
versus 68 percent); (8) on the whole, GAO's results for heart 
attack survivors treated by cardiologists and generalist 
physicians in Medicare HMOs are consistent with those of other 
studies of physician specialty differences in the United 
States; and (9) GAO's finding that patients under the regular 
care of cardiologists are more likely to take recommended 
medications reinforces the findings of the small number of 
other studies of physician specialty differences that are 
specifically concerned with HMO members and extends those 
findings to an older population and to a different medical 
condition.

                             Housing Issues

Assisted housing: occupancy restrictions on persons with disabilities 
        (GAO/RCED-99-9, 11/12/98)
    The Housing and Community Development Act of 1992 allows 
the owners of federally assisted housing projects to establish 
occupancy policies that favor elderly tenants over nonelderly 
tenants with disabilities. These owners are not required to 
obtain approval from the Department of Housing and Urban 
Development (HUD) before imposing such a restriction, nor to 
notify HUD once a restriction occurs. As a result, little 
information is available on the law's effect. However, concerns 
have been raised that the law may make it harder for nonelderly 
persons with disabilities to obtain affordable housing. Since 
fiscal year 1997, Congress has appropriated funds for new 
Section 8 rental housing certificates and vouchers for the 
exclusive use of nonelderly persons with disabilities. This 
report discusses (1) the extent to which the occupancy policies 
of eligible projects restrict occupancy to the elderly and the 
portion of units in eligible projects actually occupied by 
nonelderly persons with disabilities and (2) the use of Section 
8 certificates and vouchers to help nonelderly persons with 
disabilities affected by the act.
Housing for the elderly: Information on HUD's section 202 and HOME 
        Investment Partnerships programs (GAO/RCED-98-11, 11/14/97)
    The Department of Housing and Urban Development (HUD) 
reported in 1996 that at least 1.4 million elderly persons 
needed, but were not receiving housing assistance. Most of 
these individuals had extremely low incomes, were paying more 
than half of their income for rent, or lived in homes that were 
physically inadequate. Two HUD programs--Section 202 Supportive 
Housing for the Elderly and HOME Investment Partnerships--are 
receiving funds each year to make new multifamily rental 
housing available to the elderly. This report compares the 
Section 202 program and the HOME program in the following three 
areas: (1) the amount and the types of new multifamily rental 
housing that each program has provided for the elderly; (2) the 
sources of each program's funding for multifamily rental 
projects; and (3) the availability of support services for 
elderly residents. GAO visited projects in four states with 
relatively high concentrations of low-income elderly residents 
and numbers of Section 202 and HOME-funded projects--
California, Florida, North Carolina, and Ohio.
Public housing: Impact of designated public housing on persons with 
        disabilities (GAO/RCED-98-160, 06/09/98)
    The provisions of the Housing and Community Development Act 
of 1992 allowing public housing authorities to designate units 
as elderly-only have had little impact on the availability of 
public housing for disabled people. Seventy-three of the 3,200 
public housing authorities had allocation plans approved by the 
Department of Housing and Urban Development as of November 1, 
1997, allowing them to designate 24,902 of their units as 
elderly--only about 36 percent of their total housing stock for 
the elderly and the disabled. Nearly all of these designated 
units had been available previously to tenants who were elderly 
or who had disabilities but were younger than 62, although few 
were actually occupied by younger people with disabilities. 
GAO's survey found that, as of November 1, 1997, the number of 
elderly residents and disabled residents in these and other 
housing units for which they were eligible had not changed 
substantially since the housing authorities began submitting 
allocation plans. Designating public housing units as elderly-
only may have more impact in the future, depending on how many 
more housing authorities opt to do so and on what the housing 
alternatives are for younger people with disabilities.

                         Income Security Issues

Employee benefits: Status of the UMWA Combined Benefit Fund (GAO/HEHS-
        99-7R, 10/02/98)
    Pursuant to a congressional request, GAO provided 
information on the current state of the United Mine Workers of 
America (UMWA) Combined Fund, focusing on: (1) the current 
population of beneficiaries; (2) the medical benefits provided 
to all classes of beneficiaries; (3) the extent to which the 
benefits provided by the fund represent the beneficiaries' 
primary medical coverage; (4) the major components of 
expenditures by the Combined Fund; and (5) how long the fund 
will remain solvent and able to cover beneficiaries.
    GAO noted that: (1) the Combined Fund provides benefits to 
71,337 individuals; (2) because Combined Fund benefits are only 
available to individuals who were eligible to receive and 
receiving benefits on July 20, 1992, the number of 
beneficiaries declines over time; (3) other beneficiaries 
include parents of mine workers, unmarried children of mine 
workers under the age of 22, unmarried dependent grandchildren 
under the age of 22, dependent children of any age who are 
mentally impaired or disabled before the age of 22, and 
surviving dependent children of deceased miners; (4) the 
Combined Fund provides beneficiaries with an array of medical 
benefits; (5) of the 71,337 individuals receiving benefits 
through the Combined Fund, 65,146 are also covered by Medicare; 
(6) Combined Fund officials could not provide GAO with the 
exact number of beneficiaries covered by private insurance; (7) 
however, they estimate that the number of beneficiaries is 
negligible; (8) according to the June 1998 actuarial 
projections, the major expenses of the Combined Fund are 
medical benefits, death benefits, and administrative costs; (9) 
in 1997, medical expenses constituted approximately 90 percent 
of expenditures, with death benefits and administrative costs 
amounting to about 3 percent and 7 percent, respectively; (10) 
these expenses vary with both the size of the beneficiary pool 
and trends in the costs of medical treatment; (11) since a 
finite number of beneficiaries is covered by the Combined Fund, 
the beneficiary pool will likely decline as recipients die, 
driving down the number of individuals claiming benefits; (12) 
conversely, medical costs are expected to rise, thereby 
increasing per-capita medical expenses; (13) thus, as the 
beneficiary pool decreases over time, medical expenses may 
become a larger component of Combined Fund expenses in the 
future; (14) if the Combined Fund becomes insolvent, the cost 
of borrowing to pay benefits may add to expenses; (15) it is 
difficult to accurately project the future solvency of the 
Combined Fund, primarily because of uncertainties created by 
the recent Supreme Court decision; (16) the June 1998 Court 
ruling will likely reduce the number of firms that are required 
to pay into the fund; and (17) regardless of the ultimate 
effect of the ruling on fund revenues, actuarial estimates made 
just before the decision show that the fund will be insolvent 
by 2000 and that its deficit will grow to between $107 million 
and $619 million by 2007, depending on the variation in 
Medicare-related expenses.
Federal pensions: Judicial survivors' annuities system costs and 
        benefit levels (GAO/GGD-97-87, 06/27/97)
    This report reviews certain aspects of the Judicial 
Survivors' Annuities System, which provides annuities to the 
surviving spouses and dependent children of deceased federal 
judges and other judicial officials. Legislation passed in 1992 
enhanced the benefits available under the system and reduced 
the amounts that participating judges and other judicial 
officials were required to contribute toward the plan's costs. 
GAO is required to review the system's costs every three years 
and determine whether participants' contributions covered one-
half of the costs. If the contributions are less than half of 
these costs, GAO must determine what adjustments would be 
needed to achieve the 50-percent figure. GAO is also required 
to compare the Judicial Survivor Annuities System to the 
survivor benefit plans for other federal workers.
Federal pensions: Relationship between pensions and final salaries for 
        retired former members of Congress (GAO/GGD-97-178R, 09/26/97)
    Pursuant to a congressional request, GAO responded to a 
series of questions concerning the relationship between 
pensions and the final salaries of retired members of Congress, 
focusing on: (1) determining the number of former members, if 
any, whose pensions have come to exceed the final salaries that 
they earned while working; (2) explaining why these members' 
pensions came to exceed their final salaries; and (3) 
determining the difference, if any, in these members' pension 
amounts had the current cost-of-living adjustment (COLA) policy 
been in effect without interruption since 1962, and also 
determining any difference in the number of retired members 
whose pensions would have exceeded their final salaries.
    GAO noted that: (1) seventy-six, or about 19 percent, of 
the 404 former members of Congress who were living and on the 
federal retirement rolls as of October 1, 1995, were receiving 
pensions that had come to exceed their final salaries when 
these salaries were not adjusted for inflation; (2) however, 
when final salaries were adjusted for inflation--i.e., 
expressed in constant dollars--only one former member was 
receiving a pension that was larger than the final salary; (3) 
using constant dollars provides a more meaningful way to 
compare monetary values across time; (4) three factors played 
an important role in explaining why members' pensions came to 
exceed their unadjusted final salaries: (a) the number and size 
of COLAs that former members received; (b) a former member's 
years of federal service; and (c) whether a member had chosen a 
survivor annuity benefit; (5) GAO's analysis of the effects 
that COLA policies have had on the pensions of retired former 
members of Congress and GAO's prior analysis of general 
employees suggest that these polices have played an important 
role in maintaining the purchasing power of retiree pensions 
since automatic COLAs began; (6) the effects COLA policies 
actually have had on retiree pension amounts cannot be 
summarized easily because of the numerous changes that have 
been made in COLA policies over the past 35 years; (7) COLA 
policy changes have affected individual retirees differently, 
depending on when their retirements began; (8) if current COLA 
policy--that is, the COLA policy enacted in 1984, which 
established the formula and schedule used today by the Office 
of Personnel Management--had been in effect without 
interruption since 1962, the pensions of some former members 
would have been larger than the pensions that they actually 
received, and the pensions of other former members would have 
been smaller; and (9) the changes that would have occurred in 
the former members' pension amounts under current policy were 
enough to cause about a two percentage point (2.0) increase in 
the number of former members whose pensions would have come to 
exceed their unadjusted final salaries.
Federal pensions: Relationship between retiree pensions and final 
        salaries (GAO/GGD-97-156, 08/11/97)
    About 27 percent of the 1.7 million retirees who were 
receiving federal pensions as of October 1995 were receiving 
pensions that had come to exceed their final salaries. However, 
when their salaries were adjusted for inflation and expressed 
in constant dollars, no retiree was receiving a pension that 
was larger than his or her final salary. Three factors helped 
explain why the pensions exceeded the retirees' unadjusted 
final salaries: the number and the size of cost-of-living 
adjustments (COLA) that retirees had received, the number of 
years that they had been retired, and the number of years that 
they had worked for the federal government. COLAs have played 
an important role in maintaining the purchasing power of 
retiree pensions. However, the COLA policies of the late 1960s 
and 1970s overcompensated for inflation and will continue to 
affect the pensions of those retirees who receive them as long 
as they are alive. If the current COLA policy--that is, the 
policy that was enacted in 1984--had been in effect without 
interruption since automatic COLAs began in 1962, the pensions 
of some retirees would have been different. GAO's analysis 
suggests that a majority of those who retired before 1970 would 
have received smaller pensions had the current COLA policy been 
continuously in effect during their retirement, and about 90 
percent of those who retired after 1970 would have received 
larger pensions.
Federal retirement: Comparison of high-3, 4, and 5 salary factors 
        (GAO)/GGD-97-84R, 04/25/97)
    Pursuant to a congressional request, GAO provided 
information on the effects of changing the high-3 salary factor 
in the formulas that are currently used to compute Civil 
Service Retirement System (CSRS) and Federal Employees 
Retirement System (FERS) pension benefits.
    GAO noted that: (1) employees retiring under either CSRS or 
FERS would need to work longer to receive annuities under a 
high 4 or high 5 that would be comparable to the annuities they 
would have received under a high 3, before any change in the 
annuity computation factor; (2) the amount of extra time, 
however, is measured in months rather than years; (3) reasons 
why include the fact that an employee's pay normally increases 
when he or she works longer, thus, so does the employee's 
annuity at retirement; (4) employees who work into the next 
calendar year in order to earn comparable annuities can receive 
general schedule pay increases early in the calendar year as 
well as step increases; and (5) in addition, the extra time 
employees work is added to their years of creditable service, 
which also increases the value of their annuities at 
retirement.
Federal retirement: Federal and private sector retirement program 
        benefits vary (GAO)/GGD-97-40, 04/07/97)
    GAO found no clearcut answer to the question of whether the 
two largest federal civilian retirement programs offer greater 
or smaller benefits than those offered by private sector 
retirement programs. The benefits available from the Federal 
Employees Retirement System (FERS) and the Civil Service 
Retirement System (CSRS) can be smaller, similar, or greater 
than those offered by the private sector, depending on a range 
of variables. Chief among these factors are the (1) ages at 
which employees retire and at which programs provide unreduced 
benefits, (2) extent to which employees and employers 
contribute to the defined contribution plans that are integral 
components of FERS and most private sector programs, and (3) 
impact of cost-of-living adjustment practices on benefit 
amounts over the long term. In fact, FERS and CSRS can provide 
quite different benefit amounts because of their different 
designs. As a rule, greater benefits are available from FERS 
than from CSRS, but FERS employees must contribute larger 
percentages of their salaries to receive the higher benefits.
Financial management: Review of the military retirement trust fund's 
        actuarial model and related computer controls (GAO)/AIMD-97-
        128, 09/09/97)
    The Defense Department's (DOD) Military Retirement Trust 
Fund was created to oversee the accumulation of funds to 
finance, on an actuarially sound basis, military retirement and 
survivor benefit programs. With total actuarial liabilities of 
$548 billion as reported in its financial statements for fiscal 
year 1996, the Fund has significant implications for the 
consolidated governmentwide financial statements that GAO plans 
to audit beginning in fiscal year 1997. In preparation for that 
audit, GAO contracted with an independent public accounting 
firm, KPMG Peat Marwick LLP, to review (1) the methods and 
assumptions used by the DOD Office of the Actuary to calculate 
the fund's pension liability as of September 30, 1996, and (2) 
the effectiveness of computer controls at the facilities that 
are responsible for receiving, formatting, and processing the 
actuarial information. This report presents the findings of 
that review.
Improving financial condition of the Pension Benefit Guaranty 
        Corporation and insured pension plans (GAO)/HEHS-99-37R, 12/18/
        98)
    Pursuant to a congressional request, GAO provided 
information on: (1) the Pension Benefit Guaranty Corporation's 
(PBGC) projections of its financial condition and assumptions 
used to prepare these projections; and (2) the funding status 
of the plans it insures and its strategy for investing its 
assets.
    GAO noted that: (1) PBGC uses different methodologies to 
fore-

cast the financial condition of its single-employer and multi-
em-

ployer insurance programs; (2) PBGC relies on extrapolations of 
its

past claims experience and past economic conditions to develop

forecasts for the single-employer program; (3) the optimistic 
and in-

termediate forecasts project surpluses at the end of fiscal 
year (FY)

2007 of $8 billion and $6.9 billion, respectively, while the 
pessimis-

tic forecast projects a deficit of $17.1 billion; (4) PBGC uses 
plan-

specific historical data in projecting whether multiemployer 
plans

will become insolvent and require its assistance; (5) PBGC 
projects

that the multiemployer program should remain financially strong

and that the program's surplus, $219 million in FY 1997, should

continue to grow; (6) the funding status of many single-
employer

plans has improved; (7) between 1980 and 1995, the proportion 
of

fully funded single-employer plans (plans with assets equal to 
or

exceeding benefits earned by participants) increased from 58 
per-

cent to 65 percent; (8) overall, funding among multiemployer 
plans

has improved since 1980, and in 1995 about 60 percent of 
multiem-

ployer plans were fully funded; (9) at the end of FY 1997, PBGC

reported having about $15.6 billion in assets available for 
investment; and (10) in accordance with its investment policy, 
these assets are invested primarily in equities and fixed 
income securities.
Integrating pensions and Social Security: Trends since 1986 tax law 
        changes (GAO/HEHS-98-191R, 07/06/98)
    Pursuant to a congressional request, GAO provided 
information on the impact of the 1986 change in the tax code 
integration provision, focusing on: (1) how integrated plans 
were modified to conform with the new provision; and (2) trend 
data relating to integrated plans.
    GAO noted that: (1) the actuaries and studies GAO consulted 
indicated that the Tax Reform Act of 1986 (TRA86) may not have 
had an immediate impact on many integrated plans because in 
1986 these plans appeared to already meet the new integration 
provision; (2) in 1986, most plans using the offset method of 
integration generally reduced pension benefits by no more than 
50 percent, and relatively few excess plans used a formula that 
withheld all benefits from the plans' lower-paid workers; (3) 
for plans not already in compliance with the new TRA86 
integration provision, plan sponsors' reactions to TRA86 
varied; (4) TRA86 increased plan costs for those sponsors who 
had to modify their plans to comply with the new integration 
provision; (5) an increasing proportion of sponsors of 
integrated plans are using the general test, even though 
initial cost remains high, because it offers design flexibility 
that can reduce the sponsors' yearly contribution costs; (6) 
the Internal Revenue Service (IRS) conducted a targeted study 
of integrated defined contribution plans for fiscal year 1993 
to determine whether they complied with the TRA86 pension 
integration provision; (7) it found that 3 of the 80 plans it 
audited required changes to bring them into compliance; (8) the 
IRS is now conducting a targeted study to determine the level 
of compliance; (9) data from surveys conducted by private 
employee benefits consultants show a decline in the proportion 
of pension plans that are integrated; (10) Bureau of Labor 
Statistics data show that the percentage of participants in 
large and medium private firms covered by integrated defined 
benefit plans declined from 62 percent in 1986 to about 51 
percent in 1995; (11) it is unclear whether the TRA86 
integration changes are working as intended, in part because 
plan sponsors can use the general test to avoid the special 
integration provision restrictions; (12) according to IRS 
officials, the TRA86 changes clearly prevent plans from 
eliminating employees' pension benefits through integration if 
they adhere to the TRA86 integration provision; (13) however, 
they acknowledged that a plan whose integration formula 
exceeded the integration provision restrictions could remain 
qualified by passing the general test; and (14) neither the 
actuaries nor the benefit rights advocate GAO contacted were 
able to provide any specific examples of benefits being 
eliminated by integration, and GAO found no examples in the 
literature it reviewed.
Pension Benefit Guaranty Corporation: Financial condition improving, 
        but long-term risks remain (GAO/HEHS-99-5, 10/16/98)
    The Pension Benefit Guaranty Corporation (PBGC) insures the 
pensions of about 42 million participants in 45,000 private 
defined benefit pension plans. During 1997, PBGC paid $824 
million to retirees in plans that had terminated with 
insufficient assets to pay promised benefits. PBGC's financial 
condition has improved significantly in recent years. The 
agency has posted a surplus for the past two fiscal years--
after having had a deficit for more than 20 years. The 
financial health of most insured, underfunded plans has also 
improved, but underfunding among some large plans continues to 
pose a risk to the agency. The improved financial condition of 
PBGC and the plans that it insures has resulted from better 
funding of underfunded plans and economic improvements, such as 
the extended national economic expansion and growth in the 
stock market. At this time, it is difficult to isolate the 
effects of the 1994 pension reform legislation on plan funding 
from other factors, such as the continued economic expansion. 
However, risks to the agency's long-term financial viability 
remain. PBGC is developing a new single-employer program 
forecasting model to estimate the probability of bankruptcies 
and terminations of underfunded plans under various economic 
conditions. In addition, PBGC has already improved its 
methodology for forecasting the financial status of the 
multiemployer program. PBGC has also improved its techniques 
for estimating its liability for plans that are likely to 
require future financial assistance and is now more closely 
monitoring the companies with underfunded plans that represent 
its biggest risks. Moreover, PBGC is strengthening its 
oversight through more audits of premium payments and audits of 
fully funded terminated plans and is working closely with plan 
sponsors to decrease plan regulatory and administrative 
burdens. Still, PBGC needs to continue its efforts to reduce 
the time it takes to assume control of terminated plans, 
improve the timeliness of final determinations of participants' 
benefits, and monitor the performance of contractors that 
assist PBGC in administering the insurance programs.
Pension Plans: Status of labor's economically targeted investments 
        clearinghouse (GAO/HEHS-98-99R, 02/27/98)
    Pursuant to a congressional request, GAO provided 
information on the Department of Labor's contract to establish 
and operate an economically targeted investments (ETI) 
clearinghouse, focusing on: (1) whether the applicable federal 
statutes and regulations were fully adhered to in selecting the 
ETI Clearinghouse contractor; (2) how much was budgeted for and 
paid to the contractor; (3) what Labor staff resources were 
involved in setting up and operating the ETI Clearinghouse; (4) 
work that the contractor performed; and (5) the current status 
of the ETI Clearinghouse.
    GAO found that Labor complied with the applicable federal 
procurement law and regulation in awarding the ETI 
Clearinghouse contract to Hamilton Securities. The entire 
contractor selection process was competitive among three 
vendors. Labor held negotiations with each vendor. Of the 
$1,520,411 base period contract awarded in September 1994 for 
the 2-year period, Labor's share of the approved contract 
expenses was to be 55 percent, and the contractor's share was 
the remaining 45 percent. For the 2-year base period, Labor 
approved payments of $774,723 of the $780,000 initially 
budgeted to reimburse Hamilton Securities for approved contract 
expenses. Labor estimates that about 16 individuals from seven 
departmental offices spent nearly 630 hours from January 1993 
through December 1997 on the ETI Clearinghouse project. Labor 
personnel activities included ETI Clearinghouse contract 
procurement, development, analysis, policy research, and 
monitoring.
    Based on its analysis of material provided by Labor, GAO 
believes that Hamilton Securities successfully completed each 
of the eight required contract tasks by the end of the contract 
base period. Among other things, the contractor developed an 
ETI database and created a clearinghouse web site for use by 
members of the pension community. In August 1996, Labor decided 
not to exercise the option year permitted by the September 1994 
contract because the contract requirements had been met by the 
end of the 2-year base period. After the base period contract 
ended in September 1996, Hamilton Securities continued to 
operate the ETI Clearinghouse but without any further Labor 
financial support. In December 1997, the firm decided to cease 
clearinghouse operations. Labor cited operational difficulties 
and long-term revenue concerns as the reasons for Hamilton 
Securities' decision to discontinue these operations.
Private pensions: Plan features provided by employers that sponsor only 
        defined contribution plans (GAO/GGD-98-23, 12/01/97)
    This report identifies the general features of defined 
contribution plans in the private sector. Defined contribution 
plans provide retirement benefits that are based on employer 
and/or employee contributions to individual employee accounts 
and the investment experience of those accounts. GAO describes 
patterns in the plans' (1) eligibility requirements for 
employee participation, (2) arrangements for employer and 
participant contributions, (3) eligibility requirements for 
employee rights to accrued benefits, (4) employee investment 
options, (5) loan and other provisions for participant access 
to plan assets while still employed, and (6) options for 
withdrawal of benefits upon separation or retirement. GAO also 
presents information on the six features for the Thrift Savings 
Plan--the defined contribution plan component of the Federal 
Employees Retirement System--for comparison. GAO also 
summarizes the explanations provided in retirement literature 
and by pension experts with whom GAO consulted on why employers 
might decide to sponsor more than one pension plan for the same 
groups of employees.
Railroad retirement: Enhancing portability would raise cost and policy 
        concerns (GAO/GGD-98-168, 08/10/98)
    The Railroad Retirement program, established in 1937, is 
among the older retirement programs for private sector 
employees in the country. In 1997, the program had about 
254,000 active participants and provided pension benefits to 
about 742,000 retirees, spouses, and survivor and disability 
annuitants. During the past 30 years, the railroad industry has 
experienced extensive downsizing. Also, about 60 percent of 
employees who begin railroad service leave the industry with 
less service than they need to qualify for a pension under the 
program. Consequently, there has been discussion of possible 
legislation to enhance the portability of Railroad Retirement 
benefits. This report discusses (1) which, if any, Railroad 
Retirement benefits are portable; (2) what changes could be 
made to the Federal Employees' Retirement System (FERS) that 
might enhance the portability of Railroad Retirement benefits 
into FERS for former railroad employees who secure federal jobs 
and the cost and administrative implications of those changes 
for FERS and whether such changes could be made cost-neutral to 
FERS; and (3) what changes could be made to Railroad Retirement 
that might enhance the overall portability of its retirement 
benefits and what are the cost and administrative implications 
of these changes for Railroad Retirement.
Retirement income: Implications of demographic trends for Social 
        Security and pension reform (GAO/HEHS-97-81, 07/11/97)
    The U.S. elderly population has tripled since 1940 and will 
more than double by 2050, according to Census Bureau 
projections. The population of ``very old''--those aged 85 and 
older--will increase fivefold. The elderly are expected to make 
up 20 percent of the U.S. population as early as 2030 compared 
with 13 percent today. These dramatic demographic trends raise 
questions about the future financing, availability, and 
protection of retirement income for the nation's elderly.
    This report provides information on (1) demographic and 
economic trends affecting retirement income, (2) the status of 
Social Security's long-term financing problems and proposals to 
address them, and (3) the extent of pension coverage and 
retirement saving and how to ensure that Americans can count on 
them throughout their retirement years.
Social Security: Better payment controls for benefit reduction 
        provisions could save millions (GAO/HEHS-98-76, 04/30/98).
    Under the Government Pension Offset provision, enacted in 
1977, the Social Security Administration (SSA) must reduce 
social security benefits to persons whose entitlement to social 
security benefits is based on another person's (usually their 
spouse's) social security coverage. Their social security 
benefits are to be reduced by two-thirds of the amount of their 
government pension. Under the Windfall Elimination Provision, 
enacted in 1983, SSA must use a modified formula to calculate 
the social security benefits that people earn when they have 
had a limited career in covered employment. The modified 
formula reduces the amount of payable benefits. With regard to 
the Government Pension Offset provision, spouse and survivor 
benefits were intended to provide some social security 
protection to spouses with limited working careers. The 
Government Pension Offset reduces spouse and survivor benefits 
to persons who do not meet this limited working career 
criterion. With regard to the Windfall Elimination Provision, 
Congress was concerned that the social security benefit formula 
provided unintended windfall benefits to workers who had spent 
most of their careers in noncovered employment. This report 
discusses how well SSA administers the two provisions and 
identifies ways to overcome administrative deficiencies.
Social Security: Different approaches for addressing program solvency 
        (GAO/HEHS-98-33, 07/22/98)
    The aging of the baby boomers, lower fertility rates, and 
increasing longevity have eroded the long-term solvency of the 
Social Security program. The system's annual cash surpluses are 
now projected to decline substantially beginning around 2008, 
and by 2013, benefit payments are expected to exceed cash 
revenues. The Social Security Trust Funds are forecast to be 
depleted by 2032, at which time revenues will be able to pay no 
more than 75 percent of promised benefits. With a national 
debate underway on how best to resolve Social Security's long-
term financing problems, GAO reviewed the various perspectives 
underlying the solvency debate, reform options within the 
current program structure, and issues that might arise if 
Social Security were restructured to include individual 
retirement accounts.
Social Security: Implications of extending mandatory coverage to State 
        and local employees (GAO/HEHS-98-196, 08/18/98)
    The Social Security Act of 1935 excluded state and local 
government employees from coverage because of concerns about 
the federal government's right to impose a tax on state 
governments and because many state and local employees were 
already covered by public pension plans. Over the years, 
Congress has extended mandatory Social Security coverage to 
workers not covered by a public pension plan and voluntary 
coverage to other state and local government workers. The 
Social Security Administration estimates that 5 million state 
and local government workers, with annual salaries totaling 
$132.5 million, are currently not covered by Social Security. 
This report examines the implications of extending mandatory 
coverage to all newly hired state and local employees. 
Specifically, GAO discusses the implications of mandatory 
coverage for the Social Security program and for public 
employers, employees, and pension plans. GAO also identifies 
potential legal or administrative problems associated with 
mandatory coverage.
Social Security: Mass issuance of counterfeit-resistant cards 
        expensive, but alternatives exist (GAO/HEHS-98-170, 08/20/98)
    Since legislation was enacted in 1986 requiring employers 
to review documents of prospective employees to establish their 
right to work in the United States, the Social Security card 
has become one of the primary documents used to determine 
employment eligibility. However, concerns have deepened that 
the card is easily counterfeited and does not prevent 
individuals from illegally working in the United States. As a 
result, some Members of Congress have asked, on several 
occasions, the Social Security Administration (SSA) and the 
Congressional Budget Office (CBO) to estimate the cost of 
issuing a counterfeit-resistant card. In 1996, the Illegal 
Immigration Reform and Immigrant Responsibility Act required 
SSA to develop a prototype counterfeit-resistant card made of a 
durable tamper-resistant material with various security 
features that could be used to establish reliable proof of 
citizenship or legal noncitizenship status. That Act also 
required SSA to estimate and compare the cost of producing and 
disseminating several types of enhanced cards to all living 
number holders over 3-, 5-, and 10-year periods. Earlier that 
year, a Member of Congress asked CBO to estimate the cost of 
issuing a counterfeit-resistant card, believing an earlier SSA 
estimate of producing such a card was high. This report (1) 
explains differences in CBO's and SSA's estimates for replacing 
the Social Security card, (2) evaluates SSA's estimates for the 
cost of issuing a more secure card, and (3) presents additional 
issuance options.
Social Security Administration: Information on monitoring 800 number 
        telephone calls (GAO/HEHS-98-56R, 12/08/97)
    Pursuant to a congressional request, GAO reviewed the 
Social Security Administration's (SSA) teleservice monitoring 
operations, focusing on: (1) requirements by laws and 
regulations regarding proper telephone monitoring practices and 
steps SSA has taken to gain consent for its telephone 
monitoring practices; and (2) best practices in telephone 
monitoring.
    GAO noted that: (1) under the current law, SSA cannot 
monitor telephone calls unless its monitoring practices fall 
within a statutory exception; (2) one exception generally 
relates to the type of telephone equipment provided to a 
business and whether it is used for business purposes; (3) 
another exception requires the consent of at least one party to 
a conversation; (4) the SSA Office of Inspector General did not 
determine whether SSA meets the first exception, but SSA 
believes it does; (5) also, the agency has taken steps to gain 
consent for telephone monitoring from the public and its 
employees; (6) SSA has negotiated agreements with the American 
Federation of Government Employees to more often notify 
employees when particular calls will be monitored and has added 
a recorded message to its 800 number to notify callers that 
their calls may be monitored; (7) SSA is also developing a new 
regulation that will formally notify its employees and the 
public of its monitoring practices; (8) regarding best 
practices, there are some similarities and differences between 
SSA's telephone monitoring practices and those identified in a 
key study of private companies considered to be the best in the 
800 number business; (9) for example, the approach SSA 
supervisors use to monitor broader unit-level performance is 
similar to private sector best practices; (10) SSA's approach 
to monitoring for quality assurance differs from private 
industry's best practices; and (11) rather than immediate 
supervisors' performing the quality monitoring function, SSA 
maintains a separate unit to monitor for quality to ensure that 
benefits are paid accurately.
Social Security Administration: More cost-effective approaches exist to 
        further improve 800-number service (GAO/HEHS-97-79, 06/11/97)
    Every day, thousands of people contact the Social Security 
Administration (SSA) to file claims for disability or 
retirement benefits, check to see that their records are up to 
date, obtain a Social Security card, or ask questions about the 
agency's programs. To reach its goal of providing world-class 
service to the public, SSA is working to improve its toll-free 
800-number service. Since the 800 number became widely 
available in 1989, SSA has struggled to keep pace with caller 
demand. Moreover, once callers reach SSA, they are limited to 
simple transactions, such as ordering Social Security card 
application forms or making appointments to file benefit 
claims. SSA has initiatives underway to improve caller access 
to its 800 number and to expand the range of available 
transactions. This report reviews (1) how well SSA's 800 number 
provides service to the public and (2) the steps that SSA needs 
to take to ensure that upgrades to the 800 number are cost-
effective.
Social Security Administration: Responses to subcommittee questions 
        about the on-line PEBES service (GAO/AIMD-97-121R, 06/20/97)
    Pursuant to a congressional request, GAO provided answers 
to questions relating to its May 6, 1997, testimony on the 
Social Security Administration's (SSA) use of the Internet to 
provide Personal Earnings and Benefits Estimate Statements 
(PEBES) to individuals.
    GAO noted, among other things, that (1) discussions 
concerning SSA's use of the Internet to disseminate PEBES 
should include a focus on systems security because there have 
been recent problems in implementing currently available 
commercial encryption processes, and computer systems that use 
these processes have been successfully attacked; (2) in making 
information readily available via the Internet, many 
opportunities for serious misuse of sensitive information 
exist, and these must be carefully considered and communicated 
to those individuals whose information might be placed at risk; 
(3) because of the sensitive information contained in the PEBES 
system, effective risk management is necessary to ensure that 
the most appropriate technical safeguards are identified and 
implemented to protect against security threats; (4) in light 
of the increasing importance of information security and the 
pattern of widespread problems that has emerged, it is 
essential that federal agencies implement information security 
programs that proactively and systematically assess risk, 
monitor the effectiveness of security controls, and respond to 
identified problems; and (5) as the senior official designated 
to oversee information resources management, SSA's chief 
information officer should have primary responsibility for 
ensuring that the on-line PEBES initiative represents a sound 
information technology investment based on factors such as the 
project's cost, risk, return on investment, and support for 
mission-related outcomes.
Social Security Administration: Significant challenges await new 
        commissioner (GAO/HEHS-97-53, 02/20/97)
    The Social Security Administration (SSA) is ahead of many 
federal agencies in developing strategic plans; measuring its 
service to the public; and producing complete, accurate, and 
timely financial statements. This gives SSA a sound foundation 
from which to manage significant current and future challenges. 
The aging of the baby boomers, coupled with longer life 
expectancy and the declining ratio of contributing workers to 
beneficiaries, will place unprecedented strains on the Social 
Security program in the 21st century. SSA, however, has yet to 
do the research, analysis, and evaluation needed to inform the 
public debate on the future financing of Social Security--the 
most critical long-term issue confronting the agency. Also 
challenging SSA have been disability caseloads that have grown 
by nearly 70 percent during the past decade. At this critical 
juncture, leadership is essential so that SSA can take the 
following steps to ensure success in the years ahead: inform 
the national debate on Social Security financial issues; 
complete its redesign of the disability claims process and 
promote return to work in its disability programs; enhance 
efforts to ensure program integrity, while quickly and 
effectively implementing many reforms; and make the technology 
enhancements and workforce decisions needed to meet increasing 
workloads with fewer resources.
Social Security Administration: Significant progress made in year 2000 
        effort, but key risks remain (GAO/AIMD-98-6, 10/22/97)
    Unless timely corrective action is taken to address the 
Year 2000 problem, the Social Security Administration (SSA), 
like other federal agencies, could face critical computer 
system failures at the turn of the century. If left 
uncorrected, this could result in Social Security benefit 
checks being issued incorrectly, or not on time, beginning in 
January 2000. This report discusses the adequacy of steps taken 
by SSA to ensure that computing problems arising from the year 
2000 are fully addressed, including its oversight of state 
Disability Determination Services' (DDS) Year 2000 program 
activities.
    GAO noted that while the agency deserved credit for its 
leadership in addressing the Year 2000 issue, the agency 
remained at risk that not all of its mission-critical systems 
would be corrected before January 1, 2000. At particular risk 
were systems that had not been assessed for the 54 state DDSs 
that provide vital support to SSA in administering its 
disability insurance programs. SSA also faced the challenge of 
ensuring that its critical data exchanges with federal and 
state agencies and other businesses are Year 2000 compliant. 
Finally, GAO noted that SSA's risk could be magnified if the 
agency does not develop contingency plans to ensure the 
continuity of its critical systems and activities should 
systems not be corrected in time.
    In light of the importance of SSA's function to most 
Americans and the risks associated with the Year 2000 program, 
GAO recommended that SSA (1) expeditiously complete the 
assessment of state DDS mission-critical systems; (2) 
strengthen its monitoring and oversight of state DDS 
activities; (3) include information on the status of DDS 
activities in SSA's quarterly reports to the Office of 
Management and Budget; (4) expeditiously complete the agency's 
compliance coordination with all data exchange partners, and 
(5) develop contingency plans for ensuring the continued 
operation of core business functions if planned corrections are 
not completed in time or if systems fail to operate as 
intended.
Social Security Administration: Software development process 
        improvements started but work remains (GAO/AIMD-98-39, 01/28/
        98)
    The Social Security Administration (SSA) is in the process 
of redesigning its work processes and modernizing its computer 
systems to better serve a growing beneficiary population and 
improve productivity. The agency plans to switch from 
centralized, mainframe-based computer processing to a more 
distributed, client/server processing environment, in which the 
Intelligent Workstation/Local Area Network will serve as the 
basic automation infrastructure. Software developed for the new 
client/server systems will be critical to ensuring that the 
modernized processes work as intended and achieve the desired 
productivity outcomes. However, software development has been 
cited by many experts as one of the riskiest and most costly 
aspects of systems development. Moreover, SSA has recognized 
weaknesses in its own software development capability and has 
begun taking steps to improve its processes for developing 
software.
    This report discussed the status of SSA's software process 
improvement efforts and noted a number of actions that SSA was 
taking to improve its capability, including launching a formal 
improvement program and acquiring the assistance of the 
Software Engineering Institute to assess current process 
weaknesses and implement improvements. However, the report also 
noted that SSA's software process improvement program lacked 
measurable goals and baseline data needed to measure the 
progress and success of the improvement efforts. To strengthen 
SSA's software process improvement program, GAO recommended 
that SSA develop and implement plans that explicitly articulate 
a strategy and time frames for (1) developing baseline data, 
(2) identifying specific, measurable goals for the improvement 
initiative, and (3) monitoring and measuring progress in 
achieving these goals.
Social Security Administration: Subcommittee questions concerning 
        information technology challenges facing the commissioner (GAO/
        AIMD-98-235R, 07/10/98)
    Pursuant to a congressional request, GAO provided 
information on the challenges the Social Security 
Administration (SSA) faces in preparing its information systems 
for the new century and in implementing technology initiatives, 
such as the Intelligent Workstation/Local Area Network (IWS/
LAN) and the on-line Personal Earnings and Benefits Estimate 
Statement (PEBES) system.
    GAO noted that (1) SSA was making good progress in its 
efforts to become Year 2000 compliant and the agency had taken 
numerous actions that demonstrated a sense of urgency and 
commitment to achieving readiness for the change of century; 
(2) although SSA stated that 100-megahertz workstations 
specified in its IWS/LAN contract met the agency's current 
needs, it was uncertain whether these workstations would 
adequately support all of the agency's future software needs; 
(3) SSA did not include a technology refreshment clause for 
IWS/LAN, but the contract did include two other clauses that 
would allow the agency to replace equipment originally 
specified in the contract with upgraded technology; (4) staff 
in certain state Disability Determination Services offices had 
expressed valid concerns about the effectiveness of SSA's 
network management control over IWS/LAN, and dissatisfaction 
with the service and technical support received from the 
contractor following its installation; (5) weaknesses in SSA's 
software development capability raised significant concerns 
about the agency's ability to effectively develop the software 
that will be needed to support its operations into the next 
century; and (6) implementation of the on-line PEBES systems 
remained suspended and the agency was continuing to evaluate 
alternatives for protecting the privacy and security of 
sensitive information that would be transmitted via the 
Internet.
Social Security Administration: Technical and performance challenges 
        threaten progress of modernization (GAO/AIMD-98-136, 06/19/98)
    To better serve a growing beneficiary population and 
improve productivity, the Social Security Administration (SSA) 
is redesigning its work processes and modernizing its computer 
systems. The Intelligent Workstation/Local Area Network (IWS/
LAN) project is intended to provide the basic automation 
infrastructure needed to increase SSA's processing abilities. 
The first phase of the planned project is a seven-year, 
approximately $1 billion effort to acquire more than 56,000 
intelligent workstations and 1,700 local area networks. This 
report (1) discusses the status of SSA's implementation of IWS/
LAN, (2) assesses whether SSA and state Disability 
Determination Services' (DDS) operations have been disrupted by 
the installation of network equipment, and (3) assesses SSA's 
practices for managing its investment in IWS/LAN.
    The report contains a number of recommendations aimed at 
strengthening SSA's management of its IWS/LAN investment, 
including (1) assessing the adequacy of the workstations 
specified in the IWS/LAN contract to determine the number and 
capacity of workstations required to support the initiative; 
(2) working with the state Disability Determination Services to 
resolve network management concerns; and (3) establishing a 
formal oversight process for measuring the actual performance 
of each phase of IWS/LAN.
Social Security advocacy: Organizations that mail fund-raising letters 
        (GAO/HEHS-97-69, 06/18/97)
    As part of their fund-raising efforts, some groups mail 
letters to the elderly claiming that Social Security has ``dire 
financial troubles'' or that the trust funds are being 
``mishandled'' and requesting financial contributions to combat 
alleged threats to the program. The media have criticized some 
letters for using scare tactics to solicit millions of dollars 
in donations from the elderly. This report focuses on the 
following seven organizations that use Social Security issues 
in fund-raising letters: the American Conservative Union, the 
Council for Citizens Against Government Waste, the National 
Committee to Preserve Social Security and Medicare, TREA Senior 
Citizens League, the Seniors Coalition, the 60/Plus 
Association, and the United Seniors Association, Inc. (USA). 
The report discusses (1) the bases for the groups' tax 
exemption; (2) the services they provide; (3) their sources of 
income, income subject to taxes, and expenses; (4) their 
financial relationships with other businesses; and (5) the 
characteristics of their Social Security-related fund-raising 
letters.
SSA: The agency's relationship with the Office of Management and Budget 
        since becoming an independent agency (GAO/HEHS-98-235R, 08/26/
        98)
    Pursuant to a congressional request, GAO reviewed the 
Social Security Administration's (SSA) dealings with the Office 
of Management and Budget (OMB) since it became an independent 
agency, focusing on: (1) SSA's current practices when dealing 
with OMB on budget, legislative, and policy matters; and (2) 
whether these current practices are in compliance with the law.
    GAO noted that: (1) since becoming an independent agency, 
SSA has continued to work with OMB on all budget, legislative, 
and policy matters; (2) according to SSA officials, two key 
differences in SSA's relationship with OMB since independence 
are: (a) the agency now works directly with OMB rather than 
going through the Department of Health and Human Services and 
(b) the President is now required to submit the Commissioner's 
budget for SSA to Congress along with the President's own 
budget; (3) during the annual budget process, SSA receives 
guidance from OMB to help it prepare a budget proposal; (4) 
once approved by OMB, SSA's budget is transmitted to Congress 
as part of the President's budget; (5) SSA continues to submit 
its legislative and regulatory proposals and testimonies to OMB 
for review prior to publication; (6) OMB officials told GAO 
that OMB's relationship with SSA is similar to that of other 
agencies within the executive branch of the government; (7) 
SSA's independence gives the agency more visibility within the 
executive branch and allows it to express agency concerns and 
views directly to OMB and Congress; (8) SSA officials told GAO 
that the budget provision in SSA's independence law, which 
requires the Commissioner to identify his budget needs 
separately in the President's budget, strengthens the agency's 
position in budget negotiations with OMB; (9) SSA officials 
believe that the agency's current relationship with OMB 
complies with the law; (10) these officials believe that, even 
though SSA is independent, it is still part of the executive 
branch; (11) therefore, SSA still needs to obtain OMB clearance 
when promulgating regulations, presenting testimony, and making 
legislative recommendations; (12) GAO agrees that SSA is not 
constrained by the independence legislation from submitting its 
regulations, testimony, and legislative recommendations to OMB; 
(13) GAO agrees with OMB and SSA officials that SSA's budget 
presentation, prepared in consultation with OMB and as 
submitted by the President, complies with the independence law 
and the federal budget process; (14) even so, Congress has 
other options should this information not satisfy its needs; 
(15) the budget provision in SSA's independence law is intended 
to provide information to Congress on SSA's budget needs, yet 
in practice the information provides a brief summary only and 
omits detail; and (16) if Congress would like more detailed or 
different information on SSA than what appears in the 
President's budget submission, the law authorizes Congress to 
obtain this information directly from SSA.
SSA benefit estimate statement: Adding rate of return information may 
        not be appropriate (GAO/HEHS-98-228, 09/02/98)
    Legislation was proposed that would require Social Security 
to include an individual rate of return estimate on the 
Personal Earnings and Benefit Estimate Statement that virtually 
every worker will begin receiving in 2000. The goal would be to 
enable workers to compare the current Social Security program 
with other investments, including alternatives being discussed 
in the congressional debate about how to restore Social 
Security's long-term solvency. GAO found that substantial 
disagreement exists about whether the rate of return concept 
should be applied to Social Security. Supporters point out that 
providing this information would educate people about the 
return that they will receive on their contributions. Others 
contend that it is inappropriate to use rate of return 
estimates for Social Security because the program is designed 
to pursue social insurance goals, such as assuring that low-
wage earners have an adequate income in their old age or 
providing for dependent survivors. In addition, actual rates of 
return for individuals can vary substantially from the 
estimates because of various uncertainties, such as a worker's 
retirement age and future earnings. To be clearly understood, 
the underlying assumptions and their effect on the estimates 
should be explained in any presentation of rate of return 
information. Moreover, comparing rate of return estimates for 
Social Security with estimates for private investments could be 
difficult for several reasons. For example, the comparisons 
would need to indicate whether the estimates for other 
investments include the transaction and administrative costs 
and the differences in risk associated with Social Security and 
private investments. Finally, providing rate of return 
information on the statements could further complicate and 
lengthen an already complex and difficult-to-understand 
document.
SSA benefit estimate statements: Additional data needed to improve 
        workload management (GAO/HEHS-97-101, 05/20/97)
    Congress passed legislation in 1990 requiring the Social 
Security Administration (SSA) to begin providing the public 
with annual statements about its Social Security earnings 
records and estimates of the amount of benefits persons may 
receive. Starting in fiscal year 2000, SSA must mail Personal 
Earnings and Benefit Estimate Statements to nearly every U.S. 
worker aged 25 and older--an estimated 123 million people. SSA 
projects that printing, mailing, and personnel costs associated 
with this effort will total nearly $77 million in fiscal year 
2000 alone. Although SSA believes that it is prepared for the 
increased workload arising from this initiative, it has not 
adequately assessed the added work likely to stem from 
questions about and corrections to the statements. SSA lacks 
reliable data on either the number of people who call or visit 
SSA with questions about their statements or the number of 
earnings corrections resulting from statement mailings. SSA 
could better manage the potential workload if it began to 
collect more complete and accurate data now on the effects of 
mailing the mandated statements.
Social Security financing: Implications of Government stock investing 
        for the trust fund, the Federal budget, and the economy (GAO/
        AIMD/HEHS-98-74, 04/22/98)
    Allowing the Social Security trust fund to invest in the 
stock market is a complex proposal that has potential 
consequences for the trust fund, the U.S. economy, and federal 
budget policy. For the Social Security trust fund, stock 
investing offers the prospect of higher returns but greater 
risk. Higher returns would allow the trust fund to pay benefits 
longer, even without other program changes. However, if stock 
investing is implemented in isolation, the trust fund would 
inevitably have to liquidate its stock portfolio to pay 
promised benefits, and it would be vulnerable to losses in the 
event of a general stock market turndown. Although stock 
investing is unlikely to solve Social Security's long-term 
financial imbalance, it could reduce the size of other reforms 
needed to restore the program's solvency.
    For the federal budget, stock investing would have the 
immediate effect of increasing the reported unified deficit or 
decreasing any reported unified surplus because, under current 
budget scoring rules, stock purchases would be treated as 
outlays. Any money used to buy stocks would no longer be 
invested in Treasury securities, reducing the Treasury's 
available cash and more clearly revealing the underlying 
financial condition of the rest of the government. Without 
compensating changes in fiscal policy, stock investing would 
not significantly alter the impact of federal finances on 
national saving and the economy. GAO summarized this report in 
testimony before Congress; see: Social Security Financing: 
Implications of Stock Investing for the Trust Fund, the Federal 
Budget, and the Economy (GAO/T-AIMD/HEHS-98-152, Apr. 22, 
1998).
Social Security reform: Implications for women's retirement income 
        (GAO/HEHS-98-42, 12/31/97)
    On average, Social Security pays lower retirement benefits 
to women than to men, primarily because women tend to have 
lower lifetime earnings. Social Security reforms that would 
create individual private savings accounts and change the way 
that benefits are distributed are most likely to affect women 
and men differently. Working women earn less than men, on 
average, and would have less money to invest in their 
individual accounts. Also, women are often more cautious 
investors than men, and may be less likely to invest in 
potentially higher yielding, though riskier, assets such as 
stocks, a tendency that puts them at risk of accumulating 
relatively less money in their accounts at retirement. 
Moreover, even if men and women enter retirement with equal 
amounts in their individual accounts, women may receive a lower 
monthly benefit if they buy an individual annuity because it is 
adjusted for their greater longevity.
SSA: Cycling payment of Social Security benefits (GAO/OGC-97-24, 02/25/
        97)
    Pursuant to a legislative requirement, GAO reviewed the 
Social Security Administration's (SSA) new rule on cycling 
payment of Social Security benefits. GAO noted that: (1) the 
rule would establish additional days throughout the month on 
which Social Security benefits would be paid; and (2) SSA 
complied with applicable requirements in promulgating the rule.
401(k) pension plans: Extent of plans' investments in employer 
        securities and real property (GAO/HEHS-98-28, 11/28/97)
    Policymakers and the pension community are concerned about 
401(k) plans in which decisions on how to invest plan assets, 
particularly employee contributions, are made exclusively by 
employers. This concern was prompted mainly by two cases in 
which employers invested a large part of the 401(k) plan assets 
in their companys' securities or real property. Later business 
reversals then forced the employers into bankruptcy, 
reorganization, or liquidation. In one case, employees lost 
their jobs and almost all of their pension benefits because the 
value of the employer's securities decreased significantly. 
This report (1) provides information on the extent to which 
401(k) plan assets are invested in employers' securities and 
real property, (2) examines the protection and any possible 
problems associated with recent amendments to title I of the 
Employee Retirement Income Security Act of 1974 (ERISA), and 
(3) identifies alternative mechanisms that might safeguard the 
retirement benefits of participants in 401(k) plans in which 
the employer decides how to invest assets.
401(k) pension plans: Loan provisions enhance participation but may 
        affect income security for some (GAO/HEHS-98-5, 10/01/97)
    More employees are likely to participate in 401(k) pension 
savings plans when they are allowed to borrow from those plans. 
Moreover, participants in plans that allow borrowing 
contribute, on average, 35 percent more to their pension 
accounts than do participants in plans that do not permit 
borrowing. GAO found that relatively few plan participants--
less than eight percent--have one or more loans from their 
pension accounts. Blacks and Hispanics, lower-income persons, 
participants who have recently been turned down for a loan, and 
workers who are also covered by other pension plans are more 
likely to borrow from their pension account than are other 
participants. The loan provisions of many pension plans provide 
for loan repayment at favorable interest rates, which may be 
lower than the investment yield that could have been earned had 
the money been left in the pension account. Consequently, the 
borrower will have a smaller pension balance at retirement 
because the interest paid to the account is less that what 
could have been earned from investing in equities. On the other 
hand, borrowing can help plan participants meet other financial 
goals. For example, borrowing for education or training could 
boost a family's lifetime income and, hence, retirement income.

                        Veterans and DOD Issues

Consumer-directed personal care programs: Department of Veterans 
        Affairs and Medicaid experience (GAO/HEHS-98-50R, 01/16/98)
    Pursuant to a congressional request, GAO reviewed the 
Department of Veterans Affairs' (VA) Aid and Attendance (A&A) 
program as well as selected state Medicaid programs that permit 
consumers to hire their own personal care attendants, focusing 
on whether: (1) the government might be paying twice for 
persons in nursing homes who also received A&A benefits; (2) 
there are any existing public programs that could serve as a 
model for Medicaid; and (3) there is sufficient knowledge about 
consumer-directed personal care to recommend one of these 
programs as a model.
    GAO noted that: (1) while such programs exist, the 
information currently available is not sufficient to determine 
whether any of the existing consumer-directed personal 
assistance programs that allow consumers to pay or participate 
in paying attendants could serve as a model for Medicaid; (2) 
in terms of the programs in place, they tend to differ both in 
their mechanisms for paying attendants and in whether they 
monitor the use of the payments; (3) VA does not monitor the 
use of A&A allowance, taking the position that has no authority 
to tell veterans how to use the benefit; (4) state programs 
want to ensure that the employer taxes are paid for personal 
care attendants, and this can present difficulties for the 
consumer/employer, who must satisfy all Internal Revenue 
Service reporting requirements, and for the state, which 
generally prefers not to be the employer of record; (5) in most 
cases, the state or a fiscal intermediary makes payments and 
handles the taxes; and (6) although there has been no rigorous 
evaluation of any of these programs to date, the four-state 
Cash and Counseling Demonstration, sponsored by the Robert Wood 
Johnson Foundation and the Department of Health and Human 
Services, will produce important information on its cost-
effectiveness--but not until 2001.
Defense health care: Fully integrated pharmacy system would improve 
        service and cost-effectiveness (GAO/HEHS-98-176, 06/12/98)
    The rapid rise in health care costs, the closure of 
military treatment facilities, and the rising number of retired 
military beneficiaries have prompted the Defense Department 
(DOD) to continually reengineer its health care delivery 
system. DOD's TRICARE health care system provides most of its 
care at Army, Navy, and Air Force facilities, supplemented by 
civilian health care services arranged by regional TRICARE 
contractors. Among health care services, the pharmacy benefit 
is most in demand by military beneficiaries. As in the private 
sector, DOD's pharmacy costs have continued to grow relative to 
total health care costs. GAO estimates that DOD's pharmacy 
costs rose 13 percent between 1995 and 1997, while its overall 
health care costs increased two percent during that same 
period. This report discusses (1) the adequacy of the 
information that DOD and its contractors use to manage the 
pharmacy benefit; (2) the merits and the feasibility of DOD and 
its contractors applying commercial best practices, including a 
uniform formulary, in managing its pharmacy programs; (3) the 
merits or limitations of recent mail-order and retail pharmacy 
initiatives to secure discounted DOD drug prices; and (4) the 
potential effects that military treatment facility's funding 
and formulary management decisions can have on beneficiaries' 
access to pharmacies and TRICARE contractors' costs.
Information systems: VA computer control weaknesses increase risk of 
        fraud, misuse, and improper disclosure (GAO/AIMD-98-175, 09/23/
        98)
    Computer control weaknesses put critical operations at the 
Department of Veterans Affairs (VA), from health care delivery 
to benefit payments to home mortgage loan guarantees, at risk 
of misuse and disruption. In addition, sensitive information in 
VA's systems, including financial transaction data and medical 
records, is vulnerable to inadvertent or deliberate misuse, 
even destruction. GAO found significant weaknesses in VA's 
control and oversight of access to its systems. For example, VA 
did not adequately limit the access of authorized users or 
effectively manage user identifications and passwords. In 
addition, VA did not provide adequate physical security for its 
computer facilities, assign duties so that incompatible 
functions were segregated, control changes to powerful 
operating system software, or update and test disaster recovery 
plans to prepare its computer operations to maintain or regain 
critical functions in emergencies. A primary reason for VA's 
computer control problems is that the agency lacks a 
comprehensive computer security planning and management 
program.
Military retirees' health care: Costs and other implications of options 
        to enhance older retirees' benefits (GAO/HEHS-97-134, 06/20/97)
    Today, 4.3 million military retirees, their dependents, and 
survivors are eligible for care under the military health care 
system. However, because of changes during the past decade, 
including the establishment of a nationwide managed care 
program and the closure of many medical facilities, many 
military retirees fear that they will lose access to care. This 
report describes various proposals that have been made to 
enhance older retirees' military health care benefits and 
provides cost estimates for implementing them. These options, 
each of which would require legislation to implement, include 
(1) enrolling Medicare-eligible retirees in TRICARE Prime, a 
health maintenance organization, and paying for their care with 
Medicare funds; (2) using Defense Department (DOD) funds to pay 
retirees' Medicare part B premiums and to furnish Medigap 
policies; (3) providing the Civilian Health and Medical Program 
of the Uniformed Services as a Medicare supplement; (4) 
extending the Federal Employees Health Benefits Program to 
retirees as a Medicare supplement and using DOD funds to pay 
part of the premium; and (5) expanding DOD's current mail-order 
prescription program to Medicare-eligibles who do not live near 
military medical facilities. GAO also discusses the 
uncertainties about and limitations of these options.
National cemetery system: Opportunities to expand cemeteries' 
        capacities (GAO/HEHS-97-192, 09/10/97)
    In fiscal year 1996, the Department of Veterans Affairs 
(VA) spent $73 million to provide burial benefits for 72,000 
veterans and their family members in national cemeteries. These 
burial grounds, however, are rapidly running out of space. As 
World War II veterans age, the number of deaths and internments 
in national cemeteries are rising and expected to peak sometime 
early in the next century. Because of the depletion of 
available gravesites, more than half of the national cemeteries 
will be unable to accommodate casket burials of family members 
before then. VA has several options to deal with this 
situation, including establishing new national cemeteries, 
developing space to hold ashes of the deceased, and acquiring 
additional land adjacent to existing cemeteries. GAO found that 
increased use of cremation, which is growing in acceptance 
nationwide, could extend the capacity of existing cemeteries at 
the lowest possible cost. For example, the cost of a 
traditional cemetery would exceed $50 million, while the cost 
of an above-ground columbarium, which holds cremations, would 
total $21 million.
VA aid and attendance benefits: Effects of revised HCFA policy on 
        veterans' use of benefits (GAO/HEHS-97-72R, 03/03/97)
    Pursuant to a congressional request, GAO provided 
information on the: (1) historical purpose of the Department of 
Veterans Affairs' (VA) aid and attendance (A&A) benefits and 
the policies affecting the use of these benefits; (2) medical, 
demographic, and economic characteristics of veterans who 
receive these benefits; and (3) impact of the Health Care 
Financing Administration's (HCFA) 1994 A&A policy decision on 
state veterans nursing homes, including federal and state 
expenditures for the care of veterans in these homes. GAO did 
not independently verify the data received from VA or the state 
veterans nursing homes.
    GAO noted that: (1) A&A benefits have historically been a 
means of providing additional disability benefits to veterans 
requiring assistance with activities of everyday living; (2) 
veterans receiving these benefits are generally among the 
oldest, poorest, and most disabled veterans; (3) HCFA's current 
A&A policy has increased state and federal Medicaid payments 
for the care of veterans in state veterans nursing homes; (4) 
while the increases potentially could be as much as $30 million 
annually, GAO estimated that the current financial impact is 
significantly less because of such factors as the relatively 
small number of Medicaid-eligible veterans residing in state 
nursing homes and the fact that many states have not yet 
implemented the current HCFA policy; and (5) HCFA's policy may 
also create an inequity by allowing Medicaid-eligible veterans 
in state homes to keep their A&A benefits, while non-Medicaid 
eligible veterans in these homes are required to use these 
benefits to pay for the cost of care.
VA community clinics: Networks' efforts to improve veterans' access to 
        primary care vary (GAO/HEHS-98-116, 06/15/98)
    In 1995, the Veterans Health Administration (VHA) announced 
plans to switch from a hospital-based system of care to a 
health-care system rooted in primary and ambulatory care. VHA 
has restructured its facilities into 22 service delivery 
networks. VHA has strengthened the process that these networks 
are to use when establishing new community-based clinics, 
thereby addressing several of GAO's earlier recommendations. 
VHA has provided more detailed guidance and it has developed a 
more structured planning process. VHA's long-range goal is to 
increase the number of community-based clinics. To that end, 
VHA has approved 198 clinics, and network business plans show 
that 402 additional clinics are to be established by 2002. The 
plans, however, do not address the percentage of current users 
who have reasonable access, or what percentage of those without 
reasonable access are targeted to received enhanced access 
through the establishment of new clinics. As a result, VHA's 
network business plans cannot be used to determine on a 
systemwide basis how well networks are using clinics to 
equalize veterans' access to primary care.
VA health care: Closing a Chicago hospital would save millions and 
        enhance access to services (GAO/HEHS-98-64, 04/16/98)
    GAO's analysis found that three hospitals can meet the 
health care needs of Chicago-area veterans. By reducing the 
number of VA hospitals in the Chicago area from four to three, 
the Veterans Health Administration (VHA) can save about $200 
million during the next 10 years and possibly generate millions 
of dollars more through the sale or lease of the closed 
property. VHA has experienced a large supply of unused beds, 
and veterans' demand for VHA hospital care is expected to 
decline further as (1) treatments shift from inpatient to 
outpatient settings and (2) the Chicago-area veteran population 
continues to decrease. In addition, other Chicago public and 
private hospitals have about 5,700 excess beds, which VHA could 
use on a contract basis to meet veterans' inpatient needs 
closer to their homes.
VA health care: Medicare reimbursement for services to veterans (GAO/
        HEHS-98-145R, 04/28/98)
    As part of its fiscal year 1998 budget submission, the 
Department of Veterans Affairs (VA) requested authority to 
collect, on a demonstration basis, Medicare funding for care 
provided to veterans with income above a statutory threshold 
(so called, high income veterans) who are eligible for both VA 
care and Medicare.
    GAO noted that a Medicare HMO demonstration could offer 
such potential benefits as: (a) access to VA care for high-
income, Medicare-eligible veterans who would otherwise not be 
served; and (b) enhanced access to or quality of care for 
veterans not enrolled in VA's demonstration. GAO cautioned that 
a demonstration could expose current VA users to such potential 
risks as delays in receiving services, denials of care, or 
reductions in quality of care. Risks for veterans could be 
minimized by VA's efforts to establish safeguards, including 
procedures to: (a) assess available operating capacity and link 
the number of demonstration enrollees to that level; and (b) 
monitor waiting times, care denials, and quality of care on an 
ongoing basis for veterans who use VA health care, but are not 
enrolled in VA's demonstration.
VA health care: More veterans are being served, but better oversight is 
        needed (GAO/HEHS-98-226, 08/28/98)
    In recent years, the Department of Veterans Affairs (VA) 
has launched two major initiatives to change the way it manages 
its $17 billion health care system. In fiscal year 1996, VA 
decentralized the management structure of its Veterans Health 
Administration, forming 22 veterans integrated service networks 
to coordinate the activities of hundreds of hospitals, 
outpatient clinics, nursing homes, and other facilities. VA 
expected the networks to improve efficiency and patient access. 
In April 1997, VA began to phase in the Veterans Equitable 
Resource Allocation system to allocate resources to the 22 
networks. Previously, each medical center received and managed 
its own budget. Concerned that some networks would be forced to 
take significant cost-saving measures to manage with the 
diminished resources they would receive under the Veterans 
Equitable Resource Allocation system and that these networks 
would, as a result, reduce veterans' access to care, Congress 
asked GAO to examine changes in access to care in two 
networks--one headquartered in Bronx, New York, and one 
headquartered in Pittsburgh, Pennsylvania. This report 
discusses (1) the changes in overall access to care, changes in 
access to certain specialized services, and a comparison of 
changes in these networks with VA's national data from fiscal 
years 1995 to 1997; (2) the extent to which VA headquarters and 
networks are working to equitably allocate resources to 
facilities within the networks; and (3) the adequacy of VA's 
oversight of changes in access to care.
VA health care: Resource allocation has improved, but better oversight 
        is needed (GAO/HEHS-97-178, 09/17/97)
    The Department of Veterans Affairs (VA) provides health 
care to about 2.6 million veterans each year, but veterans in 
different parts of the country traditionally have not had equal 
access to these services. A shift of the veteran population 
from the northeast and the midwest to the south and the west 
without appropriate reallocation of resources has created 
inequities in access to services. In April 1997, VA launched 
the Veterans Equitable Resources Allocation system as part of a 
strategy to improve the equity of veterans' access to health 
care. The system is designed to allocate resources to 22 
regional VA health care networks, which are responsible for 
allocating resources to hospitals and clinics. This report 
assesses VA's (1) implementation of the Veterans Equitable 
Resources Allocation system, (2) monitoring of changes in 
health care delivery resulting from the system, and (3) 
oversight of the network allocation process used to give 
veterans equitable access to service.
VA health care: Status of efforts to improve efficiency and access 
        (GAO/HEHS-98-48, 02/06/98)
    The Department of Veterans Affairs (VA) has taken important 
steps to improve the efficiency of its health care system and 
veterans' access to it. VA medical centers have increased 
efficiency by expanding the use of outpatient care. Preventive 
care, including health assessments and patient education, has 
also increased, enabling patients to stay healthier and avoid 
expensive hospital stays. VA is further increasing efficiency 
by integrating services both within and among medical centers. 
VA is improving access to health care in several ways. For 
example, it has begun to emphasize primary care, in which 
generalist physicians see patients initially and coordinate any 
specialty care that patients may need. In addition, VA is 
providing outpatient care at additional community-based 
outpatient clinics, expanding evening and weekend hours for 
clinics, and exploring other innovations. As networks and 
medical centers continue to respond to incentives to improve 
the efficiency of their operations, headquarters' monitoring of 
the impact of such responses is necessary to help ensure that 
they do not compromise the appropriateness of health care that 
veterans receive.
VA health care: VA is adopting managed care practices to better manage 
        physician resources (GAO/HEHS-97-87, 07/17/97)
    The Department of Veterans Affairs (VA) is in the midst of 
making fundamental changes in its health care delivery system 
because of budgetary pressures and increasing competition in 
the health care industry. Many of these initiatives are 
affecting the entire VA health care system; they will also 
affect how VA manages physician resources, including 
identifying the appropriate number and skill mix of physicians 
and monitoring productivity and quality of care provided. These 
initiatives involve changes in physician practice patterns and 
in resource allocation to help ensure effectiveness and 
efficiency. In this report, GAO discusses steps VA is taking 
and the challenges it faces in managing physician resources, 
including the need to balance multiple congressionally mandated 
missions.
VA health care: VA's plan for the integration of medical services in 
        central Alabama (GAO/HEHS-98-245R, 09/23/98)
    On June 11, 1998, The Department of Veterans Affairs (VA) 
submitted a plan for congressional approval to integrate 
services at medical facilities located in Tuskegee and 
Montgomery, Alabama.
    GAO noted that VA's plan contains the necessary information 
to understand the proposed integration of services at the 
Montgomery and Tuskegee facilities, including (1) how proposed 
changes should occur, (2) how such changes could benefit 
veterans and employees, and what steps will be taken to 
minimize adverse effects on veterans' access to care and 
employees' access to work sites. Most veterans responding to 
GAO's survey believed VA's plan contains the necessary 
information to understand the proposed integration of the 
Montgomery and Tuskegee facilities and most supported VA's plan 
because they believe that integrating the two facilities will 
increase VA's capacity to provide health care.
VA Hospitals: Issues and challenges for the future (GAO/HEHS-98-32, 04/
        30/98)
    Use of the 173 hospitals run by the Department of Veterans 
Affairs (VA) has steadily declined during the past three 
decades; from 1963 through 1995, the average daily workload of 
VA hospitals declined 66 percent. This report identifies major 
issues and changes that Congress and the administration will 
face in the next few years concerning VA hospitals. GAO 
compares VA and community hospitals regarding (1) how hospital 
care evolved during the 20th century, including changes in 
supply and demand; (2) factors contributing to the declining 
demand; (3) the extent of excess capacity; and (4) actions 
taken to increase efficiency and compete for patients.
VA medical care: Increasing recoveries from private health insurers 
        will prove difficult (GAO/HEHS-98-4, 10/17/97)
    For more than a decade, the Department of Veterans Affairs 
(VA) has been authorized to recover from private health 
insurers some of its expenses in providing health care to 
veterans with no service-connected disabilities. VA's recovery 
authority was expanded in 1990 to include care provided to 
veterans with service-connected disabilities, as long as that 
care was for treatment of conditions unrelated to the veterans' 
service-connected disabilities. In fiscal year 1996, VA sought 
to recover $1.6 billion but obtained only 31 percent of the 
billed amount--or $495 million--a five-percent decline from 
fiscal year 1995 recoveries. In its fiscal year 1998 budget 
submission, however, VA projects that it will be able to 
recover $826 million from private health insurers by fiscal 
year 2002. This is important because VA sought and was recently 
authorized to keep the money it recovers and to use it to 
supplement future appropriations. This report (1) identifies 
factors that limit VA's ability to recover more of its billed 
charges, (2) evaluates VA's ability to achieve its revenue 
targets by identifying factors that could decrease future 
recoveries and by assessing the potential for VA initiatives to 
boost medical care cost recoveries, and (3) evaluates the way 
that VA applies insurance payments to veterans' copayment 
liability for veterans in the discretionary care category.
The Veterans Benefits Administration: Clarifying information on 
        implementing the results act performance requirements (GAO/
        HEHS-98-149R, 04/17/98)
    Pursuant to a congressional request, GAO provided follow-up 
information on the Veterans Benefits Administration's (VBA) 
implementation of the Government Performance and Results Act of 
1993.
    GAO noted that (1) while federal agencies' planning efforts 
in implementing the Results Act, as well as, GAO's assessment 
of these efforts are still very much a work in progress, the 
Department of Human Services is one of the agencies with 
programs involving human services that had identified goals 
that largely focused on outcomes; (2) moving agencies towards 
result-oriented management and associated performance measures 
is a significant challenge and GAO believes judging the success 
or failure of the Results Act should turn on the extent to 
which information produced through the act's goal-setting and 
performance measurement practices helps inform policy 
decisions; (3) while we have made no recommendations, we have 
pointed out that the initial goals and measures for the VBA 
programs, as stated in VA's June 1997 draft strategic plan, 
were process-oriented and did not reflect program results and 
that VBA needs to coordinate with other agencies and 
effectively measure and assess its performance in meeting its 
goals; and (4) VA's Office of the Inspector General (OIG) 
reported that data on claims-processing times were inaccurate, 
the data reliability in the claims-processing system was 
questionable, and there was evidence of manipulation of data by 
regional office staffs. VBA is developing safeguards and plans 
for addressing the prevention of data manipulation.
Veterans benefits computer systems: Risks of VBA's year-2000 efforts 
        (GAO/AIMD-97-79, 05/30/97)
    Unless timely, corrective action is taken, the Veterans 
Benefits Administration (VBA), like other federal agencies, 
could face widespread computer failures at the turn of the 
century because of the ``Year 2000'' problem. In many computer 
systems, the Year 2000 is undistinguishable from 1900. This 
could make veterans who are due to receive benefits appear 
ineligible. If this were to happen, issuance of benefits checks 
could be disrupted. VBA has tried to address this problem, but 
it can do more. First, the Year-2000 management office's 
structure and technical capabilities are inadequate. Second, 
key Year-2000 readiness assessment processes--determining the 
potential severity of the Year-2000 impact on VBA operations, 
inventorying its information systems, and developing 
contingency plans--have not been completed. Third, VBA lacks 
enough information on the costs or potential problems 
associated with its approach to making systems Year-2000 
compliant. As a result, it cannot make informed choices about 
which systems must be funded to avoid disruptions in service 
and which can be deferred. Addressing these problems requires 
top management attention. Contributing to the challenges are 
the loss of key computer people, difficulties in obtaining 
information on whether interfaces and third-party products are 
Year-2000 compliant, and delays in upgrading systems at VBA 
data centers. GAO summarized this report in testimony before 
Congress; see: Veterans Benefits Computer Systems: 
Uninterrupted Delivery of Benefits Depends on Timely Correction 
of Year-2000 Problems (GAO/T-AIMD-97-114, June 26, 1997).
Veterans benefits modernization: VBA has begun to address software 
        development weaknesses but work remains (GAO/AIMD-97-154, 09/
        15/97)
    The Veterans Benefits Administration (VBA) is modernizing 
its information systems to strengthen its administrative 
operations. VBA has taken steps to improve its software 
development capability, including launching a software process 
improvement initiative, chartering a software engineering 
process group, and obtaining the services of an experienced 
contractor to help with software process improvements. Despite 
this progress, other software development improvements are 
needed. These include (1) a defined strategy to reach the 
repeatable level and a baseline to measure improvements, (2) a 
process improvement training program for its software 
developers, and (3) a process to ensure that VBA's software 
development contractors are at the repeatable level. Unless 
these deficiencies are addressed, VBA's software development 
capability will remain ad hoc and chaotic, putting the agency 
at risk for cost overruns, poor quality software, and schedule 
delays in software development.
Veterans Health Administration facility systems: Some progress made in 
        ensuring year 2000 compliance, but challenges remain (GAO/AIMD-
        98-31R, 11/07/97)
    Pursuant to a congressional request, GAO provided 
additional information on Year 2000 initiatives at the 
Department of Veterans Affairs (VA), focusing on the Veterans 
Health Administration's (VHA) failure to complete an inventory 
of the elevator, heating, air conditioning, lighting systems, 
and disaster recovery systems at its hospitals.
    GAO noted that: (1) ensuring Year 2000 compliance for 
facility-related systems, as well as disaster recovery or 
backup systems, is a critical problem for both public and 
private organizations; (2) many facilities built or renovated 
within the last 20 years contain embedded computer systems that 
control, monitor, or assist in operations, and many of these 
systems could malfunction due to vulnerability to the Year 2000 
problem; (3) addressing the facility-related systems problems 
is especially critical for VHA, because it oversees 173 medical 
centers, 376 outpatient clinics, 133 nursing homes, and 39 
domiciliaries; (4) VHA has made some progress, including: (a) 
its Year 2000 project office has established a project team to 
pull together a list of facility-related systems manufacturers; 
(b) its medical centers are developing an inventory and 
assessing their facility systems for Year 2000 compliance; and 
(c) VHA is working with the Chief Information Officer Council's 
newly formed Year 2000 Building Systems Subgroup on facility-
related systems issues; and (5) VHA faces some major 
challenges, including: (a) it has a very short time frame to 
address the Year 2000 computing problem; (b) manufacturers may 
not promptly respond to VHA and may not know whether their 
products are Year 2000 compliant; (c) VHA is largely dependent 
upon manufacturers to determine whether a Year 2000 problem 
exists and how problems will be corrected; and (d) VHA must 
implement the manufacturers' recommendations for achieving Year 
2000 compliance, validate the systems, develop contingency 
plans for failures and errors, and coordinate contingency plans 
with disaster recovery plans.
Veterans' health care: Chicago efforts to improve system efficiency 
        (GAO/HEHS-98-118, 05/29/98)
    In June 1996, the Department of Veterans' Affairs (VA) 
announced the integration of two Chicago hospitals--Lakeside 
and West Side hospitals--under one director. These hospitals 
became the VA Chicago Health Care System within the Great Lakes 
network, which encompasses parts of Illinois, Indiana, 
Michigan, and Wisconsin. The Great Lakes network runs 8 
hospitals and 12 outpatient clinics. Lakeside and Westside, 
which are located about six miles apart in downtown Chicago, 
provide acute inpatient medical, surgical, and psychiatric 
care. Both hospitals are affiliated with medical schools. This 
report examines the effect that the integration has had on 
veterans, employees, and medical schools in the Chicago area. 
GAO describes (1) the VA Chicago Health Care System's 
integration process; (2) the integration decisions made; (3) 
the impacts on veterans, employees, and medical schools; and 
(4) the dollar savings resulting from these decisions.
Veterans' health care: Service delivery for veterans on Guam and the 
        Commonwealth of the Northern Mariana Islands (GAO/HEHS-99-14, 
        11/04/98)
    About 9,400 veterans live on Guam and the Commonwealth of 
the Northern Mariana Islands. On Guam alone, about 700 veterans 
received health care from the Department of Veterans Affairs 
(VA) in 1997, at a cost of $1.2 million. In addition to 
providing care through its outpatient clinic, VA bought care 
from the Navy and private providers on Guam, as well as from 
military and private providers in Hawaii and the continental 
United States. Veterans groups have raised concerns about the 
health care provided on Guam and the inconvenience of traveling 
to Hawaii and elsewhere when appropriate care is unavailable on 
Guam. They have also raised concerns about the possibility that 
the Navy may reduce or eliminate services in its hospital on 
Guam. They believe that VA should establish an inpatient 
facility at the U.S. Naval Hospital on Guam. This report (1) 
describes how VA now meets veterans health care needs on Guam 
and the Northern Mariana Islands, (2) estimates these veterans' 
possible future demand for health care and assesses VA's 
ability to meet this demand, and (3) estimates the cost to 
establish a veterans' inpatient ward at the U.S. Naval Hospital 
on Guam.
Year 2000 computing crisis: Compliance status of many biomedical 
        equipment items still unknown (GAO/AIMD-98-240, 09/18/98)
    Biomedical equipment that relies on computers or computer 
chips, from cardiac monitoring systems to electronic imaging 
machines, may be adversely affected by the Year 2000 problem. 
Although this situation has serious implications for the 
delivery of health care to the nation's veterans, the Veterans 
Health Administration (VHA) still does not know the full extent 
of its Year 2000 problem or the cost to overcome it. This is 
because it has yet to receive compliance information from 27 
percent of the biomedical equipment manufacturers on its list 
of suppliers or from the nearly 100 other manufacturers that 
VHA discovered were no longer in business. According to VHA, 
most manufacturers reporting noncompliant equipment cited 
incorrect display of date and/or time as problems--albeit ones 
that health care providers can work around. Some manufacturers, 
however, cited more serious problems that could jeopardize 
patient safety. For example, a miscalculation by a radiation 
therapy planning computer could cause a patient to receive a 
hazardous radiation dose. The Food and Administration (FDA), 
which oversees and regulates medical devices, has sent letters 
to biomedical equipment manufacturers asking for information on 
products affected by the Year 2000 problem. The response rate 
to FDA has been disappointing. It is critical that such 
information be obtained and publicized. GAO summarized this 
report in testimony before Congress; see: Year 2000 Computing 
Crisis: Leadership Needed to Collect and Disseminate Critical 
Biomedical Equipment Information (GAO/T-AIMD-98-310, Sept. 24, 
1998).
Year 2000 computing crisis: Progress made in compliance of VA systems, 
        but concerns remain (GAO/AIMD-98-237, 08/21/98)
    GAO has reported in the past that unless timely corrective 
action is taken, the Department of Veterans Affairs (VA) could 
face widespread computer system failures at the turn of the 
century because of incorrect information processing involving 
dates. (See GAO/T-AIMD-97-174, Sept. 1997; GAO/T-AIMD-97-114, 
June 1997; GAO/AIMD-97-79, May 1997; and GAO/AIMD-96-103, June 
1996.) In many systems, the year 2000 is indistinguishable from 
the year 1900, which could make veterans who are due to receive 
benefits and medical care appear ineligible. The upshot is that 
benefits and health care that veterans depend on could be 
delayed or interrupted. This report assesses the Year 2000 
programs of the Veterans Benefits Administration and the 
Veterans Health Administration.

  CALENDAR YEARS 1997 AND 1998 TESTIMONIES ON ISSUES AFFECTING OLDER 
                               AMERICANS

    GAO testified 53 times before Congressional committees 
during calendar years 1997 and 1998 on issues relating to older 
Americans. Of these testimonies, 31 were on health, 11 on 
income security, and 11 on veterans and DOD issues.

                             Health Issues

Balanced Budget Act: Implementation of key medicare mandates must 
        evolve to fulfill congressional objectives (GAO/T-HEHS-98-214, 
        07/16/98)
    The Balanced Budget Act of 1997 (BBA) contained more than 
200 mandates for Medicare. These mandates amount to what are 
probably the most significant modifications to the Medicare 
program since its inception 30 years ago. In summary, this 
testimony found that the Health Care Financing Administration 
(HCFA) is making progress in meeting the legislatively 
established implementation schedules for BBA Medicare 
provisions. Since the passage of BBA in August 1997, almost 
three-fourths of the mandates with a July 1998 deadline have 
been implemented. However, HCFA officials have acknowledged 
that many remaining BBA mandates will not be implemented on 
time.
California nursing homes: Care problems persist despite Federal and 
        State oversight (GAO/T-HEHS-98-219, 07/28/98)
    This testimony summarizes a July 1998 report, California 
Nursing Homes: Federal and State Oversight Inadequate to 
Protect Residents in Homes With Serious Care Violations (GAO/
HEHS-98-202, 7/27/98).
High-risk areas: Benefits to be gained by continued emphasis on 
        addressing high-risk areas (GAO/T-AIMD-97-54, 03/04/97)
    This testimony addresses solutions to the serious 
management problems (discussed two weeks before in GAO/T-HR-97-
22), which cost taxpayers billions of dollars and undermine the 
quality of government services. GAO outlines the steps that 
need to be taken to fix these problems. (High-Risk Series, GAO/
HR-97-1 through GAO/HR-97-14, February 1997)
High-risk areas: Update on progress and remaining challenges (GAO/T-HR-
        97-22, 02/13/97)
    In 1990, GAO began a special effort to identify federal 
programs at high risk for waste, fraud, abuse, and 
mismanagement. GAO issued a series of reports in December 1992 
on the fundamental causes of the problems in the high-risk 
areas; it followed up on the status of these areas in February 
1995. GAO's third series of high-risk reports, revisits these 
troubled government programs and designates five additional 
areas as high-risk (defense infrastructure, information 
security, the year 2000 problem, supplemental security income, 
and the 2000 decennial census), bringing to 25 the number of 
high-risk programs on GAO's list. This testimony before 
Congress summarized the third series of high-risk reports. 
(High-Risk Series, GAO/HR--7-1 through GAO/HR-97-14, February 
1997)
Long term care: Baby boom generation presents financing challenges 
        (GAO/T-HEHS-98-107, 03/09/98)
    Long-term care presents a significant burden for many 
persons and for public programs. Long-term care in a nursing 
home can cost more than $40,000 per year, with many nursing 
home residents paying that out of their own pockets. In 
addition to this out-of-pocket spending, Medicaid and Medicare 
paid out more than $51 billion in 1995 for long-term care for 
the elderly. More than a million elderly persons with extensive 
disabilities live at home, relying on their families for 
assistance. The aging of the baby boomers, particularly as they 
reach age 85 and older, will have a dramatic impact on the 
numbers of persons needing long-term care and will challenge 
individuals, families, and public programs to finance and 
furnish that care. This testimony (1) provides an overview of 
current spending for long-term care for the elderly, (2) 
discusses the increased demand that the baby boomers will 
likely create for long-term care, (3) describes recent shifts 
in Medicaid and Medicare financing of long-term care, and (4) 
discusses the potential role of private long-term care 
insurance in helping to pay for this care.
Medicare automated systems: Weaknesses in managing information 
        technology hinder fight against fraud and abuse (GAO/T-AIMD-97-
        176, 09/29/97)
    GAO has included Medicare in its list of government 
programs at high risk for fraud and abuse. (See GAO/HR-97-10, 
Feb. 1997.) The Department of Health and Human Service's 
Inspector General estimates that Medicare overpayments totaled 
$23.2 billion in fiscal year 1996, or about 14 percent of total 
Medicare fee-for-service payments. Ongoing Medicare initiatives 
to combat fraud and abuse include (1) an arrangement with the 
Energy Department's Los Alamos National Laboratory in 1995 to 
research the potential identification of fraud and abuse 
patterns and, more recently, (2) an assessment of the 
feasibility of using commercial abuse-detection software. This 
testimony focuses on the Medicare Transaction System (MTS), the 
Health Care Financing Administration's (HCFA) principal 
information technology initiative to detect fraud and abuse, 
and recommendations GAO made to correct serious weaknesses in 
MTS management. GAO also describes the two continuing HCFA 
initiatives against fraud and abuse, including the agency's 
response to earlier GAO recommendations on the benefits of 
commercial abuse detection software. Finally, GAO frames the 
discussion in broader terms, examining underlying information 
technology management issues with an eye toward identifying 
causes and solutions so HCFA can use automated systems to 
successfully fight Medicare fraud and abuse.
Medicare billing: Commercial system will allow HCFA to save money, 
        combat fraud and abuse (GAO/T-AIMD-98-166, 05/19/98)
    This testimony summarizes the GAO report on Medicare 
Billing: Commercial System Could Save Hundreds of Millions 
Annually (GAO/AIMD-98-91, 04/15/98).
Medicare: Control over fraud and abuse remains elusive (GAO/T-HEHS-97-
        165, 06/26/97)
    Medicare's size and mission make it an attractive target 
for exploitation. That wrongdoers continue to dodge safeguards 
underscores the need for increasingly sophisticated ways to 
protect against system abuses. Improved oversight and 
leadership at the Health Care Financing Administration (HCFA), 
the mitigation of risks involved in acquiring Medicare's new 
multibillion dollar automated claims processing system--the 
Medicare Transaction System, and the appropriate use of new 
anti-fraud-and-abuse funds should help stem substantial losses 
in the future. Moreover, as Medicare's managed care enrollment 
grows, HCFA needs to ensure that beneficiaries receive enough 
information about health maintenance organizations (HMO) to 
make informed choices and that the agency enforces HMO 
compliance with federal standards. How HCFA will use the 
funding and authority provided under the Health Insurance 
Portability and Accountability Act of 1996 to improve its 
oversight over Medicare expenditures has not yet been 
determined. However, HCFA's earlier efforts to oversee fee-for-
service contractors, the acquisition of the Medicare 
Transaction System, and Medicare managed care plans were 
plagued by weak monitoring, poor coordination, and delays. In 
GAO's view, HCFA's prospects for successfully combatting 
Medicare fraud and abuse are unclear.
Medicare: HCFA can improve methods for revising physician practice 
        expense payments (GAO/T-HEHS-98-105, 03/03/98)
    This testimony summarizes an earlier GAO report with the 
same title (GAO/HEHS-98-79, Feb. 27, 1998), which evaluated the 
Health Care Financing Administration's (HCFA) proposed 
revisions of physician practice expense payments and presented 
information on HCFA's ongoing efforts to refine its data and 
methodologies.
Medicare: HCFA faces multiple challenges to prepare for the 21st 
        century (GAO/T-HEHS-98-85, 01/29/98)
    This testimony focuses on the Health Care Financing 
Administration's (HCFA) preparedness to run the Medicare 
program in the 21st century. Because the $200 billion Medicare 
program is critical to nearly all elderly Americans and to many 
of the nation's disabled, program management, excessive 
spending, and depletion of the Medicare Trust Fund have been 
the subject of much congressional scrutiny in recent years. GAO 
and others have frequently reported that too much is being 
spent inappropriately because of the fraudulent and abusive 
billing practices of health care providers. GAO discusses (1) 
HCFA's new authorities under recent Medicare legislation, (2) 
the view of HCFA managers on the agency's ability to carry out 
various Medicare functions, and (3) the steps HCFA needs to 
take to accomplish its objectives over the next several years.
Medicare: Home health cost growth and administration's proposal for 
        prospective payment (GAO/T-HEHS-97-92, 03/05/97)
    After relatively modest cost growth during the 1980s, 
Medicare expenditures for home health care have soared in 
recent years. Home health care costs grew from $2.4 billion in 
1989 to $17.7 billion in 1996--an average annual increase of 33 
percent. Medicare's home health care costs have grown because a 
larger portion of beneficiaries use this benefit than in the 
past and the number of service used by each beneficiary has 
more than doubled. Several factors have increased use of the 
benefit. Legislation and coverage policy changes in response to 
court decisions liberalized coverage criteria for the benefit. 
These changes, in turn, transformed the nature of home health 
care from primarily posthospital care to more long-term care 
for chronic conditions. Finally, weaker administrative controls 
over the benefit, resulting from resource constraints, make the 
detection of inappropriate claims more unlikely. The 
administration's major proposals for home health care are 
designed to give providers greater incentives to operate 
efficiently by immediately tightening the limits on the cost 
per visit that will be paid and imposing a new cap on per-
beneficiary costs. After these changes go into effect in 1999, 
home health payments would switch from a cost reimbursement to 
a prospective payment system. These two proposals are estimated 
to save $12.4 billion during the next five years.
Medicare: Improper activities by Mid-Delta Home Health (GAO/T-OSI-98-6, 
        03/19/98)
    Testimony given on report entitled: Medicare: Improper 
Activities by Mid-Delta Home Health (GAO/T-OSI-98-5, Mar. 12, 
1998).
Medicare: Inherent program risks and management challenges require 
        continued federal attention (GAO/T-HEHS-97-89, 03/04/97)
    Federal spending for Medicare, one of the largest 
government entitlement programs, totaled $197 million in fiscal 
year 1996. Because of the program's size and mission, Medicare 
remains at high-risk for waste, fraud, and abuse. That 
wrongdoers continue to find ways to dodge safeguards 
illustrates the need for constant vigilance and increasingly 
sophisticated ways to protect against gaming the system. Better 
oversight and leadership by the Health Care Financing 
Administration (HCFA), the appropriate application of new anti-
fraud-and-abuse funds, and the mitigation of risks involved in 
acquiring the Medicare Transaction System--a major claims 
processing system--should help reduce future losses. Moreover, 
as Medicare's managed care enrollment grows, HCFA must ensure 
that payments to health maintenance organizations (HMO) reflect 
the cost of care, that beneficiaries receive enough information 
about HMOs to make informed choices, and that the agency uses 
its expanded authority to enforce HMO compliance with federal 
standards.
Medicare: Interim payment system for home health agencies (GAO/T-HEHS-
        98-234, 08/06/98)
    A well-designed prospective payment system is the best way 
for Medicare to rationally control home health spending. Until 
such a system is implemented, however, the interim payment 
system will help constrain the growth in outlays. Yet concerns 
have been raised about the interim payment system. 
Specifically, the industry doubts whether payments will be 
adequate and whether the payment limits will adequately account 
for differences in patient mix and treatment patterns across 
agencies. Another concern is that inefficient providers will 
have unduly high limits because the limits are based on 
historic payments that reflect inappropriate practices. GAO and 
the Department of Health and Human Services' Office of 
Inspector General have previously reported that Medicare has 
been billed for home health visits that may not have been 
needed, were inconsistent with Medicare policies, or were not 
even delivered. Thus, concerns about the overall adequacy of 
payments under the interim system may be unwarranted because 
the limits were based on historic costs, a portion of which 
were unreliable. Whether the payments to individual agencies 
will reflect legitimate differences across agencies is more 
difficult to determine.
Medicare: Provision of key preventive diabetes services falls short of 
        recommended levels (GAO/T-HEHS-97-113, 04/11/97)
    This testimony summarizes a report entitled Medicare: Most 
Beneficiaries With Diabetes Do Not Receive Recommended 
Monitoring Services (GAO/HEHS-97-48, 3/28/97).
Medicare: Recent legislation to minimize fraud and abuse requires 
        effective implementation (GAO/T-HEHS-98-9, 10/09/97)
    With the enactment of the Health Insurance Portability and 
Accountability Act of 1996 and the Balanced Budget Act of 1997, 
Congress has provided significant opportunities to strengthen 
areas in the Medicare program at high risk for fraud and abuse. 
How Medicare will use this legislation to improve its oversight 
of program expenditures remains to be seen, however. The 
outcome depends largely on how promptly and effectively the 
Health Care Financing Administration (HCFA) implements the 
various provisions. HCFA's past efforts to implement 
regulations, oversee Medicare managed care plans, and acquire a 
major information system have often been slow or ineffective. 
Now that many more demands have been placed on HCFA, GAO is 
concerned that the promise of the new legislation to combat 
health care fraud and abuse could be delayed or not realized at 
all.
Medicare and Medicaid: Meeting needs of dual eligibles raises difficult 
        cost and care issues (GAO/T-HEHS-97-119, 04/29/97)
    ``Dual eligibles'' are Medicare beneficiaries who are also 
eligible for some form of Medicaid support. In 1995, Medicare 
and Medicaid spending for the roughly 6 million dual eligibles 
totaled $106 billion, or nearly one third of these programs' 
combined expenditures. The dually eligible population is 
expected to grow, resulting in even greater health financing 
expenditures and care challenges. The dually eligible 
population consists of persons with a range of health needs--
from the young to the very old, from the healthy to the 
chronically ill in nursing homes. Compared with Medicare-only 
beneficiaries, however, dually eligible beneficiaries are more 
likely to be in poor health and require costly care, including 
long-term care. Meeting their needs under two programs that are 
administered under different rules complicates matters in both 
fee-for-service and managed care environments. The potential to 
cover posthospital and long-term care benefits under either 
program has resulted in costs being shifted between programs. 
Much of the financial burden falls on the federal government. 
To better coordinate acute and long-term care needs, some 
states are looking into enrolling their dually eligible 
populations in a single managed care plan. However, differences 
in Medicare and Medicaid requirements for commercial managed 
care participation could pose barriers.
Medicare HMOs: HCFA could promptly reduce excess payments by improving 
        accuracy of county payment rates (GAO/T-HEHS-97-78, 02/25/97)
    This testimony discusses the rates that Medicare pays 
health maintenance organizations (HMO) in its risk contract 
program, Medicare's principal managed care option. Medicare's 
method for paying risk contract HMOs was designed to save the 
program five percent of the costs for beneficiaries who enroll 
in HMOs. However, GAO testified that HMO rate-setting problems 
have prevented Medicare from realizing this saving. The 
program's rate-setting methods have resulted in excess payments 
to HMOs because HMO enrollees would have cost Medicare less if 
they had stayed in the fee-for-service sector. A recent 
estimate placed the total excess payments to HMOs at $2 billion 
annually. GAO's method of calculating the county rate would 
reduce payments more for HMOs in counties with higher excess 
payments and less for HMOs in counties with lower excess 
payments. GAO's method represents a targeted approach to 
reducing excess payments and could lower Medicare expenditures 
by at least several hundred million dollars each year.
Medicare HMOs: HCFA could promptly reduce excess payments by improving 
        accuracy of county payment rates (GAO/T-HEHS-97-82, 02/27/97)
    This testimony discusses the rates that Medicare pays 
health maintenance organizations (HMO) in its risk contract 
program, Medicare's principal managed care option. Medicare's 
method for paying risk contract HMOs was designed to save the 
program five percent of the costs for beneficiaries who enroll 
in HMOs. However, GAO testified that HMO rate-setting problems 
have prevented Medicare from realizing this saving. The 
program's rate-setting methods have resulted in excess payments 
to HMOs because HMO enrollees would have cost Medicare less if 
they had stayed in the fee-for-service sector. A recent 
estimate placed the total excess payments to HMOs at $2 billion 
annually. GAO's method of calculating the county rate would 
reduce payments more for HMOs in counties with higher excess 
payments and less for HMOs in counties with lower excess 
payments. GAO's method represents a targeted approach to 
reducing excess payments and could lower Medicare expenditures 
by at least several hundred million dollars each year.
Medicare home health: Success of balanced budget act cost controls 
        depends on effective and timely implementation (GAO/T-HEHS-98-
        41, 10/29/97)
    This testimony examines how the Balanced Budget Act of 1997 
has addressed rapid cost growth in Medicare's home health 
benefit. This benefit is important to many beneficiaries 
recovering from illness or injury following hospitalization--
the original purpose of the benefit. Of late, however, 
increasing numbers of beneficiaries have used the benefit for 
custodial-type care for chronic conditions. This change has 
helped to fuel growth in Medicare home health costs, which 
soared from about $2 billion in 1989 to nearly $18 billion in 
1996. GAO's remarks focus on the following four areas: the 
reasons for the rapid growth of Medicare home health care costs 
in the 1990s, the interim changes in the act to Medicare's 
current payment system, establishment under the act of a 
prospective payment system for home health care, and efforts by 
Congress and the administration to strengthen program 
safeguards to prevent fraud and abuse in home health services.
Medicare home health agencies: Certification process is ineffective in 
        excluding problem agencies (GAO/T-HEHS-97-180, 07/28/97)
    As a result of changes to Medicare during the 1980s, more 
people are receiving home health services for longer periods of 
time. This has led to rapid growth in the number of certified 
home health agencies--from 5,700 in 1989 to nearly 10,000 at 
the beginning of 1997. During this same period, Medicare 
payments for home health care jumped from $2.7 billion to about 
$18 billion. These payments are projected to reach nearly $22 
billion in fiscal year 1998. GAO testified that it is simply 
too easy for home health agencies to become certified. The 
certification of a home health agency as a Medicare provider is 
based on an initial survey that takes place soon after the 
agency begins operating, and there is little assurance that the 
home health agency is providing quality care. And because the 
requirements are minimal, Medicare certifies nearly all home 
health agencies seeking certification. Although many home 
health agencies are drawn to the program with the intent of 
providing quality care, some are attracted by the relative ease 
with which they can become certified and participate in this 
lucrative, growing industry. Once certified, home health 
agencies are unlikely to be terminated from the program or 
otherwise penalized, even when they have been repeatedly cited 
for substandard care or failure to meet Medicare's conditions 
for participation.
Medicare home health benefit: Congressional and HCFA actions begin to 
        address chronic oversight weaknesses (GAO/T-HEHS-98-117, 03/19/
        98)
    Home health care is an important Medicare benefit, allowing 
beneficiaries with acute-care needs, such as recovery from hip 
replacement, and chronic conditions, such as congestive heart 
failure, to receive care in their homes rather than in more 
costly settings, such as nursing homes and hospitals. Drawing 
on past GAO work on the home health care industry, this 
testimony summarizes (1) the general nature of beneficiary 
eligibility criteria, which opportunists exploit to provide 
excessive services; (2) diminished Medicare contractor review 
and audit effort, which makes it less likely that abusers will 
be caught; (3) weaknesses in Medicare's home health provider 
certification process; and (4) new tools that Congress has 
provided to strengthen oversight of the home health benefit, 
including provisions of the Health Insurance Portability and 
Accountability Act of 1996 and the Balanced Budget Act of 1997.
Medicare managed care: HCFA missing opportunities to provide consumer 
        information (GAO/T-HEHS-97-109, 04/10/97)
    Medicare beneficiaries need more and better information so 
that they can make informed decisions when choosing a health 
plan. Although Medicare is the nation's largest purchaser of 
managed care services, it lags behind other large purchasers in 
providing comparative information to beneficiaries. The need 
for this information grows more urgent each month as tens of 
thousands of beneficiaries join the 4 million beneficiaries who 
have already opted for Medicare managed care. The Health Care 
Financing Administration (HCFA) is moving in the right 
direction by making information available, but GAO believes 
that HCFA could, with relatively little time and effort, do 
much more. Requiring that health maintenance organizations use 
standard terminology and formats to describe benefits, 
producing comparison charts and ensuring that interested 
beneficiaries know how to get such charts, and analyzing and 
publishing comparative data already available (such as 
disenrollment rates) would greatly enhance the ability of 
Medicare beneficiaries to be wise consumers of managed care.
Medicare managed care: HMO rates, other factors create uneven 
        availability of benefits (GAO/T-HEHS-97-133, 05/19/97).
    Medicare risk health maintenance organization (HMO) plans 
are not available nationwide, and differences in premiums 
charged and benefits offered across the country have produced 
inequities for Medicare beneficiaries. In addition, the risk 
contract program has not realized the expected savings from 
enrolling beneficiaries in capitated managed care plans. 
Medicare's risk HMO payment system, which is built largely on 
fee-for-service costs, accounts for some, but not all, of the 
unevenness in Medicare's risk contract program. Differences in 
local medical prices and service utilization explain much of 
the variation in HMO capitation rates across counties. In turn, 
the variation in these rates explains some of the differences 
across locations in the availability of risk contract HMOs, the 
level of HMO premiums charged, and the richness of benefits 
offered. Other factors, however, also play an important role. 
GAO proposes correcting a flaw in Medicare's rate-setting 
method that contributes to excess payments to HMOs.
Medicare managed care: Information standards would help beneficiaries 
        make more informed health plan choices (GAO/T-HEHS-98-162, 05/
        06/98)
    GAO reported in 1996 that beneficiaries received little or 
no comparative information on Medicare health maintenance 
organizations. (See GAO/HEHS-97-23.) GAO recommended that the 
Health Care Financing Administration (HCFA) produce plan 
comparison charts; require plans to use standard formats and 
terminology in key aspects of their marketing materials; and 
publicize readily available plan performance indicators, such 
as disenrollment rates. In addition, Medicare+Choice provisions 
authorize new health plan options for Medicare beneficiaries 
and require HCFA to provide beneficiaries with comparative 
information on the Medicare+Choice options. This testimony 
discusses the extent to which HCFA's Medicare+Choice 
information development efforts are likely to (1) enable 
beneficiaries to readily compare benefits and out-of-pocket 
costs using plan brochures and (2) facilitate the agency's 
approval of plans' marketing materials and other administrative 
work required of both HCFA and the health plans.
Medicare post-acute care: Cost growth and proposals to manage it 
        through prospective payment and other controls (GAO/T-HEHS-97-
        106, 04/09/97)
    After relatively modest growth during the 1980s, Medicare 
outlays for skilled nursing facilities and home health care 
have soared during the 1990s. Expenditures for inpatient 
rehabilitation facilities have grown rapidly since the mid-
1980s. Skilled nursing facility payments rose from $2.8 billion 
in 1989 to $11.3 billion in 1996, while home health care costs 
grew from $2.4 billion to $17.7 billion during that same 
period. Rehabilitation facility payments increased from $1.4 
billion in 1989 to $3.9 billion in 1994. During those periods, 
annual growth averaged 22 percent for skilled nursing 
facilities, 33 percent for home health care, and 23 percent for 
rehabilitation facilities. This testimony focuses on the 
reasons behind the cost growth and the administration's 
legislative proposals for these three Medicare benefits.
Medicare post-acute care: Home health and skilled nursing facility cost 
        growth and proposals for prospective payment (GAO/T-HEHS-97-90, 
        03/04/97)
    After relatively modest cost growth during the 1980s, 
Medicare's outlays for skilled nursing facilities and home 
health care have grown rapidly during the 1990s. Skilled 
nursing facility payments rose from $2.8 billion in 1989 to 
$11.3 billion in 1996, while home health care costs rose from 
$2.4 billion to $17.7 billion during the same period. This 
testimony discusses the reasons behind the costs growth for 
skilled nursing facilities and home health care and the 
administration's announced legislative proposals for these two 
Medicare benefits.
Medicare transaction system: Serious managerial and technical 
        weaknesses threaten modernization (GAO/T-AIMD-97-91, 05/16/97)
    This report summarizes the GAO report on Medicare 
Transaction System: Success Depends Upon Correcting Critical 
Managerial and Technical Weaknesses (GAO/AIMD-97-78, 05/16/97).
Nursing homes: Too early to assess new efforts to control fraud and 
        abuse (GAO/T-HEHS-97-114, 04/16/97)
    Although Medicaid is the largest single payer for nursing 
home care, Medicare pays a substantial portion of the health 
care costs of nursing home residents. For the opportunistic 
provider, a nursing home represents a vulnerable elderly 
population in a single location and the opportunity for 
multiple billings. Many nursing home patients are mentally 
impaired, and their care is controlled by the nursing home. 
Because these patients would not realize what items or services 
were billed on their behalf, some providers may take advantage 
of the situation by submitting fraudulent claims. GAO testified 
that fraudulent billing has occurred because (1) the 
complexities of the reimbursement process invite exploitation 
and (2) poor control over Medicare claims has reduced the 
likelihood that inappropriate claims will be denied. GAO is 
encouraged by recent efforts to combat fraud and abuse--the 
pending implementation of provisions in the Health Insurance 
Portability and Accountability Act and a proposal made by the 
administration.
Private health insurance: Employer coverage trends signal possible 
        decline in access for 55- to 64-year-olds (GAO/T-HEHS-98-199, 
        06/25/98)
    This testimony summarizes the GAO report on Private Health 
Insurance: Declining Employer Coverage May Affect Access for 
55- to 64-Year-Olds (GAO/HEHS-98-133, 06/01/98).
Retiree health insurance: Erosion in retiree health benefits offered by 
        large employers (GAO/T-HEHS-98-110, 03/10/98)
    Employer-provided insurance for retirees has experienced a 
slow but persistent decline since the early 1990s. Rising 
health care costs have spurred companies to find ways to 
control their benefit expenditures, including eliminating 
retiree coverage and increasing cost sharing. Moreover, a new 
financial accounting standard developed in the late 1980s has 
changed employers' perceptions of retiree health benefits and 
may have served as a catalyst to reduce retiree coverage. The 
Health Insurance Portability and Accountability Act of 1996 
mandates continued access to health insurance for persons 
losing group coverage. The legislation does not, however, 
guarantee that the continued coverage will be affordable. 
Because state laws governing the operation of the individual 
market can vary, the premiums faced by early retirees vary 
substantially. Moreover, considering that large companies 
typically pay 70 to 80 percent of the premium, costs in the 
individual market may come as a rude awakening for early 
retirees. Persons who are already retired when a company 
terminates coverage are not eligible to temporarily continue 
that firm's health plan at their own expenses. COBRA coverage 
is only available to active employees who quit or retire or are 
fired or laid off. To address this potential gap in coverage 
when a former employer unexpectedly terminates health 
insurance, Congress and the President have proposed allowing 
affected retirees to purchase continuation coverage at a cost 
that reflects their higher utilization of services until they 
become eligible for Medicare.

                         Income Security Issues

Social Security: Mandating coverage for State and local employees (GAO/
        T-HEHS-98-127, 05/21/98)
    This testimony preceded a GAO report on mandatory coverage 
which expanded on the testimony. The report was entitled Social 
Security: Implications of Extending Mandatory Coverage to State 
and Local Employees (GAO/HEHS-98-196, 08/18/98).
Social Security: Restoring long-term solvency will require difficult 
        choices (GAO/T-HEHS-98-95, 02/10/98)
    Social Security, the foundation of the nation's retirement 
income system, provides 42 percent of all income for the 
elderly--about twice as much as any other single source. 
Because of significant demographic changes, however, Social 
Security now faces a serious long-term financing shortfall. 
This testimony discusses five fundamental choices that Social 
Security reforms will reflect: (1) balancing income adequacy 
and individual equity, (2) determining who bears risks and 
responsibilities, (3) choosing among various benefit reductions 
and revenue increases, (4) using pay-as-you-go or advance 
funding, and (5) deciding how much to save and invest in the 
nation's productive capacity.
Social Security Administration: Information technology challenges 
        facing the commissioner (GAO/T-AIMD-98-109, 03/12/98)
    During congressional testimony, GAO discussed generally the 
challenges that SSA faced in implementing its Year 2000 program 
and other information technology initiatives. GAO noted SSA's 
need to address three major risks in its Year 2000 program: (1) 
ensuring compliance of the state Disability Determination 
Services' (DDS) systems that support SSA in administering its 
disability programs, (2) ensuring that SSA's data exchanges 
with other federal agencies, state agencies, and private 
businesses were Year 2000 compliant, and (3) developing 
contingency plans to ensure business continuity in the event of 
systems failure. GAO also discussed ongoing issues concerning 
the implementation of IWS/LAN, including contractor concerns 
regarding the availability of the workstations specified in the 
IWS/LAN contract, DDS concerns regarding SSA's management of 
the network, and the need for IWS/LAN performance measures. In 
addition, this testimony discussed a recent GAO report on SSA's 
efforts to improve its software development process (see GAO/
AIMD-98-39, Jan. 1998); it also updated testimony from last 
year on SSA's experiences in making personal earnings and 
benefits information available over the Internet (see GAO/T-
AIMD/HEHS-97-123, May 1997).
Social Security Administration: Internet access to personal earnings 
        and benefits information (GAO/T-AIMD/HEHS-97-123, 05/06/97)
    This testimony updated the testimony described immediately 
above. See Social Security Administration: Information 
Technology Challenges Facing the Commissioner (GAO/T-AIMD-98-
109, 03/12/98).
Social Security reform: Demographic trends underlie long-term financing 
        shortage (GAO/T-HEHS-98-43, 11/20/97)
    Increasing life expectancy and declining fertility rates 
pose serious challenges not just for the Social Security system 
but also for Medicare, Medicaid, the federal budget, and the 
economy as a whole. The aging of the baby boomers will simply 
accelerate this trend. Today, Social Security receives more 
from payroll taxes than it pays out in benefits. This excess 
revenue is helping to build substantial trust fund reserves 
that should help pay full benefits until 2029, according to 
Social Security's intermediate projections. At the same time, 
this excess revenue is helping to reduce the overall federal 
budget deficit, although it will begin to taper off after 2008. 
In 2012, Social Security benefit payments are projected to 
exceed cash revenues, and the federal budget will start to come 
under considerable strain as the general fund starts to repay 
funds borrowed from the trust funds.
    Although Social Security's revenues now exceed its 
expenditures, those revenues are expected to be about 14 
percent less than total projected expenditures over the next 75 
years, according to Social Security Administration estimates. 
Various benefit reductions and revenue increases within the 
current program structure could be combined to restore 
financial balance. However, some observers believe that the 
program structure should be reevaluated. Reform is necessary, 
and the sooner it is addressed the less severe the adjustments 
will need to be.
Social Security reform: Implications for the financial well-being of 
        women (GAO/T-HEHS-97-112, 04/10/97)
    Proposed Social Security reforms affect the financial well-
being of beneficiaries, especially women. Elderly unmarried 
women are much more likely to be living below the poverty line. 
Twenty-two percent of unmarried elderly women have income below 
the poverty threshold, compared with 15 percent of unmarried 
elderly men and only 5 percent of elderly married couples. 
Under current Social Security law, women tend to receive lower 
financial benefits than do men, primarily because they usually 
have lower lifetime earnings and work fewer years. Women's 
experiences under pension plans also differ from men's not only 
because of earning differences but also because of differences 
in investment behavior and longevity. Moreover, public and 
private pension plans do not offer the same social insurance 
protections that Social Security does. The Social Security 
Advisory Council's reform proposals aimed at resolving future 
financial problems confronting the system contain elements that 
may exacerbate the differences in benefits. For example, 
proposals that call for individual retirement accounts will pay 
benefits that are affected by investment behavior and 
longevity. Expected changes in women's labor force 
participation rates and increasing earnings will reduce but 
probably not eliminate these differences.
Social Security reform: Raising retirement ages improves program 
        solvency but may cause hardship for some (GAO/T-HEHS-98-207, 
        07/15/98)
    Many of the proposals before Congress to mitigate Social 
Security's long-term financial shortfall of nearly $3 trillion 
would raise either the normal retirement age, currently 65, the 
early retirement age, currently 62, or both. Increasing 
retirement ages is expected to help alleviate the financing 
problem by increasing the amount that individuals pay into the 
Social Security trust fund and reducing the benefits they draw 
out. GAO found that raising the Social Security retirement ages 
could improve long-term solvency for the program by increasing 
revenues and reducing benefits, but it is unclear whether 
employers will be willing to retain or hire older workers. 
Older blue-collar workers may be adversely affected because 
they are at risk for certain health problems that limit their 
ability to continue working.
Social Security financing: Implications of Government stock investing 
        for the trust fund, the Federal budget, and the economy (GAO/T-
        AIMD/HEHS-98-152, 04/22/98)
    This testimony summarized GAO's report entitled Social 
Security Financing: Implications of Government Stock Investing 
for the Trust Fund, the Federal Budget, and the Economy, (GAO/
AIMD/HEHS-98-74, April 22, 1998). In addition, it examined ways 
that government stock investing contrasts with stock investing 
through Social Security reforms that would create individual 
retirement savings accounts. With government stock investing, 
risks and returns would be shared collectively through the 
government rather than borne individually.
SSA's management challenges: Strong leadership needed to turn plans 
        into timely, meaningful action (GAO/T-HEHS-98-113, 03/12/98)
    The Social Security Administration (SSA) has been an 
independent agency since March 1995. This testimony discusses 
SSA's progress in addressing several challenges identified in 
earlier GAO reports. These challenges include the agency's need 
to strengthen its research and policy capacity so that it can 
address the solvency issue, address management and oversight 
problems with its Supplemental Security Income program, 
redesign its disability programs and promote beneficiaries' 
return to work, and meet its future workload demands.
Year 2000 computing crisis: Continuing risks of disruption to Social 
        Security, Medicare, and Treasury programs (GAO/T-AIMD-98-161, 
        05/07/98)
    The upcoming change of century poses a challenge to 
virtually all major organizations, public and private, 
including government programs with a high degree of interaction 
with the American public such as Social Security and Medicare. 
For this reason, GAO designated the Year 2000 computing problem 
as a high risk area for the federal government, and published 
guidance to help organizations successfully address the issue.
    GAO briefly outlined what additional actions must be taken 
to reduce the nation's Year 2000 risks, and what its inquiries 
into Year 2000 readiness found at the Social Security 
Administration (SSA), the Health Care Financing Administration 
(HCFA), and the Department of Treasury.
    The Year 2000 will present many difficult challenges in 
information technology and in ensuring the continuity of 
business operations, and has the potential to cause serious 
disruption to the nation and to the government entities on 
which the government depends, including the SSA, the HCFA, and 
the Department of the Treasury. These risks can be mitigated 
and disruptions minimized with proper attention and management. 
While these agencies and programs have been working to mitigate 
their Year 2000 risks, further action must be taken to ensure 
continuity of mission critical business operations.
Year 2000 computing crisis: Progress made at Department of Labor, but 
        key systems at risk (GAO/T-AIMD-98-303, 09/17/98)
    The Department of Labor has made progress in addressing the 
Year 2000 computing crisis, but risks remain in several areas, 
including making benefit payments to laid-off workers, 
collecting labor statistics, and ensuring accurate accounting 
for pension benefits. Some of the systems supporting these 
business areas are at risk. It is critical that contingency 
plans be developed to ensure business continuity in the event 
of systems failures.

                         Veterans' & DOD Issues

Arlington National Cemetery: Authority, process, and criteria for 
        burial waivers (GAO/T-HEHS-98-81, 01/28/98)
    Since 1967, 196 waivers have been granted to allow burial 
at Arlington National Cemetery to persons not otherwise 
qualified, and at least 144 documented requests have been 
denied. Of the granted waivers, about 63 percent involved 
burials of persons in the same grave as someone already 
interred or expected to be interred. Although the Secretary of 
the Army has no explicit statutory or regulatory authority to 
grant waivers, it is legal for the Secretary to do so. GAO 
found that most waiver requests have been handled through an 
internal Army review process involving officials responsible 
for the administration of Arlington. However, this process is 
not followed in all cases. For example, in the case of 
presidential waiver decisions, the Army process is generally 
bypassed. Moreover, because the process is not widely 
understood, persons with high-level contacts sometimes appear 
to have an advantage. Finally, although those responsible for 
making waiver decisions appear to apply some generally 
understood criteria, these criteria, which are not formally 
established, are not always consistently applied or clearly 
documented.
Defense health care: Limits to older retirees' access to care and 
        proposals for change (GAO/T-HEHS-97-84, 02/27/97)
    When space and resources are available in military medical 
facilities, military retirees may receive care at little or no 
cost. When resources are unavailable, retirees under age 65 can 
seek medical care from the private sector, and the Defense 
Department's (DOD) Civilian Health and Medical Program of the 
Uniformed Services (CHAMPUS) will cover the cost. But retirees 
age 65 or over lose the CHAMPUS benefit, and the only DOD-
funded care they are eligible for is the space-available care 
at military facilities. In the last 10 years, one-third of 
military hospitals have been closed because of military 
downsizing, reducing space available for older retirees, a 
group that has grown 75 percent during the last 10 years to 1.2 
million. In addition, DOD's managed health care system gives 
older retirees the lowest priority for access to space. GAO 
examines the costs and benefits of five proposed alternatives 
for addressing the issue of health care for older retirees: (1) 
Medicare subvention, (2) enrollment in the Federal Employees 
Health Benefit Program, (3) CHAMPUS as a secondary payer, (4) 
Medigap policies, and (5) a mail order pharmacy benefit. This 
testimony preceded the actual enactment and implementation of 
Medicare Subvention and FEHBP for persons 65 or over on a trial 
basis. See Military Retirees' Health Care: Costs and Other 
Implications of Options to Enhance Older Retirees' Benefits 
(GAO/HEHS-97-134, 06/20/97), which was related to this 
testimony.
National cemetery system: Plans for addressing projected increases in 
        veterans' burials (GAO/T-HEHS-98-157, 04/29/98)
    This testimony summarizes a GAO report on National Cemetery 
System: Opportunities to Expand Cemeteries' Capacities (GAO/
HEHS-97-192, 09/10/97).
VA health care: Lessons learned from medical facility integrations 
        (GAO/T-HEHS-97-184, 07/24/97)
    The Department of Veterans Affairs (VA) operates 173 
hospitals and more than 200 freestanding outpatient clinics 
nationwide at a cost of about $17 billion a year. Two years 
ago, VA created 22 networks to help improve service delivery to 
the 3 million veterans who use its medical facilities each 
year. So far, networks have begun facility integrations in 18 
geographic areas, involving a total of 36 hospitals. This 
testimony focuses on (1) the role of facility integrations in 
reshaping VA's health care delivery system and (2) lessons 
learned that could help enhance VA's process for planning and 
implementing ongoing and future facility integrations.
VA health care: Opportunities to enhance Montgomery and Tuskegee 
        service integration (GAO/T-HEHS-97-191, 07/28/97)
    The Department of Veterans Affairs (VA) is integrating its 
medical facilities in Tuskegee and Montgomery, Alabama. The two 
facilities' managerial, clinical, and patient support services 
are to be restructured into a single health care delivery 
system called the Central Alabama Veterans Health Care System, 
which is intended to provide the same or higher quality 
services at lower cost. GAO testified that VA officials have 
made significant progress in planning for this integration, and 
benefits have already been realized. Planning activities, 
however, have yet to be completed, including (1) key decisions 
on whether and how to restructure services, such as nutrition 
and food services; (2) assessments of the probable impact of 
clinical, administrative, and patient support service changes 
on veterans and employees; and (3) determinations of how 
savings will be reinvested to benefit veterans. Moreover, some 
stakeholders have found it difficult, if not impossible, to 
assess the reasonableness of VA's decisions and to ultimately 
``buy in'' to them without the benefit of information from 
completed planning activities facilitywide. VA needs to 
complete its planning in sufficient detail to ensure that 
benefits are maximized and adverse impacts minimized.
Veterans' Affairs: Veterans Benefits Administration's progress and 
        challenges in implementing GPRA (GAO/T-HEHS-97-131, 05/14/97)
    In response to widespread management problems in the 
government, Congress has taken steps to fundamentally change 
the way that federal agencies go about their work. The 
Government Performance and Results Act, passed in 1993, 
requires agencies to clearly define their missions, set goals, 
measure performance, and report on their accomplishments. This 
testimony discusses the progress made and the challenges faced 
by the Veterans Benefits Administration in implementing that 
legislation.
Veterans Affairs computer systems: Action underway yet much work 
        remains to resolve year 2000 crisis (GAO/T-AIMD-97-174, 09/25/
        97)
    This testimony discusses the progress being made by the 
federal government and, in particular, the Department of 
Veterans Affairs (VA) in ensuring that its automated 
information systems are ready for the upcoming century change. 
GAO summarizes the federal government's progress in addressing 
the Year 2000 problem, discusses action taken by VA as a whole, 
and examines steps taken by the Veterans Benefits 
Administration in response to recent GAO recommendations.
Veterans Benefits Administration: Progress and challenges in 
        implementing the results act (GAO/T-HEHS-98-125, 03/26/98)
    The Veterans Benefits Administration (VBA) received more 
than $22 billion in fiscal year 1997 to run programs that 
provide veterans, their dependents, and survivors with a host 
of benefits--from pensions to rehabilitation assistance to 
education and home loan assistance. This testimony discusses 
VBA's progress in implementing the Government Performance and 
Results Act of 1993, which requires agencies to clearly define 
their mission, set goals, measure performance, and report on 
their accomplishments.
Veterans benefits computer systems: Uninterrupted delivery of benefits 
        depends on timely correction of year-2000 problems (GAO/T-AIMD-
        97-114, 06/26/97)
    This testimony summarizes GAO's May 1997 report, Veterans 
Benefits Computer Systems: Risks of VBA's Year 2000 Efforts, 
GAO/AIMD 97-79, 5/30/97.
Veterans' health care: Challenges facing VA's evolving role in serving 
        veterans (GAO/T-HEHS-98-194, 06/17/98)
    The Department of Veterans Affairs (VA) operates one of the 
nation's largest health care systems including 400 service 
delivery locations, and 183,000 employees. This year, VA will 
serve about 2.9 million of the nation's 26 million veterans, at 
a cost of $19 billion. During the past 75 years, this health 
care role has evolved from one of rehabilitating disabled 
wartime veterans to also providing a health care safety net for 
veterans in peacetime. Today, VA is positioning itself as a 
competitive health care alternative for all veterans. More 
specifically, three years ago VA began to transform its health 
care system, in response to market changes and budgetary 
pressures, to make it more competitive with other health care 
providers. To aid in this transformation, Congress provided new 
revenue sources and reformed veterans' eligibility for care and 
VA's ability to purchase services from other providers. This 
testimony focuses on how the transformation of VA's health care 
system is progressing and what challenges VA faces as its role 
evolves.
Year 2000 computing crisis: Leadership needed to collect and 
        disseminate critical biomedical equipment information (GAO/T-
        AIMD-98-310, 09/24/98)
    This testimony summarizes GAO's September 1998 report, Year 
2000 Computing Crisis: Compliance Status of Many Biomedical 
Equipment Items Still Unknown (GAO/AIMD-98-240, September 18, 
1998).

                          Related GAO Products

Aging issues: Related GAO reports and activities in calendar years 1995 
        and 1996 (GAO/HEHS-98-101, March 27,1998)
Aging issues: Related GAO reports and activities in fiscal year 1996 
        (GAO/HEHS-97-41, Dec. 31, 1996)
Aging issues: Related GAO reports and activities in fiscal year 1995 
        (GAO/HEHS-96-82, Mar. 6, 1996)
Aging issues: Related GAO reports and activities in fiscal year 1994 
        (GAO/HEHS-95-44, Dec. 29, 1994)
Aging issues: Related GAO reports and activities in fiscal year 1993 
        (GAO/HRD-94-73, Dec. 22, 1993)

                  ITEM 22--LEGAL SERVICES CORPORATION

                              ----------                              


                          Service to the Aging

    The Legal Services Corporation (LSC) was created by 
Congress in 1974 to provide access to civil legal aid to low-
income Americans. The corporation receives an annual 
appropriation from Congress. In 1997, LSC funded some 269 local 
legal aid programs across the country, serving every county and 
congressional district in the nation.
    Legal services clients are as diverse as our nation, 
encompassing all races and ethnic groups and ages. The problems 
that bring people to local legal services offices arise out of 
everyday life. Usually they relate to matters of family law. 
Housing, employment, government benefits, or consumer 
disagreements. Frequently they represent matters of crisis for 
clients and their families. The possible consequences may be as 
serious as the loss of a family's only source of income, 
homelessness, or the breakup of a family.
    In 1997, LSC-funded programs served 193,261 Americans over 
the age of 60. Older Americans represented 10 percent of the 
clients served by legal services programs. Because of their 
special health, income, and social needs, older people often 
require legal assistance, especially in coping with the 
government-administered benefits on which many depend for 
income and health care.
    Some local legal services programs have special elderly law 
units. But every program provides services to the elderly. Most 
LSC programs are listed in the blue or yellow pages of the 
phone book, usually listed under Legal Aid or Legal Services. 
You can also get a referral by calling LSC at (202) 336-8800; 
going to the LSC web site (www.lsc.gov); or writing Public 
Affairs, LSC 750 First Street NE, Washington, DC 20002.

                ITEM 23--NATIONAL ENDOWMENT FOR THE ARTS

                              ----------                              


  Summary of Activities Relating to Older Americans--Fiscal Year 1998

                              introduction

    The National Endowment for the Arts works to broaden public 
access to the arts for people of all ages throughout the 
country by strengthening the role of the arts in enriching 
educational experiences, enhancing the vitality of communities 
and promoting individual growth.
    Realizing that cultural activities enrich the lives of all 
citizens, we enthusiastically seek ways to involve older adults 
in the arts as creators, students, volunteers, patrons, 
teachers and as audience members. Through funding, leadership 
initiatives and technical assistance, the Arts Endowment 
assures the continued participation of older Americans in the 
ever-widening kaleidoscope of arts activities.

                       office for access abiltity

    The AccessAbility Office continues to serve as the advocacy 
and technical assistance arm of the Arts Endowment for older 
adults, individuals with disabilities and people living in 
institutions including long-term care. This Office works with 
grantees, applicants, organizations that represent the targeted 
populations, and other Federal agencies to educate and assist 
on the importance of making the best art more available to 
older citizens.
    As part of her technical assistance efforts, the 
AccessAbility Coordinator organizes and conducts presentations 
at conferences to better educate participants concerning the 
value of and how to implement accessible programming. During 
this reporting period, workshops and panels were given at eight 
conferences including those of the National Council on Aging in 
Washington, D.C., the National Assembly of State Arts Agencies 
in Cleveland, Ohio, and the American Association of Museums in 
Los Angeles, CA.
    The Arts Endowment received the Universal Design Leadership 
Award at the international conference, Designing for the 21st 
Century, for the Endowment's ``substantial and effective 
leadership in encouraging and assisting universal design.'' 
Convened at Hofstra University in New York City on June 18-21, 
1998, this was the first-ever international conference that 
focused on universal design. As documented in previous reports 
to the Special Committee beginning in 1990, the Arts Endowment 
has initiated and supported a variety of projects that address 
this important design process--which makes spaces and products 
usable by people of all abilities throughout their lifespans.

   national forum on careers in the arts for people with disabilities

    The Arts Endowment convened the first ``National Forum on 
Careers in the Arts for People with Disabilities'' in 
partnership with four other Federal agencies: the U.S. Dept. of 
Education, the U.S. Dept. of Health and Human Services, the 
Social Security Administration and the John F. Kennedy Center 
for the Performing Arts. Convened June 14-16, 1998 at the 
Kennedy Center in Washington, D.C., 300 people of all ages from 
around the country discussed the myriad of issues facing people 
with disabilities in pursuit of the wide variety of arts 
careers. Participants included artists, arts administrators, 
rehabilitation professionals, educators and staff from Federal 
agencies. In addition, conference proceedings were audio and 
video-streamed over the internet, making it possible for 
hundreds more to participate as they provided valuable input 
via listservs.
    Guidance from the eighteen-member planning committee, 
composed of select leadership from the arts, aging, 
rehabilitation and education fields, was invaluable in setting 
goals, selecting speakers and conducting the Forum. The Forum 
focused on three areas: education/training, funding and jobs. 
We were able to involve leaders in the arts, disability and 
funding fields including: Phyllis Frelich, the first deaf actor 
to receive the Tony award; Gordon Davidson, Artistic Director 
of the Mark Taper Forum; Dianne Pilgrim, Director of the Cooper 
Hewitt Museum of Design; Melissa Franklin, Director of Pew 
Fellowships in the Arts; Robert Cogswill, Director of the Folk 
Arts Program at the Tennessee Arts Commission; Jeremy Alliger, 
Artistic Director of Dance Umbrella; and Jordan Thaler, Casting 
Director of the Joseph Papp Theatre. The forum featured 
performances by artists with disabilities on the Kennedy 
Center's Millennium Stage, including the Cleveland Ballet's 
Dancing Wheels and jazz musicians Valarie Capers and Lisa 
Thorson.
    I was pleased to address this enthusiastic body in my 
second keynote as Chairman of the National Endowment. My 
remarks included some of my goals for this agency:
          We must advance President Clinton's goal of health 
        coverage for all Americans, addressing the health 
        concerns of artists, and disseminating relevant 
        information to the field. This includes the Endowment's 
        work with the Actor's Fund of America to develop a 
        national database of health insurance for artists.
          We must help the arts advance the concerns of our 
        communities--from design and celebration to youth-at-
        risk, and through arts initiatives in non-traditional 
        venues like long-term care facilities, correctional 
        facilities and hospitals. It is in these settings that 
        the arts can be a powerful tool to educate and enhance 
        the quality of life.
          We must encourage and support lifelong learning in 
        the arts, from kindergarten through grade twelve and 
        through a lifetime of learning as well.
          We must broaden access to the arts for all Americans. 
        This means geographical reach, and the use of advanced 
        technologies--for example audio description, 
        captioning, and universal design.
    In panels and breakout sessions, Forum participants 
discussed models for pursuing education and jobs; and the 
concept of universal design, which has the potential to open up 
education and cultural institutions to everyone. And in almost 
every session, concerns were expressed about financial 
disincentives to receiving financial remuneration due to 
government program regulations (such as SSI, supplemental 
income and health benefits) that restrict receiving monetary 
awards for excellence in one's career field (i.e. 
apprenticeships, fellowships or National Heritage awards); and 
receiving irregular or infrequent compensation for art. We find 
that these rules affect many older artists including 
basketmakers, musicians, quilters and poets.
    At the Forum's final session, participants formulated 
recommendations that address barriers to arts careers. They 
encouraged vigorous enforcement of government disability rights 
legislation; finding ways to end financial disincentives; 
working with government vocational rehabilitation to ensure 
that counselors are able to assist eligible people who chose 
arts careers; ensuring the definition of diversity includes 
disability; and establishing more arts related scholarship/
internship programs for people with disabilities. Taking this 
important guidance into consideration, the Arts Endowment is 
presently working with our Federal partners to plan for the 
next steps to advance arts careers for Americans of all ages 
and abilities.
    As the National Endowment for the Arts continues to work 
towards these worthy objectives, older adults will benefit even 
more from this agency's initiatives and funding.

              universal design: designing for the lifespan

    Through the competitive process, the Center for Universal 
Design at North Carolina State University in Raleigh, N.C. was 
selected to identify, describe and visually document fifty 
excellent examples of universal design from the disciplines of 
interior, landscape, graphic and product design, and 
architecture. The purpose of this effort is to encourage and 
assist the use of this valuable design process that makes the 
environment usable by people from childhood into their oldest 
years. The visuals and text will be produced on CD Rom and 
widely disseminated to schools of design, design professionals, 
city planners, as well as private and public sector leaders. 
This project will be completed within the year for review by 
the Special Committee in next year's report.

                            work in progress

    Our AccessAbility Office is working with the New England 
Foundation for the Arts in Boston to convene the fifth regional 
symposium on making the arts fully available to older adults 
and people with disabilities. These regional meetings have 
enjoyed a high degree of success where arts administrators 
participate in workshops and share their experiences to learn 
about the latest technologies, materials and models for making 
the arts fully accessible. ``Clearing the Path: Arts 
Accessibility in New England'' will take place in September 22-
24, 1999 at the new Pequot Museum and Research Center in 
Mashantucket, CT. The main reason that this new museum was 
selected for the symposium is because it was conceived and 
built with the elders of the Piquot tribe--to assure it meets 
the needs of older adults and that Native Americans' traditions 
and culture are authentically depicted throughout the museum.
    Further, we are working with the National Assembly of State 
Arts Agencies (NASAA) and the National Endowment for the 
Humanities to update our 700 page ``Design for Accessibility: 
An Arts Administrator's Guide'' and put it on NASAA's Website. 
Produced in 1994 with NASAA, it is the most comprehensive guide 
to-date for making the arts accessible to older adults and 
individuals with disabilities. Through an interagency 
agreement, the Humanities Endowment joined with us to add 
humanities examples of accessible programming to the Guide and 
disseminate 2,000 print copies to its grantees.

                         arts endowment funding

    Endowment supported programs continue to benefit people of 
all ages. Many projects specifically focus on older adults. For 
example:
    Des Moines Metro Opera, Inc. in Indianola, Iowa was awarded 
a grant for Opera Iowa's three-state tour of 
``Rumpelstiltskin,'' a world premiere opera commissioned by Des 
Moines Opera and composed by Amy Tate Williams. The nine week 
tour includes workshops and performances in concert halls, 
retirement complexes, long-term care institutions and schools.
    Grass Roots Art and Community Efforts (GRACE) in Hardwick, 
VT received funding for its weekly community visual arts 
workshops for older adults that culminate with an exhibition in 
Greensboro, Vermont's elementary school and library.
    Hunter College of CUNY in New York City received a grant 
for the production of a documentary film by Menachem Daum and 
Oren Rudasky, ``Trial by Fire: The Faith and Doubt of Aging 
Holocaust Survivors'' that profiles the lives of five survivors 
and their families, with emphasis on how their faith in God was 
affected by the Holocaust.
    Life Long Medical Care of Berkeley, CA received support for 
a ceramic and paint installation by artists Chere Mah and Susan 
Wick at the Over Sixty Health Center that is located in the 
senior housing community of South Berkeley. Members of the 
community donated objects that reflect personal or historical 
aspects of their community which the artists integrated into 
the two dimensional elements on the building's exterior and the 
three-dimensional art in the interior lobbies and courtyard.
    The North Dakota Council on the Arts in Bismarck was 
awarded a grant for a traditional arts apprenticeship program 
and a series of performances in long-term facilities by folk 
artists.
    Stuart Pimsler Dance and Theater of Columbus, Ohio received 
support for its ``Caring for the Care Giver'' program to create 
a performance work and workshops that address and provide 
outlets for the healing of care givers.
    Other examples of Arts Endowment supported efforts that 
benefit older Americans are listed by arts discipline.

                                 dance

    Margaret Jenkins Dance Studio, Inc. of San Francisco, 
California received support for the creation, presentation and 
national touring of a dance-theater collaboration titled ``Time 
After.'' This piece is an exploration in movement and words of 
personal and public issues at the critical juncture in the life 
of a choreographer, performer and older woman.

                               folk arts

Fellowships
    Seven National Heritage Fellowships were awarded to artists 
who are age sixty five and older in recognition of their 
outstanding contributions to the traditional arts. They 
include:
    Antonio De la Rosa is an accordionist from the Texas-
Mexican ensemble in Riviera, Texas. Mr. De La Rosa was one of 
twelve children in a family of field laborers. As a child, he 
heard an accordion on the radio, acquired one, and learned to 
pick out the chords. He imitated the recordings of accordion 
pioneer Narciso Martinez and at age sixteen, went to nearby 
towns and played in small taverns. De La Rosa codified the 
instrumentation of the conjunto that endures to this day. In 
1949, he made his first recorded disc featuring two polkas 
entitled ``Sarita'' and ``Tres Rios.'' Soon his polkas made him 
a household word among the Texas-Mexican working class. He was 
inducted into the Conjunto Music Hall of Fame in San Antonio in 
1982 and is considered ``an icon of a style whose cultural 
power few musicians in the Americas can match.''
    Claude Williams, an African-American jazz/swing fiddler was 
born in Muskogee, Oklahoma, where, by the age of ten, he was 
playing the guitar, mandolin, banjo, and cello in his brother-
in-law's string band. In 1928, Mr. Williams moved to Kansas 
City where he played and toured with a variety of bands, 
including Clouds of Joy led first by Terrance Holder. He worked 
with the Cole Brothers, featuring pianist and singer Nat 
``King'' Cole. In 1937, Claude formed his own group and has 
toured with a variety of jazz bands for forty years. Further, 
Mr. Williams performed in the popular Broadway show ``Black and 
Blue'' and in a tour entitled ``Masters of the Folk Violin.''
Folk Arts' Grants
    Documentary Arts Inc. in Dallas, Texas received a grant for 
the production of ``Masters of Traditional Arts,'' an 
interactive digital program showcasing the arts and cultures of 
recipients of the Arts Endowment's National Heritage 
Fellowships for their lifetime achievements in the arts.
    Elders Share the Arts Inc. in New York city received a 
grant to support a partnership with the Los Pleneros de la 21 
to complete post production work and distribute the video, 
``Bomba! Dancing the Drum,'' a documentary about the Cepeda 
family, who are important artists in the Puerto Rico Bom.
    University of Georgia in Athens received a grant for the 
restoration of important folk music tapes recorded in northern 
and coastal Georgia, which include performances by the McIntosh 
County Shouters, the Tanners and the Eller Brothers.

                               media arts

    Dance Pioneers of Honolulu, Hawaii received support for the 
production of a video documentary intended for national 
broadcast on American choreographer and dancer Donald McKale. 
Produced in collaboration with Hawaii Television, ``Donald 
McKale: Heartbeats of a Dancemaker'' chronicles this artist's 
struggle from his Harlem roots to become a leading statesman 
and ambassador of American modern dance. McKale's distinguished 
career began in 1948 and has spanned choreography, direction, 
writing, education, and performance in dance, theater, film and 
television.
    ETV Endowment of South Carolina in Spartanburg received 
funding for the production of a weekly radio series ``Marian 
McPartland's Piano Jazz.'' The series features host Marian 
McPartland collaborating with fellow musicians to explore the 
world of jazz through a mix of performance and discussion. A 
part of the jazz through a mix of performance and discussion. A 
part of the jazz scene since the 1940's, McPartland is a 
preeminent jazz performer and thoughtful observer of music and 
musicians.
    Film Arts Foundation FOR Search Films in San Francisco, 
California received funding for the production and post-
production of a documentary film on gospel singer Marion 
Williams. The video, ``Packin' Up: Marion Williams & the 
Philadelphia Gospel Women,'' is a one-hour portrait of one of 
America's greatest singers, and the important influences that 
her hometown, Philadelphia, had in the early development of 
black gospel music. The film used extensive archival footage 
and photographs, oral histories, contemporary performance 
footage, and taped interviews with Ms. Williams--where she 
describes her conscious decision to remain in gospel music 
rather than switching to a more lucrative career in secular 
blues and pop music.
    New York Foundation for the Arts in New York City received 
support for the completion of a documentary film by Academy 
award-winning film maker Ira Wohl entitled ``Best Man: Best Boy 
and All of Us Twenty Years Later.'' It is a follow-up piece to 
his 1979 Oscar-winning film, ``Best Boy,'' about his 50- year-
old developmentally disabled cousin, Philly, and his transition 
from life at home with his parents to a group house with other 
disabled residents. The sequel features Philly's extended 
family; his close relationship with his sister and his 
comfortable lifestyle within the group home.
    Washington D.C. International Film Festival received 
support for its International festival that features films for 
older citizens and other underserved people in the Washington 
Metropolitan area. ``Cinema for Seniors'' offers free matinees 
of movie classics for older persons. The festival presents 
American independent films, cinema from around the world, 
classic restored Hollywood productions and special events for 
older adults.

                                 music

    Coro de Ninos de San Juan, Inc. in San Juan, Puerto Rico 
received support for its 1998 Christmas Concerts that involved 
a tour to five rural areas in Puerto Rico, including audiences 
of older adults and people with disabilities. Musicians 
presented classical, traditional and international Christmas 
music with special attention to Puerto Rican Christmas 
traditions and the works of Puerto Rican composers.
    Dorian Woodwind Quintet Foundation, Inc. of New York City 
received support for a domestic tour of the Dorian Woodwind 
Quintet and associated outreach activities. The Quintet tours 
domestically each year to six cities and towns that are often 
in economically distressed areas. They offer master classes, 
``informances'' for school children, pre-concert lecture 
demonstrations, and visits to hospices, hospitals, centers for 
older adults, and nursing homes.
    Helena Presents of Helena, Montana received support for 
``Cultural Crossings,'' a program of new work that involves 
multi-cultural and multi-disciplinary collaborations by 
performing artists throughout the Helena community. The 
``Cultural Crossings'' concept includes intergenerational 
programming and older artists as part of its diverse mix. The 
overarching goals of the series are: to sensitize audiences to 
the complex issues of ``difference,'' cultural diversity, and 
inclusion; empower community voices in support of tolerance; 
continue introducing aesthetic traditions and multi-
disciplinary work; and show the power of art in its depiction 
of cultural identity and collaboration between cultures. 
Artists include: The National Theatre of the Deaf; and 
percussionist-rhythm dancer Keith Terry with Indonesian 
choreographer Wayan Dibia in their new project, ``Perayaan: The 
Celebration.''
    Minnesota Orchestral Association in Minneapolis received 
support for the Minnesota Orchestra's statewide educational and 
outreach efforts including their Music Residency program where 
two to four musicians visit rural towns in Minnesota, and a 
program to reach seniors residents in convalescent and nursing 
homes. The project is designed to increase access statewide, 
specifically targeting needs of the older people living in 
isolated circumstances, inner-city youth and those living in 
rural Minnesota. Working with Minnesota Public Radio, they 
created a one-hour radio program and video for older adults 
living in nursing homes, convalescent centers, and hospices.
    New Sounds Music, Inc. received support for a year-long 
artist's residency in Philadelphia by the PRISM Quartet, the 
Saxophone, MIDI Ensemble and composer Jennifer Higdon in 
collaboration with the Settlement Music School, Free Library of 
Philadelphia, and Kardon Institute of the Arts for People with 
Disabilities. The project involves a wide variety of arts 
education and outreach activities in the community for people 
of all ages.
    Spokane Symphony Orchestra in Washington received support 
for the Symphony Ensembles for Education (SEED) program which 
provides underserved populations of all ages throughout the 
Inland Northwest with interactive and educational programming 
by Symphony Orchestra ensembles. Through the SEED program, the 
orchestra reaches audiences that traditionally have less access 
to live performances, including school children, older adults, 
families in rural and economically disadvantaged areas, and 
people with disabilities. Each program is specifically designed 
for the targeted audience with demonstrated sensitivity toward 
the audiences' needs and culture.

                                theater

    Cornerstone Theater Company of Santa Monica, California 
received support to commission playwright Chay Yew to create a 
theater work produced in collaboration with Cornerstone's 
ensemble of older artists, guest artists, and members of Los 
Angeles' Chinese American communities at the Pacific Asia 
Museum. The artists involved local participants of all ages in 
the creation of this new theater piece, which serves as a 
source of pride, entertainment and cultural exploration for 
participants and audiences from the surrounding communities.
    Stagebridge of Oakland, California received support for its 
``Storybridge,'' an intergenerational arts and literacy 
project. Stagebridge is using its experience in theater 
storytelling and training senior actors to develop 
``Storybridge''. This project reaches 2,000 low-income older 
adults and 12,000 at-risk children. It incorporates three 
programmatic approaches: (1) Grandparents Tales uses drama to 
capture children's interest in language and stories. It 
involves a play about grandparents, performed in schools 
throughout Oakland by a multi-cultural, professional cast of 
older actors. The teachers receive twenty page curriculum 
guides to continue the dialogue in their classrooms; (2) Senior 
Storytellers in the Schools involves the development of ongoing 
relationships between older storytellers and students that 
helps to keep children interested in literature and 
storytelling; and (3) Storytelling Assemblies where Stagebridge 
recruits, trains, and places older adults as storytellers in 
schools in Oakland, Berkeley and San Francisco where the 
storytellers work once a week at schools, telling stories and 
talking with students.

                              visual arts

    Little City Foundation in Palatine, Illinois was awarded a 
grant for a multi-phase exhibition of artwork, created by 
student artists with developmental disabilities, in a variety 
of locations in the greater Metropolitan Chicago area. The 
exhibition grew out of a residency program of three guest 
artists who worked with the student artists at Little City 
Foundation's campus.
    National Institute of Art and Disabilities (NIAD) of 
Richmond, California received support for the development of a 
new exhibition to promote public awareness concerning the 
creative abilities of adults with developmental disabilities. 
The exhibition consists of fifty of the best works on paper, 
canvas, and prints, as well as ceramic and textile pieces. The 
exhibition brochure includes photographs of each piece, brief 
biographical information on the artists, and an overview of 
NIAD.

             ITEM 24--NATIONAL ENDOWMENT FOR THE HUMANITIES

                              ----------                              


 National Endowment for the Humanities Report on Activities Affecting 
             Older Americans in Fiscal Years 1997 and 1998

    In 1997, an agency representative attended the Office of 
Personnel Management's ``Celebrating Older Americans 
Conference'' in order to gain information on resources and 
services available for older Americans and to learn about the 
issues that are important to them.
    In 1998, the agency was again represented at the 
``Celebrating Older Americans Conference.'' In addition, staff 
members were informed of hyperlinks to internet sites for elder 
caregivers and notified of a conference dealing heavily with 
Alzheimer's disease, ``Dimensions of Dementia.''
    Referral to the agency's employee assistance program COPE, 
Inc. is always available to Endowment employees for assistance 
in locating services or in dealing with issues and problems 
related to aging.

                  ITEM 25--NATIONAL SCIENCE FOUNDATION

                              ----------                              


      National Science Foundation Report for Developments in Aging

    The National Science Foundation, an independent agency of 
the Executive Branch, was established in 1950 to promote 
scientific progress in the United States. The Foundation 
fulfills this responsibility primarily by supporting basic and 
applied scientific research in the mathematical, physical, 
environmental, biological, social, and engineering sciences, 
and by encouraging and supporting improvements in science and 
engineering education. The Foundation does not support projects 
in clinical medicine, the arts and humanities, business areas, 
or social work. The National Science Foundation does not 
conduct laboratory research or carry out educational projects 
itself, rather, it provides support or assistance to grantees, 
typically associated with colleges and universities, who are 
the primary performers of the research.
    The National Science Foundation is organized generally 
along disciplinary lines. None of its programs has a principal 
focus on aging-related research; however, a substantial amount 
of research bearing a relationship to aging and the concerns of 
the elderly is supported across the broad spectrum of the 
Foundation's research programs. Virtually all of this work 
falls within the purview of the Directorate for Social, 
Behavioral, and Economic Sciences and the Directorate for 
Engineering.

    Directorate for Social, Behavioral, and Economic Sciences (SBE)

    The Directorate for Social, Behavioral, and Economic 
Sciences supports research in a broad range of disciplines and 
interdisciplinary areas through its Division of Social, 
Behavioral, and Economic Research. For example, sociological 
research is being supported which examines how the labor force 
participation and earnings of older Americans have been 
affected by recent economic trends; how Americans in their 50's 
cope with the dual pressures of supporting aging parents and 
grown children; how income distribution differs between the 
``young old'' and the ``old old,'' and how the degree of 
political activism of older Americans has changed overtime in 
the twentieth century. Projects within anthropology are being 
supported to examine how economic development affects patterns 
of caring for dependent elderly, and with cognitive psychology 
to examine the extent to which knowledge acquired in youth is 
retained in later life.
    The SBE Directorate also supports several large-scale data 
gathering efforts which can be and have been used to study 
issues related to aging, although that is not their sole or 
even primary purpose. For example the Panel Study of Income 
Dynamics, which has been tracking a sample of more than 7,000 
American families since 1968, provides information on changing 
household composition, labor force participation, income, 
assets, and consumption patterns as individual respondents grow 
older. The General Social Survey, which has carried out sample 
surveys of the U.S. adult population more or less annually 
since 1972, contains several attitudinal items dealing with the 
status of, and care for, the elderly. These surveys enable 
researchers to examine how attitudes toward the elderly have 
changed over time and how age groups differ across a wide range 
of opinion areas. The National Election Survey, which has 
studied American elections since 1952, provides information on 
how attitudes regarding candidates and issues vary across age 
groups. The SBE Directorate is also supporting a project that 
will make available to researchers in a consistent and readily 
usable form public use microdata from the U.S. censuses from 
1850 through 1990. When completed, this project will make it 
possible to examine how the status and family relationships of 
older Americans have changed over the course of a century and a 
half.

                   Directorate for Engineering (ENG)

    The National Science Foundation's Directorate for 
Engineering seeks to enhance long-term economic strength, 
security, and quality of life for the Nation by fostering 
innovation, creativity, and excellence in engineering education 
and research. This is done by, supporting projects across the 
entire range of engineering disciplines and by identifying and 
supporting special areas where results are expected to have 
timely and topical applications, such as biotechnology and 
materials processing.
    Aging-related research is primarily supported within the 
Directorate for Engineering through the Biomedical Engineering 
and Research to Aid Persons with Disabilities programs. 
Research funded in this program relates to issues of aging and 
the elderly due to the propensity for the elderly to develop 
physical disabilities. Many of the current projects are also of 
interest to NASA. Several of the effects of weightlessness on 
the human body are strongly similar to the effects of aging on 
the human body. Projects recently supported by this program 
include the following studies: Biophysical mechanisms of 
cartilage repair and generation; Mechanisms of drug delivery in 
the treatment of various diseases, including those associated 
with aging, such as diabetes; Simple, noninvasive, quantitative 
methods to assess postural instability associated with aging; 
Investigation of biodegradable polymer matrices to support the 
growth of bone and the generation of bone-like tissues for 
application in osteoporosis; A variety of activities involving 
joint replacement, including computer assisted design of 
orthopedic surgery, cementing techniques, failure detection 
techniques, and the pathophysiology of implant device-related 
infection; An image processing system for low vision people 
such as those with age related maculopathies; An artificial 
retina which will restore limited vision to people who are 
blind due to certain diseases; A visual speech articulation 
training aid for the hearing impaired; and Imaging modalities 
that allow physicians to perform a ``virtual colonoscopy'' in a 
non-invasive fashion; Undergraduate projects by student 
engineers to design and fabricate custom designed devices and 
software for disabled individuals.
    While some of these projects are not specifically directed 
toward problems of aging, all of these studies have potential 
for dealing with conditions prevalent among the elderly.

             ITEM 26--PENSION BENEFIT GUARANTY CORPORATION

                              ----------                              


                  Executive Director's Message (1997)

    It gives me great pleasure to report that the Pension 
Benefit Guaranty Corporation has concluded a very rewarding 
year. Record earnings on investments enabled PBGC to record 
significant net income for both insurance programs, further 
strengthening the agency's financial footing.
    Our highest priority now must remain PBGC's solvency. After 
more than 20 years of continuous deficits, we must maintain a 
reserve that will be sufficient to protect the program. The 
most recent gains came in a good economic period marked by high 
investment returns and low pension losses. The agency remains 
vulnerable to changing economic conditions, which can 
significantly affect the values of both its assets and its 
liabilities. Even with a strong economy last year, PBGC assumed 
responsibility for more than 160 underfunded plans, and 
underfunding continues to exist among ongoing defined benefit 
pension plans. We have achieved a surplus which can serve as a 
cushion to protect workers and retirees in the event of future 
economic downturns.
    It is very important for PBGC to remain strong. With a 
healthy insurance program, workers and employers can have 
confidence in the defined benefit pension system. Workers can 
be confident their pensions are secure and their benefits will 
be there when they are ready for them. Employers can be 
confident that the cost of providing insurance coverage will be 
kept reasonable.
    Our second priority is making PBGC a premier customer 
service organization--not only for the workers and retirees 
whom we protect, but also for the companies that pay our 
insurance premiums and for the pension professionals who advise 
them. PBGC has won many awards for its service to workers and 
retirees. Our goal now is to make sure we pay the same 
attention to the employers whose payments support the insurance 
program and the pension professionals who rely on our agency.
    Our third priority is to promote defined benefit pension 
coverage for American workers. We want both workers and 
employers to take a new look at defined benefit pensions and to 
understand their value in providing American workers with a 
predictable, guaranteed lifetime pension. It is PBGC's mandate 
to promote defined benefit pensions and to bring the advantages 
of workplace pensions to a greater number of working Americans. 
I want PBGC to play a meaningful role in the ongoing public and 
private sector efforts to meet that challenge.
    The improvement in PBGC's financial condition and service 
to the public is a fitting tribute to the leadership of my 
predecessor, Martin Slate, who passed away unexpectedly at 
midyear, and to the creativity and diligence of the agency's 
staff. A significant number of people are affected by PBGC. We 
want to make sure that we continue the remarkable turnaround of 
the pension insurance program and serve them well.
                                          David M. Strauss,
                                                Executive Director.

                         Safeguarding Solvency

    PBGC developed a five-year Strategic Plan that provides 
long-term direction to the agency's activities and milestones 
for measuring progress along the way. The plan resulted from 
consultation with PBGC's stakeholders, including participants, 
pension professionals, and premium payers.
    The Strategic Plan established four goals that support the 
Secretary of Labor's overall goal of enhancing retirement 
security. PBGC's goals are to:
           Strengthen financial programs and systems to 
        keep the pension insurance system solvent;
           Provide high-quality services and accurate 
        and timely payment of benefits to participants;
           Protect existing defined benefit plans and 
        their participants and encourage new plans; and
           Improve internal management support 
        operations.
    PBGC's financial results for 1997 showed encouraging 
progress toward the agency's strategic goal of strengthening 
its financial programs and systems to keep the pension 
insurance system solvent. Record investment earnings enabled 
PBGC to further strengthen its financial base to support the 
insurance programs' long-term responsibilities. Valuable 
settlements generated through the Early Warning Program, in 
combination with the agency's vigorous litigation posture, 
protected the insurance program and tens of thousands of 
workers and retirees from pension losses.

                          financial management

    PBGC's financial strength rests on a foundation of skilled, 
professional financial management. The agency's financial 
statements have received their fifth straight unqualified 
opinion from the agency's auditors, attesting to the 
consistency and integrity of its financial systems. The 1997 
audit was again performed by Price Waterhouse LLP under the 
direction and oversight of PBGC's Inspector General.
    Both PBGC insurance programs recorded significant financial 
gains in 1997, fueled largely by investment earnings. 
Investments of the larger single-employer program produced 
record income of nearly $2.7 billion. Premium income totaled 
nearly $1.1 billion, down slightly from the record level 
reached in 1996 because reduced underfunding led to lower 
variable-rate premium payments to PBGC. Investment gains 
enabled the single-employer program to record net income of 
$2.6 billion. As a result, the program's net surplus grew to 
nearly $3.5 billion.
    The multiemployer program also continued to be financially 
strong, with net income of $95 million and an end-of-year net 
surplus of $219 million, based on assets of $596 million and 
liabilities totaling $377 million primarily for future benefits 
and nonrecoverable future financial assistance. The net income, 
paced by investment gains, reversed a three-year period of 
moderate losses.
    The agency took several steps during the year to improve 
compliance with premium obligations. Several of these 
initiatives were intended to create a more cooperative climate 
and forge a partnership with the employers who pay PBGC's 
premiums. With the assistance of focus groups and surveys, PBGC 
began to identify employers' concerns and make changes that 
would improve service and still ensure the agency's ability to 
safeguard workers' pensions and the pension insurance program. 
In addition to restructuring and lowering its premium penalties 
to encourage voluntary correction of premium payment errors, 
the agency set time limits to ensure that needed information is 
submitted timely for its premium audit program. PBGC also 
expanded the premium audit program nationwide after 
successfully testing the program in a limited geographic area. 
The pilot program had proven premium audits to be a cost-
effective means of ensuring accuracy in premium payments.

                           investment program

    The Corporation has approximately $15.6 billion of total 
assets available for investment, consisting of premium receipts 
accounted for in the Revolving Funds and assets from terminated 
trusteed plans and their sponsors accounted for in the Trust 
Funds. Under law, the Revolving Funds are required to be 
invested in fixed-income securities; current policy is to 
invest these funds only in Treasury securities. PBGC has more 
discretion in its investment of the Trust Funds, which are 
primarily invested in high-quality equities, with asset 
allocation designed for sound long-term performance.
    The agency's investment in equities provides overall 
portfolio diversification and a higher long-term expected 
return, within prudent levels of risk. PBGC uses institutional 
investment management firms to invest its assets subject to 
PBGC oversight. PBGC's investment portfolio is structured to 
improve PBGC's financial condition in a stable manner over the 
long term. PBGC continually reviews its investment strategy to 
ensure that the agency maintains an investment structure that 
is consistent with its long-term objectives and 
responsibilities.
    Investment Profile.--As of September 30, 1997, the value of 
PBGC's total investments, including cash, was approximately 
$15.6 billion. The Revolving Fund's value was $9.0 billion and 
the Trust Fund's value was $6.6 billion.
    PBGC's fund allocation further shifted toward equities 
during 1997 due primarily to strong equity returns. Cash and 
fixed-income securities represented 61 percent of the total 
assets available for investment at the end of the year, as 
compared to 63 percent at the end of 1996, while the equity 
allocation stood at 38 percent of all investments compared to 
36 percent one year earlier. A very small portion of the 
invested portfolio remains in real estate and other financial 
instruments.

                           INVESTMENT PROFILE
------------------------------------------------------------------------
                                                         Sept. 30--
                                                   ---------------------
                                                       1997       1996
------------------------------------------------------------------------
Fixed-income assets:
    Average quality...............................        AAA        AAA
    Average maturity (years)......................       21.0       22.6
    Duration (years)..............................       10.5       10.1
    Yield to maturity (%).........................        6.4        7.2
Equity assets:
    Average price/earnings ratio..................       26.0       19.7
    Dividend yield (%)............................        1.6        2.0
    Beta..........................................       1.04       1.08
------------------------------------------------------------------------

    Investment Results.--Fiscal year 1997 was a favorable year 
for capital market investments and PBGC's investment program. 
The broad stock market, as measured by the Wilshire 5000 Index 
that most closely reflects PBGC's equity portfolio, advanced 
38.0%, while PBGC's equity portfolio returned 37.6%. PBGC's 
fixed-income program returned 13.5% for the year, while the 
Lehman Brothers Long Treasury Index gained 13.2%. For the year, 
PBGC reported income of nearly $1.1 billion from fixed-income 
investments and nearly $1.7 billion from equity investments. 
Other investments, including real estate and insurance 
contracts, produced a small gain of $8 million, for total 
investment income of almost $2.8 billion.

                                             INVESTMENT PERFORMANCE
                                       [Annual rates of return in percent]
----------------------------------------------------------------------------------------------------------------
                                                                            Sept. 30,--             Five years
                                                                 --------------------------------   ended Sept.
                                                                       1997            1996          30, 1997
----------------------------------------------------------------------------------------------------------------
Total invested funds............................................            21.9             8.5            14.4
Equities........................................................            37.6            19.7            20.6
Fixed-income....................................................            13.5             2.2            10.9
Trust funds.....................................................            35.6            18.6            19.1
Revolving funds.................................................            13.3             2.3            11.6
Indices:
    Wilshire 5000...............................................            38.0            18.9            20.6
    S&P 500 Stock Index.........................................            40.4            20.3            20.8
    Lehman Brothers Long Treasury Index.........................            13.2             2.3             8.9
----------------------------------------------------------------------------------------------------------------

                         early warning program

    The Early Warning Program, which helps PBGC prevent pension 
losses, continued to play a major role in safeguarding the 
solvency of the pension insurance program. Under this program, 
PBGC monitors companies with pension plans underfunded by at 
least $5 million to identify transactions that could jeopardize 
pensions. This effort enables PBGC to find such transactions at 
an early stage, when both PBGC and the company involved have 
the most flexibility to structure an agreement that protects 
the interests of the company, its workers and the pension 
insurance program. During 1997, while monitoring more than 500 
companies, PBGC negotiators reached agreements valued at about 
$760 million with 17 companies, providing contributions, 
security, and other protections for the pensions of about 
140,000 workers and retirees. Since its inception six years 
ago, the program has generated more than $15 billion in 
additional protection for the pensions of more than 1.6 million 
people. Specific agreements reached in 1997 included:
    NCR Corporation.--NCR, a formerly wholly owned subsidiary 
of AT&T Corporation, was responsible for underfunded pensions 
covering more than 57,000 workers and retirees. AT&T planned to 
spin off NCR at the end of 1996. Under an agreement reached in 
November 1996, NCR provided security interests in various NCR 
properties totaling $80 million to guarantee the future funding 
of the pensions. In addition, the company agreed to continue 
full minimum funding contributions without applying an existing 
credit balance of more than $100 million for prior funding that 
exceeded the contributions required by law. Without the 
agreement, NCR could have used the credit balance to reduce or 
eliminate future contributions for a number of years. The 
agreement will remain in effect five years, after which it will 
expire once NCR achieves a specified financial rating.
    Anchor Glass Container Corporation.--Anchor planned to sell 
its assets to a buyer who would also assume responsibility for 
the company's three pension plans, which covered some 15,600 
workers and retirees and were underfunded by about $190 
million. The sale would remove Anchor from the control of its 
Mexican parent, Vitro S.A., thereby relieving Vitro and its 
subsidiaries from responsibility for the Anchor pensions. When 
PBGC proposed to terminate the plans in order to preserve 
claims against Vitro for the pension underfunding, the buyer 
agreed to pay missed pension contributions totaling about $18 
million at the close of the sale and to assume responsibility 
for all future contributions to the plans. Vitro agreed to 
guarantee payments of up to $70 million over 10 years should 
PBGC have to terminate any of the plans in the future. A 
separate firm acquired a smaller portion of Anchor covering 
about 500 workers and assumed responsibility for about $15 
million of the total underfunding.
    Del Monte Corporation.--Del Monte, with three pension plans 
that were underfunded about $90 million and covered more than 
6,700 workers and retirees, was being purchased at part of a 
leveraged buyout. In April 1997, PBGC and the company reached 
an agreement to compensate the pension plans for the increased 
risk resulting from the transaction. Under the agreement, Del 
Monte will add $55 million in cash to its plans over the next 
five years, with the funding planned for the last three years 
secured by an irrevocable $20 million letter of credit. As a 
result of the agreement, the plans are expected to be close to 
fully funded at the end of the five-year period.
    Amphenol Corporation.--Amphenol maintained eight plans that 
covered 6,800 workers and retirees and were underfunded by 
about $45 million. When bank financing for a planned leveraged 
buyout of Amphenol threatened to add significant debt to the 
company, PBGC initiated negotiations that led to a May 1997 
agreement. The agreement gave PBGC a second interest for up to 
$45 million in stock of Amphenol's foreign subsidiaries as 
security for the pension underfunding. PBGC will get additional 
collateral for the underfunding if the banks financing the 
purchase later determine that they need more collateral to 
secure their loans. The agreement will be in effect for at 
least five years and will continue thereafter until the pension 
plans are fully funded or Amphenol debt obtains an investment -
grade rating.
    Lockheed Martin Corporation.--Lockheed spun off some of its 
aerospace and defense communications units to a new, highly 
leveraged company called L-3 Communications Corporation. As 
part of the transaction, Lockheed also transferred seven 
pension plans covering nearly 3,000 workers and retirees of the 
divested businesses. While four of the plans were well funded, 
three were underfunded by about $40 million. In May 1997, PBGC 
and Lockheed negotiated a settlement under which Lockheed 
agreed to reassume sponsorship of the three underfunded plans 
if L-3 is unable to support the plans. The agreement will 
remain in effect until L-3 achieves an investment-grade 
financial rating.
    Kerr Group, Inc.--A leveraged buyout of Kerr would have 
been financed primarily through debt secured by Kerr assets. 
Kerr maintained a pension plan covering 5,600 workers and 
retirees that was underfunded by about $41 million. PBGC 
determined that the proposed transaction would weaken its 
position relative to other creditors, thereby putting the 
insurance program at increased risk of loss, and filed a motion 
in district court to terminate the plan. Subsequent 
negotiations led to an agreement in August 1997 under which 
Kerr will continue to be responsible for the pension plan while 
accelerating funding of the plan. Kerr paid $3.5 million into 
the plan at the closing of the sale and will pay an additional 
$35.5 million through January 2003. PBGC obtained a second 
security interest in substantially all Kerr assets and withdrew 
its pending court action to terminate the plan. The agreement 
will remain in effect for at least five years and until Kerr 
meets other conditions.

                               litigation

    While preferring to negotiate solutions to pension issues, 
PBGC stands ready to use its independent litigation authority 
when necessary to enforce its legal positions and to protect 
the insurance program. At the end of the year, PBGC had 85 
active cases in state and federal courts and 790 bankruptcy 
cases. Major cases in 1997 included:
    Pineiro, Brooks, and Beaumont v. PBGC.--In September 1996, 
three former employees of Pan American World Airways filed suit 
in district court asking that the court replace PBGC with an 
independent trustee. PBGC had terminated and become trustee of 
three Pan Am pension plans underfunded by $914 million in 1991. 
The agency currently pays more than $100 million annually to 
14,000 Pan Am retirees, and has issued benefit determinations 
to more than half of the Pan Am participants to whom PBGC owes 
benefits. It is expected that more than 95 percent of the Pan 
Am participants will receive all of their pension benefits 
earned under the plans.
    PBGC filed a motion to dismiss the complaint and, in 
November 1997, the court dismissed all but one of the 
allegations in the suit as meritless. The court noted that 
there were no allegations that ``estimated benefits are not 
being paid or that the amounts of estimated benefits that are 
being paid are incorrect.'' The only allegation the court left 
open, without ruling on the merits, concerns the timeliness of 
PBGC's notice of benefits to the Pan Am participants.
    Despite complications caused by the deplorable condition of 
company records and the company's protracted bankruptcy 
proceedings, PBGC has been paying benefits to Pan Am retirees 
continuously since taking over the plans while making steady 
progress in completing its determination of the benefits owed 
to about 35,000 former Pan Am workers and retirees.
    Copperweld Steel Company.--PBGC continued to pursue 
bankruptcy claims to recover amounts due PBGC and Copperweld's 
three terminated pension plans, which covered about 3,000 
workers and retirees. The company's liquidation trustee 
contests the extent to which PBGC's claims for unpaid minimum 
funding contributions are entitled to priority under the 
Bankruptcy Code and whether the factors prescribed in PBGC's 
regulations appropriately measure PBGC's claims for unfunded 
benefit liabilities in terminated pension plans that are 
trusteed by PBGC. These issues are central to PBGC's ability to 
recover its losses from bankrupt employers. In December 1997, 
the bankruptcy court ruled for the liquidation trustee's 
positions in both issues. PBGC is determining what appropriate 
future steps it should take in the litigation.
    CF&I Steel Corporation.--PBGC continued to pursue its 
claims against the reorganized CF&I for a CF&I plan that was 
underfunded by about $221 million when terminated in March 
1992. In a November 1994 ruling, a district court denied 
priority to most of PBGC's claims for minimum funding 
contributions owed to CF&I's plan and for the plan's 
underfunding. The court also remanded the case to the 
bankruptcy court for reconsideration of the amount of PBGC's 
underfunding claim, ruling that the bankruptcy court erred in 
``deferring'' to PBGC's interest rate assumption. The 
bankruptcy court subsequently revalued PBGC's claim for 
unfunded benefit liabilities from about $221 million to about 
$123 million based on a ``discount rate'' that differed from 
the assumptions prescribed by PBGC's regulation. The district 
court affirmed this ruling in April 1997. PBGC's appeal was 
pending in the Tenth Circuit Court of Appeals at yearend.
    White Consolidated Industries, Inc.--White continued to 
contest PBGC's claims for estimated $120 million underfunding 
in pension plans that White transferred to Blaw Knox 
Corporation in 1985. PBGC is alleging that a principal purpose 
of White in entering into the transaction was to evade pension 
liabilities. PBGC has taken over all the Blaw Knox plans either 
because they ran out of money or because they would have been 
abandoned after Blaw Knox ceased business and sold its assets 
in 1994. Trial before the district court was completed during 
April 1997, but the court's decision was still pending at 
yearend.

                        multiemployer litigation

    Although most of the significant multiemployer plan issues, 
such as ``arbitrate first,'' are now well-settled principles of 
law, some important questions remain.
    In Board of Trustees, Bay Area Laundry and Dry Cleaning 
Pension Trust Fund v. Ferbar Corp of CA, et al., the Supreme 
Court was asked to decide when the statute of limitations 
begins to run for an action to collect withdrawal liability 
under the Multiemployer Pension Plan Amendments Act of 1980. In 
December 1997, the Court affirmed the position advocated by 
PBGC and the Solicitor General, who had filed a joint brief in 
July 1997 as ``friends of the court.'' The Court held that the 
statute of limitations begins to run when an employer fails to 
make a scheduled withdrawal liability payment, and not on the 
(earlier) date the employer withdrew from the plan. The lower 
court's holding to the contrary could have significantly 
limited the ability of multiemployer plans to collect 
withdrawal liability.

                    Providing High-Quality Services

    PBGC's second strategic goal is to provide high-quality 
services and accurate and timely payment of benefits to 
participants. During the year, PBGC worked to improve service 
both to the people owed benefits and to the employers whose 
premium payments support the pension insurance program.

                        single-employer program

    Through its single-employer program, PBGC oversees 
terminations of fully funded plans and guarantees payment of 
basic pension benefits when underfunded plans must be 
terminated. The single-employer program covers about 33 million 
workers and retirees in about 43,000 plans. While the number of 
people covered by the program has grown slightly over the past 
few years, the number of plans has decreased as small companies 
have terminated their plans. The decrease abated during 1997.
    Standard Terminations.--An employer may end a fully funded 
plan in a standard termination by purchasing annuities or 
paying lump sums to participants. Standard terminations are 
subject to legal requirements governing notifications to 
participants and to PBGC and payment of benefits. PBGC may 
disallow standard terminations that do not comply with the 
requirements.
    The number of standard terminations filed with PBGC 
continued to decline in 1997, albeit at a slower pace, falling 
by 8 percent to about 3,500. Most of these plans had 50 or 
fewer participants.
    PBGC audits a statistically significant number of completed 
terminations to confirm compliance with the law and proper 
payment of benefits. These audits generally have found few and 
relatively small errors in benefit payments, which plan 
administrators are required to correct. The errors primarily 
are due to the use of incorrect interest-rate assumptions in 
valuing lump sum distributions to plan participants. PBGC's 
enforcement of its audit findings in 1997 resulted in payment 
of nearly $4 million of additional benefits to about 4,900 
participants, about 5 percent of all participants in audited 
plans.
    Shortly after the year ended, PBGC issued final rules that 
extended the deadlines and simplified the procedures companies 
must follow in standard terminations. The changes had been 
developed after PBGC conducted focus groups with pension 
professionals and also took participant concerns and PBGC's 
experience into account. The final rules also provided new 
model notices companies may use to inform workers and retirees 
about the intended termination of their plan and the guarantees 
offered by their states for annuity benefits if their annuity 
provider encounters financial difficulty. The simplified 
requirements provided regulatory relief for employers while 
maintaining full protection for workers' pensions.
    Distress and Involuntary Terminations.--Defined benefit 
plans that are not able to pay all promised benefits may be 
terminated either by the company responsible for the plan or by 
PBGC. An employer wishing to terminate an underfunded plan 
generally may do so only if the employer is being liquidated or 
if the termination is necessary for the company's survival. The 
employer must first prove to PBGC, or to a bankruptcy court if 
appropriate, that it and each of its affiliated companies meets 
one of the financial distress criteria set by law.
    An underfunded plan also may be terminated involuntarily by 
PBGC when necessary to protect the interests of the 
participants or of the insurance program. PBGC must terminate 
any plan that does not have assets available to pay current 
benefits.
    During 1997 the agency completed the termination of 165 
underfunded plans, the vast majority of which were involuntary 
terminations by PBGC. In most cases termination was necessary 
because the sponsoring employer had gone out of business. Many 
of these plans had been under consideration for termination for 
a period of time and their actual termination dates occurred in 
earlier years, when the circumstances leading to their 
termination first arose.
    Trusteed Plans.--PBGC typically becomes trustee of a plan 
only after it has been terminated, although not necessarily in 
the same year it was terminated. During the year, PBGC became 
trustee of 195 single-employer plans covering 54,000 people. At 
yearend, the agency was in the process of becoming trustee of 
an additional 90 plans terminated in 1997 or earlier. In all, 
including 10 multiemployer plans previously trusteed, a total 
of 2,510 terminated plans were trusteed or were being trusteed 
as of the end of the year. (This total also reflects the 
elimination of three single-employer plans included in last 
year's total, which no longer required PBGC to become trustee.)
    Benefit Processing.--PBGC 's responsibility for benefit 
payments begins immediately upon becoming trustee of a 
terminated plan. Top priority is given to maintaining 
uninterrupted benefit payments to existing retirees and 
commencing payments to new retirees without delay. 
Concurrently, PBGC staff also begin to notify plan participants 
of PBGC's trusteeship and to obtain essential data and records 
on each individual participant, a difficult task frequently 
complicated by inadequate plan and employer records.
    PBGC pays estimated benefits to retirees until it has 
confirmed necessary data and valued plan assets and recoveries 
from the plan's sponsor. PBGC then calculates the actual 
benefit payable to each participant according to the specific 
terms of that person's plan, statutory guarantee levels, and 
the funds available from plan assets and employer recoveries. 
Benefit calculation can be an intricate process since each 
trusteed plan is different and must be separately administered.
    By the end of the year, PBGC was responsible for the 
current and future pension benefits of about 465,000 
participants from single-employer and multiemployer plans. 
These include 205,800 retirees who received benefit payments 
totaling $824 million.
    PBGC continued to accelerate its completion of individual 
benefit determinations. In 1997, PBGC issued more than 69,000 
benefit determinations, exceeding the record number issued one 
year earlier. The heightened production is the direct result of 
the agency's advanced automated imaging, letter generation, and 
participant record management systems.
    Benefit Payment Policies.--PBGC announced two important 
changes in policies affecting benefit payments to people in 
PBGC-trusteed plans. In one. PBGC will no longer charge for 
pre-retirement survivor annuity protection for any plan 
terminated on or after August 23, 1984. This insurance provides 
benefits to surviving spouses of workers who die before they 
retire and begin receiving benefits. The agency had been 
providing this protection as an option for plan participants, 
who were subject to a small fee if they accepted the insurance. 
PBGC now provides this coverage without charge. Under the other 
change, announced shortly after the year ended, PBGC will be 
revising how it recovers benefit overpayments made after the 
date of plan termination from plan participants. PBGC has been 
giving participants the choice of repaying overpayments either 
in a lump sum or through a permanent reduction (generally 
capped at 10 percent) in their benefit payment. With the 
change, which is expected to be final during 1998, the 
reduction will cease when the total amount collected matches 
the amount by which the person had been overpaid.
    Appeals of Benefit Determinations.--PBGC's Appeals Board 
reviews appeals of certain PBGC determinations. Most of the 
appeals are from people disputing their benefit determinations. 
Typically, about 2 percent of all benefit determinations are 
appealed and that remained true this year. In 1997, the Appeals 
Board received 1,300 appeals and decided 927 appeals. Of these, 
the Board met to decide 122 appeals, 65 of which required 
changes in benefits primarily as a result of new facts, 
correction of calculation errors, or a different interpretation 
of plan provisions; the other 805 appeals were resolved based 
on prior Board decisions, settlements with organizations 
representing the appellants, Board staff efforts that led to 
new determinations, or more thorough explanations of the 
original determination.
    Pension Search Program.--PBGC's efforts to link people 
missing from terminated pension plans with their retirement 
benefits continued to meet with success throughout the year. In 
addition to searching for workers and retirees missing in 
terminated underfunded plans that the agency now administers, 
PBGC conducts a missing participants clearinghouse to assist 
employers who are terminating fully funded plans to locate all 
people owed benefits. For the hardest-to-find people who have 
frustrated all previous searches by either their former 
employers or PBGC, the agency also maintains a listing on the 
Internet, which is called the Pension Search Directory.
    During 1997, the second year of operation for the missing 
participants clearinghouse, 417 companies asked PBGC to find 
4,734 missing people. Of these, 3,542 were due over $5.3 
million in benefits and 1,192 were covered by annuity contracts 
that will pay their benefits when they are found. By yearend, 
PBGC had confirmed addresses for 554 of the missing people and 
paid nearly $1 million in benefits to 510 of them. PBGC is 
continuing its search for valid addresses for the remaining 
missing people.
    In 1997, the Pension Search Directory enabled PBGC to find 
more than 1,000 other people who were owed over $4 million in 
benefits plus interest. The total listing included about 4,600 
people who had worked for some 780 companies and were owed over 
$12 million in pension benefits. The Directory is a joint 
public and private sector effort that is being assisted by more 
than 20 organizations and unions. It may be viewed on the 
Internet at http://search.pbgc.gov. The agency's Pension Search 
effort, with its innovative use of an on-line self-search 
listing and partnerships with private organizations, was 
recognized after the year ended with a Hammer Award from Vice 
President Al Gore's National Performance Review, the fifth such 
award received by PBGC. With this award, PBGC has won more 
Hammer Awards per employee than any other government agency.

                         multiemployer program

    The multiemployer program, which covers about 8.8 million 
workers and retirees in about 2,000 insured plans, is funded 
and administered separately from the single-employer program 
and differs from the single-employer program in several 
significant ways. The multiemployer program covers only 
collectively bargained plans involving two or more unrelated 
employers. For such plans, the event triggering PBGC's 
guarantee is the inability of a covered plan to pay benefits 
when due at the guaranteed level, rather than plan termination 
as required under the single-employer program. PBGC provides 
financial assistance through loans to insolvent plans to enable 
them to pay guaranteed benefits.
    The significant reforms enacted in 1980 created several 
safeguards for the program, including a requirement that 
employers who withdraw from a plan pay a proportional share the 
plan's unfunded vested benefits. These safeguards have 
permitted PBGC to maintain multiemployer premiums at a 
constant, reasonably low level.
    Plan Underfunding.--Based on Form 5500 data at the 
beginning of 1995--the most recent information available--
multiemployer plans had total assets of $202.3 billion and 
liabilities of $217.0 billion. Overfunding among multiemployer 
plans as of the beginning of 1995 totaled about $12.6 billion. 
Underfunding among these plans totaled $27.4 billion, a 
decrease of $2.6 billion from the previous year resulting 
mainly from the higher interest rates that prevailed in 1994. 
The average funding ratio of underfunded plans slipped slightly 
from 81 percent to 80 percent because of the effect of 
declining investment returns on asset values.
    Future developments in multiemployer underfunding and the 
financial condition of the multiemployer program depend on 
future economic and demographic factors such as interest rates, 
plan experience and investment performance, and the financial 
health of covered industries, particularly as reflected in 
industry employment levels.
    Financial Assistance.--The multiemployer program has 
received relatively few requests for financial assistance. 
Since enactment of the reforms in 1980, PBGC has provided 
assistance to only 19 of the 2,000 insured plans, with a total 
value of approximately $35 million net of repaid amounts. In 
1997, only 14 of these plans were still receiving assistance of 
about $4 million annually.

                            customer service

    Premier customer service is a corporate priority and was a 
driving force behind a variety of PBGC initiatives during the 
year. While most of the agency's activity was aimed at those 
whom PBGC serves directly, two projects will also benefit the 
general public.
    PBGC completed and issued a new reference publication, the 
``Pension Insurance Data Book 1996,'' which provides detailed 
statistics on the experience of the single-employer insurance 
program and on the pension plans that it protects. The ``Data 
Book'' is intended to contribute to informed analyses that will 
help ensure a sound pension system. PBGC also redesigned and 
expanded its Home Page and web-site on the Internet to make it 
more user-friendly and to highlight information of interest to 
workers, retirees, employers, and pension professionals.
    Service Improvements for Participants.--PBGC annually 
surveys a sampling of people whose plans have been taken over 
by the agency to determine their level of satisfaction with 
PBGC services and identify areas for improvement. Past surveys 
indicated a general desire for better and more timely 
communications, leading PBGC to introduce regular newsletters, 
a Customer Service Center with a toll-free telephone number, 
and more understandable form letters for regular 
correspondence. The most recent survey showed increased 
satisfaction with PBGC, as 79 percent of the surveyed 
participants rated PBGC's overall customer service as ``above 
average'' or ``outstanding.'' One of PBGC's goals under its 
strategic plan is to satisfy 90 percent of the participants by 
the year 2002. In response to the latest survey, PBGC added a 
new standard that pledges the agency to deal with routine 
matters in one telephone call. The agency also expanded the 
availability of its toll-free telephone number so that all 
participants have a single telephone number with which to reach 
PBGC on any matter.
    In other areas of communication, PBGC simplified and 
clarified its benefit determination letters and benefit 
summaries, which are used to inform people of the amount of 
their guaranteed benefit, and its two most important 
explanatory pamphlets for participants in trusteed plans. In 
addition, while continuing to hold informational meetings for 
people in large, newly trusteed plans, PBGC developed a 
videotape for participants of smaller plans when meetings with 
PBGC representatives are not feasible.
    Service Improvements for Employers.--In addition to easing 
deadlines and simplifying rules for terminations of fully 
funded pension plans, PBGC adopted several measures to improve 
service and provide reporting relief for the business 
community. The agency ended publication of its annual listing 
of the 50 companies with the most underfunded pension plans. 
PBGC determined that the list was no longer needed since full 
implementation of the reporting and funding reforms enacted in 
the Retirement Protection Act has provided better enforcement 
tools to protect pensions.
    PBGC also waived a requirement that small companies notify 
the agency if they fail to make quarterly pension 
contributions. According to PBGC analysis of reports received 
during the year, this change will ease reporting burdens for 
small companies without harm to plan participants or the 
insurance program. In addition, PBGC also announced shortly 
after the end of the year that it generally would ask employers 
selected for the agency's premium audit program to provide only 
three years of premium-related information rather than the six 
years of information previously required, in order to ease the 
burden and expense of these audits. Agency audits will extend 
back beyond three years only if problems appear in the initial 
information.

                   Promoting Defined Benefit Pensions

    Only defined benefit pensions offer a predictable, 
guaranteed, lifetime pension for America's working men and 
women and their families. For a company, defined benefit plans 
promote worker loyalty and retain an experienced workforce, and 
in some cases are the most economical way to provide adequate 
pensions for employees.
    The decline in the number of defined benefit plans 
continued to slow in 1997. Employers ended about 3,500 fully 
funded plans during the year, compared to about 3,800 such 
terminations in 1996. As a result of the continuing 
terminations and mergers of ongoing plans, the number of 
insured single-employer pension plans fell from a high of 
112,000 in 1985 to 43,000 in 1997. The drop has been primarily 
among small plans--those with fewer than 100 participants. The 
number of larger plans--with 1,000 participants or more--has 
remained relatively stable.
    PBGC has a statutory mandate to encourage the maintenance 
and continuation of defined benefit pension plans. To carry out 
this mandate, PBGC focused effort in 1997 in several areas.
    The agency discussed with employer groups ways for small 
businesses, where fewer than 25 percent of the workers are 
covered by any retirement plan, to provide federally insured 
defined benefit pension coverage. As the year ended, the 
Administration was developing a simplified defined benefit 
plan--later called SMART (Secure Money Annuity or Retirement 
Trust)--to provide small businesses with an easy- to-administer 
pension option that would provide predictable, guaranteed 
benefits for workers. The Administration's proposal builds on 
the bipartisan SAFE proposal developed by Representatives Earl 
Pomeroy of North Dakota and Nancy Johnson of Connecticut, among 
others, and combines many of the best features of defined 
benefit and defined contribution plans. The SMART plan 
eliminates many of the complex rules that now apply to defined 
benefit plans while ensuring that the tax benefits of the plan 
flow primarily to low and middle-income workers. The 
Administration's proposed plan would cover all eligible workers 
in small businesses with 100 or fewer employees, and employers 
would have predictable funding based on conservative 
assumptions that would keep earned benefits fully funded at all 
times. Participants would be guaranteed a minimum annual 
retirement benefit that could be increased if the return on 
plan investments exceeded specified conservative assumptions, 
and their benefits would be protected by PBGC.
    PBGC also sought to spur interest in defined benefit plans 
by following one of the key principles of a customer-driven 
organization--listening more effectively to the concerns of our 
customers, including the employers who provide defined benefit 
plans and pay insurance premiums. PBGC developed mechanisms for 
two-way communication with employers and pension plan 
practitioners through focus groups, surveys, and through the 
Internet via e-mail. The agency sought to identify obstacles to 
the creation and maintenance of defined benefit pension plans 
arising from PBGC rules and procedures and to take corrective 
action where appropriate.
    To set up an environment conducive to defined benefit 
plans, PBGC began to ease regulatory and administrative 
requirements to encourage the provision of defined benefit 
plans, while still carrying out its mandate to protect workers' 
pensions and the pension insurance program. PBGC will continue 
to build on the achievements of 1997 to ease the burdens on 
providers of defined benefit pensions.
    Defined benefit plans offer distinct advantages to workers:
           Predictable benefits
           Secure benefits
           Lifetime benefits
    To further encourage defined benefit pensions, PBGC has 
begun to seek opportunities to reach out with information and 
education strategies to communicate the value of defined 
benefit pension plans to both employers and employees. Defined 
benefit retirement plans offer numerous advantages. Workers can 
earn a reasonable retirement benefit even if they were not 
covered by a retirement plan earlier in their career, and they 
can know in advance what benefits they will receive at 
retirement. These retirement benefits are not dependent on the 
amount of salary that workers are willing or able to 
contribute, and the retirement benefit is not subject to 
fluctuations of the stock market. The benefit is paid as an 
annuity for the life of a worker, no matter how long the worker 
lives. The defined benefit plan must also pay a lifetime 
survivor annuity to the worker's surviving spouse, unless both 
the worker and spouse elect otherwise.
    Defined benefit plans offer distinct advantages to 
employers:
           Valuable retirement benefits for workers
           Flexible benefit options
           Investment advantages
    Defined benefit plans provide more flexibility for 
employers to design different types of benefits packages for 
their workforces. For example, a defined benefit plan can be 
used to accomplish corporate workforce goals by providing early 
retirement incentives. Employers also can choose to add 
valuable benefits such as extra spousal benefits, disability 
benefits, or cost-of-living adjustments. There are investment 
advantages as well for employers. The collective investment of 
plan assets can result in higher plan investment returns, and 
favorable interest rates and economic conditions can reduce an 
employer's contribution. Finally, PBGC guarantees to pay most 
of a worker's pension benefit if the employer cannot afford to 
pay the benefits or goes out of business.
    Defined benefit pensions have and will continue to play an 
important role in the effort to provide American workers with a 
secure retirement.

                    single-employer program exposure

    PBGC's expected future claims are dependent on two factors: 
the amount of underfunding in the pension plans it insures 
(i.e., the exposure), and the likelihood that plan sponsors 
encounter financial distress that results in bankruptcy and 
plan termination (i.e., the probability of claims).
    Expected claims over the near term are related to 
underfunding in plans sponsored by firms that exhibit weakness 
in their creditworthiness. PBGC assigns plan sponsors to this 
category based upon factors such as whether the firm has a 
below-investment-grade bond rating. PBGC calculates 
underfunding for vested benefits using data from a variety of 
sources, including the annual confidential filings that 
companies with plans with at least $50 million in underfunding 
for vested benefits are required to make under Section 4010 of 
ERISA.
    Underfunding by companies in this category is classified as 
PBGC's ``reasonably possible'' exposure, for purposes of PBGC's 
financial statements, as required under generally accepted 
accounting principles. As of December 31, 1996, baseline 
``reasonably possible'' exposure was $21 billion, as compared 
to $22 billion one year earlier.
    Expected claims in the longer term are more difficult to 
quantify either in terms of a single number or a limited range. 
That is, the amount of PBGC's future claims depends on many 
factors, including current underfunding among insured plans, 
changes in underfunding over time, and bankruptcies among plan 
sponsors. These factors are influenced by future economic 
conditions, most particularly those affecting interest rates, 
stock returns, and the rate of business failure.
    Claims also depend importantly on the financial performance 
and the plan funding history of the individual insureds. If 
firms that enter bankruptcy also are those that sponsor 
underfunded defined benefit plans, then claims could be high 
even if overall economic conditions are favorable, and vice 
versa. It is not possible to predict either economic conditions 
or which particular firms will enter bankruptcy in the future. 
Indeed, PBGC needs to be prepared financially to handle a range 
of outcomes.
    In assessing the longer term, underfunding in companies 
with investment-grade bond ratings also must be considered 
because, over time, some of these companies will experience 
deterioration of their financial condition. Although this 
underfunding is referred to as ``remote'' (to distinguish it 
from ``reasonably possible''), PBGC will incur claims from some 
of these firms over the next ten years.
    In previous years, we based our estimates of total pension 
underfunding on information received from companies during the 
process of creating a list of the 50 companies with the largest 
underfunded pensions. With the reporting requirements in the 
Retirement Protection Act of 1994 fully implemented, the agency 
discontinued the Top 50 process in 1997.
    Using data obtained for the last Top 50 list, PBGC reported 
overall pension underfunding of $64 billion as of the end of 
1995. While the agency does not have a comparable estimate for 
aggregate underfunding as of the end of 1996, various other 
indices used by PBGC indicate that a moderate reduction in 
underfunding did take place in 1996.
    Underfunding is sensitive to changes in interest rates or 
stock returns, or the development of underfunding in some large 
firms. There is clear volatility in underfunding over time, as 
seen in the period from 1980 to 1995.
    Likewise, claims vary substantially over time reflecting 
overall economic conditions, the performance of some particular 
industries, or the bankruptcy of a few very large companies. 
Volatility and the concentration of claims in a small number of 
terminations characterize PBGC expected claims. This volatility 
is apparent in the agency's historical claims experience.
    Methodology for considering long-term claims.--No single 
underfunding number or range of numbers--even the reasonably 
possible estimate--is sufficient to evaluate PBGC's exposure 
and expected claims over the next ten years. There is too much 
uncertainty about the future, whether the performance of the 
economy or the performance of the companies that sponsor the 
insured pension plans.
    The proper way to assess future claims is with advanced 
analytic tools such as stochastic models. The agency is now in 
the final stages of peer review of its stochastic model, the 
Pension Insurance Modeling System (PIMS). PIMS models future 
underfunding under current funding rules as a function of a 
variety of economic parameters and recognizes that all 
companies have some chance of bankruptcy, and that these 
probabilities can change significantly over time. The model 
recognizes the uncertainty in key economic parameters 
(particularly interest rates and stock returns). The model 
simulates the flows of claims that could develop under 
thousands of combinations of economic parameters and bankruptcy 
rates.
    Until PIMS is fully peer-reviewed, we will continue to use 
our existing model that portrays three potential claims 
scenarios and does not assign probabilities to their 
occurrence.
    Ten-Year Forecasts.--PBGC's current methodology for the 
ten-year forecasts relies on an extrapolation of the agency's 
claims experience and the economic conditions of the past two 
decades.
    Forecast A is based on the average annual net claims over 
PBGC's entire history ($467 million per year) and assumes the 
lowest level of future losses. Forecast A projects steady 
improvement in PBGC's financial condition, resulting in a 
surplus of $8.0 billion at the end of 2007.
    Forecast B, which assumes the mid-level of future losses, 
is based upon the average annual net claims over the most 
recent 11 fiscal years ($545 million per year). Forecast B 
projects net income levels that, while lower than Forecast A, 
still lead to a surplus of $6.9 billion at the end of 2007.
    Forecast C is highly pessimistic and reflects the potential 
for heavy losses from the largest underfunded plans by assuming 
that the plans that represent the reasonably possible exposure 
will terminate uniformly over the next ten years in addition to 
a modest number of lesser terminations each year. This forecast 
assumes $2.1 billion of net claims each year, resulting in a 
return to a deficit position and the steady growth of PBGC's 
deficit throughout the ten-year period to $17.1 billion.
    The 1997 forecasts share several assumptions. Average 
annual net claims and projected claims are in 1997 dollars. The 
present value of future benefits is valued at 6.18% and using 
other actuarial assumptions that are consistent with 
assumptions used to value the present value of future benefits 
in the financial statements as of September 30, 1997. PBGC's 
assets are projected to earn 6.18% annually. Benefits for plans 
terminating in the future are assumed to grow at 4.38% annually 
until termination. Plan funding ratios are assumed to increase 
at 1.5% per year from historical averages and recoveries from 
plan sponsors are assumed to be constant at 10% of plan 
underfunding. The number of participants in insured single-
employer plans is assumed to remain constant. The flat-rate 
portion of the single-employer premium is assumed to remain 
constant at $19 per participant. Receipts from the variable-
rate portion of the premium are projected on the basis of a 
constant 30-year U.S. Treasury bond rate of 6.5%. Assumed 
administrative expenses are consistent with PBGC's 1999 
President's Budget submission.

                 Improving Internal Management Support

    With a strategic goal of improving internal management 
support operations, PBGC is committed to a strong 
infrastructure built on modern technology and comprehensive 
employee development.

                          technology advances

    PBGC continued to bring new automated information 
management systems on-line, using commercial off-the-shelf 
software as appropriate. Some of the new systems, such as a new 
trust fund accounting system, converted critical applications 
from outmoded mainframe computers to modern PBGC-based "client-
server" systems using networked personal and small multi-user 
computers. Another system that will become operational in 1998 
will account for revolving fund activities with the use of off-
site Department of Commerce computers for which PBGC has made a 
special arrangement. Both of the new accounting systems will be 
part of PBGC's integrated core financial system.
    The agency also worked to improve existing systems while 
applying finishing touches to the major new systems implemented 
within the past two years. Enhanced software for the Early 
Warning Program provides the program's financial analysts with 
easier access to the detailed information they need for their 
analyses, freeing them to handle more cases and address more 
issues. PBGC expanded the availability of the new participant 
information management and image processing systems that had 
been developed for insurance operations so that other 
departments could begin making use of the information in these 
systems. The agency also established an in-house Document 
Management Center to centralize and facilitate mail handling, 
imaging, and limited automated letter generation, and an off-
site facility has been set up to handle large-scale production 
and mailing of automated letters.
    While PBGC has not yet achieved full integration of its 
automated information systems, the systems it is developing do 
allow easier sharing of data. In addition, the agency adopted a 
corporate-wide systems development methodology that will ensure 
that all future information systems and applications will be 
developed consistent with existing corporate standards and 
systems.
    PBGC's advances in technology are beginning to demonstrate 
value beyond the pension insurance program. During 1997, PBGC 
received special recognition from the Smithsonian Institution 
for using information technology ``for the benefit of 
mankind.'' Information on the premium accounting system will be 
added to the Smithsonian's Permanent Research Collection of 
Information Technology at its National Museum of American 
History. Separately, in support of the President's initiative 
to strengthen the District of Columbia and in memory of PBGC's 
late Executive Director Martin Slate, the Department of Labor 
and PBGC donated 45 surplus computers to a local elementary 
school, increasing the accessibility of computers from one for 
every eight students to one for every four students. PBGC 
volunteers subsequently donated time and materials to wire the 
school for access to the Internet.

                          employee development

    PBGC added new courses to expand its in-house employee 
training program, which also was renamed the Martin Slate 
Training Institute in memory of the late PBGC Executive 
Director. Secretary of Labor Alexis Herman joined PBGC's then-
Acting Executive Director John Seal and Mr. Slate's widow, Dr. 
Caroline Poplin, in a June 1997 ceremony dedicating the newly 
named Training Institute in commemoration of Mr. Slate's 
commitment to employee training and development.
    By yearend the agency had completed development of ten new 
technical courses and was in the process of developing six 
additional courses. The new courses focus on such areas as the 
agency's new information systems, pension law, and the 
processing and administration of terminated plans. Other 
innovations during the year included a new mentoring program 
for professional staff and an expert witness-attorney trial 
advocacy training program to sharpen the expert testimony 
skills of PBGC analysts and actuaries and the trial skills of 
PBGC attorneys.

                  Executive Director's Message (1998)

    I am happy to report that, for the third consecutive year, 
the Pension Benefit Guaranty Corporation's insurance programs 
generated an accounting surplus. Because of low claims, good 
investment performance, and adequate premium revenues, PBGC is 
financially healthier than ever before. But I am also very 
mindful that it was not so very long ago that PBGC's financial 
condition was precarious. As the U.S. General Accounting Office 
stated in its recent evaluation of PBGC, ``While PBGC's 
financial condition has significantly improved, risks to the 
long-term financial viability of the insurance programs 
remain.'' We remain vigilant.
    PBGC's improving financial position has allowed me to focus 
my efforts on strengthening and expanding the defined benefit 
system. We face an enormous challenge in helping to provide 
retirement security for the baby boom generation and others 
nearing retirement. If we are to achieve the goal of retirement 
income security for our aging workforce, I believe the solution 
must include defined benefit plans. Defined benefit plans 
provide a predictable, secure pension for life, and even small 
monthly benefit amounts can make a large difference in a 
retiree's standard of living.
    I believe that the defined benefit system is in trouble. 
Both the number of plans and the number of workers whose 
primary pension is a defined benefit plan have declined 
dramatically. To remedy this, I asked a PBGC team to work with 
pension professionals and other stakeholders to find out what 
can be done to make defined benefit plans more attractive. We 
have received a lot of good ideas and we are working to develop 
them to strengthen and expand the defined benefit system. That 
will be my primary objective in 1999. It is important that we 
succeed. The retirement security of millions depends on our 
efforts.
                                          David M. Strauss,
                                                Executive Director.

                           Strategic Planning

    PBGC continued to follow the five-year strategic plan first 
developed in 1997. The plan established four broad goals that 
form the framework for PBGC to structure both its short-term 
and long-term plans. PBGC's goals are to:
          (1) protect existing defined benefit plans and their 
        participants and encourage new plans,
          (2) provide high-quality services and accurate and 
        timely payment of benefits to participants,
          (3) strengthen financial programs and systems to keep 
        the pension insurance system solvent, and
          (4) improve internal management support operations.
    The strategic plan establishes performance measures through 
which PBGC assesses its progress toward each of its strategic 
goals. The performance measures track specific results that are 
significant to PBGC's customers and gauge PBGC's solvency and 
customer service accomplishments. PBGC will periodically review 
its performance measures for necessary adjustments as 
circumstances change and program performance reporting 
capabilities improve.

                                    1998 PBGC Corporate Performance Measures
----------------------------------------------------------------------------------------------------------------
  Measure and applicable goal          1998 milestone              1998 result              Baseline (1997)
----------------------------------------------------------------------------------------------------------------
Pension Loss Prevention (total   (1)......................  100%.....................  88.5%.
 value of loss prevention as
 compared to total underfunded
 vested benefits) (goal 1).
Achieve 90% participant          81%......................  Available in 3/99........  79%.
 satisfaction regarding
 responses to inquiries (goal
 2).
Provide post-audit estimated     To be established in 1999  93.5%....................  90%.
 benefits to new retirees that
 are within 5% of final
 benefits in clear,
 understandable language (goal
 2).
Provide final accurate benefit
 determinations to participants
 within 3-5 years of plan
 trusteeship (goal 2):
    (a) age of pretrusteeship    No more than 4 years.....  98.6% 4 years............  Not available.
     inventory.
    (b) timeliness of final      7-8 years................  5.39 years...............  5.95 years.
     benefit notifications.
Collect 97% of total pension     95%......................  99%......................  97%.
 insurance premiums due (goal
 3).
Approximate comparable 5-year    (1)......................
 investment indices for PBGC's
 portfolio investment (goal 3).
----------------------------------------------------------------------------------------------------------------
1 Not projected--determined annually based on actual results.


                              [In percent]
------------------------------------------------------------------------
                                        1998 Result--    Baseline (1977)
                                     -----------------------------------
                                        PBGC    Index     PBGC    Index
------------------------------------------------------------------------
Equities............................     18.1     17.6     20.6     20.6
Fixed-income........................      9.2      9.2     10.9      8.9
------------------------------------------------------------------------

                   Promoting Defined Benefit Pensions

    Providing retirement income security for the baby boom 
generation and others nearing retirement is one of the most 
compelling domestic challenges facing the country. The problem 
is becoming increasingly urgent because of the huge number of 
people affected and the short time left to deal with this 
issue. There are 25 million people between ages 53 and 62 who 
are now close to the end of their working careers, and right 
behind them are 78 million ``baby boomers,'' 18 million of whom 
are already at least 48 years old.
    People are not saving enough, early enough in life, to meet 
their retirement needs. Many low-income workers have no savings 
at all, and most older workers have not saved very much either. 
Half of America's households headed by people between ages 55 
and 64 have wealth of less than $92,000, the bulk of which is 
equity in their homes. Nor is the savings situation likely to 
improve soon. Even those with a 401(k) plan are not saving 
enough. An Employee Benefit Research Institute study of 6.6 
million 401(k) participants shows that the average 401(k) 
balance is only $37,000 and that nearly half of these 
participants have less than $10,000 in their accounts. Many 
low-income workers do not make enough to contribute anything to 
their 401(k) accounts. President Clinton has taken an important 
step to address this problem by proposing to establish 
universal savings accounts to give all Americans the 
opportunity to save.
    Not only are workers not saving enough on their own, but 
many have no pension plan. Half of the private-sector workforce 
is not covered by any employer-sponsored retirement plan, and 
only 20 percent of the workers in small businesses have any 
retirement plan. Among lowwage workers, only 8 percent have a 
plan.
    Historically, the defined benefit plan has provided 
adequate benefits for low-income workers who cannot afford to 
save and for older workers who failed to start saving early 
enough.
    Yet, despite the value of defined benefit plans, the number 
of plans insured by PBGC has decreased from 114,000 in 1985 to 
44,000 today, with most of the decline among smaller plans. The 
number of active workers in all plans has dropped from 29 
million in 1985 to fewer than 25 million in 1994.
    To encourage more employers to offer defined benefit plans, 
the Administration proposed a simplified defined benefit plan 
called SMART (Secure Money Annuity or Retirement Trust) for 
small businesses with 100 or fewer employees. SMART combines 
many of the best features of defined benefit and defined 
contribution plans. The plan would provide coverage for all 
eligible workers, and employers would have predictable funding 
based on conservative assumptions that would keep earned 
benefits fully funded at all times. SMART would guarantee a 
minimum annual retirement benefit for participants that 
employers could increase if the return on plan investments 
exceeded specified conservative assumptions, and PBGC would 
protect their benefits.
    SMART is an important step. More could be done for 
businesses of all sizes. At the request of the Executive 
Director, a PBGC team is working with employer and employee 
groups, pension professionals, and consultants who market 
pension plans to determine the reasons defined benefit plans 
are less prevalent today.
    PBGC's efforts to promote defined benefit plans in 1998 
laid the groundwork for future action. In 1999, PBGC will 
continue to work with stakeholders to develop ideas to 
strengthen and expand the defined benefit system.

                         Safeguarding Solvency

    PBGC reported further improvement in its financial 
condition, marking another year of progress toward its 
strategic goal of strengthening its financial programs and 
systems to keep the pension insurance system solvent. Fixed-
income investments, in particular, recorded dramatic gains. The 
Early Warning Program produced numerous settlements that 
protected the insurance program and hundreds of thousands of 
workers and retirees from pension losses. The agency also 
continued to meet legal challenges in courts across the 
country.

                          financial management

    Both PBGC insurance programs again posted significant 
financial gains due mainly to investment earnings. Investments 
of the larger single-employer program produced income of more 
than $2.1 billion. Premium income totaled $966 million, $100 
million less than in 1997 and nearly $200 million less than the 
record level reached in 1996. PBGC collected 99 percent of the 
premiums due, exceeding the target of 95 percent set under its 
strategic plan. However, companies' premium payments continued 
to decline because of reduced risk-based premium obligations. 
The investment earnings enabled the single-employer program to 
record net income of more than $1.5 billion, increasing the 
program's net surplus to more than $5 billion.
    The multiemployer program also continued to be financially 
strong, with net income of $122 million almost exclusively from 
investment income and an end-of-year net surplus of $341 
million. As of September 30, the program had assets of $745 
million and liabilities totaling $404 million primarily for 
nonrecoverable future financial assistance. Both the net income 
and net surplus represent record levels for the multiemployer 
program.

                     Year 200 Readiness Disclosure

    PBGC instituted a comprehensive review of its information 
systems, Operations, and third-party relationships to assess 
its readiness for the Year 2000. Under the leadership of the 
Chief Financial Officer, PBGC formed a cross-functional team to 
formulate the agency's Y2K plans.
    PBGC expects new automated systems implemented during 1998 
to be century-date-change ready and all systems requiring 
changes to become ready and to complete independent 
verification in 1999. PBGC is also working with its business 
partners to address their readiness for the Year 2000, but PBGC 
cannot ensure that other entities will be Y2K-compliant.
    This information is PBGC's Year 2000 Readiness Disclosure 
for the purpose of the Year 2000 Information and Readiness 
Disclosure Act.
    PBGC's financial statements have received their sixth 
straight unqualified opinion from the agency's auditors. The 
1998 audit was again performed by PricewaterhouseCoopers LLP 
under the direction and oversight of PBGC's Inspector General.
    After the year ended, the U.S. General Accounting Office 
issued a report, ``Pension Benefit Guaranty Corporation: 
Financial Condition Improving, But Long-Term Risks Remain,'' 
which cited PBGC's ``significantly'' improved financial 
condition. However, GAO also noted that long-term risks to the 
insurance program remain, many of which are beyond PBGC's 
control. These risks include continued underfunding among some 
large plans, downturns in the economy, problems in certain 
sectors of the economy, a significant decline in the stock 
market, and a substantial drop in interest rates. As the report 
stated, ``An economic downturn and the termination of a few 
plans with large unfunded liabilities could quickly reduce or 
eliminate PBGC's surplus.'' The GAO report provided independent 
validation that PBGC needs to be vigilant in managing its risks 
and cautious about changes that could affect liabilities or 
revenues.
    Investment Program--The Corporation's investable assets 
consist of premium revenues accounted for in the Revolving 
Funds and assets from terminated plans and their sponsors 
accounted for in the Trust Funds. By law, PBGC is required to 
invest the Revolving Funds in fixed-income securities; current 
policy is to invest these funds only in Treasury securities 
agency has more discretion in its management of the Trust 
Funds, which it invests primarily in high-quality equities. The 
asset allocation is designed to provide sound long-term 
performance.
    PBGC has structured its investment portfolio to improve the 
agency's financial condition in a prudent manner. The Revolving 
Fund assets are invested to earn a competitive return and 
partially offset changes in its benefit liabilities. The 
agency's investment in equities provides overall portfolio 
diversification and a higher long-term expected return, within 
prudent levels of risk. PBGC uses institutional investment 
management firms to invest its assets subject to PBGC 
oversight. PBGC continually reviews its investment strategy to 
ensure that the agency maintains an investment structure that 
is consistent with its long-term objectives and 
responsibilities.
    As of September 30, 1998, the value of PBGC's total 
investments, including cash, was approximately $18.1 billion. 
The Revolving Fund's value was $11.6 billion and the Trust 
Fund's value was $6.5 billion. PBGC's fund allocation shifted 
toward fixed income and cash during 1998 due primarily to 
strong fixed income returns. Cash and fixed-income securities 
represented 66 percent of the total assets invested at the end 
of the year, as compared to 61 percent at the end of 1997, 
while the equity allocation stood at 33 percent of all 
investments compared to 38 percent one year earlier. A very 
small portion of the invested portfolio remains in real estate 
and other financial instruments.

                           INVESTMENT PROFILE
------------------------------------------------------------------------
                                                       September 30--
                                                   ---------------------
                                                       1998       1997
------------------------------------------------------------------------
Fixed-income assets:
    Average quality...............................        AAA        AAA
    Average maturity (years)......................       21.3       21.0
    Duration (years)..............................       11.3       10.5
    Yield to Maturity (%).........................        5.1        6.4
Equity assets:
    Average price/earnings ratio..................       19.7       26.0
    Dividend yield (%)............................        1.6        1.6
    Beta..........................................       1.04       1.04
------------------------------------------------------------------------

    Fiscal year 1998 was positive for capital market 
investments and PBGC's investment program. For the year, PBGC's 
fixed-income program returned 22.8% while its equity program 
advanced 2.1 %. PBGC's five-year returns equalled or exceeded 
their comparable market indices, surpassing the requirements of 
the agency's strategic plan. For the year, PBGC reported income 
of more than $2.1 billion from fixed-income investments and 
$121 million from equity investments.

                                             INVESTMENT PERFORMANCE
                                       (Annual rates of return on percent)
----------------------------------------------------------------------------------------------------------------
                                                                          September 30--            Five years
                                                                 -------------------------------- endedSept. 30,
                                                                       1998            1997            1998
----------------------------------------------------------------------------------------------------------------
Total Invested Funds............................................            14.4            21.9            11.9
Equities........................................................             2.1            37.6            18.1
Fixed-income....................................................            22.8            13.5             9.2
Trust funds.....................................................             2.1            35.6            16.2
Revolving funds.................................................            22.4            13.3             9.1
Indices:
    Wilshire 5000...............................................             3.3            38.0            17.6
    S&P 500 Stock Index.........................................             9.2            40.4            19.9
    Lehman Brothers Long Treasury Index.........................            22.1            13.2             9.2
----------------------------------------------------------------------------------------------------------------

                    single-employer program exposure

    PBGC's ``expected claims'' are dependent on two factors: 
the amount of underfunding in the pension plans that PBGC 
insures (i.e., exposure), and the likelihood that corporate 
sponsors of these underfunded plans encounter financial 
distress that results in bankruptcy and plan termination (i.e., 
the probability of claims).
    Over the near term, expected claims result from 
underfunding in plans sponsored by financially weak firms. PBGC 
treats a plan sponsor as financially weak based upon factors 
such as whether the firm has a below-investment-grade bond 
rating. PBGC calculates the underfunding for plans of these 
financially weak companies using the best available data, 
including the annual confidential filings that companies with 
large underfunded plans are required to make to PBGC under 
Section 4010 of ERISA.
    For purposes of its financial statements, PBGC classifies 
the underfunding of financially weak companies as ``reasonably 
possible'' exposure, as required under generally accepted 
accounting principles. As of December 31, 1997, PBGC's 
estimated ``reasonably possible'' exposure ranged from $15 
billion to $17 billion.
    Over the longer term, exposure and expected claims are more 
difficult to quantify either in terms of a single number or a 
limited range. Claims are sensitive to changes in interest 
rates and stock returns, overall economic conditions, the 
development of underfunding in some large plans, the 
performance of some particular industries, and the bankruptcy 
of a few large companies. Large claims from a small number of 
terminations and volatility characterize the agency's 
historical claims experience and are likely to affect PBGC's 
potential future claims experience as well.
    Despite the exceptional economic conditions of recent 
years, it is not reasonable to assume that future experience 
will be as favorable to PBGC. PBGC has had a surplus for only 
three years after running a deficit for more than 20 straight 
years. Furthermore, with premium changes built into the reforms 
of the Retirement Protection Act of 1994, PBGC expects its 
variable-rate premium revenues to decline substantially after 
the year 2000.
    After reviewing PBGCs financial situation, the U.S. General 
Accounting Office concluded on October 16, 1998, that: 
``Although PBGC's financial condition has significantly 
improved over the past few years, risks remain from the 
possibility of an overall economic downturn or a decline in 
certain sectors of the economy, substantial drops in interest 
rates, and actions by sponsors that reduce plan assets. These 
risks could threaten the long-term viability of the insurance 
programs. Further, PBGC has only a limited ability to protect 
itself from risks to the insurance programs.''
    Methodology for considering long-term claims.--No single 
underfunding number or range of numbers--even the reasonably 
possible estimate--is sufficient to evaluate PBGC's exposure 
and expected claims over the next ten years. There is too much 
uncertainty about the future, both with respect to the 
performance of the economy and the performance of the companies 
that sponsor the insured pension plans.
    The proper way to assess future claims is with advanced 
analytic tools such as stochastic models, which incorporate 
random events. PBGC has developed a stochastic model to 
evaluate its exposure, the Pension Insurance Modeling System 
(PIMS), and, with this report, the agency is adopting this 
model for its forecasts.
    PIMS portrays future underfunding under current funding 
rules as a function of a variety of economic parameters. The 
model recognizes that all companies have some chance of 
bankruptcy and that these probabilities can change 
significantly over time. The model also recognizes the 
uncertainty in key economic parameters (particularly interest 
rates and stock returns). The model simulates the flows of 
claims that could develop under thousands of combinations of 
economic parameters and bankruptcy rates.
    Under the model, median claims over the next ten years will 
be about $600 million per year (expressed in today's dollars); 
that is, half of the scenarios show claims above $600 million 
per year, and half below. The mean level of claims (that is, 
the average claim) is much higher, more than $900 million per 
year. The mean is higher because there is a chance under some 
scenarios that claims could reach very high levels. For 
example, under the model, there is a ten percent chance that 
claims could exceed $2.1 billion per year. Despite PBGC's 
recent favorable experience, the financial condition of the 
agency could seriously deteriorate.
    PIMS projects PBGC's potential financial position by 
combining simulated claims with simulated premiums, expenses, 
and investment returns. The mean outcome is an $8.8 billion 
surplus in 2008 (in present value terms). However, the model 
also shows the potential for significant downside outcomes. In 
particular, there is nearly a 20 percent chance that the agency 
could return to a deficit in the next ten years and a ten 
percent chance that the deficit could exceed $6.3 billion in 
2008 (in present value terms). These outcomes are most likely 
if the economy performs poorly, in which case PBGC may 
experience large claims amounts and investment losses. PBGC is 
continuing to analyze the best way to manage and reduce the 
risk of insolvency.
    Comparison to the Previous Forecast Method.--PBGC's past 
methodology for the tenyear forecasts relied on an 
extrapolation of the agency's claims experience and the 
economic conditions of the past two decades. Although PBGC is 
now using a new method for forecasting its future financial 
condition, the agency also prepared forecasts using the old 
methodology for comparison with PIMS.
    Forecast A is based on the average annual net claims over 
PBGC's entire history ($527 million per year) and assumes the 
lowest level of future losses. Forecast A projects steady 
improvement in PBGC's financial condition, resulting in a 
surplus of $11.5 billion at the end of 2008 ($6.6 billion in 
present value terms for comparison to PIMS).
    Forecast B, which assumes the mid-level of future losses, 
is based upon the average annual net claims over the most 
recent 11 fiscal years ($611 million per year). Forecast B 
projects net income levels that, while lower than Forecast A, 
still lead to a surplus of $10.5 billion at the end of 2008 
($6.0 billion in present value terms).
    Forecast C reflects the potential for heavy losses from the 
largest underfunded plans by assuming that the plans that 
represent the reasonably possible exposure will terminate 
uniformly over the next ten years in addition to a modest 
number of lesser terminations each year. This forecast assumes 
$1.5 billion of net claims each year and projects a $2.5 
billion deficit in ten years ($1.4 billion in present value 
terms).
    Technical Notes.--Forecasts A, B, and C share several 
assumptions. Average annual net claims and projected claims are 
in 1998 dollars. PBGC calculated the present value of future 
benefits using an interest rate of 5.71% and other actuarial 
assumptions that are consistent with assumptions used to value 
the present value of future benefits in the financial 
statements as of September 30, 1998. PBGC's assets are 
projected to earn 5.71% annually. Benefits for plans 
terminating in the future are assumed to grow at 3.81% annually 
until termination. Plan funding ratios are assumed to increase 
at 1.5% per year from historical averages and recoveries from 
plan sponsors are assumed to be constant at 10% of plan 
underfunding. The number of participants in insured single-
employer plans is assumed to remain constant. The flat-rate 
portion of the singleemployer premium is assumed to remain 
constant at $19 per participant. Receipts from the variable-
rate portion of the premium are projected on the basis of a 
constant 30-year U.S. Treasury bond rate of 5.2%. Assumed 
administrative expenses are consistent with PBGC's 1999 
President's Budget submission.

                            loss prevention

    Under its Early Warning Program, PBGC continued to monitor 
more than 500 companies with pension plans underfunded by at 
least $5 million in order to identify transactions that could 
jeopardize pensions and to arrange suitable protections for 
those pensions and the pension insurance program. During 1998, 
PBGC negotiators reached agreements valued at nearly $1.1 
billion with 35 companies, including Pepsico, Fruit of the 
Loom, Sunbeam, Pillowtex, and Inland Steel Company. These 
agreements provided contributions, security, and other 
protections for the pensions of about 257,000 workers and 
retirees. Loss prevention is PBGC's principal performance 
measure for its strategic goal of protecting existing defined 
benefit plans and their participants; with regard to these 
agreements, PBGC is able to report a loss prevention rate of 
100 percent for 1998.

                               litigation

    PBGC continues to face challenges in courts across the 
country, a number of which threaten to impair the agency's 
ability to recover its losses for underfunded plans from the 
employers responsible for those plans. At the end of the year, 
PBGC had 132 active cases in state and federal courts and 830 
bankruptcy cases.
    Several of the most significant cases concerned the 
priority and value of PBGC's claims for losses from plan 
terminations:
    Copperweld Steel Company.--PBGC continued to pursue 
bankruptcy claims to recover amounts due PBGC and Copperweld's 
three terminated pension plans, which covered about 3,000 
workers and retirees. The company's liquidation trustee 
contests whether PBGC's claims for unpaid minimum funding 
contributions in excess of $1 million are entitled to tax 
priority, and whether the assumptions PBGC prescribes in its 
regulations appropriately measure PBGC's claims for unfunded 
benefit liabilities. These issues are central to PBGC's ability 
to recover its losses from employers in bankruptcy. In December 
1997, the bankruptcy court ruled for the liquidation trustee's 
position on both issues. PBGC and the liquidation trustee 
negotiated an agreement that will expedite PBGC's appeal of 
these two programmatic issues to the district court.
    CF&I Steel Corporation.--PBGC continued to pursue its 
claims against the reorganized CF&I for a CF&I plan that was 
underfunded by about $221 million when terminated in March 
1992. In August 1998, the Tenth Circuit Court of Appeals 
adversely decided PBGC's appeal regarding the treatment of its 
claims in bankruptcy. The court found that PBGC valuation of 
its claim for unfunded benefit liabilities conflicts with the 
Bankruptcy Code and affirmed lower court decisions reducing 
PBGC's claim to about $123 million. The court also found that 
PBGC's claim for unpaid minimum funding contributions is not 
entitled to tax priority and that only a small portion of this 
claim is entitled to administrative priority. PBGC's subsequent 
petition for rehearing by the full appeals court was denied in 
October 1998. PBGC is considering whether to seek further 
review.
    PBGC v. Skeen (In re Bayly Corporation).--Just after 
yearend, PBGC received an adverse ruling from the Tenth Circuit 
Court of Appeals in this case of first impression. The court 
rejected PBGC's argument that a portion of its unfunded 
liability claim is entitled to tax priority under the 
Bankruptcy Code. The appeals court therefore affirmed the 
decisions of the lower courts denying priority to this claim.
    Other major cases in 1998 included:
    Hughes Aircraft Company v. Jacobson.--On January 25, 1999, 
the U.S. Supreme Court unanimously ruled that the Hughes 
pension plan was not terminated merely because it was amended. 
The Court expressly stated that the provisions of Title TV of 
ERISA ``constitute[ ] the sole avenues for voluntary 
termination'' of a pension plan. Hughes had amended its ongoing 
plan in 1991 to create a non-contributory benefit structure. 
Prior to the amendment, the plan, which was reportedly 
overfunded by $1 billion, had been funded by contributions from 
both employees and the employer. A group of retirees filed suit 
for a share of the plan's alleged surplus, claiming that the 
amendment created a new pension plan and terminated the old 
one. A district court dismissed the suit but was reversed on 
appeal. PBGC, along with the Department of Labor and the 
Internal Revenue Service, filed a ``friend-of-the-court'' brief 
urging the Court to reverse the Ninth Circuit decision. On the 
issue of most concern to PBGC, the government argued that the 
appeals court seriously misconstrued the plan termination 
requirements of Title IV in ruling that the plan amendment had 
``constructively'' terminated the plan even though the plan had 
not been terminated in accordance with Title IV, and the Court 
agreed.
    Pineiro, Brooks, and Beaumont v. PBGC.--In 1991, PBGC 
became trustee of three Pan Am pension plans underfunded by 
$914 million. Three former employees of Pan American World 
Airways later filed suit asking a district court to replace 
PBGC with an independent trustee. The court dismissed virtually 
all of the allegations as meritless, leaving open only an 
allegation concerning the timeliness of PBGC's notice of 
benefits to the Pan Am participants. The plaintiffs filed an 
amended complaint in January 1998 realleging PBGC delays in 
issuing benefit determinations as well as most of the dismissed 
allegations. PBGC's motion to dismiss the amended complaint was 
pending action by the district court at yearend. Despite the 
exceedingly poor condition of company records and the 
difficulties caused by Pan Am's protracted bankruptcy 
proceedings, PBGC has been paying benefits to Pan Am retirees 
continuously since taking over the plans and has completed 
benefit determinations for more than 44,000 of the 53,000 
former Pan Am workers and retirees. The agency expected to 
complete most of the remaining benefit determinations by the 
end of calendar year 1998.
    White Consolidated Industries, Inc.--The district court's 
decision was pending at yearend on PBGC's claims for the 
estimated $120 million underfunding in pension plans that White 
transferred to Blaw Knox Corporation in 1985. PBGC alleges that 
a principal purpose of White in entering into the transaction 
was to evade pension liabilities. PBGC took over all the Blaw 
Knox plans either because they ran out of money or because they 
would have been abandoned after Blaw Knox ceased business in 
1994.

                     Providing High-Quality Service

    Listening to customers is an essential ingredient to 
premier customer service, to which PBGC management and staff 
are committed. PBGC continued its outreach to plan sponsors, 
plan participants, and pension professionals as it searched for 
ways to further improve its service.

                    single-employer program results

    Through its single-employer program, PBGC oversees 
terminations of fully funded plans and guarantees payment of 
basic pension benefits when underfunded plans must be 
terminated. The single-employer program covers about 33 million 
workers and retirees in more than 42,000 plans.
    Standard Terminations of Fully Funded Plans.--The number of 
standard terminations continued to decline from their peak of 
about 11,800 in 1990, with 2,475 submitted to PBGC in 1998. 
Most of these plans had 50 or fewer participants.
    PBGC audits a statistically significant number of completed 
terminations to confirm compliance with the law and proper 
payment of benefits. These audits generally have found few and 
relatively small errors in benefit payments, which plan 
administrators are required to correct. The errors arise 
primarily from use of incorrect interest-rate assumptions in 
valuing lump-sum distributions to plan participants. Due to 
PBGC's audits, in 1998 some 5,800 participants (about 4 percent 
of all participants in audited plans) received about $2.75 
million of additional benefits.
    Distress and Involuntary Terminations of Underfunded 
Plans.--During 1998 the agency completed the termination of 160 
underfunded plans, the vast majority of which were involuntary 
terminations by PBGC. In most cases termination was necessary 
because the sponsoring employer had gone out of business. Many 
of these plans had been under consideration for termination for 
a period of time and their actual termination dates occurred in 
earlier years, when the circumstances leading to their 
termination first arose.
    Trusteed Plans.--PBGC generally becomes trustee of a plan 
after the plan has been terminated, although not necessarily in 
the same year the plan was terminated. During 1998, PBGC became 
trustee of 187 single-employer plans covering 41,000 people. At 
yearend, the agency was in the process of trusteeing an 
additional 58 plans terminated in 1998 or earlier. In all, 
including 10 multiemployer plans previously trusteed, a total 
of 2,665 terminated plans were trusteed or were being trusteed 
as of the end of the year. (This total also reflects the 
elimination of five single-employer plans included in last 
year's total, which no longer required PBGC to become trustee.)
    When PBGC trustees a large plan, the agency organizes 
informational meetings with plan participants to allay their 
concerns and to explain about PBGC's insurance. In 1998, the 
agency held 21 such sessions across the country that reached 
about 3,000 people. Executive Director David Strauss often 
attended the sessions to meet the participants and answer their 
questions.
    Benefit Processing.--By the end of the year, PBGC was 
responsible for the current and future pension benefits of 
about 472,000 participants from single-employer and 
multiemployer plans. These include 209,300 retirees who 
received benefit payments totaling $848 million.
    In 1998, PBGC issued more than 61,100 benefit 
determinations. The agency's improved automation and 
adjustments to basic benefit payment policies enabled PBGC 
staff to further reduce the amount of time needed to produce 
final benefit determinations. On average, PBGC issued final 
benefit determinations 5.39 years after the date it had 
trusteed the participant's plan, compared to the 8.75 year 
average of just two years earlier. In doing so, the agency 
exceeded the performance goal of 7-8 years set for 1998 under 
its strategic plan, which directs PBGC to issue final 
determinations within 3-5 years of plan trusteeship. PBGC 
routinely pays benefits in estimated amounts until final 
determinations are completed.
    Appeals Processing.--PBGC's Appeals Board reviews appeals 
of certain PBGC determinations. Most of the appeals are from 
people disputing their benefit determinations. Typically, about 
2 percent of all benefit determinations are appealed. During 
1998, the Appeals Board received 3,705 appeals, a greater 
percentage of benefit determinations than is usual due to a 
high rate of form-letter appeals relating to one large pension 
plan. The Appeals Board decided 779 appeals during the year, 
closing them within 349 days, on average, of the date received. 
The Board also made substantial progress toward decisions on 
the high number of appeals filed this year.
    Pension Search Program.--During 1998, the third year of 
operation for the missing participants clearinghouse, 552 
companies terminating fully funded plans asked PBGC for 
assistance in finding 4,855 missing people. Of these, 3,687 
were due over $6.6 million in benefits and 1,168 were covered 
by annuity contracts that will pay their benefits when they are 
found. By yearend, PBGC had confirmed addresses for 769 of the 
missing people and paid more than $1.5 million in benefits to 
493 of them. PBGC is continuing its search for valid addresses 
for the remaining missing people.
    The agency maintains a listing on the Internet called the 
Pension Search Directory as an additional means of locating 
people who have frustrated all previous searches by either 
their former employers or PBGC. Since its inception in December 
1996, the Directory has enabled PBGC to find nearly 1,400 
people who were owed more than $4 million in benefits plus 
interest. By the end of 1998, the total listing included almost 
7,200 people who had worked for about 1,000 companies and were 
owed nearly $13 million in pension benefits. The Directory is 
found on the Internet at http://search.pbgc.gov.

                     multiemployer program results

    The multiemployer program, which covers about 8.7 million 
workers and retirees in about 2,000 insured plans, is funded 
and administered separately from the single-employer program 
and differs from the single-employer program in several 
significant ways. The multiemployer program covers only 
collectively bargained plans involving two or more unrelated 
employers. For such plans, the event triggering PBGC's 
guarantee is the inability of a covered plan to pay benefits 
when due at the guaranteed level, rather than plan termination 
as required under the single-employer program. PBGC provides 
financial assistance through loans to insolvent plans to enable 
them to pay guaranteed benefits.
    As PBGC stated in its June 1996 report on the multiemployer 
program's financial condition, ``The multiemployer program is 
financially strong. Since enactment of the current financial 
assistance program in 1980, the program's financial condition 
has improved from a deficit of $8.5 million to the current 
surplus . . . The program has had a surplus since 1982 . . . 
Projections show that the surplus should continue to grow under 
a wide range of economic scenarios.'' During 1998, PBGC updated 
the data used in preparing the report and found that the 
results remained substantially the same.
    Financial Assistance.--The multiemployer program has 
received relatively few requests for financial assistance. 
Since 1980, PBGC has provided assistance to only 22 of the 
2,000 insured plans, with a total value of approximately $38 
million net of repaid amounts. In 1998, 18 of these plans were 
still receiving assistance of about $6 million annually.
    In January, the Anthracite Health and Welfare Fund and 
Pension Plan, a plan for coal miners, became the first 
multiemployer plan to repay financial assistance from PBGC. The 
Fund repaid PBGC $3.2 million for financial assistance provided 
in the 1980's to enable the Fund to pay benefits during 
temporary periods of insolvency.
    Legislation.--The Administration has recommended that the 
Congress more than double the current maximum guarantee from 
$5,850 to $12,870. The multiemployer program's benefit 
guarantee has been at the same level since 1980, and inflation 
has cut the real value of the guarantee almost in half. 
Currently, less than 1 percent of all workers and retirees in 
insolvent multiemployer plans have all their benefits 
guaranteed. With the change, at least three-quarters of all 
plan participants in future insolvencies would receive their 
full benefits through PBGC's insurance. The guarantee increase 
would require no change in the multiemployer premium rate. The 
proposed increase in the guarantee has been pending before the 
Congress since 1996.

                            customer service

    PBGC's Customer Service Center for participants in trusteed 
plans continued to meet higher-than-expected demands. When the 
center began operations three years ago, PBGC projected that it 
would handle about 8,000 calls per month with answer times 
averaging about 2 minutes. During the past year, the center 
handled, on average, more than 21,000 calls each month in 
slightly more than 2 minutes per call. Another 516,000 calls 
were answered through automated information.
    In 1998, PBGC began implementing President Clinton's plain 
language initiative. The agency started developing a Plain 
Language Guide for use by PBGC staff that includes, in part, a 
dictionary that defines technical terms commonly used by PBGC 
in more easily understandable language. The agency also began 
training staff in how to write in plain language. In addition, 
PBGC rewrote selected, frequently sent letters to customers 
using common everyday words and short sentences. These efforts 
will continue in 1999.
    PBGC also completed its first ``practitioner'' survey of 
plan administrators and pension professionals to determine 
their level of satisfaction with the agency's services. The 
results, together with those of the agency's third survey of 
plan participants conducted in 1997, were heartening and 
instructive. Both practitioners and participants found that 
PBGC's service was improving, with 79 percent of the surveyed 
participants and 54 percent of the practitioners rating PBGC's 
overall customer service as ``above average'' or 
``outstanding.'' Under its five-year strategic plan, one of 
PBGC's goals is to satisfy 90 percent of participants by the 
year 2002--the agency intends to set a satisfaction goal for 
practitioners after it reviews the results of its second 
practitioner survey, during the second quarter of 1999.

                   pbgc's customer service standards

    Our customers deserve our best effort as well as our 
respect and courtesy.
    On the first call from you, we will say:
           what we can do immediately and what will 
        take longer,
           when it will be done, and
           who will handle your request.
    We will call you if anything changes from what we first 
said, give you a status report and explain what will happen 
next.
    We will have staff available from 8:00 a.m.--5:00 p.m. 
Eastern time to answer your calls. If you leave a message, we 
will return the call within one workday.
    We will acknowledge your letter within one week of receipt.
    The practitioner survey suggested that PBGC could raise the 
overall satisfaction level simply by improving the timeliness, 
responsiveness, and follow-up to inquiries. Those surveyed made 
it clear they want their calls returned promptly and their 
questions resolved within three to five days and with only one 
or two calls. Many of these issues also surfaced in the 
participant surveys. As a result, PBGC revised its Customer 
Service Standards to reflect the type of service requested by 
its customers.
    In response to the surveys, PBGC formed several cross-
departmental teams of employees late in the year to develop 
recommendations for improvements in specific areas of service, 
including participant communications and billings for underpaid 
premium payments. The intensive effort, termed Reach for 
Excellence and Customer Happiness, allowed team members to tap 
each other's knowledge about different areas of the agency in 
identifying and addressing barriers to good customer service. 
The teams had wide discretion to propose solutions. Ultimately, 
many of the teams' recommendations were accepted, including 
toll-free telephone numbers for employers, plan administrators, 
and pension professionals and expansion of PBGC's website to 
include more information for plan participants. The agency was 
beginning to implement the recommendations as the year ended.
    PBGC initiated a number of changes in part to address 
issues raised by the surveys and to improve customer service. 
Of these, perhaps the most significant involved the extension 
of the premium filing due date by one month. Plan 
administrators and pension professionals have frequently 
expressed concern about the requirement that plans file their 
final premium payment one month earlier than the final due date 
for the Form 5500 annual information report they must file with 
the Internal Revenue Service. Some of the information needed to 
compute the PBGC premium is reported on the plan's Form 5500. 
The premium due date also coincided with the last day a company 
may contribute to its plan for the prior year, leading to 
problems in the calculation of a plan's funding level. The 
change in due date, effective for plan years beginning on or 
after January 1, 1999, will ease a substantial burden on plan 
administrators.
    The agency introduced an electronic version of its 
reportable events forms on its Internet website. Software on 
the website now allows employers and plan administrators to 
complete the form and submit it to PBGC by e-mail. In addition, 
PBGC issued a new publication, the ``Small Business Guide,'' to 
help small businesses with PBGC-insured plans understand the 
operation and requirements of the pension insurance program. 
The Guide summarizes all employer administrative 
responsibilities under the insurance program in a single, 
nontechnical reference publication.
    PBGC also began an effort to educate workers about defined 
benefit plans. Through a special section on its website and the 
issuance of a new publication called ``A Predictable, Secure 
Pension for Life,'' PBGC is providing easy-to-understand 
information about how traditional defined benefit plans operate 
and the advantages they offer.
    For plan participants in PBGC-trusteed plans, PBGC changed 
its policy on recovery of benefit overpayments to ensure that 
no one ever repays more than the actual amount of the 
overpayment. Until 1998, if a participant did not wish to repay 
an overpayment in a lump sum, PBGC made the recovery through a 
permanent reduction (generally capped at 10 percent) in the 
person's future benefit payments. Now, the reduction will cease 
when the total amount collected matches the amount by which the 
person had been overpaid. In addition, PBGC increased the 
maximum value of a benefit it will pay in a single, lump sum 
from $3,500 to $5,000. A participant still has the option of 
receiving the benefit as an annuity instead if that person's 
monthly benefit at normal retirement age is at least $25. PBGC 
also revised its procedures for valuing its recoveries for plan 
underfunding and unpaid contributions, which will help reduce 
the amount of time needed to complete final benefit 
determinations.

                        ITEM 27--POSTAL SERVICE

                              ----------                              


                   Programs Affecting Older Americans

                            ballots by mail

    A growing number of Americans are voting early by sending 
their ballots through the mail. After election officials make 
the decision to utilize this opportunity, the Postal Service 
has an obligation to ensure that officials know how to optimize 
use of the mail for voter registration and elections. There are 
numerous examples demonstrating that mail has enabled the 
achievement of greater voter participation while lowering costs 
to taxpayers. This phenomenon benefits, among others, the large 
population of senior citizens who otherwise might not be able 
to exercise their right to vote due to infirmities or inclement 
weather which may prevent them from getting to the polls.
    During 1998, the Postal Service worked with election 
officials from around the country to develop and distribute an 
Election Officials User Guide as a special resource manual to 
assist them in utilizing mail more efficiently and effectively 
for sending and receiving election ballots. The Postal Service 
also unveiled a new ``Official Election Mail'' logo which 
clearly distinguishes official election mail--voter 
registration materials, absentee ballots, and referendum 
information--from partisan political mail, campaign literature, 
and other mail.

                         carrier alert program

    Carrier Alert is a voluntary community service provided by 
city and rural delivery letter carriers who watch participant 
mailboxes for mail accumulation which might signal illness or 
injury. Accumulations of mail are reported by carriers to their 
supervisors, who then notify a sponsoring agency, through 
locally developed procedures, for follow-up action. The program 
completed its 16th year of operation in 1998 and continues to 
provide a lifeline to thousands of elderly citizens who live 
alone.

                        delivery service policy

    The Postal Service has a long-standing policy of granting 
case-by-case exceptions to delivery regulations based upon 
hardship or special needs. This policy accommodates the special 
needs of elderly, handicapped, or infirm customers who are 
unable to obtain mail from a receptacle located some distance 
from their home. Information on hardship exceptions to delivery 
receptacles can be obtained from local postmasters.

               services available from your rural carrier

    Rural carriers continue to provide their customers with 
retail services they have come to expect from the rural ``post 
office on wheels.'' Retail services provided include registered 
and certified mail, accepting parcels for mailing, and taking 
applications for money orders. Rural carriers also provide 
customers with receipts for such services.
    Retail services are available to all customers served by 
rural carriers but are most beneficial to those individuals who 
are elderly or have a physical handicap which limits their 
ability to go to the post office for these important services. 
Rural carriers provide their customers with almost all retail 
services available from the post office 302 days per year.

                        parcel delivery policies

    For postal customers who are unavailable to receive 
parcels, but who normally are at home, our letter carriers will 
automatically redeliver the article the following day. In 
addition, if the mailer requests, uninsured parcels are left at 
customer homes or businesses provided there is reasonable 
protection from weather and theft. Both of these policies make 
it easier for customers, particularly the elderly, to receive 
mail and minimize the need for trips to the post office.

                             accessibility

    The Postal Service is subject to the Architectural Barriers 
Act of 1968. The resulting standards for the design, 
construction, and alteration of leased and owned facilities, 
are published in Postal Service Handbook RE-4, Standards for 
Facility Accessibility by the Physically Handicapped.
    Significant progress continues to be made to increase the 
accessibility of the 36,000 Postal Service Facilities. In 
Fiscal Year 1998, approximately $1.5 billion was invested in 
new construction projects resulting in the completion of over 
800 new facilities. These projects were built fully accessible 
for elderly and disabled customers. The 1998 Building Design 
Standards comply with and in some cases exceed all 
accessibility standards. Our commitment to barrier-free 
facilities is apparent by our continued effort toward 
retrofitting historic facilities. The Postal Service values its 
elderly customers and feels they will benefit from our efforts 
to make facilities more accessible.

                consumer education and fraud prevention

    The U.S. Postal Inspection Service endeavors to alert 
consumers and businesses to various types of crimes by 
attracting media attention to postal crime trends, publicizing 
positive law enforcement accomplishments, circulating media 
releases, and hosting crime prevention presentations.
    In February 1997, the Inspection Service joined with the 
American Association of Retired Persons (AARP) and the Attorney 
General's office for the state of New Mexico in a continuing 
public education initiative aimed at preventing telemarketing 
fraud. Volunteers from the Albuquerque area AARP, state and 
local consumer protection agencies, the New Mexico Attorney 
General's office, and the Postal Inspection Service worked 
together to turn the tables on crooked boiler room operators. 
Using lists of previous victims of telemarketing fraud and 
names of seniors gleaned from commercial phone lists, 
volunteers telephoned 1,500 New Mexico residents to warn them 
of the dangers of telemarketing fraud.
    At a joint press conference in September 1997, the Chief 
Postal Inspector, and members of the AARP, the Federal Trade 
Commission (FTC), and the offices of the Attorneys General of 
Massachusetts and Arizona, via satellite, announced Operation 
Mailbox. This cooperative effort focused attention on 
unsolicited mailings received by seniors, including suspicious 
prize offerings, sweepstakes promotions, and requests for 
charitable contributions. Senior volunteers collected hundreds 
of unsolicited mailings which were displayed dramatically at 
the press conference.
    Project Mailbox II is an on-going, multi-pronged public/
private initiative focusing on companies that use deceptive 
mass mailings, e-mails, and unsolicited faxes to entice 
consumers to send money through the mail, call a telemarketer, 
or show up at a face-to-face sales meeting. On October 1, 1998, 
the U.S. Postal Inspection Service joined with the Attorneys 
General from all 50 states, the FTC, AARP, Better Business 
Bureaus, Yellow Pages Publishing Association, and National 
Association of Attorneys General (NAAG) in announcing Project 
Mailbox II. The project is designed to remind consumers that, 
while the vast majority of direct mail solicitations are sent 
by legitimate mail order companies, sometimes crooks use the 
mail too.
    Senior victimization was the topic of a Dateline NBC story 
which featured the Inspection Service's efforts to stop the 
flood of illegal foreign lottery mailings entering the United 
States. The story focused on the success inspectors have 
achieved in identifying illegal mailings at border entry 
points, with the assistance of the U.S. Customs Service. These 
efforts have led to the seizure and destruction of over 4.5 
million pieces of foreign lottery mail. This story also 
explored the sad tales of financial ruin suffered by many 
elderly victims of these schemes who seem easy prey to the 
allure of promised multi-million dollar jackpots.
    In January 1998, the Inspection Service, the Postal Service 
General Counsel, and the FTC held a joint news conference in 
Washington to announce the filing of multiple injunctions and 
civil complaints against various self-styled employment 
agencies. Inspectors and General Counsel attorneys sought to 
focus public awareness on ``postal job'' promotions, which 
misrepresent their relationship with the U.S. Postal Service 
and the benefits they can provide prospective job hunters. 
These promoters seek to take advantage of individuals who may 
be out of work or seeking to better themselves, and who 
consider Postal Service employment extremely desirable.
    The Inspection Service, FBI, AARP, and Retired Service 
Volunteer Program (RSVP) participants assembled in Los Angeles 
in February 1998 to conduct a friendly boiler room initiative. 
Volunteers used call lists seized in raids by law enforcement 
officers to telephone individuals who were treated to several 
telemarketing fraud prevention messages. A number of 
entertainment celebrities attended the affair to help attract 
media attention.
    A similar friendly boiler room was conducted in Washington, 
D.C., during November 1998. The AARP, FTC, and Department of 
Justice (DOJ), with the assistance of the Inspection Service 
and the FBI, made friendly fraud prevention calls from a 
downtown hotel to consumers nationwide. Several thousand calls 
were made during a 12-hour period and over two thousand 
individuals were contacted, several whom dishonest 
telemarketers may have victimized. These potential victims were 
provided Mail Fraud Complaint forms and instructed as to proper 
completion.
    In New Jersey and Massachusetts, inspectors and local AARP 
volunteers formed partnerships to educate senior citizens about 
some of the fraudulent promotions which target the elderly 
through direct mail and telemarketing schemes. Senior 
volunteers were recruited to participate by collecting all 
questionable or suspicious unsolicited promotional mailings 
received during a specific period of time. Volunteers also kept 
a log of all unsolicited telemarketing calls received. 
Everything collected by the volunteers was turned over to 
inspectors for examination and follow-up attention. The results 
of the seniors' collection effort and the inspectors' 
preliminary investigations were publicized with media 
cooperation. This served to dramatically highlight the quantity 
of fraudulent solicitations targeting senior citizens.
    On September 1, 1998, Chief Postal Inspector Ken Hunter 
testified before the Senate Subcommittee on International 
Security, Proliferation, and Federal Services regarding 
sweepstakes and prize award mailings representing fraud against 
the consumer. Chief Hunter discussed numerous cases, which 
illustrated prize award schemes, and the actions postal 
inspectors took to prevent consumer losses.
    One of the most significant investigations involved a 
Canadian citizen who operated numerous companies that solicited 
money from consumers through direct mail and telemarketing 
ventures. The individual was indicted based on his involvement 
in a telemarketing scheme involving foreign lotteries, which 
had swindled hundreds of American consumers out of millions of 
dollars. During the investigation, a questionnaire sent to 880 
victims revealed the average age of the victim was 74. This 
individual was sentenced to 180 days in custody and ordered to 
forfeit approximately $8 million in funds seized by postal 
inspectors to be paid to victims of his scheme. An article 
regarding this case was published in the AARP Bulletin.
    In October 1998, the U.S. Postal Inspection Service joined 
with AARP, the Attorney General's office for the state of 
Arizona, and Arizona State University Gerontology Program, in a 
telemarketing and mail fraud conference. Over 135 people 
attended the one-day seminar in Tempe, Arizona, whose theme was 
New Directions: Seniors, Sweepstakes and Scams. The conference 
was held to educate and protect seniors from telemarketing and 
mail fraud schemes.
    Postal Inspectors have taken a new tact in efforts to 
combat international mail fraud schemes. From March through 
November 1998, about 30 postal employees at John F. Kennedy 
Airport/Air Mail Center in Queens, NY, using guidelines set by 
postal inspectors, intercepted approximately 3 million letters 
from Nigeria that promoted an illegal scam. The letters, often 
referred to as ``419'' letters after the Nigerian statute that 
makes them illegal, were found to have counterfeit Nigerian 
postage and they promoted fraudulent business proposals. Most 
of the intercepted letters were destroyed unopened at a 
Westbury, Long Island, landfill. Nigerian postal authorities 
are cooperating with the Postal Inspection Service in the 
crackdown.

                   injunctions and other civil powers

    In addition to the investigation of individuals or 
corporations for possible criminal violations, the Inspection 
Service can protect consumers from material misrepresentations 
through the use of several statutes. In less severe cases, 
operators of questionable promotions agree to a Voluntary 
Discontinuance. This is an informal promise to discontinue the 
operation of the promotion. Should the agreement be violated, 
formal action against the promoter could be initiated. In 
certain cases where a more formal action is better suited, a 
Consent Agreement is obtained. Generally, a promoter signs a 
Consent Agreement to discontinue the false representations or 
lottery charged in a complaint. If this agreement is violated, 
the Postal Service may withhold the promoter's mail pending 
additional administrative proceedings.
    The Postal Service (Judicial Officer) is empowered under 39 
U.S.C. (b)(2) to issue a Cease and Desist (C&D) Order which 
requires any person conducting a scheme in violation of Section 
3005 to immediately discontinue. C&D orders are issued as part 
of a False Representation order and, as a matter of course, are 
agreed to as a part of a Consent Agreement. Violators of C&D 
orders may be subject to civil penalties under 39 U.S.C. 3012. 
When more immediate relief to protect the consumer is 
warranted, the Postal Service has a number of effective 
enforcement options available. Title 39 U.S.C. 3003 and 3004 
enables the Postal Service, upon determining that an individual 
is using a fictitious, false, or assumed name, title, or 
address in conducting or assisting activity in violation of 18 
U.S.C. Sections 1302 (Lottery), 1341 or 1342 (Mail Fraud), to 
withhold mail until proper identification is provided and the 
person's right to receive mail is established.
    In those instances where a more permanent action is 
necessary, 39 U.S.C. 3007 allows the Postal Service to seek a 
Temporary Restraining Order detaining mail. By withholding 
service to the suspected violator, the extent of victimization 
is limited while an impartial judge reviews the facts and makes 
a final determination. If the judge decides that all mail 
pertaining to the promotion should be returned, then a False 
Representation Order, authorized under 39 U.S.C. 3005 is 
issued. In addition, U.S. District Judges may hold a hearing on 
alleged fraudulent activity and issue a permanent injunction 
regarding the operation pursuant to 18 U.S.C. 1345.
    By requesting the court to withhold mail while a case is 
argued, Postal Inspectors have been successful in many cases in 
limiting the extent of victimization. Action under these 
statutes does not preclude criminal charges against the same 
target.

                       customer advisory councils

    The Postal Service established its first Customer Advisory 
Council (CAC) in October, 1998. The council concept was adopted 
to foster a sense of partnership between local postal officials 
and the communities they serve. Since that time, customer 
participation in, and the total number of councils, have 
continued to grow.
    CACs provide a forum for the exchange of ideas and 
suggestions and improve the quality of service provided through 
an understanding of customer expectations. Membership usually 
includes individuals who are representative of their community; 
small business owners, local government officials, university/
college students, homemakers, and retired persons. The valuable 
feedback received from councils is often used by local postal 
officials to improve service and customer relationships.

                   national consumer protection week

    The Postal Service has sponsored an annual Consumer 
Protection Week since 1977. Beginning in 1980, the Postal 
Service scheduled its observance to coincide with the National 
Consumers Week sponsored by the U.S. Office of Consumer 
Affairs. Postmasters and facility managers are urged to sponsor 
special activities to educate customers about postal products 
and services as well as Postal Inspection Service efforts to 
protect consumers from perpetrators of fraudulent schemes and 
other postal crimes. In conjunction with open houses and 
special gatherings scheduled during National Consumers Week, 
brochures are distributed to warn consumers about mail fraud 
and misrepresentations of products and services sold by mail. 
Helpful information about proper addressing of mail, packaging 
parcels correctly, temporary address changes, sending valuables 
through the mail, and how to report service problems are made 
widely available through planned events. As medical fraud and 
work-at-home schemes have traditionally ranked at the top of 
the fraudulent promotions, the focus of material distributed is 
frequently directed toward alerting senior citizens of these 
other schemes.
    Traditionally, National Consumers Week has been held in 
October. In 1998 a decision was made to postpone it until the 
first week of February 1999. The U.S. Postal Inspection Service 
will join the U.S. Postal Service, the Federal Trade Commission 
(FTC), and the American Association of Retired Persons (AARP) 
to promote National Consumer Protection Week.
    The Inspection Service will issue three Video News Releases 
(VNRs) entitled, Conning Older Americans; How They Scam Older 
Americans; and Fraud Fighters which will be sent to local 
television stations via satellite for release during Consumer 
Protection Week. The VNRs correspond with the purpose of 
National Consumer Protection Week, which is to highlight 
consumer protection and education efforts around the country.

                stamps by automated teller machine (atm)

    Stamps by ATM is a convenient way to purchase stamps at a 
bank's automated teller machine. A specially designed sheetlet 
of 18 First-Class stamps is dispensed at the touch of a button. 
The cost is debited from your checking or savings account and 
treated like a cash withdrawal. Because many ATMs are 
accessible 24 hours a day, our customers are able to do banking 
and buy postage stamps at their convenience.

                             stamps by mail

    Stamps by Mail is a service that allows customers to 
purchase stamps in booklets, sheets and coils along with other 
products such as postal cards, and stamped envelopes by 
ordering through the mail.
    The Stamps by Mail program benefits a wide variety of 
people and is particularly beneficial to elderly or shut-in 
customers who cannot travel to the post office. Stamps by Mail 
provides order forms incorporated in self-addressed postage-
paid envelopes to customers for their convenience in obtaining 
products and services without having to visit a Postal Service 
retail unit. The form is available in lobbies or from the 
customer's letter carrier. Once the form is completed it can be 
returned to the carrier or dropped in a collection box. Orders 
are normally returned to the customer within 2 or 3 business 
days.

                            stamps by phone

    Stamps by Phone is a convenient program that is intended to 
target business, professional, and household customers who are 
willing to pay a service charge for the convenience of ordering 
by phone and paying by credit card (VISA or Master Card) to 
avoid trips to the post office. Customers utilizing this 
service can call a toll-free number (1-800-STAMPS-24), 24 hours 
a day, 7 days a week, and order from a menu of postal products. 
There is no minimum purchase amount, and customers receive 
their orders within 3 to 5 business days.

                     alternate postal retail sites

    Alternate postal retail sites include, grocery stores and 
other retail stores that offer stamps for sale through a 
consignment agreement, and contract Postal Units that offer a 
wider variety of services. Stamps offered through consignment 
agreements are sold at no more than face value at retailer 
checkstands. Contract postal units provide more convenient 
locations for our customers to mail packages, purchase stamps 
and postal money orders, send registered mail, and obtain 
postal services.
    In 1998 the Postal Service began testing a partnership with 
Mail Boxes Etc. (MBE) to sell stamps and postal services at 250 
MBE locations throughout the United States. By providing 
services at numerous alternate locations, the Postal Service 
provides greater access and flexibility for all customers to 
obtain stamps and other postal services, which generally means 
less wait time for them to obtain these retail services. This 
enables customers to combine their mailing needs and other 
errands into a single trip to the neighborhood shopping center 
or grocery store. This is especially convenient for our elderly 
customers who may have limited access to transportation.

                   ITEM 28--RAILROAD RETIREMENT BOARD

                              ----------                              


Annual Report on Program Activities for the Elderly for the U.S Senate 
                Special Committee on Aging 1997 and 1998

    The U.S. Railroad Retirement Board is an independent agency 
in the executive branch of the Federal Government, 
administering comprehensive retirement-survivor and 
unemployment-sickness benefit programs for the nation's 
railroad workers and their families under the Railroad 
Retirement and Railroad Unemployment Insurance Acts. The Board 
also has administrative responsibilities under the Social 
Security Act for certain benefit payments and railroad workers' 
Medicare coverage.
    Under the Railroad Retirement Act, the Board pays 
retirement and disability annuities to railroad workers with at 
least 10 years of service. Annuities based on age are payable 
at age 62, or at age 60 for employees with 30 years of service. 
Disability annuities are payable before retirement age on the 
basis of total or occupational disability. Annuities are also 
payable to spouses and divorced spouses of retired workers and 
to widow(er)s, divorced or remarried widow(er)s, children, and 
parents of deceased railroad workers. Qualified railroad 
retirement beneficiaries are covered by Medicare in the same 
way as social security beneficiaries.
    Under the Railroad Unemployment Insurance Act, the Board 
pays unemployment benefits to railroad workers who are 
unemployed but ready, willing and able to work and pays 
sickness benefits to railroad workers who are unable to work 
because of illness or injury.

                       benefits and beneficiaries

    During fiscal year 1998, retirement and survivor benefit 
payments under the Railroad Retirement Act amounted to some 
$8.2 billion, $41 million more than the prior year. The number 
of beneficiaries on the retirement-survivor rolls on September 
30, 1998, totaled 718,000. The majority (86 percent) were age 
65 or older.
    At the end of the fiscal year, 325,000 retired employees 
were being paid regular annuities averaging $1,284 a month. Of 
these retirees, 149,000 were also being paid supplemental 
railroad retirement annuities averaging $43 a month. In 
addition, some 174,000 spouses and divorced spouses of retired 
employees were receiving monthly spouse benefits averaging $502 
and, of the 227,000 survivors on the rolls, 190,000 were aged 
widow(er)s receiving monthly survivor benefits averaging $768. 
About 9,000 retired employees were also receiving spouse or 
survivor benefits based on their spouse's railroad service.
    Some 659,000 individuals who were receiving or were 
eligible to receive monthly benefits under the Railroad 
Retirement Act were covered by hospital insurance under the 
Medicare program at the end of fiscal year 1998. Of these, 
645,000 (98 percent) were also enrolled for supplementary 
medical insurance.
    Gross unemployment and sickness benefits paid under the 
Railroad Unemployment Insurance Act totaled $92.4 million 
during fiscal year 1998, while net benefits totaled $59.3 
million after adjustments for recoveries of benefit payments, 
some of which were made in prior years. Total gross and net 
payments decreased by approximately $12.0 million and $13.6 
million, respectively, from fiscal year 1997. Unemployment and 
sickness benefits were paid to 31,000 railroad employees during 
the fiscal year. However, only about $0.2 million (less than 1 
percent) of the benefits went to individuals age 65 or older.

                               financing

    At the end of fiscal year 1998, the balance in the Railroad 
Retirement Board's accounts was $16.5 billion, registering an 
increase of over $1.1 billion over the previous year, and 
earnings on investments totaled $1.2 billion for the year.
    The Board's 1998 railroad retirement financial report to 
Congress, which addressed railroad retirement financing during 
the next 25 years, was generally favorable. It concluded that, 
barring a sudden, unanticipated, large decrease in railroad 
employment, no cash-flow problems arise during the next 20 
years. Cash-flow problems arise only under the Railroad 
Retirement Board's most pessimistic employment assumption and 
then not until 2022. This is one year later than in the 
previous year's report. Like previous reports over the last 
decade, the 1998 report also indicated that the long-term 
stability of the system, under its current financing structure, 
is still dependent on future railroad employment levels.
    The Board's 1998 railroad unemployment insurance financial 
report was also favorable, indicating that even as maximum 
benefit rates increase 40 percent from $43 to $60 from 1997 to 
2008, experience-based contribution rates are expected to keep 
the unemployment insurance system solvent, even under the 
Board's most pessimistic employment assumption. The average 
employer contribution rate remains well below the maximum 
throughout the projection period.
    The Board's reports consequently did not recommend 
financing changes for the railroad retirement or unemployment 
insurance systems.

                        legislative developments

    Public Law 105-277, enacted October 21, 1998, provided for 
the restoration of annuities to certain divorced spouses of 
workers whose widows previously elected to receive lump-sum 
payments. Public Law 105-33, enacted August 5, 1997, clarified 
that non-resident aliens are eligible for benefits under the 
Railroad Retirement and Railroad Unemployment Insurance Acts.
    House Concurrent Resolution 52 was a non-binding resolution 
which urged all parties of the railroad community, including 
rail labor, rail management and railroad retiree organizations 
to begin open discussions for the purpose of adequately funding 
an amendment to the Railroad Retirement Act to increase 
benefits for widows and widowers. A hearing on this resolution 
was held on September 17, 1998, before the Subcommittee on 
Railroads of the House Committee on Transportation and 
Infrastructure, but no further action was taken by the House on 
this resolution.

                               officials

    On April 27, 1998, the Senate confirmed President Clinton's 
appointment of Cherryl T. Thomas as Chair of the Railroad 
Retirement Board for a term expiring in August 2002. Prior to 
her appointment, Ms. Thomas served as Commissioner of the 
Department of Buildings for the City of Chicago and in numerous 
other posts including Deputy Chief of Staff to Mayor Richard M. 
Daley during a 30-year career with the city.
    V. M. Speakman, Jr. continues to serve as Labor Member of 
the Board; prior to his appointment Mr. Speakman had been 
President of the Brotherhood of Railroad Signalmen and had also 
served as Vice Chairman of the Railway Labor Executives' 
Association.
    Jerome F. Kever continues to serve as Management Member of 
the Board; before his appointment Mr. Kever had been Vice 
President and Controller of the Santa Fe Pacific Corporation.

                service and administrative improvements

    The Railroad Retirement Board implemented various 
initiatives during 1997 and 1998 to improve agency operations 
and provide the best possible service to its customers.
    Plans.--In its Strategic Plan prepared in accordance with 
the Government Performance and Results Act of 1993, the Board 
outlined its four main goals: (1) provide excellent customer 
service; (2) safeguard the trust funds through prudent 
stewardship; (3) align resources to effectively and efficiently 
meet the agency's mission; and (4) expand the use of technology 
and automation to achieve the agency's mission. The overall 
mission statement in the Strategic Plan provides, in part, that 
the Board ``will pay benefits to the right people, in the right 
amounts, in a timely manner, and safeguard our customers' trust 
funds.'' The Board will also ``treat every person who comes 
into contact with the agency with courtesy and concern, and 
respond to all inquiries promptly, accurately and clearly.''
    The Board submitted its initial annual performance plan 
with its fiscal year 1999 budget submission. The performance 
plan links the goals in the Strategic Plan to day-today work, 
defines the processes and resources necessary to meet the goals 
and shows how the agency will measure progress toward achieving 
its goals. The Board also finalized a Strategic Information 
Resources Management Plan which incorporates the agency's 
Information Technology Capital Plan and outlines the critical 
role of information technology and automation in achieving the 
goals and objectives contained in the Strategic Plan. 
Consistent with those plans, the agency made technological 
improvements that will improve performance and efficiency.
    Y2K Compliance.--At the beginning of 1999, all of the 
Board's mission-critical computer systems were Year 2000 (Y2K)-
compliant.
    The Board's computer systems process benefit payments, 
issue informational notices, enroll beneficiaries in Medicare, 
withhold Federal income tax and perform other functions 
essential to the Board's ongoing operations and service to the 
railroad public. Having met the Y2K goal, the Board began a 
series of comprehensive tests of its mission-critical systems 
to ensure that all interfaces, connections, and links between 
the various systems remain in sync and are fully functional. 
The Board also plans to complete work on those systems that are 
not mission-critical by September 30, 1999.
    The agency's most important information exchange systems 
are with the Department of the Treasury and the Social Security 
Administration. The Board exchanges data with the Department of 
the Treasury in order to issue benefit payments, and the 
Board's staff expects a smooth transition in that area. The 
Board also coordinates benefit payments with the Social 
Security Administration, and these systems have already been 
tested to ensure that the data exchanges will function 
correctly in the year 2000.
    Help Line.--In November 1997, new service options were 
added to the Board's Help Line, a toll-free interactive voice 
response system. Employees can now use the Help Line to obtain 
statements of creditable service and compensation, and 
beneficiaries on the rolls can use it to verify their current 
monthly benefit rate or secure a replacement Medicare card. 
Callers are also able to find the address and telephone number 
of their local field office by entering their zip code, and 
information on unemployment-sickness benefits continues to be 
available on the Help Line, which is available 24 hours a day, 
7 days a week.
    Customized Notices.--In cooperation with the Department of 
the Treasury's Chicago Financial Management Center which 
provided printing services, the Board mailed customized notices 
to over 750,000 annuitants which expanded the general 
information notices issued annually following cost-of-living 
adjustments. The revised notices gave annuitants a detailed 
breakdown of their monthly rates by tier, and can be used as 
proof of income, to verify the amount of the cost-of-living 
adjustment and to calculate Federal income tax withholding 
amounts.
    Field Service.--As of October 30, 1997, the restructuring 
of the Board's field service achieved its target configuration 
of 53 service locations and 3 regional offices, as the number 
of its field offices declined from 86 service locations and 5 
regional offices in 1995. Most of the closed offices had been 
base points or branch offices that functioned as satellites of 
larger district offices. Automatic call forwarding was 
established in those areas where offices were closed so that 
customers could contact their new servicing office at no 
additional expense. Board staff members have been able to 
maintain service standards in these areas through greater use 
of the telephone, mail and itinerant service as planned. Voice 
mail and Internet e-mail are also now available in all field 
offices. The restructuring reflected the ongoing demographic 
changes in the rail industry and the budget limitations on the 
Board's resources.
    Occupational Disability Standards.--The Board unanimously 
approved new standards for the evaluation of claims for 
occupational disability benefits payable under the Railroad 
Retirement Act. The standards, based on joint recommendations 
negotiated by representatives of rail labor organizations and 
the Association of American Railroads, call for a system based 
on up-to-date medical standards to replace guidelines that had 
been in effect for five decades. Effective February 13, 1998, 
the new standards apply to applications filed on or after 
January 1, 1998.

                      office of inspector general

    During fiscal year 1998, the Office of Inspector General 
continued its efforts to assist management in increasing the 
efficiency of agency programs. Twenty-three audits and 
evaluations issued during the year contained findings for 
improvement in both administrative and program operations. Two 
audit reports will have an estimated financial impact of $2.4 
million when Board management completes necessary corrective 
actions. Reviews were conducted of significant activities which 
included the status of the conversion of information systems to 
ensure compliance with the Year 2000, the investment of agency 
trust funds, and agency progress in meeting the requirements of 
the Government Performance and Results Act. Investigative 
activities resulted in 100 criminal convictions, 43 
indictments/informations, 73 civil judgments and almost $2 
million in court-ordered restitutions, fines, recoveries and 
prevention of overpayments.

                     public information activities

    The Board maintains direct contact with railroad retirement 
beneficiaries through its field offices located across the 
country. Field personnel explain benefit rights and 
responsibilities on an individual basis, assist railroad 
employees in applying for benefits and answer any questions 
related to the benefit programs. The Board also relies on 
railroad labor groups and employers for assistance in keeping 
railroad personnel informed about its benefit programs.
    At informational conferences sponsored by the Labor 
Member's Office of the Board for railroad labor union 
officials, Board representatives describe and discuss the 
benefits available under the railroad retirement-survivor, 
unemployment-sickness and Medicare programs, and the attendees 
are provided with comprehensive informational materials. During 
1998, 2,210 railroad labor union officials attended 46 
informational conferences held in cities throughout the United 
States. In addition, railroad labor unions frequently request 
that a Board representative speak before their meetings, 
seminars and conventions.
    At seminars for railroad executives and managers, Board 
representatives review programs, financing, and administration, 
with special emphasis on those areas which require cooperation 
between railroads and Board offices. The Board also conducts 
informational seminars on benefit programs for employees at the 
request of railroad management. During 1998, the Management 
Member's Office of the Board conducted 11 seminars for railroad 
officials. It also conducted pre-retirement counseling seminars 
attended by railroad employees and their spouses, and benefit 
update presentations.
    The Board's headquarters is located at 844 North Rush 
Street, Chicago, Illinois 60611-2092, phone (312) 751-4500; the 
agency's Web site is www.rrb.gov. In addition, the Board 
maintains an Office of Legislative Affairs in Washington, DC as 
a liaison for dealing with Members of Congress on matters 
involving the Railroad Retirement and Unemployment Insurance 
Acts and legislative issues that affect the Board. The Office 
of Legislative Affairs is located at 1310 G Street, NW, Suite 
500, Washington, DC 20005-3004, phone (202) 272-7742.

                 ITEM 29--SMALL BUSINESS ADMINISTRATION

                              ----------                              

    The SBA continues to create, implement and deliver 
technical and financial assistance programs for the benefit of 
the Nation's small business community. We currently do not have 
a program that gives specific focus to older Americans.
    However, the SBA is the sponsoring Federal agency for the 
Service Corp of Retired Executives (SCORE) program. SCORE is an 
organization of nearly 12,000 business men and women who 
volunteer their time and expertise to provide management 
counseling and training to small business owners and people 
just starting a new business. They have extensive business 
experience, either as entrepreneurs and business owners or as 
former corporate executives. SCORE counseling is confidential 
and free of charge and is provided at more than 700 locations 
in the United States and its territories.

                ITEM 30--SOCIAL SECURITY ADMINISTRATION

                              ----------                              


 Programs Administered by the Social Security Administration, Calendar 
                               Year 1998

    The Social Security Administration (SSA) administers the 
Federal Old-Age, Survivors, and Disability Insurance (OASDI) 
program (title II of the Social Security Act). OASDI is the 
basic program in the United States that provides income to 
individuals and families when workers retire, become disabled, 
or die. The basic idea of the cash benefits program is that, 
while they are working, employees and their employers pay 
Social Security taxes; the self-employed also are taxed on 
their net earnings. Then, when earnings stop or are reduced 
because of retirement in old-age, death, or disability, cash 
benefits are paid to partially replace the earnings that were 
lost. Social Security taxes are deposited to the Social 
Security trust funds and are used only to pay Social Security 
benefits and administrative expenses of the program. Amounts 
not currently needed for these purposes are invested in 
interest bearing obligations of the United States. Thus, 
current workers help to pay current benefits and, at the same 
time, establish rights to future benefits.
    SSA also administers the Supplemental Security Income (SSI) 
program for needy aged, blind, and disabled people (title XVI 
of the Social Security Act). SSI provides a federally financed 
floor of income for eligible individuals with limited income 
and resources. SSI benefits are financed from general revenues. 
In about 46 percent of the cases, SSI is reduced due to 
individuals' having countable income from other sources, 
including Social Security benefits.
    SSA shares responsibility for the black lung program with 
the Department of Labor. SSA is responsible, under the Federal 
Coal Mine Health and Safety Act, for payment of black lung 
benefits to coal miners and their families who applied for 
those benefits prior to July 1973 and for payment of black lung 
benefits to certain survivors of miners.
    Local Social Security offices process applications for 
entitlement to the Medicare program and assist individuals with 
questions concerning Medicare benefits. Overall Federal 
administrative responsibility for the Medicare program rests 
with the Health Care Financing Administration, HHS.
    Following is a summary of beneficiary data and selected 
administrative activities for calendar year 1998.

     i. old-age, survivors, and disability insurance benefits and 
                             beneficiaries

    At the beginning of 1998, about 96 percent of all jobs were 
covered under the Social Security program. The major groups of 
workers not covered under Social Security are Federal workers 
hired before January 1, 1984 and State and local government 
employees covered under a retirement system for whom the State 
has not elected Social Security coverage.
    At the end of December 1998, 44.2 million people were 
receiving monthly Social Security cash benefits. Of these 
beneficiaries, 27.5 million were retired workers, 3.3 million 
were dependents of retired workers, 6.3 million were disabled 
workers and their dependents, 7.1 million were survivors of 
deceased workers.
    The monthly amount of benefits being paid at the end of 
December 1998 was $31.3 billion. Of this amount, $22.7 billion 
was payable to retired workers and their dependents, $3.8 
billion was payable to disabled workers and their dependents, 
and $4.8 billion was payable to survivors.
    Retired workers were receiving an average benefit at the 
end of December 1998 of $780, and disabled workers received an 
average benefit of $733.
    During the 12 months ending December 1998, $375 billion in 
Social Security cash benefits were paid. Of that total, retired 
workers and their dependents received $252.7 billion, disabled 
workers and their dependents received $48.2 billion, and 
survivors received $73.9 billion.
    Monthly Social Security benefits were increased by 2.1 
percent for December 1997 (payable beginning January 1998) to 
reflect a corresponding increase in the Consumer Price Index 
(CPI).

      ii. supplemental security income benefits and beneficiaries

    In January 1998, SSI payment levels (like Social Security 
benefit amounts) were automatically adjusted to reflect a 2.1 
percent increase in the CPI. From January through December 
1998, the maximum monthly Federal SSI payment level for an 
individual was $494. The maximum monthly benefit for a married 
couple, both of whom were eligible for SSI, was $741.
    As of December 1998, 6.6 million aged, blind, or disabled 
people received Federal SSI or federally administered State 
supplementary payments. Of the 6.6 million recipients on the 
rolls during December 1998, about 2.0 million were aged 65 or 
older. Of the recipients aged 65 or older, about 701,000 were 
eligible to receive benefits based on blindness or disability. 
About 4.6 million recipients were blind or disabled and under 
age 65. During December 1998, Federal SSI benefits and 
federally administered State supplementary payments totaling 
slightly over $2.5 billion were paid.
    For calendar year 1998, $29.4 billion in benefits 
(consisting of $26.4 billion in Federal funds and $3.0 billion 
in federally administered State supplementary payments) were 
paid.

               iii. black lung benefits and beneficiaries

    Although responsibility for new black lung miner claims 
shifted to the Department of Labor (DOL) in July 1973, SSA 
continues to pay black lung benefits to a significant, but 
gradually declining, number of miners and survivors. (While DOL 
administers new claims taken by SSA under part C of the Federal 
Coal Mine Health and Safety Act, SSA is still responsible for 
administering part B of the Act.)
    As of the end of March 1998, about 116,000 individuals 
(106,000 age 65 or older) were receiving $47 million in black 
lung benefits which were administered by the Social Security 
Administration. These benefits are financed from general 
revenues. Of these individuals, 18,000 miners were receiving 
$10 million, 78,000 widows were receiving $35 million, and 
20,000 dependents and survivors other than widows were 
receiving $2 million. During fiscal year 1998 SSA paid out 
black lung payments in the amount of $588 million.
    Black lung benefits increased by 3.1 percent effective 
January 1999. The monthly payment to a coal miner disabled by 
black lung disease increased from $455.40 to $469.60. The 
monthly benefit for a miner or widow with one dependent 
increased from $683.10 to $704.40 and with two dependents from 
$797.00 to $821.80. The maximum monthly benefit payable when 
there are three or more dependents increased from $910.80 to 
$939.20.

                     iv. communication and services

    SSA's public information initiatives are aimed at more than 
44 million Social Security beneficiaries, more than six million 
SSI recipients and about 150 million workers currently paying 
into the system. SSA seeks to ensure that current and future 
beneficiaries are aware of programs, services, and their rights 
and responsibilities.
    In 1998, SSA planned public information outreach activities 
to help educate the public about Social Security. Two public 
service campaigns were conducted during 1998. The campaigns 
used television, radio and print media to encourage the public 
to learn more about Social Security. To date, the media has 
donated more than $2.5 million in advertising space.
    The Agency designed, pilot tested, and produced a kit of 
information materials for employers to use in helping educate 
employees about the value of Social Security. It updated its 
Social Security Teachers Kit and developed a special ``kids 
page'' on the Internet. It continued working with external 
groups and organizations to help them better understand Social 
Security and spread the word about Social Security to their 
constituencies.
    Additional subjects covered through public information 
messages included changes in the law affecting noncitizens and 
direct deposit of benefits. Messages were placed in the form of 
news releases, radio and television public service 
announcements and publications such as Social Security Today, a 
newsletter distributed to national organizations.
    SSA produces a wide range of publications on all Social 
Security programs. More than 100 consumer booklets and fact 
sheets keep the public informed about programs and policies 
affecting them. Many publications also are available in 
Spanish. Many are available through the agency's FAX Catalog, 
as well as on the Internet at SSA's web site, http://
www.ssa.gov. Also, SSA's Public Information Distribution Center 
provides materials directly to external groups and 
organizations.

          v. summary of legislation that affects ssa, 1997-98

P.L. 105-18 (H.R. 1871), emergency supplemental appropriations bill 
        including extension of benefits for noncitizens, signed on June 
        12, 1997
           Provided a one-month extension of SSI 
        eligibility for noncitizens who were receiving benefits 
        on August 22, 1996, and who would not continue to be 
        eligible under the noncitizen restrictions in the 
        Personal Responsibility and Work Opportunity 
        Reconciliation Act of 1996, by changing the date that 
        noncitizen redeterminations have to be completed from 
        August 22, 1997 to September 30, 1997.
P.L. 105-33 (H.R. 2015), Balanced Budget Act of 1997, signed on August 
        5, 1997
            Noncitizens

    SSI Eligibility for Aliens Receiving SSI on August 22, 1996 and 
     Disabled Legal Aliens in the United States on August 22, 1996

           Provides that ``qualified alien'' 
        noncitizens lawfully residing in the United States who 
        received SSI on August 22, 1996, would remain eligible 
        for SSI--i.e., eligibility ``grandfathered. ''
           Also provides that ``qualified aliens'' 
        lawfully residing in the United States on August 22, 
        1996 would be eligible for SSI if they meet the SSI 
        definition of disability or blindness.
           Extends from September 30, 1997 to September 
        30, 1998 the period during which redeterminations of 
        eligibility can be conducted for noncitizens who were 
        receiving SSI on August 22, 1996. Thus, noncitizens who 
        are not ``qualified aliens'' who received SSI on August 
        22, 1996 could remain eligible until September 30, 
        1998.
           Effective as if enacted in the ``Personal 
        Responsibility and Work Opportunity Reconciliation Act 
        of 1996'' (PRWORA), pertinent sections of which were 
        effective upon its enactment--i.e., August 22, 1996.

    Extension of Eligibility Period for Refugees and Certain Other 
  Qualified Aliens from 5 to 7 years for SSI and Medicaid; Status of 
                         Cuban/Haitian Entrants

           Extends the current 5-year eligibility 
        period for refugees, asylees, and noncitizens who have 
        had their deportations withheld to 7 years.
           Also adds Cuban and Haitian entrants to the 
        categories of noncitizens who are considered to be 
        ``qualified aliens,'' to the categories of noncitizens 
        who are eligible for SSI for 7 years after they are 
        granted status, and to the categories of noncitizens 
        who are exempt from the 5-year eligibility ban on 
        noncitizens who enter the United States after August 
        22, 1996.
           Effective as if enacted in PRWORA.

         Treatment of Certain Amerasian Immigrants as Refugees

           Adds Amerasian immigrants to the categories 
        of noncitizens who are eligible for SSI and for the 
        first 7 years after they are admitted to the United 
        States and exempts them from the 5-year eligibility ban 
        on noncitizens who enter the United States after August 
        22, 1996.
           Effective as if enacted in PRWORA.

   Exceptions for Certain Indians from Limitation on Eligibility for 
           Supplemental Security Income and Medicaid Benefits

           Exempts noncitizen members of federally 
        recognized Indian tribes or noncitizen native Americans 
        who come under section 289 of the Immigration and 
        Nationality Act from the SSI and Medicaid restrictions 
        in PRWORA, including the restriction on benefits only 
        to ``qualified aliens'' and the 5-year ban.
           Effective as if enacted in PRWORA.

  Exemption from Restriction on SSI Program Participation by Certain 
       Recipients Eligible on the Basis of Very Old Applications

           Exempts individuals who have been on SSI 
        rolls since before January 1, 1979 from the noncitizen 
        restrictions in PRWORA if the Commissioner lacks clear 
        and convincing evidence that such an individual is a 
        noncitizen ineligible for benefits under the 
        restrictions in PRWORA.
           Effective as if enacted in PRWORA.

      Derivative Eligibility for Medicaid and Food Stamp Benefits

           Provides that noncitizens who are otherwise 
        ineligible for Medicaid under PRWORA, may be eligible 
        for Medicaid if they receive SSI benefits and if the 
        State's Medicaid plan provides Medicaid eligibility for 
        SSI recipients.
           Also provides that noncitizens who are 
        otherwise ineligible under PRWORA for food stamps are 
        not made eligible for food stamps because they receive 
        SSI.
           Effective as if enacted in PRWORA.
            State supplementary payment program

    Fees for Federal Administration of State Supplementary Payments

           Increases fees for SSA's administering 
        supplementary payments (currently $5 per check) under 
        the following schedule: FY 98-$6.20; FY 99-$7.60, FY 
        00-$7.80; FY 01-$8.10; FY 02-$8.50. Each succeeding 
        year, fees are indexed to increases in the Consumer 
        Price Index or set at a different rate as determined by 
        the Commissioner of Social Security.
           Amounts of fees collected in excess of $5 
        per check are to be credited to a special Treasury fund 
        available for SSA administrative purposes. Such amounts 
        are credited as a discretionary offset to discretionary 
        spending to the extent that they are made available for 
        expenditures in appropriations acts.
           Effective upon enactment.

      Timing of Delivery of October 1, 2000, SSI Benefit Payments

           Provides that the October 2000 SSI check be 
        paid on October 2, which is a Monday, rather than on 
        the last Friday in September.
            Technical amendments to PRWORA

    Disclosures Involving Fugitive Felons and Probation and Parole 
                               Violators

           Authorizes SSA to charge fees as a condition 
        for processing requests by law enforcement authorities 
        for SSN and address information regarding SSI 
        beneficiaries who are fugitive felons or probation or 
        parole violators.

    Definition of Qualified Alien: Inclusion of Noncitizen Child of 
                   Battered Parent as Qualified Alien

           Provides that the benefit-paying agencies 
        rather than the Attorney General make certain 
        determinations. Such determinations are made under 
        guidance promulgated by the Attorney General. Also 
        provides ``qualified alien'' status to noncitizen 
        children whose parents are abused and makes conforming 
        amendments reflecting changes in the Immigration and 
        Nationality Act.

                         Treatment of Prisoners

           Authorizes prisoner reporting incentive 
        payments to a penal institution with respect to an 
        inmate who receives an SSI benefit for the month 
        preceding the first month throughout which he is an 
        inmate of the institution, and who is determined to be 
        ineligible for an SSI benefit based on the information 
        provided by the institution.
            Children with disabilities

   Eligibility Redeterminations for SSI Children Who Are Under Age 18

           Extends current 12-month period (ending 8/
        22/97) to 18 months (ending 2/22/98) for redetermining 
        the disability of children under age 18 under the new 
        standards. However, if a redetermination is not made 
        within this time period, requires that it be conducted 
        as soon thereafter as practical. Also, requires that 
        the individual be notified of the redetermination 
        provision before the redetermination process is 
        started.

   Eligibility Redeterminations for SSI Recipients Who Attain Age 18

           Provides SSA with the authority to make 
        redeterminations of disabled childhood SSI recipients 
        who attain age 18, using the adult disability 
        eligibility criteria, more than one year after the date 
        such recipient attains age 18.

   Continuing Disability Review Required for Low Birth Weight Babies

           Permits SSA to schedule a continuing 
        disability review for a child whose eligibility for SSI 
        benefits is based on low birth weight at a date after 
        such individual's first birthday if the Commissioner 
        determines that such individual's impairment is not 
        expected to improve within 12 months of the child's 
        birth.

      Additional Accountability Requirements (Dedicated Accounts)

           Clarifies that monies from a dedicated 
        account which are misapplied by an individual who is 
        his or her own payee shall reduce future SSI payments 
        to that individual and also clarifies the type of 
        benefits a representative payee may deposit in a 
        previously established account.

  Reduction in Cash Benefits Payable to Institutionalized Individuals 
          Whose Medical Costs Are Covered by Private Insurance

           Replaces the terms ``hospital, extended care 
        facility, nursing home, or intermediate care facility'' 
        in section 1611(e) with ``medical treatment facility'' 
        and makes other conforming changes.

 Clarification of the Effective Date of the Denial of SSI Benefits to 
                      Drug Addicts and Alcoholics

           Clarifies the meaning of the term ``final 
        adjudication'' and clarifies SSA's authority to make 
        SSI medical redeterminations after January 1, 1997.
           Expands the applicability of the provisions 
        in P.L. 104-121 which require treatment referrals and 
        authorization of a $50 fee for organizations serving as 
        representative payees for SSI beneficiaries who are 
        incapable and have a DA&A condition. Under prior law, 
        the provisions were limited to SSI applications and 
        reapplications filed after July 1, 1996. This amendment 
        extends these provisions to SSI beneficiaries whose 
        applications are adjudicated after enactment of P.L. 
        104-121--March 29, 1996--(regardless of when filed) and 
        to individuals allowed SSI benefits before March 29, 
        1996 and who filed a request for a new medical 
        determination before July 1, 1996.

                Repeal of Obsolete Reporting Requirement

           Repeals an obsolete reporting requirements 
        in subsections (b)(3)(B)(ii) of section 201 of P.L. 
        103-296, the Social Security Independence and Program 
        Improvements Act of 1994. Reports were to have been 
        made to the House Committee on Ways and Means and the 
        Senate Committee on Finance on SSA's experience with 
        SSI beneficiaries whose disabling condition is 
        primarily caused by alcohol or drug addiction.

Exceptions to Benefit Limitations: Corrections to Reference Concerning 
               Noncitizens Whose Deportation Is Withheld

           Reflects the redesignation of Immigration 
        and Naturalization Act (INA) section 243(h) to 
        241(b)(3) in order to assure that noncitizens whose 
        deportations are withheld under either section are 
        treated the same way effective April 1, 1997. Such 
        noncitizens may be eligible for SSI during the 7-year 
        period beginning the date their deportations are 
        withheld.

     Veteran Exception: Application of Minimum Active Duty Service 
   Requirement; Extension to Unremarried Surviving Spouse; Expanded 
                         Definition of Veteran

           Requires a minimum of military service--
        generally 24 months--in order to qualify for SSI and 
        Medicaid.
           Makes the following clarifications:
                  --Provides SSI eligibility to an unremarried 
                surviving spouse of a noncitizen veteran or 
                active duty military personnel generally if 
                they were married for at least one year.
                  --Provides that the term ``veteran'' includes 
                military personnel who die during active duty 
                service.
                  --Provides that certain Filipinos who fought 
                for the United States military during World War 
                11 are considered veterans for benefit 
                eligibility purposes.

Notification Concerning Noncitizens Not Lawfully Present; Correction of 
                              Terminology

           Provides for replacing in section 1631(e)(9) 
        of the Social Security Act ``unlawfully in the United 
        States'' with ``not lawfully present in the United 
        States.''

Correction To Assure That Crediting Applies to All Quarters of Coverage 
                 Earned by Parents Before a Child is 18

           Clarifies that all quarters of coverage 
        earned by a parent before a child is age 18, including 
        those earned before the child was born, may be credited 
        to the noncitizen child for purposes of the child's 
        eligibility for SSI.
            Other provisions of interest

    Medicaid--Continued Coverage for Disabled Children Who Lose SSI

           Provides States must continue Medicaid 
        coverage for disabled children who were receiving SSI 
        benefits as of 8/22/96 and would have continued to be 
        eligible for such benefits except that their 
        eligibility terminated because they did not meet the 
        new, more strict SSI childhood disability criteria.

Medicaid--State Option To Permit Workers With Disabilities To Buy Into 
                                Medicaid

           Permits individuals with disabilities whose 
        family income is less than 250% of poverty to buy into 
        Medicaid. States determine the amount of the premium, 
        which will be based on a sliding scale based on income.

             Disclosure of Quarters of Coverage Information

           Authorizes SSA to disclose quarters of 
        coverage information about a noncitizen or the spouse 
        or parent of an alien for purposes of determining the 
        noncitizen's eligibility under certain Federally funded 
        benefit programs.
           Effective as if enacted in PRWORA.

       Medicare Part B Premium Assistance for Low-Income Seniors

           Expands the current level of premium 
        assistance by establishing a $1.5 billion capped 
        entitlement block grant to States to use to assist 
        Medicaid enrollees whose family incomes range from 120 
        percent to 135 percent of the poverty level.
          Under current law, States are required to pay the 
        Medicare Part B premium for Medicaid beneficiaries 
        whose family income is between 100 percent and 120 
        percent of the poverty level.
          This new program does not, however, provide any 
        individual entitlement to any low-income senior 
        citizens. The amount of assistance a person gets is 
        decided by the States. In addition, the block grant is 
        authorized for five years, but the increase in premium 
        is permanent.

    Sense of the Congress Concerning the Treatment of Hmong Veterans

           Expresses the sense of Congress that, based 
        on their service on behalf of the United States during 
        the Vietnam War, Hmong veterans should be treated like 
        other noncitizen veterans for purposes of continued 
        eligibility for assistance benefits.

                        Advisory Board Personnel

           Eliminates the statutory restrictions on the 
        number and type of staff that the Advisory Board is 
        authorized to hire.
           Effective as if enacted in the Contract With 
        America Advancement Act of 1996 (P.L. 104-121).
P.L. 105-34 (H.R. 2014), Taxpayer Relief Act of 1997, signed on August 
        5, 1997

                Expanded SSA Records for Tax Collection

           Provides that, for an application for an SSN 
        for a person under age 18, SSA must collect the SSNs of 
        each parent in addition to currently required evidence 
        of age, identity, and citizenship. SSA must share this 
        information with IRS for administration of tax benefits 
        based on support or residency of a child.
           Provides that States must make available to 
        SSA each parent's name and SSN collected in the birth 
        certification process. SSA must share this information 
        with IRS.
           SSA collection of parents' SSNs is effective 
        for SSN appli-

        cations made more than 180 days after the date of 
        enactment.

        States' sharing of birth certificate information with 
        SSA and

        SSA sharing of such information with IRS applies to 
        informa-

        tion obtained on, before, or after the date of 
        enactment.

                      Work Opportunity Tax Credit

           Adds qualified SSI recipients to the 
        ``targeted group'' list, thus making their employers 
        eligible for the tax credit. Also, increases the 
        percentage of the existing tax credit to 40 percent of 
        a ``targeted group'' individual's wages for qualified 
        individuals working more that 400 hours a year, 25 
        percent for qualified individuals working between 120-
        140 hours a year, and deny the credit for qualified 
        individuals working less than 120 hours. In addition, 
        extends the expiration date of the tax credit from 
        September 30, 1997 to July 1. 1998, and makes 
        conforming amendments to welfare-to-work provisions in 
        PRWORA.

      Exclusion of Termination Payments Made to Insurance Salesmen

           Excludes for Social Security purposes 
        payments made to a self-employed insurance salesman 
        after his agreement to work for the insurance company 
        has terminated if: he performed no additional work for 
        the company in that taxable year; he entered into a 
        covenant not to compete with the company; and the 
        amount of the payment was based entirely on the 
        policies he sold or was credited with selling during 
        the last year of the agreement which remain in force 
        rather than on his length of service or overall 
        earnings from the company.

          Status of Representatives of Security Broker-Dealers

           Provides that, in determining whether a 
        registered representative of a securities broker-dealer 
        is an employee or independent contractor, no weight is 
        to be given to instructions from a service recipient 
        which are imposed in order to comply with government-
        imposed investor protection standards.

                Employer-Provided Educational Assistance

           Reinstates a provision that expired in June 
        1997, under which certain employer provided educational 
        assistance was excluded for Social Security and income 
        tax purposes.

                             Magnetic Media

           Requires partnerships with more than 100 
        partners to report on magnetic media.

                            Fringe Benefits

           Broadens the exclusion of employer-provided 
        fringe benefits for Social Security and income tax 
        purposes to apply to qualified parking provided in lieu 
        of compensation.
P.L. 105-277 (H.R. 4328), Omnibus Consolidated and Emergency 
        Supplemental Appropriations Act of 1999, signed on October 21, 
        1998
            Supplemental security income-related provisions

                            Redeterminations

    The President's request for $50 million to conduct 
additional non-medical SSI redeterminations was not 
specifically funded. However, SSA's regular ``Limitation on 
Administrative Expenses'' (LAE) account was increased by $47 
million over the President's budget request. SSA intends to use 
the additional LAE funds to conduct SSI redeterminations. 
Effective on enactment.

          Qualified Medicare Beneficiary Demonstration Project

           Requires the Commissioner of Social Security 
        to evaluate methods to promote Medicare buy-in programs 
        targeted to elderly and disabled individuals whose 
        incomes are below specified percentages of the poverty 
        line and whose resources generally are less than twice 
        the SSI resource limits. Effective on enactment.

                      Work Opportunity Tax Credit

           Extends the work opportunity tax credit 
        available to employers of SSI beneficiaries and other 
        targeted groups until June 30, 1999. The tax credit 
        expired on June 30, 1998.
            Other provisions

          Social Security Coverage Agreements With the States

           Permits States to modify their Social 
        Security coverage agreements with the Commissioner of 
        Social Security between January 1, 1999 and March 31, 
        1999 to exclude from Social Security coverage services 
        performed by students employed by a public school, 
        university, or college in that State. The exclusion 
        applies to student services performed after June 30, 
        2000.

   Perfecting Amendments Related to Withholding From Social Security 
                                Benefits

           Amends section 207 of the Social Security 
        Act to allow voluntary withholding from Social Security 
        benefits for income tax purposes. Effective for 
        benefits paid on or after December 1, 1998.

               Paperwork Elimination/Electronic Signature

           Requires that, not later than 18 months 
        after enactment, the Director of the Office of 
        Management and Budget (OMB), in consultation with the 
        National Telecommunications and Information 
        Administration (NTIA) develop procedures for use and 
        acceptance of electronic signatures by Executive 
        Agencies.
           Provides that, not later than 5 years after 
        enactment, the Director of OMB will ensure that 
        Executive Agencies allow the option of electronic 
        maintenance, submission, or disclosure of information, 
        when practicable; and allow the use of electronic 
        signatures, when practicable.
           Provides for the development by OMB of 
        procedures to allow private employers to electronically 
        file employee records with Executive agencies.
           Provides that electronic records or 
        signatures developed in compliance with the procedures 
        in the law are not denied legal effect, validity, or 
        enforceability because they are in electronic form.

             No DOT Funding for Changes in Drivers Licenses

           Provides that no funds appropriated for the 
        Department of Transportation (DOT) may be used to issue 
        the final regulations required by section 656(b) of the 
        Illegal Immigration Reform and Responsibility Act of 
        1996. Section 656(b) prohibits Federal agencies from 
        accepting as proof of identification a drivers license 
        that does not meet standards promulgated by the DOT. 
        The standards include a document that contains a Social 
        Security number that can be read electronically or 
        visually and is in a form that includes security 
        features to limit tampering and counterfeiting.
P.L. 105-285 (S. 2206), Human Services Reauthorization Act of 1998, 
        signed on October 27, 1998
           Establishes the Individual Development 
        Account (IDA) demonstration under which low-income 
        individuals, including recipients of SSI, may establish 
        dedicated savings accounts that can be used for 
        purchasing a first home, meeting the costs of post-
        secondary education, capitalizing a business, or 
        addressing certain defined hardship cases. An 
        individual's deposits into the IDA are matched by a 
        sponsoring non-profit organization, State or local 
        government participating in the demonstration.
           For purposes of determining eligibility and 
        benefit amounts under Federal or federally assisted 
        programs based on need, including SSI, only the 
        deposits made by the individual and interest accrued on 
        those funds may be considered to be the income, assets, 
        or resources of the individual. The matching funds are 
        excluded.
P.L. 105-306 (H.R. 4558), Noncitizen Benefit Clarification and Other 
        Technical Amendment Act of 1998, signed on October 28, 1998
            Supplemental security income provisions

Continuing Eligibility for Certain Aliens Receiving Benefits in August 
                                  1996

           Permanently extends the eligibility of all 
        ``nonqualified'' noncitizens who were receiving SSI 
        benefits when the welfare reform law was passed in 
        August 1996 (P.L. 104-193). Their benefits had been 
        previously extended through September 30, 1998, by the 
        Balanced Budget Act of 1997 (P.L. 105-33).

Disregard of Awards Made to Children on SSI Because of Life-Threatening 
                               Conditions

           Excludes from SSI eligibility and benefit 
        determinations in-kind gifts not converted to cash and 
        the first $2,000 annually of cash gifts made by tax-
        exempt organizations, such as the Make-A-Wish 
        Foundation, to individuals under age 18 with life-
        threatening conditions.
           Applies to gifts made on or after the date 
        that is 2 years before the date of enactment.

  Enhanced Recovery of SSI Overpayments From Social Security Benefits

           Authorizes SSA to collect SSI overpayments 
        by offsetting Social Security benefits, with a maximum 
        monthly offset of no more than 10 percent of the Social 
        Security benefit. (Currently, such recovery of SSI 
        overpayments from Social Security benefits may be made 
        only with the agreement of the overpaid individual.)
           Effective upon enactment.
P.L. 105-318 (H.R. 4151), Identity Theft and Assumption Deterrence Act 
        of 1998, signed on October 30, 1998
           Provides criminal penalties (to be 
        determined by the U.S. Sentencing Commission) for any 
        person who knowingly transfers or uses, without lawful 
        authority the means of identification of another person 
        with the intent to commit, or to aid or abet, any 
        unlawful activity that constitutes a violation of 
        Federal law or that constitutes a felony under any 
        applicable State or local law;
           Defines ``means of identification'' to 
        include name, social security number, date of birth, 
        official State or government issued driver's license or 
        identification number, alien registration number, 
        government passport number, and employer or taxpayer 
        identification number; and
           Directs the Federal Trade Commission, no 
        later than 1 year after enactment, to establish 
        procedures to receive complaints, provide informational 
        materials to victims, and refer complaints to 
        appropriate entities, which may include credit bureaus 
        or law enforcement agencies.
P.L. 105-369 (H.R. 1023), Ricky Ray Hemophilia Relief Fund Act of 1998, 
        signed on November 12, 1998
           Prohibits payments made under the Ricky Ray 
        Hemophilia Relief Fund Act of 1998 from being 
        considered income or resources in determining 
        eligibility for, or the amount of, benefits under the 
        Supplemental Security Income (SSI) program or medical 
        assistance under the Medicaid program.
P.L. 105-379 (S. 1733), Requirement that State agencies ensure that 
        food stamp coupons are not issued to deceased individuals, 
        signed on November 12, 1998
           Requires each State agency that administers 
        a food stamp program to enter into a cooperative 
        arrangement with the Commissioner of Social Security to 
        verify whether food stamp recipients are deceased to 
        ensure that benefits are not issued to deceased 
        individuals; and
           Provides that the Secretary of Agriculture 
        is to report to Congress and to the Secretary of the 
        Treasury on the progress and effectiveness of the 
        cooperative arrangements established.

                        ITEM 31--VETERANS AFFAIR

                              ----------                              


                            I. INTRODUCTION

    The Department of Veterans Affairs has the potential 
responsibility for a beneficiary population of more than 25 
million veterans. The median age of veterans is approximately 
58 years old compared to a median age of approximately 34 years 
old for the general U.S. population. Over 36% (or more than 9 
million) of the veteran population is age 65 and older. By the 
year 2005, over four-and-a-half million veterans will be 75 
years or older.
    This demographic trend will require VA to redistribute its 
resources to meet the different needs of this older population. 
Historically, older persons are greater users of healthcare 
services. The number of physician visits, short-term hospital 
stays and number of days in the hospital, as well as need for 
long-term care services, all increase as the patient moves from 
the fifth to seventh decade of life.
    VA has developed a wide range of services to provide care 
in a variety of institutional, non-institutional, and community 
settings to ensure that the physical, psychiatric and 
socioeconomic needs of the patient are met. Special projects, a 
variety of innovative, medically-proven programs and individual 
VA facility initiatives have been developed and tested that can 
be used for veteran patients and adapted for use by the general 
population.
    VA operates the largest health care system in the Nation, 
encompassing 172 hospitals, 132 nursing home care units, 40 
domiciliaries, and over 500 outpatient clinics. VA also 
contracts for care in non-VA hospitals and in community nursing 
homes, provides fee-for-service visits by non-VA physicians and 
dentists for outpatient treatment, and supports care in 93 
State Veterans Homes in 43 States. As part of a broader VA and 
non-VA network, affiliation agreements exist between virtually 
all VA healthcare facilities and nearly 1,000 medical, dental, 
and associated health schools. This affiliation program with 
academic health centers results in almost 107,000 health 
profession students receiving education and training in VAMCs 
each year.
    In addition to VA hospital, nursing home and domiciliary 
care programs, VA is increasing the number and diversity of 
non-institutional extended care programs. The dual purpose is 
to facilitate independent living and to keep the patient in a 
community setting by making available the appropriate 
supportive medical services. These programs include Home-Based 
Primary Care, Community Residential Care, Adult Day Health 
Care, Psychiatric Day Treatment and Mental Hygiene Clinics, and 
Homemaker/Home Health Aide Services.
    The need for both acute and chronic hospitalization will 
continue to rise as older patients experience a greater 
frequency and severity of illness, as well as a different mix 
of diseases, than younger patients. Cardiovascular diseases, 
chronic lung diseases, cancers, psychiatric and mental 
disorders, bone and joint diseases, hearing and vision 
disorders, and a variety of other illnesses and disabilities 
are all more prevalent in those persons age 65 and older. VA 
continues efforts to improve the outcomes of care for elderly 
patients with complex problems by supporting Geriatric 
Research, Education and Clinical Centers and specialized 
clinical services such as Geriatric Evaluation and Management 
Programs.

                   II. VETERANS HEALTH ADMINISTRATION

                   A. Office of Patient Care Services

    The Office of Patient Care Services comprises thirteen 
strategic healthcare groups. Each of these functional groups 
has contributed significantly to VA's efforts on behalf of 
older veterans.

      primary and ambulatory care strategic healthcare group (shg)

    The Office of Primary and Ambulatory Care and the Office of 
Geriatrics and Extended Care continue to maximize collaboration 
in transforming the veterans healthcare system from a bed-
based, hospital inpatient system to one rooted in ambulatory 
care.
    In 1998, the Employee Education System, Northport Center, 
sponsored a national conference for the purpose of providing an 
integrated Geriatric Primary Care Education Program that would 
allow each VHA Network to develop and implement a Geriatric 
Primary Care model. The emphasis was on continuity of care, 
care management, and assessment/triage, based on an 
interdisciplinary approach. The conference also provided a 
forum for discussion of a variety of successful VA and non VA 
Geriatric Primary Care models of care, and attempted to link 
the models to FY 98 Performance Measures.
    Conference participants included a multidisciplinary team 
composed of a geriatrician and various primary care providers 
(physician, physician assistant, nurse practitioner, clinical 
nurse specialist and social worker) from each Network. In 
addition, the Northport Center purchased in 1998 Geriatric 
Primary Care pocket guides and pocket pals for all conference 
participants and for each VA facility.
    The Employee Education System, Northport Center, will 
continue to coordinate the activities of VHA's National Primary 
and Ambulatory Care Education. The Northport Center, in 
collaboration with Primary and Ambulatory Care, Geriatric Care 
and Mental Health is planning to present a Strategic 
Integration Conference in fiscal year 1999.

                               Dentistry

    Oral/dental care for the geriatric patient involves the 
restoration of the dentition and the elimination of pain and 
suffering attributable to oral disease. Microorganisms 
originating in the mouth have been identified as the causative 
agents for life-threatening infections of the heart, brain, 
lung, kidney, spine, and joints. There is growing evidence, 
much of it deriving from longitudinal studies at several VA 
facilities, that chronic periodontal (gum) disease plays a role 
in causing heart attacks and stroke.
    Oral cancer is a disabling and disfiguring disease that 
primarily affects middle-aged and older adults. Ninety-five 
percent of cases occur in those over age 40. Tobacco, alcohol, 
and advanced age are important risk factors in the development 
of this disease. Through a long-standing program of oral 
screening examinations, VA dentists have been able to 
expeditiously detect incipient oral cancers in veterans. Such 
interventions minimize mortality rates and the need for 
ablative surgery, which often results in severe disfigurement 
and functional difficulties in eating, speaking, and 
swallowing.
    It is important for older veterans to be able to masticate 
a variety of foods so that daily maintenance of caloric and 
nutritive intake, as well as convalescence after surgery, 
chemotherapy, or other significant radical interventions, is 
expedited. Elimination of the causes of oral pain and 
replacement of missing oral structures both work to enhance the 
amount and number of choices of foods that can be eaten. 
Interpersonal skills, which are highly dependent upon physical 
appearance, and effective communication are enhanced by 
improving the patient's appearance and by properly aligning and 
restoring anterior teeth to maintain clarity of speech.
    Destruction of tissues due to dental decay and the 
periodontal diseases is chronic and, in the elderly, usually 
asymptomatic. For this reason, public and private healthcare 
payers may perceive oral healthcare directed at dental and 
periodontal diseases as a low priority or even a luxury. In 
older patients, dental and periodontal diseases are often 
aggravated by coexistent medical problems; the oral disease in 
turn contributes to systemic illness, and in this way drives up 
healthcare costs. The relatively minor expense associated with 
preventive dentistry thus represents a net saving in overall 
health costs. Preventive modalities can include the use of 
home-applied fluoride solutions, anti-microbial mouth rinses, 
specially fabricated toothbrushes, instruction to family or 
caregivers on oral hygiene techniques, and more frequent dental 
examinations.
    Most VA facilities have a Geriatric Evaluation and 
Management (GEM) Program. The goals for all disciplines 
involved in geriatrics--to maximize function and to foster 
independence--are reflected in dentistry's goals for elderly 
veterans.
    Patients are rehabilitated more rapidly with properly 
staged and coordinated care. To that end, Dental Services 
contribute to the interdisciplinary team effort by conducting 
admission oral assessments, collaborating on treatment 
planning, providing specialty consultations and needed care, 
and preparing summaries of oral care protocols to be maintained 
after discharge. The VA Program Guide, ``Oral Health Guidelines 
for Long-Term Care Patients'' developed by the Offices of 
Patient Care Services, the Office of Dentistry, and the Office 
of Geriatrics and Extended Care, continues to serve as the 
primary handbook for management of the geriatric oral health 
efforts. It describes the goals, implementation and monitoring 
of oral care provision for patients in VA long-term care 
programs.
    VA dentistry is an undisputed leader in geriatric oral 
healthcare training. GEMs and nursing homes serve as training 
sites for all of the existing advanced formal training programs 
in geriatric dentistry in the United States. VA-trained 
geriatric dentists have appointments on a majority of the 
dental school faculties in the United States. More than one 
fourth of all hospital-based general dentistry post-graduate 
education takes place in VA medical centers, where the 
residents devote much of their educational efforts to the 
clinical management of older veterans.
    The impact of VA programs in geriatric dentistry is not 
limited to its own healthcare system, but extends to a broader 
level. VA dentistry is represented on National Institute of 
Dental Research reviews, a U.S. Surgeon General's workshop on 
oral health promotion and disease prevention, the development 
of the first Surgeon General's Report on Oral Health, and on 
review panels for programs in medical and dental geriatric 
education funded by the Health Services and Resources 
Administration.
    VA dentists are and have been long involved at the highest 
levels of leadership in the professional organizations 
(American Society for Geriatric Dentistry, American Association 
of Hospital Dentists, Federation of Special Care Organizations 
in Dentistry, American College of Prosthodontists, American 
Association for Dental Research, Gerontological Society of 
America) most heavily concerned with oral care issues for older 
adults. The American Association of Dental Schools (AADS) has 
an ongoing Geriatric Education Project that has developed 
guidelines for teaching concepts in gerontology and geriatrics 
to dental and dental hygiene students, and VA dentists have 
been noteworthy contributors to these efforts to define 
geriatric educational objectives and identify source materials 
for dental faculty members.
    VA dentists have been leaders and active part ants in 
recent projects involving health services and basic research 
relevant to the older adult. One investigator has developed 
measures to assess the relationship between or-I health and 
overall quality of life in older patients. Longitudinal studies 
of older veterans in Massachusetts and Michigan have yielded a 
wealth of knowledge on the relationships between age, systemic 
disease, oral diseases, and diet. VA researchers have surveyed 
VA dental services to determine the effectiveness of smoking 
cessation interventions; others have investigated the education 
of both dental and non-dental health providers with respect to 
oral cancer risk factors and screening.
    Multicenter longitudinal clinical studies through the VA 
have examined the efficacy of metal, ceramic, and ceramo-metal 
crowns. Another VA cooperative study has amassed the largest 
database in the world on the emerging alternative to 
toothlessness, osseointegrated implants, and the factors that 
predict their successful implementation. VA clinical studies on 
preventive strategies and materials in oral cancer patients 
have set the standards for management of such patients 
internationally. Finally, research, in collaboration with NIH, 
is ongoing to discover biological markers for the detection of 
oral cancer.
    In summary, VA dentistry and the Office of Dentistry 
continues to support efforts that will benefit older veterans 
in the three general areas that define the mission of the 
Department. First, the provision to elderly veterans of quality 
oral healthcare, of both preventive and restorative character, 
is recognized by and practiced within VA as an important and 
cost-effective component of total health maintenance.
    Second, education in geriatric oral health is critical on 
many levels, and will continue to be a VA focus directed at 
veterans; VA dental staff and residents; the dental profession 
and dental education communities; and nondental providers such 
as nurses, physicians, and family members. Third, VA dental 
research has enhanced and will continue to broaden our 
understanding of oral disease, its relationship to general 
health, and its treatment in older adults.
Acute Care Stratecgic Health Care Group (SHG)
    The Acute Care Strategic Health Care Group serves as the 
primary source of physicians trained in the medical specialties 
for the care of all veterans, including elderly patients. Due 
to the growing proportion of older veterans, Hospital-Based 
Acute Care is increasingly involved in all aspects of the 
delivery of healthcare to this patient population. Acute and 
intermediate medical wards, coronary and intensive care units, 
and outpatient clinics are all seeing an increased proportion 
of elderly patients with acute and chronic illnesses who 
require treatment by specialists. While some care is provided 
specifically by geriatricians, as the population ages, all 
internists and surgeons are seeing an older veteran population. 
In FY 1998, 61.1 percent of veterans operated on by the 
surgical specialists were over the age of 60 years.
    Some specialty areas are particularly affected, including 
cardiology, endocrinology (diabetes), rheumatology, oncology, 
orthopedic surgery, urology, cardiothoracic surgery and 
vascular surgery. Acute care specialists provide necessary 
specialty care in inpatient and outpatient settings and 
participate in the care of patients in other medical center 
programs, including Geriatric Evaluation and Management (GEM) 
Programs, Hospice, Respite, Nursing Home, Adult Day Health Care 
and Home-Based Primary Care. The specialized care required by 
elderly patients with complex problems has been recognized by 
Hospital-Based Acute Care at a number of VA facilities by their 
establishment of Geriatric Medicine Sections which emphasize 
clinical care, as well as coordinate research and education 
efforts related to geriatrics.
Geriatrics and Extended Care Strategic Healthcare Group (SHG)
    Geriatrics and Extended Care has developed an extensive 
contin-

uum of clinical services including specialized and primary 
geriatric

care, residential rehabilitation, community-based long-term 
care,

and nursing home care. The shared purpose of an geriatrics and 
ex-

tended care programs is to prevent or lessen the burden of 
disabil-

ity on older, frail, chronically ill patients and their 
families/care-

givers, and to maximize each patient's functional independence.
    The following is a description of VA's geriatrics and 
extended

care programs and activities within each.

                          va nursing home care

    VA nursing home care units (NHCUs), which are based at VA 
facilities, provide skilled nursing care and related medical 
services. Patients in NHCUs may require shorter or longer 
periods of care and rehabilitation services to attain and/or 
maintain optimal functioning. An interdisciplinary approach to 
care is utilized in order to meet the multiple physical, 
social, psychological and spiritual needs of patients.
    In Fiscal Year 1998, more than 46,000 veterans were treated 
in VA's 132 NHCUs. The average daily census of patients 
provided care on these units was 13,391.
    Plans are underway for systemwide implementation of the 
Resident Assessment Instrument/Minimum Data Set (RAI/MDS) in VA 
NHCUs. Implementation of the RAI/MDS will enhance care provided 
nursing home patients. VA is providing interdisciplinary NHCU 
staff educational programs in the use of the RAI/MDS and 
automation required to support this initiative.

                      Community Nursing Home Care

    This is a community-based contract program for veterans who 
require skilled nursing care when making a transition from a 
hospital setting to the community. Veterans who have been 
hospitalized in a VA facility for treatment, primarily for a 
service-connected condition, may be placed at VA expense in 
community facilities for as long as they need nursing home 
care. Other veterans may be eligible for community placement at 
VA expense for a period not to exceed six months. Selection of 
nursing homes for VA contracts requires the prior assessment of 
participating facilities to ensure quality services are 
offered. Follow-up visits are made to veterans by staff from VA 
medical centers to monitor patient programs and quality of 
care. In Fiscal Year 1998, 28,895 veterans were treated and the 
average daily census of veterans in these homes was 5,605.

                          VA Domiciliary Care

    Domiciliary care in VA facilities provides necessary 
medical and other professional care for eligible ambulatory 
veterans who are disabled by disease, injury, or age and are in 
need of care but do not require hospitalization or the skilled 
nursing services of a nursing home.
    The domiciliary offers specialized interdisciplinary 
treatment programs that are designed to facilitate the 
rehabilitation of patients who suffer from head trauma, stroke, 
mental illness, chronic alcoholism, heart disease and a wide 
range of other disabling conditions. With increasing frequency, 
the domiciliary is viewed as the treatment setting of choice 
for many older veterans.
    Implementation of rehabilitation-oriented programs has 
provided a better quality of care and life for veterans who 
require prolonged domiciliary care and has prepared an 
increasing number of veterans for return to independent or 
semi-independent community living.
    Special attention is being given to older veterans in 
domiciliaries with a goal of keeping them active and productive 
as well as integrated into the community. The older veterans 
are encouraged to utilize senior centers and other resources in 
the community where the domiciliary is located. Patients at 
several domiciliaries are involved in senior center activities 
as part of VA's community integration program.
    Other specialized programs in which older veterans are 
involved include Foster Grandparents, Handyman Assistance to 
senior citizens in the community, and Adopt-A-Vet.
    In fiscal year 1998, 23,889 veterans were treated in 40 VA 
domiciliaries resulting in an average daily census of 5,583. Of 
these numbers, nearly 5,000 veterans and an average daily 
census of more than 1,500 were admitted to the domiciliaries 
for specialized care for homelessness. The average age of this 
latter group was 43.7 years, while the overall average age of 
domiciliary patients was 59 years.

                              State Homes

    The State Home Program has grown from 10 homes in 10 states 
in 1888 to 93 state homes in 43 states. Currently, a total of 
24,154 state home beds are authorized by VA to provide 
hospital, nursing home, and domiciliary care. VA's relationship 
to state veterans homes is based upon two grant programs. The 
per them grant program enables VA to assist the states in 
providing care to eligible veterans who require domiciliary, 
nursing home or hospital care. The other VA grant program 
provides up to 65 percent federal funding to states to assist 
in the cost of construction or acquisition of new domiciliary 
and nursing home care facilities, or the expansion, remodeling, 
or alteration of existing facilities.
    In fiscal year 1998, state veterans homes provided care to 
6,413 veterans in domiciliaries and 22,421 veterans in nursing 
homes. The average daily census of veteran patients was 3,626 
for domiciliary care and 14,674 for nursing home care.

                              Hospice Care

    VA has developed programs that provide pain management, 
symptom control, and other medical services to terminally ill 
veterans, as well as bereavement counseling and respite care to 
their families. The hospice concept of care is incorporated 
into VA facility approaches to the care of the terminally ill. 
All VA facilities have appointed a hospice consultation team, 
which is responsible for planning, developing, andimplementing 
the hospice program.

                        Home-Based Primary Care

    This program provides in-home primary medical care to 
veterans with chronic illnesses. The family provides the 
necessary personal care under the coordinated supervision of a 
home-based interdisciplinary treatment team. The team 
prescribes the needed medical, nursing, social, rehabilitation, 
and dietetic regimens, and provides training to family members 
and the patient in supportive care.
    Seventy-one VA medical centers are providing home-based 
primary care (HBPC) services. In fiscal year 1998, home care 
was provided by VA health professionals to an average daily 
census of 6,348 patients.

                         Adult Day Health Care

    Adult Day Health Care (ADHC) is a therapeutically-oriented, 
ambulatory program that provides health maintenance and 
rehabilitation services to veterans in a congregate setting 
during the daytime hours. ADHC in VA is a medical model of 
services, which in some circumstances may be a substitute for 
nursing home care. VA operated 14 ADHC centers in Fiscal Year 
1998 with an average daily attendance of 442 patients. VA also 
continued a program of contracting for ADHC services in 83 
medical centers. The average daily attendance in contract 
programs was 615 in Fiscal Year 1998.

               Community Residential Care/Assisted Living

    The Community Residential Care/Assisted Living program 
provides residential care, including room, board, personal 
care, and general healthcare supervision to veterans who do not 
require hospital or nursing home care but who, because of 
health conditions, are not able to resume independent living 
and have no suitable support system (e.g., family or friends) 
to provide the needed care. All homes are inspected by a 
multidisciplinary team prior to incorporation of the home into 
the VA program and annually thereafter. Care is provided in 
private homes that have been selected by VA, and is at the 
veteran's own expense. Veterans receive monthly follow-up 
visits from VA health care professionals. In fiscal year 1998, 
an average daily census of 8,104 veterans was maintained in 
this program, utilizing approximately 2,100 homes.

                   Homemaker/Home Health Aide (H/HHA)

    VA provided homemaker/home health aide services for 
veterans needing nursing home care. These services are provided 
in the community by public and private agencies under a system 
of case management provided directly by VA staff. One hundred 
eighteen VAMCs purchased H/HHA services in Fiscal Year 1998 
with an average daily census of 2,385.

                  Geriatric Evaluation and Management

    The Geriatric Evaluation and Management (GEM) Program 
includes inpatient units, outpatient clinics, and consultation 
services. A GEM Unit is usually a functionally different group 
of beds (ranging typically in number from 10 to 25 beds) on a 
medical service or an intermediate care unit of the hospital 
where an interdisciplinary healthcare team performs 
comprehensive, multidimensional evaluations on a targeted group 
of elderly patients who will most likely benefit from these 
services. The GEM unit serves to improve the diagnosis, 
treatment, rehabilitation, and discharge planning of older 
patients who have functional impairments, multiple acute and 
chronic diseases, and/or psychosocial problems. GEM clinics 
provide similar comprehensive care for geriatric patients not 
in need of hospitalization as well as follow-up care for older 
patients to prevent their unnecessary institutionalization. A 
GEM program also provides geriatric training and research 
opportunities for physicians and other health care 
professionals in VA facilities. Currently, there are 110 GEM 
Programs.

                              Respite Care

    Respite care is a program designed to relieve the spouse or 
other caregiver from the burden of caring for a chronically 
disabled veteran at home. This is done by admitting the veteran 
to a VA hospital or nursing home for planned, brief periods of 
care. The long range benefit of this program is that it enables 
the veteran to live at home with a higher quality of life than 
would be possible in an institutional setting. It may also 
provide the veteran with needed treatment during the period of 
care in a VA facility, thus maintaining or improving functional 
status and prolonging the veteran's capacity to remain at home 
in the community. Nearly all VA facilities have a respite care 
program.
    An earlier formal evaluation of the program found a high 
level of satisfaction with the Respite Care Program by family 
caregivers. The evaluation also found a high level of 
enthusiasm for the program by medical center staff delivering 
the care.

                Alzheimer's Disease and Other Dementias

    VA's program for veterans with Alzheimer's disease and 
other dementias is decentralized throughout the medical care 
system, with coordination and direction provided by the 
Geriatrics and Extended Care Strategic Group in VA 
Headquarters. Veterans with these diagnoses participate in all 
aspects of the healthcare system, including outpatient, acute 
care, and extended care programs.
    In order to advance knowledge about the care for veterans 
with dementia, VA investigators conduct basic biomedical, 
applied clinical, health services, and rehabilitation research, 
much of which occurs at VA's Geriatric Research, Education and 
Clinical Centers (GRECCs), and which is supported through the 
VA Office of Research and Development as well as extramural 
sources. In Fiscal Year 1998, VA investigators were involved in 
227 funded research projects on Alzheimer's disease and other 
dementias.
    Continuing education for staff is provided through training 
classes sponsored by GRECCs and VA's continuing education field 
units. In addition, VHA has disseminated a variety of dementia 
patient care educational materials in the form of publications 
and videotapes to all VA medical centers, some of which are 
available to the general public through inter-library loan.
    In Fiscal Year 1998, the VA Educational Center in 
Minneapolis completed and distributed to all VA medical centers 
a multimedia computer program (CD-ROM) for education and 
training of family caregivers for patients with dementia. This 
interactive program provides basic information on Alzheimer's 
disease; guidelines with examples for assessing the functional 
capacity, or stage, of dementia; and strategies for dementia 
care appropriate at each stage. A modified version for 
professional caregivers is now under development. Also in 1998, 
a field-based work group continued development of a VA clinical 
guideline for pharmacological management of cognitive symptoms 
of Alzheimer's disease.
    Another major activity in Fiscal Year 1998 was VA's 
continued participation, through its Upstate New York 
Healthcare Network, in a national demonstration project on 
Alzheimer's disease and managed care. This project, ``Chronic 
Care Networks for Alzheimer's Disease,'' is co-sponsored by the 
Alzheimer's Association and the National Chronic Care 
Consortium. Implementation of the project is scheduled for 1998 
to 2000.
    In addition, the comprehensive Center for Alzheimer's 
Disease and Other Neurodegenerative Disorders at the Oklahoma 
City VA Medical Center completed its fourth year of development 
during Fiscal Year 1998. The Center is progressing toward a 
goal to develop and evaluate a rural healthcare model for the 
coordinated care of patients with Alzheimer's disease or other 
degenerative neurological disorders in the state of Oklahoma, 
using an interdisciplinary, case-management approach.
    A new project examining ways to improve home- and 
community-based end of life care for persons with advanced 
dementia began in FY 1998. This one-year Dementia End of Life 
Care project is funded by the national Alzheimer's Association, 
with principal investigators at the GRECC in Bedford, 
Massachusetts.

          Geriatric Research, Education, and Clinical Centers

    Geriatric Research, Education and Clinical Centers (GRECCs) 
are designed to enhance VA's capability to develop state-of-
the-art care for the elderly through research, training and 
education, and evaluation of alternative models of geriatric 
care. First established by VA in 1975, the current 16 GRECCs 
continue to serve an important role in further developing the 
capability of the VA healthcare system to provide cost-
effective and appropriate care to older veterans.
    GRECCs have established many interrelationships with other 
programs to avoid fragmentation and duplication of efforts. 
Important examples include the GRECC's coordination with VA's 
Health Services Research and Development Field Programs and 
other research programs within VA and at affiliated health 
science centers; coordination with VA Employee Education 
Centers and Cooperative Health Manpower Education Programs, as 
well as with Geriatric Education Centers at affiliated 
universities; and coordination with clinical programs and 
quality improvement efforts at each host VA facility and 
throughout the VA network in which each GRECC is located.
    In Fiscal Year 1998, GRECCs continued to make a number of 
contributions to the field of aging and care of the elderly. 
Examples include further research on the Alzheimer's gene 
discovered by researchers at the GRECC in Seattle, Washington; 
the dissemination of a CD-ROM for family caregivers of 
Alzheimer's patients (developed at the Minneapolis GRECC); and 
an evaluation by the Sepulveda, California, GRECC of an 
interdisciplinary model of geriatric primary care for elderly 
patients.
    During fiscal year 1998, VHA solicited proposals from VA 
facilities and networks for establishing new GRECCs. VHA plans 
to expand the GRECC program by up to three new sites in 1999.
Mental Health Strategic Healthcare Group (SHG)
    Although the reported prevalence of mental illness among 
the elderly varies, conservative estimates for those age 65 
years or older include a minimum of 5 percent with Alzheimer's 
disease or other dementias and an additional 15 to 30 percent 
with other disabling psychiatric illnesses. If we use the 30 
percent estimate, 2.3 to 2.7 million veterans can be expected 
to need psychogeriatric care at any given time during the first 
two decades of the next century. Mental Health Services 
throughout VA have continued to provide care to older veterans 
through both clinic and other community-based programs and a 
growing continuum of residential care, acute, subacute, and 
long-term hospital programs in each of the 22 Veterans 
Integrated Services Networks (VISNs). Close collaboration with 
Geriatric and Extended Care Services at the medical centers is 
strongly recommended. Some of the specific activities in Fiscal 
Year 1998 are noted below:

                  New Mental Health Program Guidelines

    The VHA Program Guide (1103.22) called Integrated 
Psychogeriatric Patient Care published March 26, 1996, was 
updated and condensed as a chapter in a new publication, Mental 
Health Program Guidelines for the New Veterans Health 
Administration (1103.3). Both program guides are recommended as 
a resource for clinicians serving elderly veterans and non-
veterans alike.

    UPBEAT (Unified Psychogeriatric Biopsychosocial Evaluation and 
                               Treatment)

    UPBEAT, a controlled, demonstration project at 9 VA 
facilities costing $2 million annually, is exploring clinical 
and economic outcomes as a result of screening elderly patients 
in acute VA medical and surgical hospital settings for 
depression, anxiety, and substance abuse. Following an 
interdisciplinary psychogeriatric team evaluation and treatment 
plan, case managers follow-up patients with positive symptoms 
for a two year period. Preliminary findings midway through the 
project suggest that the UPBEAT care patients were hospitalized 
an average of 5.4 days less than patients in the usual care 
group during the year following initial randomization, 
amounting to over $5200 savings per patient per year for 
inpatient care. This data will need to be confirmed during the 
completion of the project.

          Treatment Guidelines for Major Depressive Disorders

    Version 11 of these algorithm-based treatment guidelines 
for both primary care practitioners and mental health 
specialists was published in 1998 and distributed to all VA 
facilities. It also appears on the IntraNet at http//
vaww.mentalhealth.med.va.gov and as a help file that can be 
downloaded for clinicians. The guidelines were created by a 
multidisciplinary group of VA and non-VA professionals to 
enhance the uniformity and quality of VHA's clinical 
interventions. A special depression screening exam for veterans 
over 60 years of age and updated annotations regarding 
pharmacological treatment of elders are major features of the 
new guidelines. In addition, treatment of veterans with 
substance abuse and post-traumatic stress disorder (PTSD) is 
included.

                           Clinical Research

    MEDLINE searches of medical research publications since 
1990 on geriatric psychiatry in VA settings revealed 66 
articles which dealt exclusively with elderly veterans. Of 
these, 27 addressed post-traumatic stress disorder (PTSD) 
including studies of ex-prisoners of war; 14 primarily alcohol 
abuse and its detection; 10 Alzheimer's and related diseases; 
and the rest, other aspects of illness in elder veterans.
Physical Medicine and Rehabilitation Strategic Healthcare Group (SHG)
    Physical Medicine and Rehabilitation Therapy strives to 
provide all referred older veterans with comprehensive 
assessment, treatment and follow-up care for psychosocial and/
or physical disability affecting functional independence and 
quality of life. The older veteran's abilities in the areas of 
self-care, mobility, endurance, cognition and safety are 
evaluated. Therapists utilize physical agents, therapeutic 
modalities, exercise and the prescription of adaptive equipment 
to facilitate the veteran's ability to remain in the most 
independent life setting. Rehabilitation personnel provide 
education to the veteran and family members about adjustment to 
a disability or physical limitations and instruct them in 
techniques to maintain independence despite disability.
    There are approximately 65 comprehensive inpatient medical 
rehabilitation programs (both acute and subacute) within the 
Veterans Health Administration (VHA). There has been some 
shifting of acute rehabilitation beds to less resource 
intensive subacute beds. The subacute rehabilitation setting 
affords VHA the ability to provide less intense rehabilitation 
services for the older veteran, aimed at promoting an 
individual's integration back into the community. On both acute 
and subacute rehabilitation units, physicians, usually board 
certified physiatrists, lead interdisciplinary teams of 
professionals to focus on outcomes of functional restoration, 
clinical stabilization, or avoidance of acute hospitalization 
and medical complications.
    A uniform assessment tool, the Functional Independence 
Measure (FIM) is being implemented throughout the VA 
rehabilitation system. Patients are evaluated on 18 elements of 
function at the time of admission, regularly during treatment 
and at discharge. Application of FIM results to quality 
management activity will assist local and national 
rehabilitation clinicians and managers to maximize effective 
and efficient rehabilitation care delivery. An administrative 
data base called the Uniform Data System for Medical 
Rehabilitation (UDS/mr) monitors outcomes of care and increases 
the accuracy of developing predictors and ideal methods of 
treatment for the older veteran with various diagnoses. Through 
a national contract with UDS/mr, facilities with inpatient 
rehabilitation programs provide data and receive outcome 
reports as part of a national and international UDS/mr data 
bank. Use of the FIM as a functional assessment tool is 
available to all VA medical centers through connectivity to the 
Functional Status and Outcomes Database (FSOD) for 
Rehabilitation housed at the VA Austin Automation Center, 
Austin, TX The FSOD allows tracking of rehabilitation outcomes 
across the full continuum of care based upon a severity of 
illness index, the Function Related Groups.
    Rehabilitation therapists are leading and participating in 
innovative treatment, clinical education, staff development and 
research. Rehabilitation professionals work within Home-based 
Primary Care Programs, Independent Living Centers, Geriatric 
Evaluation and Management Units, Adult Day Health Care, Day 
Treatment Centers, Domiciliaries, Interdisciplinary Team 
Training Programs, Geriatric Research, Education, and Clinical 
Centers (GRECCs), and Hospice Care Programs. Applying 
principles of health education and fitness, rehabilitation 
staff develop and provide programs aimed at promoting health 
and wellness for the aging veteran.
    Driver training centers are staffed at 40 VA medical 
centers to meet the needs of aging and disabled veterans. With 
the growing numbers of older drivers, VA has put emphasis on 
the training of the mature driver. Classroom education, updates 
in laws and defensive driving techniques are supported with 
behind-the-wheel evaluation by trained specialists. 1

                           recreation therapy

    Provided that adequate preventive and support services are 
made available, older individuals can enjoy full and satisfying 
lives. Studies have shown that isolation leads to depression, 
and depression is the most common mental disorder affecting 20% 
of persons aged 65 and older. Also, the highest suicide rate in 
America is among persons aged 50 and over. Recreation therapy 
interventions address restoration of functioning; health 
maintenance and reduction of health risk factors; and 
psychosocial health concerns. Interventions include fitness and 
movement activities; reality orientation and sensory 
stimulation; activities promoting socialization, choice, and 
self-expression; various daily living activities; and health 
and lifestyle education.
    Since 1972, the University of Maryland's ``Adult Health and 
Development Program'' has provided a valuable interchange and 
opportunity for elderly veterans receiving healthcare at the VA 
Capitol Network (Washington, DC), to participate in a variety 
of physical recreation, exercise, social, expressive, and 
artistic activities.
    Since 1985, VA's Recreation Therapy Service has held the 
National Veterans Golden Age Games (NVGAGs) for the benefit of 
veterans age 55 and older. Sports and recreation are vital 
components of rehabilitative medicine within VA medical 
facilities, where recreation therapy plays an important role in 
the lives of older patients.
    The NVGAGs serve as a showcase for the preventive and 
therapeutic medical value that sports and recreation provide in 
the lives of all older Americans. Participants compete in a 
variety of events that include but are not limited to, 
swimming, tennis, shuffleboard, horseshoes, croquet, bowling, 
and bicycle races. The NVGAGs are co-sponsored by VA and the 
Veterans of Foreign Wars of the United States. Numerous 
corporate sponsors provide financial support, and hundreds of 
local volunteers provide on-site assistance each year.
Nursing Strategic Healthcare Group (SHG)
    Nursing Service, in support of VHA's reorganization and 
``Journey of Change,'' continues to rank care of the elderly 
veteran as a major priority. Nurses at every level of the 
organization are committed to leadership in the clinical, 
administrative, research, and educational components of 
gerontological nursing. Powerful societal forces in both the 
federal government and the private sector require even a 
greater collaborative teamwork as nursing strives to integrate 
advances in technology and information management, and 
participates in the transition from inpatient to outpatient 
healthcare within the managed care model.
    Nurses continue to participate in preventive care and 
health promotion initiatives, to preserve both the veterans' 
and their significant others' independence. Team approaches to 
improving the health status of aging veterans have fostered 
optimum levels of self-care, improved productivity, and 
enhanced quality of life. Health screening, education, primary 
care and referral of elderly veterans are critical functions 
necessary to evaluate healthcare needs and properly place the 
veteran in the most appropriate level of care. This may range 
from the environment of personal care in the home as the least 
restrictive setting to nursing home care as the most 
restrictive environment. Nurses have facilitated 
interdisciplinary leadership to create and strengthen programs 
to help keep patients in their homes as long as possible. These 
include Adult Day Care Programs, Home-Based Primary Care, and 
Case Management to coordinate multiple health services. Nurses 
in wellness clinics, mobile units and other ambulatory care 
settings provide supervision, screening and health educational 
programs to assist veterans and their significant others in 
fostering and maintaining healthy lifestyles.
    Effective utilization of Advanced Practice Nurses (APN) in 
the provision of health care services is a critical component 
of VHA's mission to provide primary care in a seamless system 
across a continuum of care. This continuum of care for aging 
veterans includes primary care, acute care, long-term care, 
rehabilitative care and mental healthcare. Nurses are a vital 
part of interdisciplinary teams that coordinate and provide 
care in settings such as Geriatric Evaluation and Management 
Programs (GEMs), ambulatory care, acute care, long-term care, 
mobile care units, and community agencies. Gerontological 
advanced practice nurses provide primary care and continuity of 
care as clinical care managers, coordinators of care, and case 
managers. Through sustained patient partnerships, APNs provide 
healthcare for aging patients in diverse settings, minimizing 
illness and disabilities and focusing on health promotion, 
disease prevention and health maintenance.
    Primary care may be provided to aging veterans by a 
physician or a nurse practitioner primary care provider and 
followed by a care team including psychiatry, psychology, 
social work, rehabilitative medicine and others. Primary care 
services are based on the long-term care needs of aging 
patients including those with multiple and chronic medical 
problems, functional disabilities, cognitive impairments and 
weakened social support systems. Services are provided across 
the continuum from health promotion and disease prevention to 
screening for community services including hospice care 
evaluation.
    Nurses facilitate the restoration of functional abilities 
of veterans with chronic illnesses and disabilities. Programs 
for the physically disabled and cognitively impaired are 
administered by nurses and advanced practice nurses in settings 
representing ambulatory care, inpatient care and home care. 
Treatment programs and rehabilitation teams are goal-directed 
with physical and psychosocial reconditioning or retraining of 
patients. Patient and family teaching is a major part of each 
program. Family/significant others have a key role in providing 
support to veterans. Both are assisted in learning and in 
maintaining appropriate patient/caregiver rights and 
responsibilities. VA nurses contribute to planning, 
implementing and evaluating services for veterans in the 
community-at-large.
    Committed to leadership in education, VA nurses provide 
creative learning experiences for both undergraduate and 
graduate nursing students. Nursing education initiatives 
including ``distance learning'' are being developed to provide 
skills and competencies necessary to function in primary and 
managed care settings. Students are able to work and study with 
VA nurses who have clinical and administrative expertise in 
aging and long-term care. These include nurses in various 
organizational and leadership roles. Nurses have responded to 
the growing emphasis upon end-of-life issues by providing 
training and local programs for palliative care, including 
hospice programs. Pain management in the elderly has been 
identified as a major problem and will be part of the National 
Pain Management Strategy. These collaborative experiences 
promote a culture and image of an agency that is committed to 
quality care and quality of life for aging veterans.
    To assist facilities in meeting performance measures, 
nurses have been involved in developing creative alternatives 
to acute inpatient care. This includes chronic ventilator 
programs, which extend into nursing home and even home 
settings. There is also increased emphasis upon defining VA 
Nursing Home Care Unit (NHCU) programs as transitional and 
rehabilitative, providing a realistic discharge option for 
patients continuing to require nursing intervention previously 
confined to acute wards. Several VA NHCUs have demonstrated a 
significant decrease in restraint usage. Decreased restraint 
usage is attributed to interdisciplinary reassessment of the 
patient's treatment. Each patient/resident has a comprehensive 
interdisciplinary plan of care, which facilitates reduced 
restraint usage. Resident outcomes include a decrease in the 
number of falls and Injuries with an increase in residents' 
alertness, happiness, muscle strength, independence and pride. 
Nurses and other members of the interdisciplinary team are 
proud of these clinical outcomes and VA NHCUs success in 
reducing the use of restraints in care of the elderly. Such an 
environment enhances resident behaviors in independence, 
decision making and socialization.
    Multi-arts programs have been developed including Tai Chi, 
Dance, Art Appreciation, Hands on Art, Sign Language and 
Creative Writing. Patient outcomes include increase in mobility 
and functions and increase in spontaneity and happiness as 
measured by standardized instruments.
    Committed to research, VA nurses continue to change and 
reshape clinical nursing practices. Nursing research is 
improving care delivery and health promotion in the following 
areas:
        Alternatives to Institutional Care;
        Wound Care and Effectiveness of Treatment Regimens;
        Risk Assessment for Falls;
        Restraint Minimalization and Interdisciplinary 
        Assessment Tool Effectiveness;
        Patient Education, Health Promotion and Maintenance; 
        and,
        Clinical Pathways.
    Timely application of research findings to clinical care in 
all practice settings will improve the quality of care and 
quality of life to aging veterans. Quality of life is an 
essential component for evaluating the effects of nursing care 
in both research and clinical practice. Research by nurses as a 
discipline and in collaboration with other members of the 
healthcare team continues to focus on specific patient care 
outcomes including quality of life, effectiveness of care 
interventions, cost effectiveness and patient satisfaction.
Pharmacy and Benefits Management Strategic Healthcare Group (SHG)
    The Under Secretary for Health established the Pharmacy 
Benefits Management (PBM) Service line in FY 1996 to provide a 
focus within the Veterans Health Administration (VHA) 
concerning the appropriate use of pharmaceuticals in the 
healthcare of veterans. A secondary goal was to decrease the 
overall cost of healthcare through achievement of the PBM's 
primary goal. As the VHA transitions from an emphasis on 
inpatient care to ambulatory/primary care, pharmaceutical 
utilization will increase dramatically.
    One of the key organizational elements of VHA's PBM is its 
group of field-based physicians called the Medical Advisory 
Panel (MAP). The MAP provides leadership and guidance to the 
PBM in addressing the four functions of the PBM. These 
functions are: (1) to enhance the efficiency and effectiveness 
of the drug use process; (2) to enhance the distribution 
systems for pharmaceuticals used in both the inpatient and 
outpatient settings; (3) to bring consistently best 
pharmaceutical practices into the VA health care system; and 
(4) to maintain and enhance VA's drug pricing capabilities.
    The PBM serves a qualitative and quantitative role in 
addressing the needs of older veterans. In a patient population 
that frequently has co-morbidities and multiple drug therapies, 
the actions of pharmacists to improve the drug use process are 
essential in realizing the goal of the appropriate use of 
pharmaceuticals. To date, eleven pharmacologic, drug treatment 
guidelines have been developed and promulgated for use in the 
VA healthcare system. Three areas of interest and merit in 
addressing the health conditions of elderly patients are 
included in the published drug treatment guidelines; they are 
depression, congestive heart failure, and benign prostatic 
hyperplasia. In addition, to improve the use of drugs in 
elderly patients the PBM plans to include a screening tool in 
VISTA (formerly known as the Decentralized Hospital Computer 
Program) to identify patients receiving one of 20 medications 
known to require close monitoring in elderly patients. 
Facilities can use this tool to individually tailor the 
patient's drug therapy.
    During 1998 dramatic increases in the utilization of 
pharmaceuticals and the dollars expended on pharmaceuticals 
occurred across VHA. Through the use of effective contracting 
strategies tied to the development of drug treatment 
guidelines, the ability of VHA to provide quality medical care 
at an affordable price was achieved. Members of Congress, 
members of veterans service organizations and individual 
patients generated considerable interest in VA's National 
Formulary and related processes. Initiatives in applied 
research regarding formulary decisions and in medication data 
management were begun in 1998. These efforts are crucial to the 
continued evolution and future value of the PBM to VHA's 
mission.
Allied Clinical Services Strategic Healthcare Group (SHG)

                       nutrition and food service

    Medical nutrition care saves money, improves patient 
outcomes and enhances the quality of life for our older 
veterans. To better serve the veteran and identify nutritional 
needs, many VA healthcare professionals are now using Determine 
Your Nutritional Health Checklist and Level 1 and 11 Nutrition 
Screen developed by the America Dietetic Association, American 
Academy of Family Physicians and National Council on Aging 
National Screening Initiative. The Checklist or Level I Screen 
identifies those at high risk for poor nutritional status, 
while the Level 11 Screen provides specific diagnostic 
nutritional information. The National Screening Initiative 
emphasizes educating the physician in nutritional care. The 
booklet, Incorporating Nutrition Screening and Interventions 
into Medical Practice, has been disseminated nationally to 
doctors.
    Many medical centers have Geriatric Nutrition Specialist 
positions. Dietitians in these positions actively participate 
in nutrition-related projects at GEMs and GRECCs to ensure that 
nutrition is an integral component of care for geriatric 
patients. Several medical centers are providing outreach 
services for the elderly in their communities. For example, the 
Bronx VA provides outreach to local senior centers, and the 
Dallas VA health screening team makes bi-monthly visits to 
facilities in their area. Feeding dependency is highly 
associated with malnutrition among nursing home residents. The 
``Silver Spoons'' program continues to be one of the most 
successful programs at many VAMC nursing homes and is aimed at 
intervention before severe nutritional problems develop in 
feeding dependent residents. The program uses volunteers to 
feed residents and to ensure adequate nutrition. This is an 
interdisciplinary program including dietary, nursing, 
voluntary, medical, recreation and dental services. Several 
medical centers have focused on upgrading their menus for 
nursing home residents. Some examples including the VAMCs at 
Brockton/West Roxbury, MA; Dayton, OH; and Denver, CO have 
developed a pureed food product line to enhance the appearance, 
taste, quality and acceptability of foods for geriatric 
patients with dysphasia. The Pittsburgh Healthcare System 
(Aspinwall Division) conducts a Patient Family Dining Program. 
Geriatric patients and their families are provided table 
service, restaurant style meals to celebrate patient birthdays, 
anniversaries and other special events. This past year, two 
medical centers, Asheville, NC and Columbia, MO, established 
meals-on-wheels contracts with local county/state elderly 
institutions. The San Francisco VAMC, has developed an 
electronic system for monitoring significant weight loss for 
long-term care patients. Since weight loss is one of the 
primary indicators for screening patients at nutritional risk, 
thisalerts dietitians to provide timely, appropriate nutrition 
intervention.

                          social work service

    Meeting the biopsychosocial healthcare needs of an aging 
population of veterans and caregivers continues to be a major 
priority of Social Work Service and the Veterans Health 
Administration. The need to be competitive in a challenging an 
changing healthcare environment, as well as cost-effective and 
efficient in addressing the social components of healthcare, 
has led to a re-examination of social work priorities and their 
relevance to VA's healthcare mission, with special reference to 
the needs of chronically ill, frail elderly veterans. Without a 
support network of family, friends, and community health and 
social services, healthcare gains would be lost and VHA acute 
care resources would be over-burdened. Frequently, it is not 
the degree of illness that determines the need for hospital 
care, but rather the presence or absence of family and 
community resources.
    The expansion of homemaker/home health aide services is 
evidence of the importance of non-institutionalized support 
networks in maintaining the veteran in the community. Social 
workers continue to coordinate discharge planning and to serve 
as the focal point of contact between the VA medical center and 
the veteran patient, family members, and the larger community 
health and social services network. The veteran and family 
members have, in many respects, become the ``unit of care'' for 
social work intervention. It is this ``customer'' focus which 
will undergird social work programming for vulnerable 
populations, including older veterans who are demanding that 
VHA be more responsive and sensitive to their psychosocial 
needs and those of their caregivers.
    The role of the caregiver as a member of the VA healthcare 
team and as a key player in the provision of healthcare 
services continues to be a major area of social work practice 
and will continue to be in the immediate future. This is 
consistent with the recognition that 80 percent of care for the 
elderly is provided in the home by family, neighbors and 
others. The family, ordinarily the veteran's spouse, is the key 
decision-maker concerning health insurance issues, access to 
health resources and community support services.
    As VHA transitions from an acute care to a primary care/
community interactive healthcare delivery system, Social Work 
Service has placed increased emphasis on its pivotal role in 
community services coordination, development, and integration. 
The development of a ``seamless garment of care,'' with case 
management services as its centerpiece, is being given 
increased emphasis by Social Work Service and its National 
Committee. The National Committee published Social Work 
Practice Guidelines, Number 2: Social Work Case Management in 
September 13, 1995, and Case Management

Outcomes and Measures: a Social Work Source Book, in August 
1997. These standards are used as a starting point and part of 
the educational process that takes place at each VA facility as 
we move into interdisciplinary clinical paths and practice 
guidelines. The National Committee functions in an advisory 
capacity concerning social work and systems issues, priorities, 
and practice concerns. While case management services have been 
a central component of social work practice in VHA, this 
service modality is being ``re-discovered'' by the VA 
healthcare system as an essential component of services 
provided to ``at-risk'' veterans and their caregivers. Case 
management, also known as care coordination, was identified in 
veterans' discussion groups as a very important ingredient in 
meeting veterans' healthcare needs and those of their 
caregivers. During 1998, and beyond, VHA, and particularly 
Social Work Service, will be challenged to expand case 
management services in concert with other community providers 
and to provide a perspective that addresses this critical 
ingredient in healthcare in terms of its absolute relevance to 
successful healthcare outcomes. In a revitalized and 
reconfigured VA healthcare system, issues of coordination, 
access, cost, and appropriateness of VA and community services 
will be determined not only by the needs of the customers, but 
also by the experience and expertise of the providers.
Diagnostic Services Strategic Healthcare Group (SHG)
    The clinical services of Pathology and Laboratory Medicine, 
Radiology, and Nuclear Medicine constitute the Diagnostic 
Services Group. Each of these clinical services provides direct 
services to veteran patients and to clinician-led teams in 
ambulatory/primary care, acute care, mental health, geriatrics 
and long-term care, and rehabilitation medicine.
    Diagnostic Services staff are educated on special care of 
the elderly. Pathology and Laboratory staff, for example, 
receive special training on phlebotomy with the elderly. In 
addition, normal values of various laboratory tests may be 
different in the elderly. These differences are incorporated 
into each VA facility's reference on normal ranges for tests.
Prosthetic and Sensory Aids Strategic Healthcare Group (SHG)
    The mission of the Prosthetic and Sensory Aids Service 
(PSAS) Strategic Healthcare Group is to provide specialized, 
quality patient care by furnishing properly prescribed 
prosthetic equipment, sensory aids and devices in the most 
economical and timely manner in accordance with authorizing 
laws, regulations and policies. PSAS serves as the pharmacy for 
assistive aids and PSAS prosthetic representatives serves as 
case managers for the prosthetic equipment needs of the 
disabled veteran.
    Currently, the majority of amputations performed in VA 
medical centers are a result of peripheral vascular disease and 
diabetes as opposed to traumatic amputations related to war 
injuries. Elderly veterans make up roughly 90 percent of this 
patient population. For some of these elderly veterans, the 
transition to learning the mobility requirements of an 
artificial limb can be difficult. For others, the adjustment to 
a different type artificial limb or an amputation of another 
extremity can be just as traumatic. Prosthetic representatives 
exercise professional judgment in filling prosthetic 
prescriptions for both groups of veterans, taking into account 
a veteran's present quality of life, mobility, and dependence. 
PSAS is an integral member of healthcare teams providing 
prevention, treatment and follow-up care to our aging veteran 
population.
Telemedicine Strategic Healthcare Group (SHG)
    The Telemedicine Strategic Healthcare Group has the mission 
of furthering the innovative use of information and 
communications technologies to provide and support healthcare 
for veterans across distance and time barriers. VHA has played 
a leadership role in telemedicine which involves the use of 
different communications technologies to transmit diagnostic 
and therapeutic information across significant distances. 
Telemedicine is expected to play an increasingly important role 
in improving healthcare for veterans by providing greater 
access to care, continuity and timeliness of care, reduction in 
travel time, and connectivity between providers and patients at 
remote locations.
    Clinicians throughout VHA in many clinical specialties have 
used different telemedicine technologies to improve access, 
coordination and continuity f care for veterans. The 
Telemedicine Strategic Healthcare Group will continue to 
evaluate and recommend strategies to improve the capabilities 
for new information technologies to assist clinicians in 
bringing down the barriers of distance and time, and thereby, 
enhance the support of healthcare delivery to the older 
veteran.
Spinal Cord Injury/Disorders Strategic Healthcare Group (SHG)
    The Spinal Cord Injury and Disorders (SCI&D) Strategic 
Healthcare Group (SHG) provides primary, specialty, and 
rehabilitation care for veterans with spinal cord injuries and 
disorders. Due to healthcare interventions and improved methods 
of long-term management, veterans with SCI&D are living longer. 
The average current age of veterans with SCI has been estimated 
to be twelve years older than the average current age in the 
general SCI population (55 years vs. 43 years). Over 20% of the 
general SCI population is over the age of 61, and since the 
veteran geriatric population is proportionately larger than the 
general population, this percentage is anticipated to be 
significantly larger. Major clinical issues related to aging 
with a spinal cord disability that are being addressed in VHA 
include degenerative processes in the shoulders secondary to 
long-term wheelchair use, recurrent pressure ulcers, over use 
syndromes, recurrent urinary tract infections, and the 
psychological and social impact of losing caregiver support.
    With about 36 percent of the total veteran population 65-
years-old or older (compared with 13 percent of the general 
population), long-term care is a critical issue for America's 
veterans. VA is intensifying its strategy development for 
providing long-term care for elderly veterans. Veterans 
Integrated Strategic Network 8, which includes all the VA 
facilities in Florida and Puerto Rico, has established a Task 
Force on Long-Term Care Issues and SCI&D in collaboration with 
a veteran's service organization. The SCI&D SHG is also working 
collaboratively with a veteran's service organization on 
policies regarding follow-up care for veterans with spinal cord 
injuries and disorders who use community nursing homes.
    Research on aging and SCI&D is a high priority in VA. The 
five-year SCI Quality Enhancement Research Initiative has 
several concept papers and research initiatives that will 
pertain to issues of aging with a disability. Over the next 
four years, solicitations will be developed in several other 
areas including long term-care, aging, and clinical areas for 
which additional research are needed. Both the Rehabilitation 
Research Center at the Houston VAMC and the Geriatric Research, 
Education, and Clinical Center (GRECC) at the Brockton/West 
Roxbury VA is focusing research aging with a spinal cord 
disability.
Forensic Medicine Strategic Healthcare Group (SHG)
    Forensic Medicine SHG addresses the interface between law 
and medicine. Within this context, Forensic Medicine is 
involved in VHA support to Veterans Benefits Administration 
(VBA) claims processing activities. This primarily involves 
Headquarters coordination for compensation and pension 
examinations of veterans. These examinations are required by 
VBA to enable the adjudication of most disability claims. The 
SHG also devotes considerable effort to tort claim reviews and 
risk management. Although not specifically focused on aging 
veterans, the work of this SHG, particularly in the 
compensation and pension examination process, directly affects 
benefits to elderly veterans and surviving spouses and 
dependents.

                 B. Office of Research and Development

    Because of the often unique and difficult health problems 
of the elderly, VA is engaged in a vigorous research effort 
that approaches aging from a number of directions reflecting 
the multi-faceted nature of aging.
    The commitment to research on aging veterans is 
demonstrated by the fact that the Office of Research and 
Development has established aging as one of nine Designated 
Research Areas (DRA) under which virtually all VA Research and 
Development programs and projects fall. For clarity, a DRA is 
defined as an area of research in which VA has a particularly 
strong strategic interest because of the prevalence of 
conditions within the VA patient population, the uniqueness of 
a specific patient population and its disease burden to the VA 
system or the importance of the question to healthcare delivery 
within VA. Clearly, veteran aging and its associated problems 
fall within this definition. VA research that is considered to 
fall primarily within the Aging DRA includes:
        Normal age-related changes in the body's structure and 
        function;
        Aging syndromes, such as frailty, immobility, falls, 
        cognitive impairment;
        Compound problems and co-morbidities, such as dementia 
        and hip fractures;
        Care of elderly veterans; and,
        End-of-life issues - hospice care, ``quality of 
        dying'', and similar areas.
    Below are highlights of recent advances in research on 
aging veterans from each of the Office of Research and 
Development's programs: Medical Research, Health Services 
Research and Development, Co-operative Studies, and 
Rehabilitation Research and Development.

                        medical research service

    Medical Research Service (MRS) strives to administer high 
quality biomedical research relevant to veterans' healthcare 
needs and to foster the productivity of research scientists at 
VA healthcare facilities. The overall goal of research is to 
support and enhance patient care at VA health facilities by 
seeking improvements in the etiology, pathogenesis, diagnosis, 
and treatment of diseases and disorders prevalent among 
veterans. In order to focus efforts on scientific advances that 
may impact the elderly, aging has been established as a 
research priority area within MRS. Aging research focuses on 
changes that occur during normal aging to syndromes associated 
with aging to geriatric care, and includes research with a 
primary focus on aging issues and also research that may 
indirectly enhance our understanding of age-related changes.
    In MRS the primary mechanism for funding peer-reviewed 
investigator-initiated research occurs through the Merit Review 
Program, where there is a scientific board dedicated to 
reviewing research on aging and age-related issues. 
Additionally, experts in the aging scientific community 
comprise a Medical Research Advisory Group that meets 
biannually to review the MRS aging research portfolio and make 
recommendations regarding aging priorities. The following three 
program areas reflect ongoing MRS aging research:

                (1) Cellular and Physiologic Senescence

    Funded studies encompass those examining changes that occur 
within and between cells during the aging process. Because 
there are age-related changes in body chemistry that affects 
cellular functioning, research is directed to understanding how 
certain chemicals may be influential within organs and systems. 
Several studies are investigating hormonal changes and their 
effects on liver function, impotence, and the immune response. 
One project is looking at the chronic effects of ultraviolet 
ray exposure on skin cells. Much research is also directed 
toward understanding the cellular changes that might underlie 
processes such as metabolic bone disease and arthritis. Other 
research is directed toward examining changes that may be 
occurring in chemical transmitters (e.g., nitric oxide, 
catecholamines) in the brain to better understand their role 
specifically as it relates to aging. Examples of ongoing 
research includes:
        Work to identify differential changes in 
        neurotransmitter (dopamine) receptors in an area of the 
        brain considered important for motor functioning and 
        Parkinson's disease. Injection of another chemical, 
        GDNF, into this brain area showed increased motor 
        function in rats, suggesting that this program may lead 
        to advances in understanding cellular processes and 
        developing potential treatments.
        ``Free radicals'' are thought to cause cellular damage 
        related to aging and cancer. Different mouse strains 
        will be developed to understand mechanisms that may 
        protect cells from free radical damage and to determine 
        if longevity is affected.

                 (2) Dementias and Behavioral Disorders

    While dementia is clearly associated with the aged, there 
are many other disorders common in the elderly that affect 
everyday mood and behavior. The distribution of MRS research 
appears to be fairly even across these two categories, with 
approximately 50% of the projects in this area devoted to 
dementia research. Intense research efforts have been directed 
toward understanding the pathology and etiology of dementia 
(Alzheimer's disease, Parkinson's disease, and others). These 
studies cover the entire spectrum of issues including 
underlying causes, mechanisms of neuronal degeneration, 
cognitive changes, and physical changes that may be identified 
with state-of-the-art brain imaging techniques. The remaining 
projects in this area are devoted to understanding a wide range 
of behavioral disturbances including depression, post traumatic 
stress disorder, and sleep disorders. The adverse effects of 
substance abuse and nicotine related to aging are being 
examined. Examples of ongoing research include:
        Determining the effectiveness of antidepressant drug 
        therapy in a group of long-term nursing home residents. 
        If treatment is effective, the research will examine 
        the sustainability of benefits over time.
        Examining the role of estrogen therapy in women with 
        Alzheimer's disease, and relating findings to cognitive 
        function and genetic risk factors.

                (3) Geriatric Syndromes and Pharmacology

    Over half of all MRS aging research is dedicated to medical 
diseases and disorders that tend to affect the aging 
population. The three major areas of research are bone disease, 
arthritis/joint disorders and prostate disease. The projects 
emphasize an understanding of the basic mechanisms underlying 
the disease processes in order to develop potential treatments. 
Diabetes, coronary disease, impotence, and infection are also 
addressed, with multiple ongoing projects in each area. 
Additionally, there are research studies being conducted in 
oral health (dentures and denture implants), sensory disorders 
(retinal degeneration and hearing loss), and lung disease. 
Several studies are investigating the outcomes of exercise and 
obesity in the elderly. Examples of ongoing research include:
        A study to identify risk factors shared by older 
        veterans who fall or incur motor vehicle accidents, and 
        to determine if those risk factors are related to 
        veterans who require assistance with activities of 
        daily living.
        A new computer-assisted drug delivery system being 
        evaluated to determine how concentrations and responses 
        of multiple drugs may be modeled.
    In addition to the MRS goal to fund high-quality biomedical 
research, we are also interested in training and developing 
scientific researchers who will continue to devote their 
efforts within VA to understand the problems related to older 
veterans. MRS has several mechanisms in place to attract, 
train, and retain investigators. These programs are designed to 
train and mentor new, young investigators, as well as to reward 
the most accomplished, independent VA scientists. All programs 
currently support investigators working on aging research and 
services utilized by hospice patients.

                health services research and development

    Research supported by the Health Services Research and 
Development Service (HSR&D) is designed to enhance veterans' 
health and functional status by informing clinical and 
management decisions about VA healthcare. HSR&D researchers 
focus on identifying effective and cost effective strategies 
for the organization and delivery of health services and for 
optimizing patient-and system-level outcomes. They employ the 
methods and approaches of clinicians, social scientists, and 
providers to advance the field of health services research and 
answer practical questions that are important both inside and 
outside VA. The predominance of elderly veterans and their 
special healthcare needs have long been a major focus of HSR&D 
research. Pertinent research supported during FY 1998 is 
described in the following pages.

           (1) HSR&D's Investigator-Initiated Research (IIR)

    This program encourages and supports projects proposed and 
carried out by researchers from VA medical centers throughout 
the Nation. This includes projects proposed in response to 
special solicitations initiated in Headquarters. All proposed 
projects undergo rigorous peer review to determine scientific/
technical merit and importance to VA.
    Forty-nine percent of the 75 HSR&D IIRs active in FY 1998, 
including fifteen new projects, addressed questions relevant to 
aging veterans. The topics addressed include:
        cost-effectiveness of lung volume reduction surgery, 
        variation in length of stay, pre-and post-hospital care 
        and survival;
        exercise training in patients with chronic obstructive 
        pulmonary disease (COPD);
        effectiveness and cost impact of a telecommunications 
        system on COPD;
        non-melanoma skin cancer outcomes;
        risk of mortality in prostate cancer; and,
        two studies related to diabetes: case management of 
        diabetes and patient preferences for diabetes care.
    Seven of the new aging projects respond to HSR&D's 
solicitations for research in ethnic and cultural issues in VA 
healthcare, access to care and implementation of clinical 
practice guidelines. Specifically, these address:
        ethnic/cultural variations in care of veterans with 
        osteoarthritis;
        prostate cancer outcome measures associated with age 
        and race;
        the impact of outsourcing VA cardiac surgery on the 
        cost and quality of care;
        post-stroke rehabilitation care;
        an evaluation of the organization of subspecialty 
        cardiac care within VA;
        guidelines for hypertension drug therapy; and,
        the effect of clinical guidelines on pressure ulcer 
        care in nursing homes.
    Among fifteen continuing projects related to aging are:
        an evaluation study of the effectiveness of screening 
        for prostatic cancer;
        a controlled trial of a physical restoration 
        intervention (SAFE-GRIP) to reduce the likelihood of 
        falls in the elderly after hospitalization;
        a study of the differences in coronary angioplasty 
        outcomes between veterans and non-veterans;
        primary care for high risk older veterans;
        the effect of patient- and system-level factors on the 
        use of VA health services among elderly veterans;
        automated calls with nurse follow-up for improving 
        glucose control and preventing costly illness among 
        diabetic patients;
        decline in functional status as a quality indicator for 
        long-term care;
        an intervention to help patients formulate and 
        communicate treatment preferences; and
        a new instrument to measure the quality and 
        effectiveness of interventions to improve end-of-life 
        care.
    Eight IIR projects related to aging were completed during 
FY 1998. These included:
        a study of the impact of oral health conditions and 
        quality of life in older veterans;
        appropriateness and necessity of cardiac procedures 
        after acute myocardial infarction;
        strategies to improve the quality of nutritional care 
        to elderly hospitalized patients;
        a stud to improve the management of patients with COPD;
        quality of life outcomes after coronary artery bypass 
        graft (CABG) surgery;
        an assessment of respiratory function in chronic spinal 
        cord injury;
        preventing chronic back pain;
        the impact of Geriatric Evaluation and Management and 
        usual primary care on the survival,
        healthcare utilization, and costs of elderly 
        outpatients; and,
        cultural factors that influence veterans' experiences 
        with and responses to chronic illness.

                    (2) HSR&D Centers of Excellence

    In 1998, VA funded two new HSR&D Centers of Excellence 
bringing the total to eleven Centers of Excellence in selected 
subject areas. One of the new Centers is the Center for Chronic 
Disease Outcomes Research at Minneapolis, MN. The Center's 
research portfolio is broad-based, with programs in prevention, 
disease, quality of care, and gender issues. Among the projects 
underway at Minneapolis are an evaluation of the effects of 
community-based outpatient clinics on access and quality of 
care for veterans and a study of gender differences in 
compensation and pension claims approval for veterans with 
PTSD.

          (3) Other Centers Emphasizing Aging are as Follows:

    The Northwest Center for Outcomes Research in Older Adults 
is the base for a very large and varied research program, 
funded by a combination of VA and nonVA sources. This center is 
a collaboration of VA Puget Sound Health Care System and the 
Portland VA Medical Center, with support from the University of 
Washington School of Public Health and Community Medicine and 
the Kaiser Permanente Center for Health Research in Portland. 
The Center's goals are to perform state-of-the-art research, to 
generate new knowledge and research methods, and to assist VA 
policy makers in a rapidly changing healthcare environment.
    Research focuses in three areas: (1) primary care 
management of chronic disease; (2) preservation of independence 
in older adults; and (3) development of methods to evaluate 
healthcare quality and efficiency. In FY 1998, VA researchers 
at the Seattle Center were involved in 95 individual projects. 
Examples of major projects related specifically to aging 
address:
        the role of physical activity and growth hormone in 
        maintaining functional status in older adults;
        prevention of older adult pedestrian injuries;
        identifying predictors of better outcomes of community 
        residential care; and,
        facilitating the use of advance care directives by 
        older adults.
    Other projects pertinent to improving the care of elderly 
veterans focus on management of chronic diseases that are very 
common among the elderly. These include diabetes, heart 
disease, depression, and low back pain.
    The Midwest Center for Health Services and Policy Research 
at Hines, IL, is a joint program of the four Chicago-area 
VAMCs, with academic support from Northwestern University, 
Loyola University of Chicago, the University of Illinois School 
of Public Health, the University of Chicago, Rush University 
and St. Xavier University. Funded since 1983, the Center has an 
established program of research in long-term care and 
geriatrics, as well as other aspects of health services 
research.
    Ongoing work related to aging includes development of a VA 
database on long-term care with associated resource guides. To 
support this work, a new VA Information Resource Center (VIREC) 
at Hines became operational in FY 1998. The primary goal of the 
Resource Center is to assist VA HSR&D in making information 
available to the research community for studies which 
ultimately will improve VA healthcare and add value to current 
HSR&D activities. Other examples of research at Hine's include 
projects focused on reducing the urden on family caregivers of 
persons with Alzheimer's disease, a major study of homebased 
primary care, and research addressing veteran patients' 
transition from hospital to home.
    The Center for Health Services Research in Primary Care at 
the Durham VAMC has been active since 1982. Through an array of 
research and proactive teaching programs, the Durham Center of 
Excellence emphasizes projects that enhance the delivery, 
quality and efficiency of primary care provided to veterans. 
Academic affiliations with Duke University and the University 
of North Carolina at Chapel Hill support a variety of research 
collaborations. Of the 28 research projects underway in FY 
1998, many specifically address age-related conditions seen in 
primary care and other aspects of healthcare for aging 
veterans.
    Aging research at the Durham Center includes projects 
focused on patient-physician interactions at the end of life 
delineating best practices for patients with chronic medical 
illnesses such as stroke and diabetes; women's health; 
understanding the influence of race on access to care; and 
quality of care in the prevention, treatment, and 
rehabilitation of patients with stroke.
    The Center for Health Quality, , Outcomes and Economic 
Research is based in Bedford, Massachusetts. This Center has, 
since its initial funding in 1990, emphasized important issues 
related to improving the quality of health services for aging 
veterans. Recent program growth extends the focus to the 
following major program areas: health outcomes measurement, 
quality assessment, and health economics.
    A number of ongoing research projects by researchers at the 
Bedford Center focuses on problems with special importance for 
aging veterans. For example, projects address methods for 
assessing the quality of long-term care, veterans hospice care, 
and other issues in end-of-life care. Other studies focus on 
care for particular conditions that are very common in elderly 
veterans, including hypertension, diabetes, chronic lung 
disease, osteoporosis, prostate disease, alcoholism, and oral 
health.
    The HSR&D Center for Practice Management and Outcomes 
Research in Ann Arbor, Michigan, shares a set of common goals 
with the other HSR&D Centers of Excellence, including 
conducting veteran-relevant health services research and 
providing consultative assistance to VA clinicians and 
administrators. Established in 1995, it is a Center of 
Excellence in research related to managing clinical practice 
and outcomes research. The Center is affiliated with the 
University of Michigan Hospitals, Medical School and School of 
Public Health. Additionally, it is fully integrated with VA's 
Serious Mental Illness Treatment Research and Evaluation Center 
(SMITREC). SMITREC was established in 1992 as the Center for 
Long-Term Mental Health Evaluation (CLTMHE) and continues as an 
ongoing special evaluation and research field program of the 
Mental Health and Behavioral Sciences Strategic Healthcare 
Group (at VA Headquarters).
    The Ann Arbor Center focuses on aging research related to 
quality improvement; costs and quality of diabetes care; 
prevention of common hospital complications; and mental health 
issues relevant to primary care practices.
    The Sepulveda, California, HSR&D Center for the Study of 
Healthcare Provider Behavior, seeks to build a knowledge base 
that will help researchers, policy makers, and healthcare 
managers design, implement and evaluate policies and programs 
that will improve health outcomes. Established in 1993, the 
Sepulveda-based Center has affiliates at the West Los Angeles 
Campuses of the VA Greater Los Angeles Healthcare and the San 
Diego VA Healthcare Systems and collaborates with two non-VA 
institutions--the University of California (campuses at Los 
Angeles and San Diego) and the RAND Health Program.
    During FY 1998, the Sepulveda Center core investigators 
conducted over 60 research projects at VHA and non-VHA 
locations. Center researchers are involved in studying Medicare 
HMO enrollees' use of VHA services; evaluating a case finding 
and referral system for older veterans in primary care; and 
studying generalist and specialist physician practices 
regarding patients with neurologic conditions as well as VHA 
and non-VHA patients with new-onset rheumatoid arthritis. They 
also are studying depression guideline implementation and have 
recently completed a comprehensive chart abstraction instrument 
for measuring adherence to pressure ulcer guidelines in VA 
nursing homes. Additionally, they developed a comprehensive 
dissemination and implementation plan for the newly-developed 
California Guidelines for Alzheimer's Disease Management, 
currently under review for dissemination within VA and a broad 
range of non-VA care settings nationwide.

                          (4) Special Projects

    The Special Projects Program encompasses the HSR&D Service 
Directed Research (SDR) Program, Management Decision Research 
Center (MDRC) and special activities such as conferences and 
seminars. Special projects may include evaluation research, 
information syntheses, feasibility studies, special initiatives 
and other research projects responsive to specific needs 
identified by Congress, other federal agencies, or Department 
of Veterans Affairs executive and management staff. This is a 
centrally-directed program of health services research 
conducted by VA field staff, VHA Headquarters staff, and/or 
contractors engaged to analyze specific problems.
    Ongoing HSR&D Service-Directed Research (SDR) projects 
focus on issues relevant to the aging veteran population. These 
projects include a study of health related quality of life; 
patient preferences in advanced metastatic prostate cancer; 
costs, quality of life and functional outcomes of veterans 
treated for multiple sclerosis; and a study to improve the 
quality of ambulatory care.
    Researchers completed five SDRs related to aging veterans. 
Two studies related to prostate cancer. One investigated 
familial patterns in prostate cancer and another assessed how 
patients obtain and synthesize information used in decision-
making about prostate cancer treatment. Other completed studies 
focused on the effectiveness of telecare in the management of 
diabetes; clinical management of veterans with stroke, and 
development of a long-term care database.
    Eight continuing HSR&D projects related to women's health 
are expected to benefit aging female veterans. These projects 
address issues of access to Am care; cancers of the 
reproductive system relating to military experience and Post 
Traumatic Stress Disorder (PTSD); quality of life; 
rehabilitation concerns of women with spinal cord injuries; 
depression, surgical risks and outcomes; alcohol prevalence, 
screening and self-help; and gender differences in compensation 
and pension claims for PTSD.
    The Under Secretary for Health proposed the nursing 
research initiative (NRI) to encourage new research on nursing 
topics and to expand the pool of nurse investigators within the 
Department of Veterans Affairs. The Research and Development 
Office, in collaboration with the Nursing Strategic Healthcare 
Group staff, implemented a research program that targets 
nursing investigators. This effort invites research proposals 
for health services research, medical research and 
rehabilitation research. In 1995, Health Services Research 
Service issued on behalf of the Office of Research and 
Development a formal Request for Applications inviting nurses 
at VA medical centers to submit research proposals. The first 
nursing research project, funded in 1996, was related to the 
psychophysiology of Post Traumatic Stress Disorder in female 
nurse Vietnam veterans. The NRI program was reauthorized in 
1996 and 1997. To date, eighteen projects have been funded 
under this initiative, including studies of behavioral 
management on quality of life in patients with heart failure; 
protocols to manage resistance to care in veterans with 
Alzheimer's disease; and pain resource nurses to improve cancer 
patient pain outcomes.
    HSR&D is leading the new Quality Enhancement Research 
Initiative (QUERI) launched in FY 1998 by the Office of 
Research and Development to create and implement a national 
system to translate research discoveries, innovations and known 
effective and efficient diagnostic and treatment strategies 
into patient care, QUERI is a comprehensive, data driven, 
outcomes-based quality improvement program promoting excellence 
in outpatient, in-patient, and long-term care. This initiative 
focuses on specific clinical conditions: mental health, 
substance abuse, diabetes, chronic heart failure, ischemic 
heart disease, prostate disease, stroke, spinal cord injury, 
HIV/AIDS, and cancer (prostate, colon). Solicitations were 
published regarding QUERI and approximately 150 proposals have 
been received for review. This initiative is fostering research 
that is directly impacting the care of aging veterans.
    HSR&D's Management Decision and Research Center (MDRC) 
works to translate research into practice by bringing 
technology assessment, management consultation, and research 
findings to managers, policymakers and clinicians within and 
outside of VA.
    For example, MDRC's Information Dissemination Program (IDP) 
has created a wide variety of products utilizing both print and 
electronic mechanisms to disseminate important research 
information. Communication mediums include televideo 
broadcasts, the web page and fax on demand system, and various 
print publications such as the primer series, Management 
Briefs, and the newsletter FORUM. Another IDP publication is VA 
Practice Matters, which summarizes the results of important 
research within VA and promotes its application by describing 
the potential impact and possible implementation strategies and 
resources. In FY 1998, two issues of Practice Matters focused 
on issues of concern to elderly veterans: ``Acute Stroke 
Treatment'' and ``Benign Prostatic Hyperplasia.''
    Also in 1998, MDRC's Technology Assessment Program produced 
two evaluations on topics relevant to elderly patients: shared 
decision making programs for patients with prostate cancer, and 
the use of stereotactic pallidotomy for treatment of 
Parkinson's disease. Other relevant assessments currently 
underway include evaluations of brachytherapy (a radiation 
therapy) for prostate cancer; systematic reviews of impotence 
therapies; minimally invasive treatment options for abdominal 
aortic aneurysms; and an update on the assessment of the use of 
positron emission tomography as a diagnostic test for cancer 
and Alzheimer's disease.
    In addition, MDRC's Management Consultation Program 
completed two studies undertaken at the request of the Office 
of Geriatrics and Extended Care. One investigation evaluated 
the national multi-state nursing home contract initiative by 
assessing costs, access, quality of care, and administrative 
burden of the new contracts. The second study was a 
Congressional ly-mandated analysis of VA hospice care, in which 
HSR&D examined the models and organizational structures through 
which VA provides hospice care, and analyzed the 
characteristics and services utilized by hospice patients.

                      cooperative studies program

    Cooperative Studies Program (CSP) is a new component of the 
Office of Research and Development established to support 
multi-center clinical studies previously under Medical Research 
Service and HSR&D and potentially in the future, Rehabilitation 
R&D as well. In cooperative studies, two or more VA medical 
centers agree to study collectively a selected medical problem 
in a uniform manner under a common human research protocol with 
central management. Large-scale studies are often necessary for 
the statistically reliable evaluation of potential medical, 
psychological, and surgical treatments as well as diagnostic 
strategies. The CSP exists to provide credible, consistent, and 
effective answers to the major scientific questions that 
determine evidence-based medical practice in VA and in the 
country.
    In 1997, the VA funded the creation of three Epidemiology 
Research and Information Centers RIC located at VA Medical 
Centers in Seattle, Washington; Boston, Massachusetts; and 
Durham, North Carolina. These centers have as their general 
objectives:
        the generation and dissemination of new knowledge about 
        the frequency, distribution, and causes of disease in 
        veterans; promotion of education in epidemiologic 
        methods and principles throughout VA;
        provision of technical assistance to VA-based 
        investigators in support of epidemiologic research; 
        and,
        facilitation of interaction between VA and non-VA 
        investigators in epidemiology.
    The ERICs work jointly to achieve systemwide objectives, 
and separately to achieve local aims or regional objectives. 
The national nature of the ERIC program should facilitate the 
coordination and conduct of multi-center VA epidemiologic 
studies.
    Epilepsy in the elderly is much more common than previously 
thought. Older veterans suffer from many diseases, such as 
stroke, heart disease, hypertension and Alzheimer's disease, 
which are frequently complicated by epileptic seizures. A new 
multi-center cooperative study on the treatment of seizures in 
elderly veterans was initiated in 1997 to study three different 
epileptic drugs and their interactions with other medications 
commonly prescribed to elderly patients. It is anticipated that 
720 patients will be enrolled from 18 VA medical centers for a 
five-year, $8 million study. There were two other on-going 
multi-center cooperative studies in the health services area 
for elderly veterans. One study to compare the cost and 
effectiveness of team-managed home-based primary care to 
customary care for severely disabled and terminally ill 
patients is being carried out in nine VA medical centers. 
Another study is underway to determine whether the combination 
of inpatient care provided by Geriatric Evaluation and 
Management (GEM) Units and outpatient care provided by GEM 
Clinics, as compared with usual care provided to hospitalized 
elderly veterans, will reduce mortality and enhance health 
related quality of life.
    This study is being carried out in 10 VA medical centers. A 
study to compare two different surgical procedures in lens 
implant after cataract extraction for elderly veterans was 
recently completed in 1997. A total of 1,098 patients in 15 VA 
medical centers were enrolled in this $3 million study. The 
results are being analyzed and will be reported to the 
scientific community.
    A recently completed VA cooperative study (published in The 
New England Journal of Medicine) challenged the benefits of 
early angioplasty and heart bypass for survivors of a certain 
type of heart attack (non-Q-wave) and indicated that they may 
actually be harmed by these procedures. About half of the 1.5 
million heart attacks in the U.S. each year are non-Q-wave 
myocardial infarctions (MI). The standard treatment approach 
involves routine catheterization followed by myocardial 
revascularization, which is done either through heart bypass or 
angioplasty. VA researchers observed that management of non-Q-
wave Mls has become more aggressive during the past decade, 
based on the unproven assumption that invasive treatment is 
superior to a conservative strategy that relies on clinical 
management to guide intervention. Clinical outcomes of MI or 
death were assessed among 920 patients randomized across 15 
hospitals with an average follow-up of 2.5 years. Researchers 
found that early aggressive treatment for these patients was 
associated with a 34 percent higher death rate than 
conservative treatment.
    In the area of prostate disease, VA Cooperative Studies 
completed a study evaluating medications for benign prostate 
disease (enlarged prostate) and found that one drug (terazosin) 
effectively relieved symptoms, while another drug (finasteride) 
did not. This landmark study, published in the New England 
Journal of Medicine, defined the optimal medical treatment for 
prostate disease, providing older men with an effective 
alternative to surgery.
    Another ongoing VA Cooperative Study (PIVOT Trial) on 
prostate cancer, in collaboration with the National Cancer 
Institute, is comparing the two most widely used treatment 
methods: radical prostatectomy, in which the prostate is 
surgically removed, and expected management or ``watchful 
waiting,'' in which only disease symptoms are treated. PIVOT is 
a 15-year, randomized study involving 2,000 men from 
approximately 80 VA and NCI medical centers. All patients will 
be followed for at least 12 years. When completed, the study 
will provide more definitive answers on the best treatment for 
early prostate cancer. If expected management is as effective 
as surgery, millions of dollars could be saved every year by 
avoiding unnecessary surgery.
    More than 90% of hemodialysis patients experience severe 
anemia. A new drug, recombinant human erythropoietin, is very 
effective in combating anemia, but costs $5,000 to $10,000 per 
patient a year. A few studies have suggested that the dosage of 
erythropoietin may be reduced by 30-50% if given subcutaneously 
rather than intravenously, without sacrificing beneficial 
effects. A randomized, multi-center clinical trial by VA 
Cooperative Studies (published in the New England Journal of 
Medicine) involving 208 patients found that erythropoietin can 
be administered just as effectively subcutaneously as 
intravenously, with a dosage reduction of 32 percent and no 
substantial increase in patient pain or discomfort. An 
estimated $450 million could be saved annually in the United 
States if this drug were administered subcutaneously to all 
hemodialysis patients.
    VA Cooperative Studies is launching a major new study to 
test a vaccine against herpes zoster (shingles). Shingles in 
older people can be extremely painful and debilitating and 
there is no effective treatment for shingles that lasts over 
one month. This randomized controlled trial of 35,000 older 
veterans will test a promising new vaccine for its ability to 
prevent shingles or reduce their severity and complications. 
Another Cooperative Study nearing completion will determine 
whether specialized inpatient and outpatient units are the best 
way for VA to care for the elderly. The impact of this study 
will extend far beyond VA, as millions of older Americans come 
under managed care. No other study is likely to provide the 
conclusive and incontrovertible evidence needed to guide policy 
in this critical area.
Rehabilitation Research and Development
    The mission of the Rehabilitation Research and Development 
(Rehab R&D) service is to investigate and develop concepts, 
products and processes that promote greater functional 
independence and improve the quality of life for impaired and 
disabled veterans. Aging, particularly the aging of persons 
with disabilities, is a high priority of the service.
    Efforts in this area include:
        A national VA program of merit-reviewed, investigator-
        initiated research, development and evaluation projects 
        targeted to meet the needs of aging veterans with 
        disabilities.
        Support of a Rehabilitation Research and Development 
        Center on Aging at Decatur, Georgia, VA Medical Center.
        Establishment of a new Rehabilitation Research and 
        Development Center focused on healthy aging with a 
        disability.
        Transfer into the VA healthcare delivery system of 
        developed rehabilitation technology and dissemination 
        of information to assist the population of aging 
        veterans and those who care for them.
    In addition to specific projects on aging, many of the 
investigations supported through the Service's nationwide 
network of research at VAMCs and at four Rehabilitation 
Research and Development Centers have relevance for impairments 
commonly associated with aging.
    Some examples of investigator-initiated studies currently 
being carried out are:
        A Low-Vision Enhancement System (LVES);
        Liquid Crystal Dark-Adapting Eyeglasses;
        Upper Body Motion Analysis for Amelioration of Falls in 
        the Elderly;
        Non-Auditory Factors Affecting Hearing Aid Use in 
        Elderly Veterans;
        The Influence of Strength Training on Balance and 
        Function in the Aged;
        Epidemiologic Study of Aging in Spinal Cord-Injured 
        Veterans.
    In addition, the Rehab R&D Service's newly initiated Career 
Development program is sponsoring an aspiring investigator 
whose research focus pursues better understandings of the 
receptive communication problems concomitant with normal and 
abnormal aging processes.
    The Rehab R&D Center on Aging is structured around five 
interdisciplinary research sections to address the multi-
dimensional nature inherent in problems of aging and 
disability: Environmental Research; Vision Rehabilitation; 
NeuroPhysiology; Engineering and Computer Science; and Social, 
Behavioral, and Health Research. Areas of study include the 
following:
        Design-related problems that affect the quality of life 
        of older people, including least restrictive 
        environments, falls, independence and safety.
        Orientation and mobility for the blind, low vision, and 
        rehabilitation outcomes measurement for older persons 
        with visual impairment.
        The neurologic and physiologic changes that accompany 
        aging and behavioral coping problems.
        Development and application of new technologies to a 
        variety of prototypes for the design of assistive 
        devices and assistive software.
    A new Rehab R&D Center located at the Houston VAMC was 
established in October 1997 with a focus on aging with a 
disability. Research will be directed to the elimination of 
preventable secondary problems and the reduction of risks for 
all secondary conditions related to patients' disabilities. 
Researchers will seek to promote early initiation of treatment, 
to develop more holistic intervention programs, to educate 
patients and family caregivers, and to develop better assistive 
devices, including mobility aids. Bringing together an 
interdisciplinary team of physicians, nurses, therapists, 
engineers, and educators, the Center will design, implement, 
and evaluate programs for the prevention of complications from 
common secondary conditions such as pressure ulcers, 
malnutrition, and mobility limitations.

                   C. Office of Academic Affiliations

    All short and long-range plans for the Veterans Health 
Administration (VHA) that address healthcare needs of the 
Nation's growing population of elderly veterans include health 
professional training activities supported by the Office of 
Academic Affiliations (OAA). Clinical experiences with 
geriatric patients are an integral part of healthcare education 
for approximately 107,000 VHA health trainees, including 33,000 
resident physicians and fellows, 20,000 medical students, and 
54,000 nursing and associated health students. Each year these 
residents and students train in VA medical centers as part of 
affiliation agreements between VA and nearly 1,000 health 
professional schools, colleges, and university health science 
centers. Recognizing the challenges presented by the increasing 
size of the aging veteran population, VHA continues to promote, 
coordinate, and support geriatric education and training 
activities for physicians, dentists, nurses and other 
associated health professional trainees.

                           geriatric medicine

    The demand for physicians with special training in 
geriatrics and gerontology continues because of the rapidly 
growing numbers of elderly veterans and aging Americans. The VA 
healthcare system offers clinical, rehabilitation, and follow-
up patient care services as well as education, research, and 
interdisciplinary programs that constitute the support elements 
required for the training of physicians in geriatric medicine. 
This special training has been accomplished through the 
Physician Fellowship Program in Geriatrics from Fiscal Years 
(FY) 1978 to 1989 and through specialty residency training 
since FY 1990. In FY 1998, VA supported 159.6 physicians 
receiving advanced education in geriatric medicine and 26 
physicians receiving advanced education in geriatric 
psychiatry. VA also supported 11 physicians pursuing post-
residency fellowship education in geriatric neurology.
    The Accreditation Council for Graduate Medical Education 
(ACGME) approved geriatric medicine as an area of special 
competence in September 1987. Effective January 1988, the 
American Board of Internal Medicine and the American Board of 
Family Practice specified procedures for the certification of 
added qualifications in geriatric medicine. VA played a 
critical role in the development and recognition of geriatric 
medicine in the United States, and since 1989, any VAMC may 
conduct training in geriatrics provided that an ACGME 
accredited program is in place.
    Over the past five years, VHA has restructured its medical 
residency portfolio and as a result, geriatric medicine 
positions have increased. In the fall of 1995, the Under 
Secretary for Health appointed an expert committee, the 
Residency Realignment Review Committee (RRRC), to advise him 
about recommended changes needed to ensure that VHA's graduate 
medical education programs meet present and future healthcare 
needs of both VA and the Nation. The RRRC recommended that VHA 
restructure its 8,900 medical resident positions and increase 
the percentage in primary care from 38 percent to 48 percent. 
This realignment of VHA's graduate medical education portfolio 
will continue VHA's progress in training a greater proportion 
of generalist physicians while protecting specialties 
particularly germane to special VHA programs. Geriatric 
medicine is one of the primary care disciplines that has 
experienced growth as a result of residency realignment. 
Geriatric medicine resident positions increased from 104 
positions in Academic Year (AY) 1995-1996 to 159.6 in AY 1998-
1999. That is a 53.5 percent increase.

                          geriatric dentistry

    In July 1982, a two-year Postdoctoral Fellowship in 
Geriatric Dentistry began at five medical centers affiliated 
with schools of dentistry. The goals of this program were 
similar to those described for the physician fellowship program 
in geriatrics. In FY 1993, the number of training sites 
increased to six for a final three-year cycle. As of June 1994, 
52 geriatric dentistry fellows had completed their special 
training. The Postdoctoral Fellowship in Geriatric Dentistry 
changed in 1994 to the VA Dental Research Fellowship to expand 
research training for dentists.
    The Postdoctoral Fellowship in Geriatric Dentistry proved 
to be an excellent recruitment source for dentists uniquely 
trained in the care of the elderly. Graduates have assumed 
leadership positions in geriatric dentistry at academic 
institutions, enhanced patient care and other geriatric 
initiatives in VA facilities, and contributed to geriatric 
efforts in affiliated health centers and the community. 
Nationally, former fellows have made significant contributions 
to the professional literature and are actively involved in 
geriatric dental research.
    Since the change in the Postdoctoral Fellowship in 
Geriatric Dentistry to the VA Dental Research Fellowships, OAA 
has initiated individual awards in dental research. Candidates 
from any VAMC with the appropriate resources may now compete 
for postdoctoral dental research fellowships.

               nursing and associated health professions

    Based on its large number of elderly patients, VA offers 
all affiliated students clinical opportunities in the care of 
the elderly. VA also has special programs that focus on 
geriatrics.

        interdisciplinary team training and development program

    The Interdisciplinary Team Training and Development Program 
(ITT&D) is a nationwide, systematic educational program that is 
designed to include didactic and clinical instruction for VA 
facility practitioners and affiliated students from three or 
more health professions such as medicine, nursing, psychology, 
social work, pharmacy, and occupational and physical therapy. 
The goal of ITT&D is to develop a cadre of health practitioners 
with the knowledge and competencies required to 
provideinterdisciplinary team care to meet the wide spectrum of 
healthcare and service needs for veterans, to provide 
leadership in interdisciplinary team delivery and training to 
other VAMCs, and to provide role models for affiliated students 
in medical and associated health disciplines. The ITT&D 
provides a structured approach to the delivery of health 
services by emphasizing the knowledge and skills needed to work 
in an interactive group. In addition, the program promotes an 
understanding of the roles and functions of other members of 
the team and the influence of their collaborative contributions 
on patient care. Training includes the teaching of staff and 
students in selected priority areas of VA healthcare needs, 
e.g., geriatrics, ambulatory care, management, and nutrition; 
instruction in team teaching and group process skills 
forclinical core staff; and clinical experiences in team care 
for affiliated education students with the core team serving as 
role models.
    The ITT&D, which began in 1978, is based at 12 VAMCs: 
Birmingham, AL; Buffalo, NY; Coatesville, PA; Little Rock, AR; 
Madison, WI; Memphis, TN; Palo Alto, CA; Portland, OR; Salt 
Lake City, UT; Sepulveda, CA; Tampa, FL; and Tucson, AZ. During 
FY 1998, 177 students from a variety of healthcare disciplines 
received funding support at the 12 ITT&D sites.

                       advanced practice nursing

    Advanced Practice Nursing, i.e., master's level clinical 
nurse specialist and n practitioner training, is another facet 
of VA education programming in geriatrics. The need for 
specialty trained graduate nurses is evidenced by the 
sophisticated level of care needed by VA patient populations, 
specifically in the area of geriatrics. Advanced nurse training 
is a high priority within VA because of the shortage of such 
nursing specialists who are capable of assuming positions in 
specialized care and leadership.
    The master's level Advanced Practice Nursing Program was 
established in 1981 to attract specialized graduate nursing 
students to VA and to help meet needs in the VA priority areas 
of geriatrics, rehabilitation, psychiatric/mental health, 
primary care, medical-surgical and critical care, all of which 
impact on the care of the elderly veteran. Direct funding 
support is provided to master's level nurse specialist students 
for their clinical practicum at VAMCs affiliated with the 
academic institutions at which the students are enrolled. 
During FY 1998, VA supported 379 master's level advanced 
practice nursestudent positions.

                va predoctoral nurse fellowship program

    Gerontological nursing has been a nursing specialty since 
the mid-1960s. As society has changed, particularly in terms of 
the demographic trends in aging, more attention has been 
focused on both the area of gerontological nursing and the 
education of nurses in this specialty. Doctoral level nurse 
gerontolgists are prepared for advanced clinical practice, 
teaching, research, administration, and policy formulation in 
adult development and aging.
    In FY 1985, VA initiated a two-year nurse fellowship 
program for registered nurses who were doctoral candidates and 
who had dissertations focused on clinical research in 
geriatrics/gerontology. The first competitive review for 
fellows was conducted in 1986. One nurse fellow was selected 
for the FY 1986 funding cycle. Since that time, two nurse 
fellowship positions have been available for selection at 
approved VAMC sites each fiscal year. In FY 1994, the program 
was changed to the VA Predoctoral Nurse Fellowship Program to 
include all clinical areas relevant to the care of veterans.

 geriatric expansion program and the geriatric research, education and 
                        clinical centers (grecc)

    A special priority for geriatric education and training is 
recognized in the allocation of associated health training 
positions and funding support to VAMCs hosting GRECCs and to 
VAMCs (non-ITT&D sites) offering specific educational and 
clinical programs for the care of older veterans. In FY 1998, a 
total of 177 associated health students received funding 
support in the following disciplines: Social Work, Psychology, 
Audiology/Speech Pathology, Clinical Pharmacy, Advanced 
Practice Nursing, Dietetics, and Occupational Therapy.

                 geropsychology postdoctoral fellowship

    In FY 1993, OAA began a one-year Geropsychology 
Postdoctoral Fellowship Program. The purpose of the program is 
to develop a cadre of highly trained geropsychologists who will 
contribute to the care of the elderly both within and outside 
VA. This pool of individuals should provide an excellent source 
of recruitment for future VA psychologists.
    One fellow is selected annually at each of the following 
ten VAMCs: Brockton, MA; Cleveland, OH; Gainesville, FL; 
Houston, TX; Knoxville, IA; Little Rock, AR; Milwaukee, WI; 
Palo Alto, CA; Portland, OR; and San Antonio, TX. These VAMCs 
have strong, geriatric-focused programs and accredited 
psychology internship programs.
    In summary, VA continues to make outstanding contributions 
to the Nation's health professions workforce and to foster 
excellence and leadership in the care of elderly veterans 
through its fellowship, residency, and associated health 
training.

                    D. Office of Employee Education

    In support of VA's mission to provide health care to the 
aging veteran population education and training opportunities 
are offered to enhance the skills of medical center employees 
in the area of geriatrics. The Office of Employee Education 
through the Employee Education System (EES) works with medical 
centers, Veterans Integrated Service Networks (VISNs), and 
Headquarters' program officials to develop 
educationalactivities that respond to the needs of healthcare 
personnel throughout VHA. Funding is provided to the VISNs to 
support employee education at the local level, to the GRECCs 
for educational programming, and to program offices for 
national or systemwide activities.
    With assistance from the EES, 29 single medical center 
programs were conducted during fiscal year 1998. Twenty-two 
multi-facility and ten VISN-wide programs were also presented 
during this time. Topics included Alzheimer's disease, Aging in 
Women--Aging in Men, Emerging Topics in Dementia, New 
Management Strategies for Parkinson's Disease, Care of the 
Frail Elderly, Essentials of Geriatric Nursing, Resident 
Assessment Instrument, Psychosocial Needs of the Elderly, 
Behavioral Changes in the Elderly, and Depression in the 
Elderly. National or systemwide activities included Geriatrics 
for the Primary Care Provider, Improving Care at the End of 
Life, and Domiciliary Clinical Care. More than 4,500 VA staff 
attended these offerings. Also, a satellite broadcast on 
Management of Alzheimer's Disease was viewed by 1600 
participants from all medical centers.
    The reference Geriatric Pocket Pal was updated and 
reprinted for the third time. This book is distributed to VA 
physicians, medical students, residents, and private sector 
health care facilities. Other products developed by the EES 
during fiscal year 1998 were two videotapes on the Resident 
Assessment Instrument and Long-Term Care and, a CD-ROM on 
Alzheimer's Caregiving Strategies.
    GRECCs utilized their funding to present training programs 
on subjects such as Clinical Advances in Cognitive Longevity, 
Dysphagia Treatment, the Continuum of Care, Aging With Chronic 
Disease, Enhancing Geriatric Care for American Indian Elders, 
Advances in Geriatrics, Gerontology Forum Series, 
Ethnogeriatrics and Cultural Competence in Managed Care, Pain 
Management in the Elderly Cancer Patient, and the Aging Brain 
in Health and Disease. All 16 GRECCs presented educational 
activities that were attended by VA staff as well as providers 
from universities and the private sector.

                      E. Chief Information Office

                  health information resources service

    The widespread education and training activities in 
geriatrics have generated systemwide requirements for 
information throughout VA. Local library services continue to 
perform hundreds of on-line searches on databases such as 
MEDLINE and other bibliographic databases, and continue to add 
books, journals, and audiovisuals on topics related to 
geriatrics and aging.
    The VHA satellite television network carried three live 
broadcasts targeted to providers who work with aged patients. 
The topics included Meaningful Communication in Patients with 
Alzheimer's (offered through our partnership with the 
University of Arizona), Osteoporosis in the Geriatric Patient, 
and Alzheimer's Disease: Diagnosis and Treatment.
    Additionally, one book and two videos were purchased and 
distributed systemwide.

                 III. VETERANS BENEFITS ADMINISTRATION

                      A. Compensation and Pension

    Disability and survivor benefits such as pension, 
compensation, and dependency and indemnity compensation 
administered by the Veterans Benefits Administration (VBA) 
provide all, or part, of the income for 1,607,511 persons age 
65 or older. This total includes 1, 186,010 veterans; 409,133 
spouses; 11,067 mothers; and 1,301 fathers.
    The Veterans' and Survivors' Pension Improvement Act of 
1911, effective January 1, 1979, provided for a restructured 
pension program. Under this program, eligible veterans receive 
a level of support meeting a national standard of need. 
Pensioners generally receive benefits equal to the difference 
between their annual income from other sources and the 
appropriate income standard. Yearly cost-of-living adjustments 
(COLAs) have kept the program current with economic needs.
    This Act provides for a higher income standard for veterans 
of World War I or the Mexican Border Period. This provision was 
in acknowledgment of the need for economic security of the 
Nation's oldest veterans. The current amount added to the basic 
pension rate is $1,989 as of December 1, 1998.

                              B. Outreach

    VBA Regional Office personnel maintain an active liaison 
with local nursing homes, senior citizen homes, and senior 
citizen centers in an effort to ensure that older veterans and 
their dependents understand andhave access to VA benefits and 
services.
    Generally, regional office staff visit these facilities as 
needed or when requested by the service providers. VA pamphlets 
and application forms are provided to the facility management 
and social work staff during visits and through frequent use of 
regular mailings. State and Area Agencies on the Aging have 
been identified and are provided pamphlets and other materials 
about VA benefits and services through visits, workshops and 
pre-arranged training sessions. Senior citizen seminars are 
conducted for nursing home operations staff and other service 
providers that assist and provide service to elderly patients. 
Regional office staff regularly participate in senior citizens 
fairs and information events, thereby visiting and 
participating in events where the audience is primarily elderly 
citizens. VBA staff also visit places where senior citizens 
congregate such as malls, churches, and special luncheons or 
breakfasts to advise veterans of their benefit entitlements. 
Regional office outreach coordinators continue to serve on 
local and state task forces and represent VA as members of 
special groups that deal extensively with the problems of the 
elderly.

                                

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