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[House Hearing, 107 Congress]
[From the U.S. Government Publishing Office]

 
             AUTHORIZING SAFETY NET PUBLIC HEALTH PROGRAMS
=======================================================================

                                HEARING

                               before the

                         SUBCOMMITTEE ON HEALTH

                                 of the

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED SEVENTH CONGRESS

                             FIRST SESSION

                               __________

                             AUGUST 1, 2001

                               __________

                           Serial No. 107-57

                               __________

       Printed for the use of the Committee on Energy and Commerce

 Available via the World Wide Web: http://www.access.gpo.gov/congress/
                                 house

                               __________

                           U.S. GOVERNMENT PRINTING OFFICE
74-851                          WASHINGTON : 2001
___________________________________________________________________________
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                    COMMITTEE ON ENERGY AND COMMERCE

               W.J. ``BILLY'' TAUZIN, Louisiana, Chairman

MICHAEL BILIRAKIS, Florida           JOHN D. DINGELL, Michigan
JOE BARTON, Texas                    HENRY A. WAXMAN, California
FRED UPTON, Michigan                 EDWARD J. MARKEY, Massachusetts
CLIFF STEARNS, Florida               RALPH M. HALL, Texas
PAUL E. GILLMOR, Ohio                RICK BOUCHER, Virginia
JAMES C. GREENWOOD, Pennsylvania     EDOLPHUS TOWNS, New York
CHRISTOPHER COX, California          FRANK PALLONE, Jr., New Jersey
NATHAN DEAL, Georgia                 SHERROD BROWN, Ohio
STEVE LARGENT, Oklahoma              BART GORDON, Tennessee
RICHARD BURR, North Carolina         PETER DEUTSCH, Florida
ED WHITFIELD, Kentucky               BOBBY L. RUSH, Illinois
GREG GANSKE, Iowa                    ANNA G. ESHOO, California
CHARLIE NORWOOD, Georgia             BART STUPAK, Michigan
BARBARA CUBIN, Wyoming               ELIOT L. ENGEL, New York
JOHN SHIMKUS, Illinois               TOM SAWYER, Ohio
HEATHER WILSON, New Mexico           ALBERT R. WYNN, Maryland
JOHN B. SHADEGG, Arizona             GENE GREEN, Texas
CHARLES ``CHIP'' PICKERING,          KAREN McCARTHY, Missouri
Mississippi                          TED STRICKLAND, Ohio
VITO FOSSELLA, New York              DIANA DeGETTE, Colorado
ROY BLUNT, Missouri                  THOMAS M. BARRETT, Wisconsin
TOM DAVIS, Virginia                  BILL LUTHER, Minnesota
ED BRYANT, Tennessee                 LOIS CAPPS, California
ROBERT L. EHRLICH, Jr., Maryland     MICHAEL F. DOYLE, Pennsylvania
STEVE BUYER, Indiana                 CHRISTOPHER JOHN, Louisiana
GEORGE RADANOVICH, California        JANE HARMAN, California
CHARLES F. BASS, New Hampshire
JOSEPH R. PITTS, Pennsylvania
MARY BONO, California
GREG WALDEN, Oregon
LEE TERRY, Nebraska

                  David V. Marventano, Staff Director
                   James D. Barnette, General Counsel
      Reid P.F. Stuntz, Minority Staff Director and Chief Counsel

                                 ______

                         Subcommittee on Health

                  MICHAEL BILIRAKIS, Florida, Chairman

JOE BARTON, Texas                    SHERROD BROWN, Ohio
FRED UPTON, Michigan                 HENRY A. WAXMAN, California
JAMES C. GREENWOOD, Pennsylvania     TED STRICKLAND, Ohio
NATHAN DEAL, Georgia                 THOMAS M. BARRETT, Wisconsin
RICHARD BURR, North Carolina         LOIS CAPPS, California
ED WHITFIELD, Kentucky               RALPH M. HALL, Texas
GREG GANSKE, Iowa                    EDOLPHUS TOWNS, New York
CHARLIE NORWOOD, Georgia             FRANK PALLONE, Jr., New Jersey
  Vice Chairman                      PETER DEUTSCH, Florida
BARBARA CUBIN, Wyoming               ANNA G. ESHOO, California
HEATHER WILSON, New Mexico           BART STUPAK, Michigan
JOHN B. SHADEGG, Arizona             ELIOT L. ENGEL, New York
CHARLES ``CHIP'' PICKERING,          ALBERT R. WYNN, Maryland
Mississippi                          GENE GREEN, Texas
ED BRYANT, Tennessee                 JOHN D. DINGELL, Michigan,
ROBERT L. EHRLICH, Jr., Maryland       (Ex Officio)
STEVE BUYER, Indiana
JOSEPH R. PITTS, Pennsylvania
W.J. ``BILLY'' TAUZIN, Louisiana
  (Ex Officio)

                                  (ii)

                            C O N T E N T S

                               __________
                                                                   Page

Testimony of:
    Baker, Diana.................................................   126
    Benjamin, Kathryn, Executive Director, Southeast Lancaster 
      Health Services............................................    38
    Brewton, David, Director of Development, East Liberty Family 
      Health Center..............................................    52
    Duke, Betty James, Acting Director, Health Resources and 
      Service Administration.....................................    24
    Hall, Robert, President, National Council of Urban Indian 
      Health.....................................................    87
    Heinrich, Janet, Director, Health Care-Public Health Issues, 
      U.S. General Accounting Office.............................   105
    Monson, Hon. Angela, Oklahoma State Senate and Vice 
      President, National Conference of State Legislatures.......    83
    O'Leary, Linda, Federation of American Health Systems, Chief 
      Nursing Officer, Regional Medical Center, Bayonet Point, 
      Hudson, Florida............................................   115
    Pietrantoni, Adele, Trustee, American Pharmaceutical 
      Association................................................   135
    Roberts, Cory, Director of Anatomic Pathology, St. Paul 
      Medical Center, Department of Pathology, Dallas, Texas.....   131
    Roberts, Russell, John M. Olin Senior Fellow, Weidenbaum 
      Center on the Economy, Government and Public Policy, 
      Washington University, St. Louis, Missouri.................   140
    Singer, Jeff, President & CEO, Health Care for the Homeless..    76
    Wiltz, Gary Michael, Teche Action Clinic.....................    29
Material submitted for the record by:
    McGovern, Hon. James P., a Representative in Congress from 
      the State of Massachusetts and Hon. Michael K. Simpson, a 
      Representative in Congress from the State of Idaho, 
      prepared statement of......................................   153
    National Association of Chain Drug Stores, prepared statement 
      of.........................................................   155
    National Rural Health Association, prepared statement of.....   159

                                 (iii)

             AUTHORIZING SAFETY NET PUBLIC HEALTH PROGRAMS

                              ----------                              

                        THURSDAY, AUGUST 1, 2001

                  House of Representatives,
                  Committee on Energy and Commerce,
                                    Subcommittee on Health,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 10:12 a.m., in 
room 2322, Rayburn House Office Building, Hon. Michael 
Bilirakis (chairman) presiding.
    Members present: Representatives Bilirakis, Burr, Bryant, 
Ehrlich, Pitts, Brown, Strickland, Barrett, Capps, Pallone, 
Wynn, Green.
    Staff present: Marc Wheat, majority counsel; Anne Esposito, 
policy coordinator; Nolty Theriot, legislative clerk; Dave 
Nelson, minority counsel; John Ford, minority counsel; and 
Cartay Johnson, clerk.
    Mr. Bilirakis. The hearing will come to order. I would like 
to start by welcoming our witnesses. I know that it can be 
difficult to drop everything, as you all have, and you are 
probably among the busiest people in the country, to come to 
Washington to testify, especially on such short notice, and we 
want to thank you, and want to apologize to you but, that is 
the way things are done up here and that is unfortunate, but 
that is the way it is.
    As I understand it the rules only require a 1-week notice 
of hearings. We talk with the minority, we do our best to give 
2-weeks notice of all hearings. Notices, I suppose, can be done 
in many ways. There are vocal notices, oral notices, discussion 
notices, and then there is, of course, the written notice.
    I think it is important that we are having this hearing 
when we are having it because we have an entire month ahead of 
us when Congress will not be in session and the staffs on both 
sides of the aisle are so very, very busy these days with the 
Managed Care legislation, prescription drug legislation, and 
all the authorizing that we have to do and that sort of thing, 
so it gives them, I think, uninterrupted by the rest of us to 
work on a bipartisan piece of legislation regarding the 
subjects over the recess. So, for that reason, we decided to 
hold the hearing this week.
    I do apologize, as I said earlier, for the short notice to 
the witnesses and, to a lesser extent, the members for the 
short notice. But it is important that we begin to look at 
these serious issues. We can sit back and talk about procedure, 
and this took place and that took place, and this did not take 
place, and make an awful lot out of it, but hopefully when we 
get that out of the way, we can reach out and shake hands and 
work together. I trust that that is going to take place. I know 
that my relationship with Mr. Brown is such a good one that 
that will be the case.
    We are discussing issues related to the programs and 
professionals that deliver health care services to many of our 
Nation's citizens. First, we will hear testimony on two vitally 
important health care programs, the Community Health Center 
Program and the National Health Service Corps.
    The second panel will explore the growing workforce 
shortages among nurses, pharmacists and medical technologists. 
And, again, I would like to welcome all of our witnesses and 
thank them.
    Community Health Centers deliver care in rural and urban 
communities which are designated as medically undeserved 
because of the inadequate supply of health care providers. That 
is an especially big cause of mine, I might add. The mission of 
these centers is to provide both primary and preventive health 
care. Community Health Centers provide care in 3,000 
communities to over 12 billion Americans, regardless of their 
ability to pay.
    The National Health Service Corps also plays a critical 
role in providing care for undeserved populations. Through the 
service-obligated and volunteer programs, the National Health 
Service Corps recruits, trains and places primary care 
providers, including dentists, nurses and physician assistants, 
in both urban and rural health care shortage areas. Program 
participants are health professionals who receive educational 
assistance in return for a period of obligated service--and I 
might add at this point parenthetically, that that is something 
that has bugged me for a long time, the fact that they are able 
to buy-out of their obligation is something that I don't think 
they should have the right to do, and Mr. Brown and I might 
talk a little further about that as time goes on.
    The National Health Service Corps plays a significant role 
in placing providers into areas that have difficulty attracting 
health professionals. Allied health professionals play a 
valuable and necessary role in the delivery of high-quality 
health care. Nurses, pharmacists and medical technologists make 
up a significant portion of this primary care workforce, and 
recent evidence suggests that we may have shortages of these 
important caregivers.
    Nurses are a mainstay in today's health care system. 
Certainly our nurse on this committee, Ms. Capps, is a mainstay 
in our health care system. These medical professionals on the 
front lines of care are dedicated to helping patients pull 
through their most vulnerable moments, and I would like to 
extend a warm Florida welcome particularly to Linda O'Leary, 
Chief Nursing Officer, at the Regional Medical Center in 
Bayonet Point, Florida, in my congressional district. I thank 
you, Ms. O'Leary, for coming here to share your views with us 
on the nursing shortage.
    As you know, the United States General Accounting Office 
has reported that there is an emerging shortage of nurses in 
the country. By 2020, millions of Baby Boomers will be retiring 
and expecting quality health care as senior citizens. These 
individuals will need the care and comfort qualified nurses 
provide, and we must do what we can to ensure an adequate 
supply of nurses to meet this demand.
    In December 1999, in legislation sponsored by Mr. Brown and 
myself, we requested that the Health Resources and Service 
Administration complete a study on the pharmacist workforce. 
HRSA's report to Congress stated, and I quote, ``Evidence 
clearly indicates the emergence of a shortage of pharmacists.'' 
When I read in the newspaper the other day the starting 
salaries, in Florida particularly, of a pharmacist coming right 
out of pharmacy school--Sherrod, I think we picked the wrong 
profession.
    Pharmacists play an increasing role in the care that many 
patients receive, and a shortage could negatively impact this 
care. Pharmacists and their related services help patients with 
medication compliance, review records to check for drug-to-drug 
interactions--which are a leading cause of medical errors, as 
we know--and counsel patients and doctors on medication 
options. With increased demand in utilization of medication 
therapies, we must make sure that we have enough qualified 
pharmacists.
    It has been brought to our subcommittee's attention that we 
are also facing a shortage in the medical technology area. 
Medical technologists play a crucial role in the detection and 
diagnosis of diseases by analyzing body fluids, tissues and 
cells. My wife is a medical technologist. I met her when she 
was doing this at one of the hospitals back in Florida.
    Medicine today and in the future will place increased 
pressure on medical laboratories to diagnose disease early 
through the use of advanced screening technology. Therefore, it 
is imperative that we have trained medical and clinical 
laboratory technologists to fill this important role.
    I would say again, parenthetically--maybe even more for the 
benefit of Mr. Brown and the minority--I don't know what the 
solution is to these shortage problems. That is why we hold 
these hearings so that we can try to get some ideas of how we 
can address matters such as this.
    As health care delivery becomes more complex, we must be 
sure that we have the trained professionals and infrastructure 
necessary to address the increasing demand for health care 
services. And, again, I look forward to hearing from the 
witnesses today, and would now yield to Mr. Brown for an 
opening statement.
    [The prepared statement of Hon. Michael Bilirakis follows:]
Prepared Statement of Hon. Michael Bilirakis, Chairman, Subcommittee on 
                                 Health
    This hearing will now come to order. Today we are discussing issues 
related to the programs and professionals that deliver health care 
services to many of our nation's citizens. First, we will hear 
testimony on two vitally important health care programs--the Community 
Health Center program and the National Health Service Corps. Our second 
panel will explore the growing workforce shortages among nurses, 
pharmacists and medical technologists. I would like to welcome all of 
our witnesses here today and thank them for taking the time and effort 
to appear before the Subcommittee.
    Community Health Centers deliver care in rural and urban 
communities which are designated as medically underserved because of 
the inadequate supply of health care providers. The mission of these 
centers is to provide both primary and preventative health care. 
Community Health Centers provide care in 3,000 communities to over 12 
million Americans, regardless of their ability to pay.
    The National Health Service Corps also plays a critical role in 
providing care for underserved populations. Through the service-
obligated and volunteer programs, the National Health Service Corps 
recruits, trains and places primary care providers--including dentists, 
nurses, and physician assistants--in both urban and rural health care 
shortage areas. Program participants are health professionals who 
receive educational assistance in return for a period of obligated 
service. The National Health Service Corps plays a significant role in 
placing providers into areas that have difficulty attracting health 
professionals.
    Allied health professionals play a valuable and necessary role in 
the delivery of high quality health care. Nurses, pharmacists and 
medical technologists make up a significant portion of this primary 
care workforce. And, recent evidence suggests that we may have 
shortages of these important caregivers.
    Nurses are a mainstay in today's health care system. These medical 
professionals, on the front lines of care, are dedicated to helping 
patients pull through their most vulnerable moments. I'd like to extend 
a warm Florida welcome to Linda O'Leary, Chief Nursing Officer at the 
Regional Medical Center at Bayonet Point. Thank you for coming all the 
way from the 9th district of Florida, my district, to share your views 
with us on the nursing shortage. As you know, the United States General 
Accounting Office (GAO) has reported that there is an emerging shortage 
of nurses in this country. By 2020, millions of baby boomers will be 
retiring and expecting quality health care as senior citizens. These 
individuals will need the care and comfort qualified nurses provide, 
and we must do what we can to ensure an adequate supply of nurses to 
meet this demand.
    In December of 1999, in legislation sponsored by Mr. Brown and 
myself, we requested that the Health Resources and Services 
Administration (HRSA) complete a study on the pharmacists workforce. 
HRSA's report to Congress stated that, ``evidence clearly indicates the 
emergence of a shortage of pharmacists.'' Pharmacists play an 
increasing role in the care that many patients receive, and a shortage 
could negatively impact this care. Pharmacists, and their related 
services, help patients with medication compliance, review records to 
check for drug-to-drug interactions (which are a leading cause of 
medical errors) and counsel patients and doctors on medication options. 
With increased demand and utilization of medication therapies we must 
make sure that we have enough qualified pharmacists.
    It has been brought to our Subcommittee's attention that we are 
also facing a shortage in the medical technology arena. Medical 
technologists play a crucial role in the detection and diagnosis of 
diseases by analyzing body fluids, tissues, and cells. Medicine today 
and in the future will place increased pressure on medical laboratories 
to diagnose diseases early through the use of advanced screening 
technologies. Therefore, it is imperative that we have trained medical 
and clinical laboratory technologists to fill this important role.
    As health care delivery becomes more complex, we must be sure that 
we have the trained professionals and infrastructure necessary to 
address the increasing demand for health care services.
    I look forward to hearing from the witnesses today. I will now 
yield to Mr. Brown for an opening statement.

    Mr. Brown. Thank you, Mr. Chairman, I appreciate that. I 
appreciate the desire of the chairman to bring reauthorization 
and other legislation to the floor in September when we return. 
It is a goal that my Democratic colleagues and I strongly 
support.
    I am concerned, however, as the chairman mentioned, about 
the schedule of hearings, particularly broad-scope hearings and 
important hearings like this one, on such short notice. Staff 
for both the majority and the minority should have been 
afforded at least 2 weeks to prepare. One week is simply not 
enough with a panel of the stature of this. Of the 13 
witnesses, 12 had no written testimony submitted as of midday 
yesterday, the day before the hearing. That is not the fault of 
you as witnesses, no formal invitations were sent out until 
late Monday afternoon. Democratic staff didn't receive 
confirmation of a critical witness, Dr. Roberts on the second 
panel, until after 3 on Monday. I specifically ask that the 
record be kept open to receive rebuttal testimony on the 
economic positions taken by Dr. Roberts.
    Mr. Bilirakis. Without objection.
    Mr. Brown. Thank you, Mr. Chairman. I would hope also that 
in the future we can agree on reasonable notice for complex 
hearings, suggest to the chairman--and we have talked about 
this privately and he has always been very, very cooperative--
the chairman of the subcommittee suggest that 2 weeks is a 
minimum timeframe for proper preparation.
    Moving on to the substance, which obviously is of much more 
concern to the witnesses, I want to thank all of you for 
testifying today. I want to extend a special welcome to Diana 
Baker, an R.N. and Assistant Nurse Manager at the Urology/
Gynecology Unit at Cleveland Clinic, from Newton Falls, Ohio. 
We are covering a lot of ground on a number of important 
issues, including Community Health Centers, the National Health 
Service Corps, and the shortage of three valuable health care 
providers--nurses, pharmacists and medical technicians.
    There is a misperception in this country that Medicaid 
offers a health care safety net for all low-income people. 
Medicaid, though, does not go far enough. In Ohio, 51 percent 
of uninsured patients are not eligible for Medicaid and 
virtually none of uninsured nonparents is eligible for 
Medicaid. National Health Service Corps and Community Health 
Centers provide health services to an undeserved and uninsured 
population ineligible for Medicaid, a population that faces 
poverty, homelessness, poor living conditions, isolation, lack 
of doctors, all of this obviously poses serious barriers to 
quality care. These programs together enable us to serve 
populations that otherwise would fall through the cracks of our 
patchwork public/private health care system.
    The NHS enables health professionals to go where no other 
health professionals would go, providing access to health care 
and working to eliminate health disparities in undeserved 
areas. Reauthorization will make this program stronger.
    Earlier this year, the chairman and I circulated a letter 
to the Appropriations Committee expressing support for 
increased funding for Community Health Centers. Two hundred 
nineteen of our colleagues signed the letter, the largest 
number of House Members ever to support funding for Health 
Centers. The President has said he is committed to doubling the 
number of Health Centers over the next 5 years. Congressional 
bipartisan support for health centers is stronger than ever. 
Health Centers and the National Health Service Corps continue 
to improve the quality of life for so many uninsured families.
    The second panel will discuss workforce shortages. Many of 
us on this committee have been working closely with a number of 
nursing groups, including the ANA, including the Service 
Employees International Union, and hospital groups on this 
issue. Right now, the average of employed Register Nurses is 45 
years old and increasing. Ominously, the number of graduates 
from nursing programs declined by 1995 and 1999 almost 14 
percent.
    My colleague, Congresswoman Capps, has worked very hard on 
this issue, has kept this issue in front of this subcommittee, 
in front of this Congress, and I am pleased, as many others 
are, to be a co-sponsor of the bill she introduced that 
addresses the long-term critical concerns facing her 
profession, facing the nursing profession.
    As this Congress considers its role, I would urge my 
colleagues that patient safety should guide our decisions. For 
every day a hospital floor is staffed with exhausted nurses 
working overtime, patients' lives are at risk.
    Congressman Shimkus has introduced legislation with respect 
to the shortage of medical laboratory technicians, individuals 
responsible for such lifesaving work as screening women for 
cervical cancer and recognizing the resistance of pathogens, 
more commonly known as anti-microbial resistance.
    I also want to thank my colleague, Mr. McGovern, for his 
diligent work on behalf of the pharmacists shortage issue. 
Americans filling are more prescriptions today than ever. It is 
critical that pharmacies are adequately staffed to ensure that 
patients are familiar with how to use their prescriptions.
    Mr. Chairman, in closing, I want to raise an issue that is 
not being discussed at today's hearing, the Community Access 
Program, a valuable program that the President has elected not 
to fund. People praise managed care for coordinating care. The 
CAP program is a demonstration program that coordinates care 
for the uninsured. Failure to fund this program creates 
duplication of services and compromises the potential of safety 
net providers who could be working together. I hope we look at 
this issue more closely in the near future, and I thank the 
chairman for his cooperation at all times.
    Mr. Bilirakis. And I thank the gentleman. Mr. Pitts, for an 
opening statement.
    Mr. Pitts. Thank you, Mr. Chairman, and thank you for 
holding this important on public health this morning. It has 
been my pleasure to coordinate the Public Health Working Group 
as part of this subcommittee, and to develop legislation that 
builds on the success of Community Health Centers and provides 
real solutions to the challenges they face. Community Health 
Centers provide invaluable medical care to millions of 
Americans without health insurance, low-income working 
families, rural residents, agricultural farm workers, and those 
living with HIV or with mental health needs.
    Today, we will hear from experts in public health, those 
who are in the field every day meeting the health needs of 
those in their community. I am especially pleased to have with 
us today Kathy Benjamin, from the Southeast Lancaster Health 
Services, from my congressional district. I visited the Health 
Center for the first time several years ago, one of my first 
site visits after coming to Congress. I then recently visited 
it again last week.
    It is encouraging to see the positive impact they have on 
the lives of families, especially women and children. The 
Southeast Lancaster Community Health Center takes seriously its 
responsibility to serve the surrounding community and the city 
of Lancaster, and they are successful in providing quality 
health care. Yet, each day they, along with Community Health 
Centers across the country, face many challenges, challenges 
which through this hearing we will have the opportunity to hear 
first-hand.
    While these servants would rather spend their time meeting 
the health needs of families who come to them, they must spend 
too much time dealing with the shortage of health care 
professionals, problems with Medicare and Medicaid 
reimbursement, community outreach, inadequate facilities, or 
limited funding. Their hands are full. We must work diligently 
to address these challenges.
    Further, Mr. Chairman, President Bush has provided a model 
to build bridges between faith-based organizations and 
government agencies. There are many such professional Community 
Health Centers throughout the country that are faith-based, and 
we must look at ways to empower them to better meet the needs 
of their community.
    I would like to recognize David Winningham, the Director of 
Development at Esperanza, a faith-based Community Health Center 
located in northeast Philadelphia, one of the most depressed 
areas in the city. Esperanza is a poster child for the 
successes and challenges that faith-based community health 
services provide. They not only meet the health needs of 
families in their community, but also seek to impact and change 
lives. Ask those who work at Esperanza why they do what they 
do. They will respond that they are compelled by love to serve 
those in need, and we must work with them. Mr. Winningham has 
prepared a statement and I would like to submit it for the 
record, and I encourage everyone to read it.
    Mr. Bilirakis. Without objection.
    [The statement follows:]
   Prepared Statement of David Winningham, Director of Development, 
                        Esperanza Medical Clinic
    Esperanza Medical Clinic was begun under the leadership of Dr. 
Carolyn Klaus in 1987. Dr. Klaus, working with a number of concerned 
health professionals from several urban churches, had discerned a need 
for a holistic, high quality, and culturally sensitive health care 
center in North Philadelphia.
    Esperanza's (Hope in Spanish) main program is operation of a 
community health care clinic to treat and prevent injury and disease. 
It has a full-time board certified staff of bilingual physicians, 
nurses, nurse practitioners, and physician assistants specializing in 
cardiology, pediatrics, women's health, family medicine, internal 
medicine, and infectious diseases. Health Partners, Inc has deemed 
Esperanza a ``Center of Excellence'' for the diagnosis and treatment of 
HIV/Aids.
    Esperanza holistic health care approach focuses on prevention. 
Patients are educated on a wide variety of issues ranging from diabetes 
care to coping with depression, from dealing with the welfare system to 
learning the ingredients of a successful marriage. Almost half of our 
visits are with children, so we have the opportunity to affect the way 
the next generation approaches their health care.
    Esperanza provides individual and family counseling. In conjunction 
with their primary health care program, the counseling program works to 
positively impact the emotional, mental, spiritual, and social health 
of the community it serves.
    Why is this so important? Many of the Hispanics in our community 
cannot access health care services because of cultural, language, and 
financial barriers.

 We estimate that 85% of our patients are 100% below the 
        federal poverty line
 26.9% of the Hispanic births in Philadelphia were to teenage 
        mothers, the highest of any racial group 1
---------------------------------------------------------------------------
    \1\ Philadelphia Dept. of Public Health, Vital Statistics Report 
1998
---------------------------------------------------------------------------
 73.7% of all children born to Hispanic mothers answered, 
        ``no'' to the question, ``Is mother married to father?'' 
        2
---------------------------------------------------------------------------
    \2\ Ibid
---------------------------------------------------------------------------
 The poverty rate for children under 18 in Philadelphia is 
        37.5% compared to the U.S average of 20.8%. 3
---------------------------------------------------------------------------
    \3\ American Institute for Research 1995
---------------------------------------------------------------------------
 Those receiving welfare (AFDC and TANF) in Philadelphia is 
        12.5% compared to the U.S. average of 3.6%. 4
---------------------------------------------------------------------------
    \4\ American Institute for Research 1998
---------------------------------------------------------------------------
    Because all of our medical staff is bilingual, many have or do live 
in the Culture. Esperanza is a light of hope in North Philadelphia 
because no one is turned away because they cannot pay for medical care.
    In Esperanza's last fiscal year, our physicians saw 9,266 patients 
while our counselors averaged forty-one visits a month. At the 
beginning of 2000, we were forced to discontinue accepting any new 
patients. The patient load and examination room availability had 
reached the maximum level for proper care. In June of this year, we 
added two physicians and additional medical personnel to our staff and 
reopened to new patients who are arriving at a rate of almost 300 per 
month.
    Last year, 85% of our patients were either Medicaid or Medicare 
recipients while 6% were self-pay. The problem lies with the delay in 
reimbursements from the government. As of this writing, we were still 
waiting for almost $200,000 in reimbursements from 1999
    As with most organizations, payroll and rent are the biggest 
expenses and Esperanza is no exception. Our staff of physicians and 
other medical personnel is paid roughly 30-35% of what they could be 
earning with for-profit organizations. Our rent is reasonable but we 
could use more space.
    It is not unusual for our medical professionals and staff to go 
without salary beyond the normal pay schedule. Needless to say, it 
causes financial difficulty for many of our already underpaid staff. 
Having said this, Esperanza has minimal turnover of personnel because 
of their overwhelming commitment to the work done here. Those employed 
at Esperanza believe in its mission and that everyone is entitled to 
the excellent healthcare provided in our clinic.
    Please allow me to tell you just one real-life story of those we 
serve in North Philadelphia. For the purpose of this testimony, lets 
call our patient ``Maria.''
    Maria is a young Hispanic woman in her early 20's born and raised 
in North Philly, a place known by the local police as ``the badlands.'' 
Her community has this reputation because it has the highest homicidal 
and suicidal rates in all of Pennsylvania. Crime is rampant, housing is 
deplorable, and people live in this narrowly defined area where drugs 
and poverty are the everyday influences with which they must contend.
    Although Maria is a second generation Hispanic, she prefers Spanish 
culture and speaks mostly Spanish. Despite the fact that she is a US 
citizen, she does not see herself as one with the same rights as other 
groups enjoy. As with most Hispanics in this area, Maria's experience 
with social institutions has proven challenging, to say the least. In 
essence, she has trouble communicating with and does not trust the 
people who represent these community organizations and has asked for 
our help with the many difficulties of her existence. Maria is an 
exemplification of the typical person in North Philadelphia. Her life 
has been a succession of pain and sorrow. She is the mother of two 
children, one of which is a three-month old daughter born with both 
brain and heart damage.
    Several weeks ago, Maria called our center in an acute emotional 
crisis. The only person that had a relationship with her was our head 
nurse, Andrea. Because the nature of her call was psychological, one of 
therapist was asked to follow-up. Maria was suicidal.
    Maria's husband was working. Her mother was unavailable as she was 
caring for her other daughter who was recently released from a 
psychiatric institution. Maria turned to her friends at Esperanza.
    We were able to ``jump through hoops'' in order to get Maria to 
Esperanza to meet with a team consisting of a pediatrician, a family 
practitioner, head nurse, and a therapist. Together we were able to 
assess, make a plan of action, and implement it in order to serve this 
patient.
    Several days later, she was scheduled to meet her therapist at the 
center. However, when the hour came, her therapist received a call from 
a very anxious and depressed young woman stating that desperately 
needed her appointment but could not come for lack of childcare. The 
therapist responded by saying she would come for the session in Maria's 
home. Maria was relieved that the staff would go so far as to visit her 
in her home.
    When the therapist arrived for the session, she was astonished by 
the conditions she saw. The first floor of the house was cluttered with 
large black trash bags, trashcans overflowing, walls half built and 
construction materials everywhere. The dust was so awful that it was 
virtually impossible to breathe. Maria was determined to make this 
house a ``home.''
    Maria took Liz to the second floor. They decided to have their 
session while sitting on the bed of the two year old daughter. Directly 
in front of them was the 3 month old in her crib. She was connected to 
feeding tubes, which nourished her young body in order to keep her 
alive. They sat there and talked endlessly as if she had never told 
anyone about her life and all its difficulties. No support from family. 
No support or confidence in social agencies. But now she feels she has 
an ally. One who understands her culturally and emotionally.
    When Liz returned to Esperanza, she came across a local pastor who 
is supportive of our center. I told him of the need Maria had to have 
her construction work finished. He joyfully agreed to use a group of 
teenagers from a suburban church to volunteer their time to serve this 
family.
    This is the holistic nature of the work of Esperanza. It is very 
difficult to describe the emotional impact that such lives have on its 
staff. It is true that their trauma vicariously affects us all. But 
because of the presence of our living God, Who goes ahead of us, we are 
more than equipped to walk side-by-side with these broken lives.
    We are grateful for the funding made available for community health 
centers in our country. We would not be able to provide the services we 
do to the citizens of Philadelphia without them. Having said that, we 
could use your influence to see that the reimbursement process is 
improved. As I said earlier, we are still waiting on annual wrap-around 
reimbursements from 1999.
    Thank you for the opportunity for me to present the work of the 
dedicated staff of Esperanza Health Center to his committee.

    Mr. Pitts. In closing, the reauthorization of Community 
Health Centers is an extremely important issue and one that the 
committee and the House cannot hesitate to address. There are 
many families and children around the country that need quality 
health care, it is our responsibility to reach out to ensure 
that this need is met.
    I look forward to hearing the testimony of our 
distinguished witnesses. Thank you, Mr. Chairman, and I yield 
back the balance of my time.
    Mr. Bilirakis. I thank the gentleman. Ms. Capps, for an 
opening statement.
    Ms. Capps. Mr. Chairman, thank you for holding this very 
important hearing today. I am very pleased that we are focusing 
on America's public health safety net and, in particular, the 
shortage of nurses in the workforce, and I have been discussing 
these related issues with you for some time, and perhaps given 
the shortness of the notice for the hearing, we can consider 
this a first step in our discussion of some very important 
topics.
    Clearly, this hearing will deal with important programs, 
and I hope it will be inclusive of ones like the Community 
Access Program, which help local agencies coordinate their 
efforts to provide health care.
    In my district, the Lompoc Valley Community Health Care 
Organization has received funds from this program, and I am 
proud to support Mr. Green's legislation to authorize the 
program. But I have a special interest in the nursing shortage. 
As has been indicated, I have been a nurse, I have been a nurse 
for 41 years, and have been working on this particular issue in 
Congress for the past 2 years. I have known first-hand the 
challenges that my profession faces, and the importance of 
nurses in my district have also informed my motivation to be 
involved in this important discussion.
    Nurses are the first line of defense in our Nation's health 
care system, and too often last in line for support. Today the 
nursing community is facing a dire situation which actually 
translates into meaning that our society is facing a dire 
situation. There is an ongoing shortage of nurses in the 
workplace that threatens access to quality of care for many 
Americans. To make matters worse, a greater crisis is looming 
just over the horizon that could strain the health care system 
to the breaking point. We have an aging nursing workforce and a 
dwindling supply of new nurses. Right now, as has been 
mentioned already, the average age of employed Registered 
Nurses is 43 years old. By 2010, 40 percent of the R.N. 
workforce will be over 50. At the same time that so many are 
approaching retirement, we are facing an incredible shortfall 
of well-trained, experienced nurses in all fields, and this 
just as the 78 million members of the Baby Boom generation 
begin to retire and need a greater amount of health care.
    That is why I worked with Representative Sue Kelly and my 
colleagues here on the Energy and Commerce Committee, 
especially Representative Ed Whitfield, as well as Ranking 
Member Dingell and Ranking Member Brown and, in the Senate, 
Senators Kerry and Jeffords and various nursing and hospital 
groups, to craft what we are calling the Nurse Reinvestment 
Act.
    Our bill establishes a National Nurse Service Corps to 
provide scholarships to nursing students who agree to work in 
health care facilities that are critically short of nurses. We 
have done this in the past. It is time to do it again.
    The bill also provides for public service announcement and 
nursing recruitment programs to help health care providers and 
nursing groups promote nursing and caregiving careers, health 
careers. The Nurse Reinvestment Act also establishes a career 
ladder grant program to help nurses afford more training and 
education so that they can advance to the next level of 
nursing, which also must include training of faculty for 
nursing education so that schools will be able to help us in 
this crisis time. And the bill extends Medicare coverage for 
clinical nurse training to nonhospital providers and increases 
the Federal Medicaid match for nursing home clinical education 
of nurses to provide 90 percent of State costs. And, finally, 
the House legislation provides for grants to develop public/
private partnerships between hospitals, nursing schools, and 
high schools who are maybe interested in health training 
programs for young people to model after a program just 
beginning now in my home town of Santa Barbara, which pairs a 
high school, a local hospital and a nursing school.
    This legislation has broad bipartisan support already, with 
167 co-sponsors. It has been endorsed by nursing and provider 
groups across the health care spectrum. These include the 
American Nurses Association and American Organization of Nurse 
Executives, the American Hospital Association, the American 
Association of Colleges of Nurses, the Association of Women's 
Health Obstetric Neonatal Nurses, the American Health Care 
Association, the American Association of Homes and Services for 
the Aging, the Emergency Nurse Association, the National 
Hispanic Medical Association.
    So, it is my hope, Mr. Chairman, that the subcommittee can 
move this legislation as soon as possible. This hearing I count 
as our first step along that path, and look forward to working 
with you on all topics including this legislation.
    Mr. Bilirakis. I thank the gentlelady. I would like to 
share with you, Lois, what is happening down in my district 
regarding the shortage of both nurses and educators, teachers. 
There is a local community college, a junior college really, 
for years and years St. Petersburg Junior College was a 2-year 
school. Just recently they went to the Legislature and asked to 
be considered a 4-year college for purposes of offering degrees 
in nursing and in teaching, and were successful. So, that is 
kind of their way to try to address these shortages. We have 
got to look at all ways. Quite often, government is just not 
enough, and should not be considered enough.
    The Chair now yields to Mr. Bryant for an opening 
statement.
    Mr. Bryant. Thank you, Mr. Chairman, I will be brief. I 
just want to make a couple of points, and then I know we have 
had some other people come in who will want to make a 
statement, but I am eager to hear the panel of witnesses that 
we have today, and I thank you for being here today and being 
patient with us as we all wade through these statements.
    Two quick points. I represent, in Tennessee, a very diverse 
district of wealth and come of the more rural counties that are 
in the State, at the same time, and particularly with the 
latter I am concerned in the rural communities with the quality 
of care and the safety net factor that we have talked about and 
will talk about today.
    Second, I would concur with my colleague from California, 
Ms. Capps, and others I am sure that have mentioned the 
potential for shortfall that we have with nurses and other 
technicians and trained medical people out there. I hope we 
haven't made a serious mistake here in underestimating the need 
there, and I hope there is time still to correct that.
    To the point now, my mother was a nurse, and she is 94, and 
we are ready to shop her around. If the bonus is right, we 
might bring her out of retirement.
    All she knows how to do, I think, is give penicillin shots. 
We have advanced a little bit since those days, but with that I 
will yield back the balance of my time.
    Mr. Bilirakis. Thank you. Mr. Green, for an opening 
statement.
    Mr. Green. Thank you, Mr. Chairman, and I appreciate your 
holding this hearing on the state of our Nation's health care 
safety net programs. These programs that are instrumental in 
our efforts to provide health care for all Americans, even 
those who can't pay.
    Community Health Centers and the National Health Service 
Corps are central components in our efforts to reach out to 
underserved Americans. More than 1,000 Community Health Centers 
serve 11 million Americans in all 50 States. Almost half of the 
patients served at CHCs are uninsured. These centers deliver 
comprehensive health and social support services to people who 
otherwise would face major financial, social, cultural or 
language barriers to obtain quality and affordable health care.
    The National Health Service Corps helps staff these Centers 
and other safety net providers by giving physicians incentives 
to serve in low-income and underserved rural and urban 
communities. Since its founding 30 years ago, the Corps has 
provided more than 23,000 health professionals to meet the 
needs of the underserved in these vulnerable populations. These 
dedicated clinicians also provide primary and preventative care 
to individuals whose only other source of health care might be 
the emergency room. Together, these two entities have 
successfully improved health care in our Nation's rural and 
inner-city areas. But I don't think we can talk about health 
care safety net without discussing the Community Access 
Program, and I was concerned with the administration's effort 
to eliminate this program. Hopefully we can work together to 
continue this program because it has shown such success in its 
early life.
    And, Dr. Wiltz, I appreciate your testimony and success 
from Louisiana. Since Mr. Tauzin is not here, I am the only one 
here that doesn't need an interpreter for somebody from 
Louisiana, since we speak Cajun and Spanish in Texas, along 
with whatever else.
    The CAP program provides grants to help agencies coordinate 
preventative and primary care for the 42 million Americans 
without health insurance. First created as a demonstration 
project in 2000, CAP grants have helped private and public 
safety net providers to join forces to improve health care 
services for the uninsured. And I have introduced CAP 
legislation--I appreciate the support of my colleagues--that 
would authorize it for 5 years so we can continue to build on 
the success we have had this last year. CAP helps fill the gaps 
in our health care safety net by improving infrastructure and 
communication among the agencies. With better information, 
agencies can provide preventative primary and emergency 
clinical health services in a coordinated and integrated 
manner.
    Mr. Chairman, let me just mention one CAP grantee in 
Broward County was able to use CAP funds to form an 
informational health line and referral system to publicize 
health care prevention and points of access for health care 
services, and I learned that every day in Houston, if we can 
have somebody treated with prevention, we can sure save money 
on our emergency care.
    Another program in Chicago, the CAP program has instituted 
Disease Management with Best Practices, to address the county's 
disproportionately high mortality rates from diabetes and 
cancer. Thanks to the CAP program, the consortium was able to 
reach more than 300,000 residents with these diseases in the 
Chicago area.
    There are many other examples, and I have a report from the 
National Association of Public Hospitals, which outlines the 
success of the CAP programs across the country and, Mr. 
Chairman, I ask unanimous consent to submit that program for 
the record.
    Mr. Bilirakis. Without objection.
    [The information referred to follows:]
     Communities in Action: Success Stories from NAPH CAP Grantees
                                alabama
Jefferson County Department of Health
    In Jefferson County, Alabama, the CAP grantee, Jefferson County 
Department of Health (JCDH) is using its funding to improve continuity 
of care and access for Birmingham residents and its surrounding areas. 
The two main objectives of the Jefferson County Community Access 
Program, known as JeffCoEasy! (Jefferson County's Easy Access to 
Services for You!) are: (1) to improve access by establishing effective 
collaboration, information sharing and clinical and financial 
coordination among all levels of care in the community network and (2) 
to implement best practices, engage in continuous performance 
improvement, staff development, and real-time feedback of outcomes of 
care.
    To meet these objectives, JCDH and partner, Cooper Green Hospital, 
have launched an extensive marketing campaign describing the website, 
hotline, and resource center to make consumers aware of available 
health care services. The county also has implemented a unified 
enrollment and eligibility program for clinics to assess patients who 
may qualify for publicly funded programs. Also, they purchased 
electronic medical record software and modified it to integrate with 
their current infrastructure. CAP funding is being used to install the 
electronic medical record at five network sites. This network will 
allow staff members to track patient medical history, observe important 
documentation from previous providers, monitor clinic visits and 
ultimately provide better service and continuity of care. The 
electronic medical record also features a linking component in which 
family members' medical records will be coupled together to ease 
accessibility. Currently, the project is in the piloting stage where 
they have one site equipped at Baptist Medical Center. At this time, 
this site is training staff members on using the new software.
    For more information on this program, please contact Terry Gunnell 
at (205) 930-3779 or email him at [email protected].
                               california
Alameda County Medical Center
    In Alameda County, the CAP grantee's goal is to improve continuity 
of care. Alameda County Medical Center (ACMC) and several collaborative 
partners, Alameda Health Consortium and its ten member clinics, the 
Alameda County Health Care Services Agency, the Alameda Alliance for 
Health, and the Community Voices project, will use their CAP grant to 
support work on building a county-wide seamless system of care for 
patients.
    They plan to enhance the function of the specialty care 
coordination unit that currently employs two nurses and two medical 
clerks. The medical clerks currently make appointments for patients at 
specialty care clinics. To enhance this activity, ACMC and their 
collaborators are developing a tracking system that will verify whether 
patients went to their specialist appointment and allows staff to view 
what services were received. This program will help decrease the number 
of referrals by identifying when duplicate services are ordered. 
Additionally, CAP funding is being used to assure that tile specialist 
refer the patients back to their primary care physicians for follow up 
treatment. Furthermore, ACMC is also considering placing select high-
demand specialty care services at nonhospital ambulatory care sites in 
order to improve access to care.
    For more information about this program, please contact Ana M. 
O'Connor at (510) 891-5708 or email her at [email protected].
Contra Costa County
    In Contra Costa County of California, Contra Costa Health Services 
(CCHS) and two community clinics operate the current safety net system 
of care. In order to increase their capacity to care for the uninsured 
and underinsured, these organizations are focusing their CAP grant on 
three objectives: creating an information system to link all the 
safety-net partner sites to reduce duplication and fragmentation of 
care, reduce financial and cultural barriers for receiving care, and to 
identify and implement cost savings through group purchasing.
    While early in their program, CCHS is developing software that 
provides demographic, programmatic, medical, and care reminder 
information to link programs and partner organizations. Also, this 
information will provide data that will be used to initiate case 
management programs for asthma, diabetes, and cellulites. CCHS and 
their partners are also meeting regularly to combine their resources to 
better integrate preventive services.
    To identify specific financial and cultural barriers, CCHS is 
conducting a patient survey to identify and assess patient's 
perceptions about hardships to receiving care, such as language and 
transportation problems. In examining financial barriers, Contra Costa 
plans to review existing fee schedules and then establish fees for 
high-use procedures. Financial counselors can use this information to 
encourage patients to obtain treatment at a fixed cost. Furthermore, 
CCHS plans to increase cultural competency among staff and providers by 
developing training programs that focus on culturally competent disease 
management. For example, patients from a specific ethnic background may 
need diabetes disease management programs tailored to their dietary 
preferences.
    To meet their third objective of reducing and containing costs, the 
partners are negotiating contracts with laboratories, diagnostic 
imaging services, and pharmaceutical vendors.
    For more information on this program, please contact Mary Foran at 
(925) 370-5055 or email her at [email protected].
Los Angeles County Department of Health Services (LAC)
    The Los Angeles County Department of Health Services is 
coordinating a CAP grant that includes two projects that use 
information technology to improve the system's infrastructure and 
access to care. One project is a joint electronic appointment system to 
allow patients more immediate access to care by coordinating 
appointments among participating clinics. The second project is a web-
based referral system that ties Community Health Centers with high 
volumes of primary care patients to the County's acute care hospitals 
that provide specialty care. This project will replace an inefficient 
system for referring approximately 100,000 patients from Community 
Health Centers to specialists. LAC is hopeful that they can demonstrate 
that the web-based referral system improves health outcomes and better 
utilizes resources.
    For more information please contact Ingrid Lamirault at (213) 989-
7152 or email her at [email protected].
San Francisco Community Clinic Consortium (SFCCC)
    The San Francisco CAP grantee is using its funding to improve care 
coordination and further integrate the public and non-profit safety net 
health care systems. To meet their goal, the San Francisco Department 
of Public Health (SFDPH), San Francisco Community Clinic Consortium 
(SFCCC) and their partners are planning for a common registration 
system, installing electronic medical record software, standardizing 
referral systems, and integrating behavioral health care within primary 
care. These SFCCC clinics refer approximately 40,000 clients annually 
to SFDPH for specialty, inpatient, and urgent care.
    Currently, SFCCC and SFDPH are meeting to develop a common 
registration system. A taskforce is meeting to assess common 
registration data and develop recommendations to establish a uniform 
registration system across the SFDPH community health network (CHN) and 
the SFCCC sites. This registration system will identify an unduplicated 
number of uninsured residents who obtain services at both SFCCC/CHN and 
SFDPH primary care sites. Also, once a patient enters the system, the 
patient's data will be available for program eligibility 
determinations. Greater efficiency in the registration process will 
reduce processing time and delays.
    Another integration component is the community health network's 
electronic medical record, called the Lifetime Clinical Record (LCR). 
The LCR contains individual clinical information on every client, and 
is a major step toward a computerized patient record. Currently, the 
LCR has been installed in one pilot clinic. Since its implementation, 
the pilot clinic documented improvement in physician morale and staff 
retention, improved continuity of care, and increased access to care. 
CAP funding is allowing the LCR to be linked to 10 more clinic sites.
    To supplement the LCR system, SFCCC is establishing a referral 
system between specialists and primary care physicians that is designed 
to reduce emergency room visits, as specialists will direct patients to 
their primary care physician to receive follow-up care. Providers at 
SFCCC and SFDPH will undergo training to reinforce common procedures 
for referrals.
    Along with referral training, primary care providers are attending 
continuing education sessions conducted by the UCSF Division of 
Psychosocial Medicine and UCSF School of Pharmacy to learn care 
techniques for behavioral health problems, limited English speaking 
patients, and homeless individuals. Primary care physicians at SFCCC 
have experienced an increase in patients needing treatment for mental 
health and substance abuse problems. In the past, these patients were 
often referred to specialists because some primary care physicians 
lacked training in prescribing, psychotropic drugs. The CAP funding 
will provide training to primary care physicians in basic behavioral 
health treatment.
    For more information on this program, please contact Dick Hodgson 
at (415) 345-4230 or email him at [email protected].
San Mateo Health Services
    In northern California, San Mateo Health Services has formed a 
consortium with, El Concillio of San Mateo County, AFL-CIO Central 
Labor Council and the Health Plan of San Mateo in order to strengthen 
current efforts to maximize the use of California's existing state and 
federal programs such as Medi-Cal, and to increase enrollment in the 
Health Services' medically indigent adult program, called the Wellness 
Education Linkage Low Cost Program (WELL). The partners are enhancing 
these enrollment efforts by providing low-income residents with access 
to health education and disease management services. Due to their 
similar goals, these organizations formed the WELL coalition. CAP 
funding is supplementing and strengthening the efforts of the WELL 
Coalition by reaching and enrolling more uninsured families through 
cultural, community and employer networks.
    Since its funding in March 2001, the WELL Coalition has hired six 
health advocates who are working with the County's Human Service Agency 
to target uninsured residents and enroll them in available federal and 
state health insurance programs. The target populations are uninsured 
working families, uninsured or underinsured low-income union members, 
immigrant families, and the medically indigent. In addition, El 
Concillio and the Labor Council have hired community health workers 
whose aim is to provide low-wage union members and immigrant families 
with increased access to health care services through multi-cultural 
health education, health screening, and prevention. San Mateo is unique 
in that over 21,000 start-up companies exist with fewer than 20 
employees; therefore, these businesses are not required to provide 
health insurance for their employees. This phenomenon has created an 
abundance of working families without health insurance. CAP activities 
along with a California Medi-Cal/Healthy Families outreach grant are 
financing efforts to assess and reach these individuals and others like 
them. Through these initiatives, the WELL Coalition is making progress 
toward their goals of reducing San Mateo County's uninsured population 
by 35%.
    For more information about this program, please contact Toby 
Douglas at (510) 541-3251 or email him at [email protected].
                                colorado
Denver Health and Hospital Authority (DHHA)
    The CAP grantee from Colorado, Denver Health and Hospital Authority 
used their CAP grant to facilitate enrollment in publicly funded health 
insurance and to enhance case management for chronically ill adults 
with physical, behavioral, and substance abuse problems.
    To meet the first goal, the DHHA's CAP program has hired six 
enrollment specialists to facilitate enrollment of eligible individuals 
into publicly sponsored programs such as Medicaid, the Child Health 
Plan Plus (SCHIP), and the Colorado Indigent Care Program. These 
enrollment specialists take applications from individuals and families 
in community settings. Once individuals have applied for a program, the 
enrollment specialists track the status of the applications and perform 
follow-up procedures.
    DHHA's CAP program is making steps toward its second objective 
through its adult case management program, which aims to alleviate 
fragmentation of care. For example, this program is designed to improve 
health outcomes and lower costs for uninsured adult patients who are 
frequent users of the healthcare system and have physical, behavioral, 
and/or substance abuse problems. To address this issue, the CAP grantee 
has hired two case managers, a nurse and a social worker, to identify 
issues, to access resources, to attend clinic visits, and to develop 
case management plans for the patients. After the assessment, 
consenting patients are referred to a Continuity of Care Clinic that is 
designed to care for this high-risk population.
    For more information about this program, please contact Liz Whitley 
at (303) 436-4071 or email her at [email protected].
                                florida
Broward Regional Health Planning Council
    In Florida, the goals of the CAP grantee, Broward Regional Health 
Planning Council, are threefold: to promote a centralized eligibility 
and referral system to improve access to healthcare services while 
providing increased awareness of existing resources, to improve data 
management and case tracking for the uninsured population through an 
enhanced information management system, and to improve care for the 
uninsured through better case management. Through these initiatives, 
Broward Regional Health Planning Council aims to increase enrollment in 
existing health programs, improve referrals for healthcare needs, and 
improve health outcomes for targeted health populations such as 
diabetes, asthma, and HIV/AIDS.
    To meet their first objective, the CAP grantee and First Call for 
Help, Inc. are workin together to form an information health line and 
referral system that will link community providers to patients in order 
to publicize healthcare prevention and provide points of access for 
health care services. Residents of Broward County can access these 
services by dialing 211 on their telephone.
    Along with this goal, Broward County Human Services Department, 
Memorial Healthcare System, North Broward Hospital District and First 
Call for Help are collaborating on using new information technology 
software to improve eligibility determinations for Medicaid, WIC, and 
KidCare. This project allows health care organizations and caseworkers 
access to the Broward Information Network (BIN). Caseworkers can use 
BIN and the new software to identify programs for which patients are 
eligible. This software can be used to create basic client files also.
    In three months of operation, Memorial Healthcare System and North 
Broward Hospital District have improved care, to vulnerable populations 
by providing disease management, information about available resources, 
and linking patients to the healthcare delivery system. One case 
manager reports that she has worked with over 150 new clients to 
facilitate prompt access to care. Another case manager reported that 
she was able to inform a diabetic patient about the benefits of using 
new needles for insulin.
    For more information about this program, please contact Mike 
Delucca at (954) 561-9681 x 252 or email him at [email protected].
                                illinois
Cook County Bureau of Health Services
    The Cook County Bureau of Health Services West Corridor Partnership 
solidifies the public private partnership among the County, the Chicago 
Department of Public Health, federally funded community health centers, 
and community hospitals in the Western corridor of Cook County. Through 
this partnership the over 400,000 uninsured and underinsured residents 
of these communities will have access to all levels of health care, 
including much needed sub specialty care. State of the art technology 
will be employed to insure timely access for appointments, for 
monitoring and case management to avoid duplication of services, to 
decrease no-show rates, and provide appropriate sharing of information 
to provide higher quality and ultimately less costly care.
    Disease management ``best practices'' is also being piloted across 
the partnership for diabetes care and cancer care and screening. 
Community residents have higher than the national and County average 
mortality rates from both diabetes and cancer. Over 300,000 residents 
will benefit from focused attention on these disease entities.
    For more information on this program, please contact Mary Driscoll 
at (312) 633-8236 or email her at [email protected].
                                indiana
Health and Hospital Corporation of Marion County
    In Indianapolis, the Community Access Program has allowed for 
expansion of the Wishard Advantage program, which currently provides a 
full range of health services to 25,000 uninsured individuals, to an 
additional 8,000 people. Through the collaboration of CAP, the Health 
and Hospital Corporation of Marion County was able to extend the 
Wishard Advantage program to include all other safety net providers in 
the community as partners. This coordinated care to the uninsured will 
improve the full range of vertical health care services currently being 
provided and reduce inappropriate hospital admissions.
    For more information on this program, please contact Seema Verma at 
(317) 221-2309 or email her at [email protected].
                               louisiana
Louisiana Public Health Institute
    New Orleans' CAP grantee, Louisiana Public Health Institute (LPHI) 
is improving continuity of care and access to care by implementing an 
electronic interface linking the Medical Center of Louisiana with two 
community health centers, and Daughters of Charity Health Center. Using 
CAP funds, an affiliation agreement between the hospital and the two 
health centers was reached in which LPHI purchased software and hired 
an analyst to develop software that has enabled the clinics to share 
diagnostic information, patient histories, and emergency discharge 
reports with the hospital.
    LPHI plans to create care coordination programs, grant medical 
staff privileges for clinic physicians to provide care at the hospital, 
and establish risk management protocols for high-risk patients. The 
care coordination programs will encourage maintenance of the 
relationship between patient and the primary care provider 
relationship. Moreover, LPHI is considering granting medical staff 
privileges so that physicians from the clinic can provide patient care 
at the hospital. In addition, LPHI is hiring a care coordinator to 
examine high-risk patients to determine how to improve care in order to 
reduce the number of subsequent visits for these patients. These 
initiatives are increasing the continuity of care for New Orleans 
residents.
    For more information about this program, please contact Anne Witmer 
at (504) 539-9481 x 102 or email her at [email protected].
                             massachusetts
Boston Medical Center (BMC)
    Boston Medical Center's, CAP funding is being used to improve 
continuity of care by purchasing web-based data services that will 
allow them to access secure data from ten community health centers and 
a major teaching hospital via the internet, in order to follow patients 
across episodes of care. This Web-based reporting and analysis tool 
will enable the grantee to turn data into meaningful information that 
can be used to improve and increase the continuity of care for 
uninsured patients. This data reporting system would not be available 
without the CAP funding. Prior to the CAP grant, the parties did not 
have access to sufficient data to manage care across different sites. 
Furthermore, using this data tool will be a model for other state 
agencies and hospitals.
    The software will enable hospitals and community health centers to 
share patient information and produce reports that can be used to track 
and better manage patient care for the 75,000 uninsured individuals who 
are registered in the BMC CareNet Plan (a program for the uninsured in 
Massachusetts). Clinical work groups will use this data to track 
episodes of care and develop intensive disease management and case 
management programs that will improve the access, quality and 
continuity of care. For example, this data will be used to help manage 
asthma care and monitor medication compliance. This should result in 
reduced use of the emergency department by asthma patients.
    For more information on this program, please contact John Cragin at 
(617) 414-5117 or email him at [email protected].
Cambridge Health Alliance
    The CAP grantee in Cambridge, Massachusetts, launched in March of 
2001, set a target of enrolling at least 50,000 of the community's 
57,000 uninsured in a comprehensive, coordinated system of care by year 
four of the project, building upon a relationship between the Cambridge 
Health Alliance and more than 50 community partners. Other goals 
include enhancing preventive and early intervention services, enhancing 
care coordination, and implementing a shared database and care system 
to facilitate enrollment and case management. The collaborators agree 
that the level of cooperation and coordination among them would not 
have occurred without the seed funding provided through CAP.
    For more information on this program, please contact Linda Cundiff 
at (617) 591-6930 or email her at [email protected].
                               minnesota
Hennepin County Medical Center
    The Community Lifeline Project of Hennepin County, Minnesota, is 
using some of its CAP funding to provide community-based person-to-
person support in navigating the health delivery system for the 
uninsured. For example, they have:

 enhanced a multi-lingual health information and referral phone 
        line that fielded 1,491 calls in the first quarter of 2001 
        alone;
 hired 1 community health educator and 8 community health 
        workers to assist 2,208 individuals apply for available public 
        insurance programs;
 arranged for transportation to clinic appointments for 114 
        patients who might otherwise have been ``no-shows'' (the number 
        of monthly rides increased more than threefold in the first 
        three months of the year)
 placed community health workers at the county hospital 
        emergency room and in community clinics to provide health 
        education and information on appropriate use of emergency 
        services; and
 held 15 community based health education fairs to further 
        enhance outreach to the community.
    For more information about this program, please contact Luann 
Nyberg at (763) 593-7709 or email her at 
[email protected].
                                missouri
Kansas City Care Network
    Truman Medical Center and the Kansas City Care Network are using 
their CAP grant to implement technological advancements in their health 
system. Partnering with Community Resource Network (CRN), Kansas City 
CareNet aims to provide shared software and computer connectivity 
between health care providers servicing the uninsured and underinsured 
in the Kansas City area.
    By providing electronic connectivity, the CAP grantee's goal is to 
link local health-related and social service agencies through web 
hosting and inter/intranet technology in order to create a 
comprehensive database of health and social service information. 
Providers will then be able to access data to better serve their 
clients and offer the community a more seamless safety net system. This 
technology is providing the KC CareLink patients with an improved 
referral process and better overall coordinated care.
    In a short time, KC CareNet has already organized information 
technology (IT) work groups, and completed the initial assessment of 
participating organizations' technology capabilities. KC CareNet has 
also recruited a Community Advisory Board, which oversees this project. 
Furthermore, staff members are researching local and national sources 
on HIPAA in order to be compliant when implementing this new 
technology.
    For more information on this program, please contact Linda Davis at 
(816) 513-6348 or email her at Linda L [email protected].
                                new york
New York City Health and Hospitals Corporation (NYCHHC)
    Within New York City and its five boroughs, New York City Health 
and Hospitals Corporation uses its CAP grant to achieve three goals: 
(1) improve birth outcomes in target communities, (2) facilitate and 
increase access to comprehensive clinical services, and (3) enhance 
community health education and outreach.
    In a short time, NYCHHC is witnessing the results of their first 
objective through the ``Sister Friend'' program where high-risk 
expectant mothers are matched with mentors during their pregnancy. As 
of June, the program had enrolled over 20 participants per site in the 
program. Of those enrolled, five high risk mothers have delivered full 
term healthy babies. Furthermore, the program focuses on the mental 
health needs of their program members. For example, one woman in the 
program miscarried and remained in the program to undergo treatment for 
depression. A future goal of the program is to establish mental health 
screening for expectant mothers.
    To meet their second objective, CAP funds will support a telephonic 
dial-up network to transmit specialty care referrals between 8 
healthcare sites and HHC hospitals. Over the course of the year, they 
anticipate that this automated system will manage 4,800 referrals. This 
service will increase continuity of care, decrease missed appointments 
and reduce ER visits.
    To meet their third objective, NYCHHC is conducting educational 
activities and forums for diverse patient groups to inform them how to 
enroll and obtain health care services. Sessions about the US health 
care system, Child Health and Family Health Plus programs, advance 
directives and end of life issues have been conducted for Asian 
Americans, Eastern Europeans, and Russian immigrants. By hiring 
educators from the same cultural background as these communities, 
NYCHHC believes that these individuals have been able to better 
maneuver the health care system. This has resulted in more people 
enrolling in health programs and using more appropriate levels of care.
    For more information on this program, please contact Nina Sporn at 
(212) 788-3604 or email her at [email protected].
                               tennessee
Erlanger Health System
    Servicing residents living in Hamilton County, Tennessee, and its 
surrounding service area of eight southeast Tennessee counties, three 
northwest Georgia counties, and one northeast Alabama county, Erlanger 
Health System is using its CAP funding to achieve two main goals: 
improving access to primary care physicians to decrease emergency room 
usage, and increasing prevention initiatives within the community to 
lower avoidable health problems. To achieve the first objective, 
Erlanger hired three community health representatives who are focusing 
on different ethnic groups. By building relationships with local 
community organizations, churches and community centers, these 
community health representatives are facilitating several programs to 
educate individuals about healthcare issues such as utilizing health 
screenings, how to access services when needed, and how to complete 
healthcare forms. Other duties of the health representatives include 
managing client information, reminding patients of their medical 
appointments, documenting medical histories, making follow-up calls, 
and arranging transportation. Through the representative's guidance, 
patients learn to use their primary care physicians on a regular basis 
instead of the emergency room.
    To address their second goal, Erlanger Health Systems is 
collaborating with other organizations such as the Homeless Coalition, 
First Call for Help, and Hamilton County Health Department to help 
educate citizens about healthcare issues. For example, Erlanger and 
Hamilton County Health Department are working together to increase 
preventive care for adults by offering immunizations for parents and 
children at the beginning of the school year. Another notable example 
is Erlanger, City of Chattanooga and Hamilton County Parks and 
Recreation Departments are sponsoring exercise programs with the 
community to promote healthy lifestyles, which may prevent health 
problems later in life such as heart disease. Moreover, by increasing 
the number of preventive health opportunities, collaborations between 
organizations will prove to be beneficial to the local healthcare 
providers as well as the entire community.
    For more information about this program, please contact George 
Ricks at (423) 778-2718 [email protected].
Regional Medical Center at Memphis/Shelby County Health
    As part of its CAP grant, The Memphis Community Access Program will 
implement a new system for referring uninsured patients seeking non-
emergent care in the emergency room to primary care providers 
participating in the coalition. Prior to implementing the referral and 
appointment system, however, the grantee has conducted a rigorous 
evaluation of the cultural competency of the participating providers, 
to design a training program that can be specifically tailored to the 
cultural needs of the nonwhite uninsured populations in different areas 
of the city.
    For more information about this program, please contact Brenda 
Theus at (901) 545-8565 or email her at [email protected].
                                 texas
The El Paso Hospital District/R.E. Thomason General
    Using CAP funding, The El Paso Hospital District plans to decrease 
emergency room visits and increase enrollment in existing publicly 
funded programs. They are meeting these objectives by implementing a 
24-hour Community Call Center, expanding the role of community health 
workers, and establishing a web-based information system.
    Open to all El Paso County residents, the community call center 
answers medically related questions, refers social services calls to 
community health workers, and facilitates enrollment into existing 
programs. Using CAP funding, this grantee hired three nurses, five 
community healthcare workers, and one call center coordinator, all of 
whom are fluent in Spanish, to staff the call center. During the first 
month of operations, the center received almost 500 calls, of which 
approximately half were clinically related and half were for social 
services. For the medical calls, triage nurses recommend a course of 
care by following nationally certified adult and pediatric protocols. 
Using these care procedures, the triage nurses have reduced 
inappropriate emergency room use.
    When social service calls are received, they are referred to 
community health workers, known as ``promotoras.'' Promotoras perform a 
variety of tasks including promotion of preventive services and 
conducting community outreach. Furthermore, these community health 
workers make referrals to other state agencies for individuals and 
families to gain more information on programs such as WIC, SSI, and 
subsidized housing. Similarly, the community health workers help enroll 
individuals into programs like Medicaid.
    Currently, El Paso County Hospital District, and other community 
partners, including community health centers, are collaborating on the 
development of a web-based information system to connect providers from 
with health community workers by allowing them access to health 
documents and demographical information. By expanding the role of the 
promotoras, these health workers can serve to facilitate issues related 
to health care and management, such as case management. The community 
health workers will also be able to identify which patients meet 
eligibility requirements of existing programs.
    For more information on this program, please contact Mary Helen 
Mays at (915) 545-4810 or email her at [email protected].
Harris County Public Health And Environmental Services
    In Harris County Texas, after one month of operation, the CAP 
coalition is already improving care for uninsured pregnant women. For 
example, prior to receiving CAP funding they organized and trained 22 
volunteer Community Health Workers to act as liaisons with people in 
one of their communities to provide health education, information about 
available resources and a link into the health care delivery system 
which was previously unavailable. During the first month after 
receiving funding, just one of these workers reported that she had 
worked with 50 clients to facilitate access to care, including 
arranging for quicker prenatal care, identifying patients with serious 
complications that needed immediate attention, facilitating enrollment 
in various programs for health and social services, and generally 
navigating an otherwise perplexing and complex system of care.
    For more information on this program, please contact Ron Cookston 
at (281) 447-2800 or email him at [email protected].
The University of Texas Medical Branch at Galveston
    In Galveston, Texas, a safety net coalition project known as ``The 
Jesse Tree'' has been able to leverage its federal CAP funding to 
greatly enhance its access to private charitable donations. The project 
now enjoys the support of well over 100 private organizations and 
individuals, whose contributions enable the project to substantially 
extend the reach of the federal grant dollars. This fundraising effort 
would not have been possible without the credibility and feasibility 
seeded through the CAP grant.
    For more information on this program, please contact Ben Raimer, MD 
at (409) 772-5033 or email him at [email protected].

    Mr. Green. I would also like to point out that the 
Institute of Medicine, the IOM, one of the most prestigious 
health research organizations in the country, has recommended 
the creation of a new Federal initiative similar to the CAP 
program to help improve coordination and communication among 
safety net providers. And the IOM recommends a minimum funding 
of $2.5 billion over 5 years.
    Mr. Chairman, as the title of this IOM report indicates, 
our health care safety net is intact, but it is in trouble, and 
it is imperative we reauthorize or authorize the CAP program so 
we can strengthen our safety net and ensure that various health 
care providers work together to improve the health care of 
uninsured and underinsured Americans.
    In closing, Mr. Chairman, I would like to compliment the 
hard work of my colleague and deskmate, Ms. Capps, on her 
effort in addressing the nursing shortage. I know in every 
urban area and I know in rural areas we have that problem. The 
nursing workforce is experiencing increasing staffing shortages 
and a decline in the recruitment of registered nurses. With the 
average Registered Nurse being 45 years old, and the aging of 
the Baby Boom generation, this nursing shortage could seriously 
diminish patient care, and I am a strong supporter of Ms. 
Capps' Nurse Reinvestment Act.
    Mr. Chairman, with that, I yield back my time.
    Mr. Bilirakis. I thank the gentleman. Mr. Pallone, for an 
opening statement.
    Mr. Pallone. Thank you, Mr. Chairman, for holding this 
important hearing on safety net health programs. There is no 
doubt that we must do everything we can to protect Community 
Health Centers and other safety net public health programs in 
order to help continue their long tradition and mission of 
providing care to all, especially the underserved.
    Although the President has included in his budget an 
increase for Community Health Centers, we must keep in mind 
that the number of uninsured patients treated by Health Centers 
is on the rise, and we must do everything possible to ensure 
the dependability of Health Centers to those who rely on them 
for health care services.
    In this discussion of Health Centers, Mr. Chairman, I would 
like to bring up the issue of urban Indian programs. I have met 
with the National Council of Urban Indian Health, whose 
programs serve health care and referral services to 
approximately 332,000 urban Indians across 34 cities. The 
number of American Indians living in urban areas is rising 
dramatically and, accordingly, the services provided by the 
Urban Health Centers become increasingly important to the urban 
Indian community.
    The urban Indian population has a history and continues to 
suffer from health problems such as diabetes, obesity, poor 
nutrition, substance abuse, and many other problems that have 
devastating consequences. This stems from the fact that health 
care services are substandard and health education is not at 
its best.
    The health status of American Indians requires special 
resources and, accordingly, I would like to see a portion of 
Section 330 funding go directly to Urban Indian Health Centers 
for the purpose of addressing these community-specific needs.
    Now, I know that we will be hearing from Bob Hall, who is 
President of the National Council of Urban Indian Health, and I 
know he will be expanding on the health issues of particular 
importance to urban American Indians. I hope my colleagues will 
learn about and appreciate the need for extra resources for the 
urban American Indian community, and that we can continue with 
debate and action on this very important issue. Thank you, Mr. 
Chairman.
    Mr. Bilirakis. I thank the gentleman and, without 
objection, the opening statement of all members of the 
subcommittee will be made a part of the record.
    [Additional statements submitted for the record follow:]
Prepared Statement of Hon. W.J. ``Billy'' Tauzin, Chairman, Energy and 
                           Commerce Committee
    First, let me thank Subcommittee Chairman Bilirakis for holding 
this legislative hearing today. I commend him for putting together what 
promise to be two very informative panels of witnesses, who will 
discuss several crucial issues related to public health safety-net 
programs. These programs are vital to our efforts to provide care for 
those most in need in this country.
    As we consider these issues, we should bear in mind that there are 
many uninsured Americans who need good health care, but have a 
difficult time finding it. Part of the problem is that America doesn't 
have enough people like Dr. Gary Wiltz of the Teche Action Clinic, in 
Franklin, Louisiana.
    Dr. Wiltz, who will testify on the first panel, is a very fine 
Louisianan who has chosen to devote his life and practice to serving 
others less fortunate than himself in underserved areas in the state. I 
note that he first came to the Teche Action Clinic, a Federally-
recognized Community Health Center, through the National Health Service 
Corps.
    I'm interested in learning more about what we can do to encourage 
more health care providers, who share a sense of duty and mission to 
the poor, to do what Dr. Wiltz is doing and practice medicine in 
underserved areas.
    Now, by definition, underserved areas lack health care providers 
because few providers are attracted to these areas in the first place. 
One solution that we will examine today involves expanding care in 
these areas by encouraging more faith-based charities to provide health 
care services to the poor. Already, faith-based charities have been 
credentialed by the Federal government and receive funding through the 
Community Health Center program.
    We also need to examine the broader workforce challenges 
surrounding the recruitment of sufficient candidates for service in the 
National Health Service Corps. This program has done a great deal to 
address the shortage of health care professionals in undreserved rural 
and urban areas. Yet more must be done. Currently, there are more than 
14,000 areas in this country that Federal officials designate as having 
a shortage of health professionals.
    We need to discover whether or not difficulty in attracting 
candidates to serve in the National Health Service Corps is compounded 
by the problems of shortages in certain health professions in general. 
What can we do to encourage more people to become nurses, medical 
technologists, or pharmacists?
    Mr. Chairman, I look forward to learning more about these 
challenging issues from our witnesses, and thank you again for bringing 
these matters into focus.
                                 ______
                                 
Prepared Statement of Hon. Ed Towns, a Representative in Congress from 
                         the State of New York
    I believe that this hearing is critical to enhancing access for the 
uninsured and to address the workforce shortage problems experienced by 
many of our health professionals.
    Both the community health centers and the National Health Service 
Corps have played a critical role in providing care to the medically 
underserved. I am hopeful that this committee will maintain its 
traditional support for the centers and mid-level practitioners. I am 
particularly concerned about future legislative proposals, which would 
impact nurse clinicians and physician assistants. These health 
providers continue to be the backbone of our national primary health 
care system. While many competing interests have suggested that we 
eliminate the 10% set-aside for these providers in the Service Corps' 
reauthorization bill, I want to stress that it is important that we 
continue to support resources for the development of primary care 
providers. Without the current set-aside, historically mid-level 
practitioners simply did not receive corps loans and scholarships.
    On the question of workforce shortages, I am hopeful that the 
committee's action will reflect the needs of all aspects of the health 
care systems. For example, hospitals, nursing homes, home health 
agencies and many other entities are all reporting a nursing shortage 
but they also all have differing needs as to what kind of personnel 
shortage they are experiencing. Additionally, we need to ensure that 
workforce proposals also will ensure the diversity that our country 
will need in the 21st century to service the multi-lingual and multi-
cultural country that the U.S. has become.
    I look forward to working with you Mr. Chairman and the members of 
this subcommittee on addressing the challenges presented by the 
concerns of our safety net providers.
                                 ______
                                 
 Prepared Statement of Hon. Eliot Engel, a Representative in Congress 
                       from the State of New York
    Mr. Chairman, Ranking Member Brown, I want to thank you for having 
this hearing today. I am pleased that the Committee is discussing 
issues such as the health care workforce shortage, the status of our 
nation's health centers, hospitals, and other safety net providers. 
These are matters of tremendous importance that tend to get 
overshadowed in the face of higher profile issues, such as Medicare 
reform and a prescription drug benefit. So again, I am pleased that we 
are giving the proper attention to these issues.
    Our health care workforce is currently under tremendous strain due 
to worker shortages in a number of areas. Areas that have been hit the 
hardest are the nursing workforce, health aides, and pharmacists. While 
all of these are a matter of great concern, I am particularly sensitive 
to the nursing shortage. Nurses are the backbone of our health care 
delivery system in every aspect of care. Nurses are on the front lines 
in our hospitals, nursing homes, physician offices, and home care 
agencies, and we are experiencing shortages in all of these areas. For 
Congress to sit idly by while this problem worsens is an injustice to 
the nursing profession, health care facilities, and especially our 
patients who rely on nurses every day.
    GAO Director William Scanlon has testified before Congress that the 
nursing shortage is real, it is likely to get worse, and it is due to a 
number of factors, including an aging workforce, fewer nurses entering 
the field, and job dissatisfaction. I believe that he is correct and 
that we in Congress must act to address this problem. To that end, I 
have been in contact with nursing associations, hospital associations, 
nursing homes, and home care agencies in New York and nation-wide to 
determine what could be done to alleviate the situation. In those 
discussions several dynamics of the problem have been identified, such 
as fewer teachers to teach new nurses, fewer students entering into 
nursing schools, an increasing number of nurses leaving the field for 
more lucrative careers or because they are dissatisfied with their 
jobs.
    In response, I developed HR 1897, the Nurse of Tomorrow Act, which 
has bipartisan support, including Ms. Bono who has worked with me on 
this issue. The Nurse of Tomorrow Act is a multi-faceted approach to 
this complex problem. HR 1897 is designed to create educational and 
economic incentives in an effort to recruit and retain more nurses. The 
legislation provides for grants to health care facilities for nurses to 
continue their education and grants to nursing schools to reinvest in 
their programs so that they can recruit more youth into the nursing 
field. It also creates economic incentives for nurses by allowing a 
$2000 tax credit, along with increased loan forgiveness funding. I have 
received letters of support from the American Nurses Association, the 
American Hospital Association, and other groups in New York and nation-
wide, which illustrate the importance of this issue.
    I have also cosponsored HR 1436, the Nurse Reinvestment Act, 
introduced by Ms. Capps. I believe that this issue requires us to take 
action. I hope this Congress will take heed and pass legislation to 
alleviate the nursing shortage and other areas of need. Mr. Chairman, I 
thank the witnesses for their time and look forward to their testimony 
on the issues before the Committee today.
                                 ______
                                 
    Prepared Statement of Hon. John D. Dingell, a Representative in 
                  Congress from the State of Michigan
    Mr. Chairman, I thank you for holding this hearing today. The 
programs that we will discuss make up a large part of what is commonly 
referred to as the health care safety net. We aspire to make quality 
health care available to all through affordable insurance, but we know 
that there will always be a need for public health programs that 
directly provide health care to millions of needy citizens. And when 
times are the toughest, they're needed the most. As the economy 
continues to cool after eight years of unprecedented growth and 
prosperity, many Americans find themselves out of work or in low paying 
jobs, putting health insurance for themselves and their families out of 
reach.
    The community health centers, National Health Service Corps, and 
allied health professions programs for nurses all have proven track 
records of outstanding service and effectiveness. But they face many 
challenges. First among these is resources. The Bush Administration's 
budget calls for an increase in Community Health Centers (CHC) funding, 
but that increase is inadequate to close the gap between the number of 
persons who need the services of CHCs and those who receive them. Other 
safety net programs have been slated for cuts, elimination, or 
inadequate increases. One of these, the Community Access Program, is 
quite popular among safety net providers and should be restored, if not 
increased.
    The National Health Service Corps and the Title VI II health 
professions programs for nurses serve an absolutely essential role of 
providing personnel to medically under served areas. I intend to focus 
on the present and future needs of these programs and will carefully 
scrutinize any proposals aimed at fundamentally altering their 
structure. While I understand the Administration's desire for 
``flexibility,'' what will that mean for the needs these programs meet?
    I look forward to working with all of my colleagues to build a 
public health safety net that is stronger than ever.
    Thank you.
                                 ______
                                 
 Prepared Statement of Hon. John Shimkus, a Representative in Congress 
                       from the State of Illinois
    Thank you, Mr. Chairman, for holding this hearing on public health 
issues.
    Dr. Cory Roberts is testifying today regarding the shortage of non-
physician medical laboratory personnel. Due to growing concern from my 
constituents, I have introduced legislation that addresses this 
alarming shortage and would like to take this opportunity to discuss 
the issue further.
    The vital role medical laboratory professionals play in health care 
must not be taken lightly. It is estimated that approximately 70-75 
percent of all medical diagnoses are performed by the laboratory. Yet, 
since these professionals often work ``behind the scenes,'' few people 
know much about the critically important testing that laboratorians 
perform every day. Laboratory personnel are often used in preventative 
medicine: to detect diseases early, rule out incorrect diagnoses, and 
to insure that a chosen treatment is working.
    It is imperative that we work now to address this shortage, and 
bring needed professionals into the laboratory field.
    Vacancy rates for cytotechnologists (the professionals who 
interpret cellular material such as Pap smears) and histotechnologists 
(the individuals who prepare tissue specimens for cancer biopsies) are 
at a startling high of over 20%, according to the American Society of 
Clinical Pathologists. Shortages are also increasing for other 
laboratory positions, such as medical technologists and medical 
laboratory technicians.
    To make matters worse, the number of accredited educational 
programs for laboratory medicine positions has decreased significantly 
over the past two decades with schools closing in several states. We 
need to act now to reverse this trend.
    The legislation I have introduced along with Mr. Jackson, Chairman 
Bilirakis, and the distinguished Ranking Member, Mr. Brown, addresses 
this critical shortage. HR 1948, the ``Medical Laboratory Personnel 
Shortage Act'' expands existing federal programs with a focus on 
laboratory personnel needs.
    The bill includes provisions to expand the eligibility for the 
National Health Service Corps to include medical laboratory personnel, 
and expand programs for increasing medical laboratory personnel in the 
areas of cervical cancer screening, antimicrobial resistance efforts, 
bioterrorism, and transfusion medicine. It also increases funding for 
the Allied Health Project Grants program, which helps attract 
laboratory professionals to the field--especially minorities and 
individuals in rural and underserved communities.
    I urge my colleagues to recognize the nationwide shortage of 
medicallaboratory personnel, and join with me in supporting this 
importantlegislation.
    Thank you, Mr. Chairman, for the opportunity to speak on this 
issue.

    Mr. Bilirakis. We will now go into the first panel. Dr. 
Elizabeth James Duke is the Acting Director of the Health 
Resources and Service Administration; Dr. Gary Wiltz is with 
Teche Action Clinic, Franklin, Louisiana--I know the chairman 
wanted to be here, sir, to personally introduce you, but the 
energy bill is on the floor and, as you know, we have principal 
responsibility over that, and that is the only reason he isn't 
here. He will probably come walking in sometime. Ms. Kathryn S. 
Benjamin, Executive Director of the Southeast Lancaster Health 
Services, out of Lancaster, Pennsylvania; Dave Brewton, 
Director of Development, East Liberty Family Health Center, 
Pittsburgh, Pennsylvania--I am a former Pittsburgher, Mr. 
Brewton, and went to Pitt, so I know that area somewhat--Jeff 
Singer, President and CEO of the Health Care for the Homeless, 
Baltimore, Maryland; The Honorable Angela Monson, Oklahoma 
State Senate, Vice President of the National Conference of 
State Legislatures--welcome, Ms. Monson; and Bob Hall, 
President of the National Council of Urban Indian Health.
    Ladies and gentlemen, I am not sure I know, with the 
limited period of time, how many of you submitted a written 
statement to us, but in any case it is a part of the record, 
and we would hope that you would complement it and supplement 
it. I will set the clock at 5 minutes. I won't cut you off, but 
hopefully you can keep your statement to as close to 5 minutes 
as possible.
    Dr. Duke, we will start off with you. Please proceed, 
ma'am.

    STATEMENTS OF BETTY JAMES DUKE, ACTING DIRECTOR, HEALTH 
RESOURCES AND SERVICE ADMINISTRATION; GARY MICHAEL WILTZ, TECHE 
ACTION CLINIC; KATHRYN BENJAMIN, EXECUTIVE DIRECTOR, SOUTHEAST 
     LANCASTER HEALTH SERVICES; DAVID BREWTON, DIRECTOR OF 
 DEVELOPMENT, EAST LIBERTY FAMILY HEALTH CENTER; JEFF SINGER, 
  PRESIDENT & CEO, HEALTH CARE FOR THE HOMELESS; HON. ANGELA 
  MONSON, OKLAHOMA STATE SENATE AND VICE PRESIDENT, NATIONAL 
 CONFERENCE OF STATE LEGISLATURES; AND ROBERT HALL, PRESIDENT, 
            NATIONAL COUNCIL OF URBAN INDIAN HEALTH

    Ms. Duke. Thank you very much, sir. I have submitted a 
statement for the record. I will summarize and will stay within 
your time line.
    Mr. Chairman and members of the committee, thank you very 
much for the opportunity to speak to you today about health 
care in America.
    The Health Resources and Services Administration, otherwise 
known as HRSA, is committed to working toward 100 percent 
access to health care and zero health disparities for all 
Americans. To achieve this goal, HRSA works closely with State 
and local governments and organizations to build a foundation 
for a national safety net of health care services that promote 
the health and well-being of our Nation's most vulnerable 
individuals and families.
    Under the leadership of President Bush and Secretary 
Thompson, HRSA is prepared to reinforce and expand the health 
care safety net to reach more vulnerable Americans who are in 
need of primary health care services. The administration's 
commitment is evident in its fiscal year 2002 financial support 
for the cornerstone of HRSA's safety net programs, the 
Community Health Centers.
    As the foundation for health care safety nets in more than 
3200 communities nationwide, community health centers deliver 
family oriented preventive and primary health care services to 
approximately 10.5 million people who live in medically 
underserved areas in rural and urban communities.
    The President's 2002 Budget request includes nearly $1.3 
billion for Community Health Centers, an increase of $124 
million above the fiscal year 2001 appropriation. Funding at 
this level will allow health centers to increase the number of 
existing and expanded health care access points by 200 in 2002, 
providing services for up to 1 million additional people, 
including 460,000 uninsured people. This increase is the first 
installment of a multi-year initiative to increase or expand 
health center access points by 1200 by the year 2006 and 
eventually double the number of people served.
    Through the President's Community Health Centers 
Initiative, new grantees will address health care problems they 
encounter in their communities. We will see small health 
centers grow to meet the increasing needs and demands for their 
services, and we will see mid-size centers grow into large-
scale operations as these additional resources provide them 
with the chance to serve even more of the medical needs for a 
growing and aging population.
    Community Health Centers serve our most vulnerable 
populations. In collaboration with State and local community 
partners, HRSA's Community Health Centers are an indispensable 
component of the national health care safety net.
    The National Health Service Corps has been a critical 
element in the safety net for over 25 years. Since 1972, the 
National Health Service Corps, through its scholarship and loan 
repayment programs, has placed over 22,000 health care 
clinicians in a health care shortage area. Today, 2500 
clinicians serve in border towns, rural areas, inner cities, in 
every State, the District of Columbia, Puerto Rico, and the 
Pacific Basin.
    The 2002 budget launched a Presidential Management Reform 
Initiative for the National Health Service Corps so it will 
better be able to address the neediest communities. We are 
examining the ratio of scholarships to loan repayments, to 
ensure maximum flexibility in placing of National Health 
Service providers. We will also seek to amend the professional 
shortage area definition to reflect other non-physician 
providers practicing in communities, which will enable the 
Corps to more closely and accurately define shortage areas and 
target their placements better. To further avoid overlap in the 
provision of health care, HHS has begun its coordination with 
immigration programs, including the J-1 and H-1C visa programs 
which review applications for health care providers practicing 
in underserved communities.
    These reform proposals will build on the existing success 
of the Corps and in turn strengthen the national safety net 
since many providers spend all or part of their careers serving 
where others choose not to go.
    HRSA remains sensitive to the needs of America's rural 
populations, who often lack ready access to health care 
providers. HRSA's Office of Rural Health Policy coordinates 
rural health policy issues within the Department of Health and 
Human Services and is the Department's focal point for 
coordinating public and private sector efforts to strengthen 
and improve the delivery of health services to populations in 
rural areas nationwide.
    Bringing health care to rural areas means creating and 
building medical infrastructure and allowing patients to heal 
in their own communities. We know that patients tend to do 
better when they are treated closer to home. Friends and family 
can visit and offer support and encouragement, and knowing that 
the physician lives in your community, that he sees the same 
things that you do, and that she is an active participant in 
the school, increases confidence, and cultural competence.
    Also to increase the strength of the safety net we will 
look to more tightly weave telehealth into areas where 
physicians do not have the experience in treating specific 
diseases. Since 1988, our growing telehealth network continues 
to provide increasing access to health care expertise to 
emerging communities and rural areas.
    Sir, I will reserve the rest of my statement.
    Mr. Bilirakis. You are welcome to summarize, if you would 
like.
    Ms. Duke. Basically, we are here to talk about two programs 
that have had very successful history and which we seek to 
expand and to strengthen. Thank you.
    [The prepared statement of Betty James Duke follows:]
 Prepared Statement of Betty James Duke, Acting Administrator, Health 
 Resources and Services Administration, U.S. Department of Health and 
                             Human Services
    Mr. Chairman, Members of the Subcommittee, thank you for the 
opportunity to speak to you today about health care in America. I am 
Betty James Duke, Acting Administrator at the Health Resources and 
Services Administration, an agency within the Department of Health and 
Human Services.
    The Health Resources and Services Administration, otherwise known 
as HRSA, is committed to working toward 100 percent access and zero 
disparities. To achieve this goal, HRSA works closely with State and 
local governments and organizations to build a foundation for a 
national safety net of health care services that promote the health and 
well-being of our nation's most vulnerable individuals and families.
    Under the leadership of President Bush and Secretary Thompson, HRSA 
is prepared to reinforce and expand the health care safety net to reach 
more vulnerable Americans who are in need of primary health care 
services. The Administration's commitment is evident in its FY 2002 
financial support for the cornerstone of HRSA's safety net programs B 
the Community Health Centers.
                        community health centers
    As the foundation for health care safety nets in more than 3,200 
communities nationwide, community health centers deliver family-
oriented preventive and primary health care services to approximately 
10.5 million people who live in medically underserved rural and urban 
communities.
    The President's FY 2002 Budget request includes nearly $1.3 billion 
for Community Health Centers, an increase of $124 million above the FY 
2001 appropriation. Funding at this level will allow health centers to 
increase the number of existing and expanded health care access points 
by 200, providing services for up to one million additional people, 
including 460,000 uninsured. This increase is the first installment of 
a multi-year initiative to increase or expand health center access 
points by 1,200 by FY 2006 and eventually double the number of people 
served.
    Through the President's Community Health Center Initiative, new 
grantees will address the health care problems that they encounter in 
their community. We will see small health centers grow to meet the 
increasing needs and demands for their services. And we will see mid-
size grantees grow into large-scale operations as these additional 
resources provide them the chance to serve even more of the medical 
needs for a growing and aging population.
    Community Health Centers serve our most vulnerable populations. The 
Health Center patient population consists of approximately:

 86 percent below 200 percent of poverty;
 40 percent uninsured (Health Center uninsured patients have 
        increased at twice the national rate since 1990);
 31 percent Medicaid recipients;
 64 percent minorities;
 40 percent children; and
 30 percent women of child-bearing age.
    Health Centers serve one in every six low income children, one in 
every 10 low income uninsured individuals, one in every 8 Medicaid 
recipients, one in every 4 homeless persons, one in every 5 migrant 
farm workers, and one in every 12 rural residents. The homeless 
community is particularly in need of health services--nearly 550,000 
homeless patients (75 percent of whom are uninsured) are served through 
culturally competent clinicians. Also, nearly 600,000 patients of 
Health Centers are migrant-farm workers.
    In calendar year 1999, health centers provided a full range of 
culturally competent primary and preventive health services over 36.6 
million encounters. These services included:

 more than 270,000 HIV tests and counseling;
 over 900,000 pap smears;
 almost two million immunizations; and
 perinatal and delivery care for 137,000 women.
    Health Centers have demonstrated their effectiveness by:

 improved health outcomes;
 increased preventive services;
 improved management of chronic diseases;
 reduced avoidable hospitalizations; and
 high patient satisfaction.
    In collaboration with state and local community partners, HRSA's 
community health centers are an indispensable component of the national 
health care safety net.
                     national health service corps
    Health care at many community health centers is provided by medical 
professionals serving in HRSA's National Health Service Corps (NHSC). 
The NHSC has been a critical element in local safety nets for over 25 
years. Since 1972, the National Health Service Corps, through its 
scholarship and loan repayment programs, has placed over 22,000 
healthcare clinicians in areas with a health professional shortage. 
Today, 2,500 NHSC clinicians serve in border towns, rural areas, and 
inner cities, in every State, the District of Columbia, Puerto Rico, 
and the Pacific Basin.
    The FY 2002 Budget launched a Presidential Management Reform 
Initiative for the National Health Service Corps so it will be better 
able to address the neediest communities. We are examining the ratio of 
scholarships to loan repayments, as well as other set-asides, to ensure 
maximum flexibility in placing NHSC providers. We will also seek to 
amend the Health Professional Shortage Area definition to reflect other 
non-physician providers practicing in communities, which will enable 
the NHSC to more accurately define shortage areas and target placements 
better. To further avoid overlap in the provision of health care, HHS 
has begun its coordination with immigration programs, including the J-1 
and H-1C visa programs, which review applications for health care 
providers practicing in underserved communities.
    These reform proposals will build on the existing success of the 
NHSC and in turn strengthen the national safety net since many NHSC 
providers spend all or part of their careers serving where others 
choose not to go. The NHSC has had remarkable success in placing its 
providers:

 approximately 97 percent of NHSC clinicians fulfill their 
        service commitments;
 approximately 60 percent of NHSC alumni continue to serve the 
        underserved four years after the completion of their service 
        obligation, and 52 percent of NHSC alumni continue to serve the 
        underserved 15 years after the completion of their service 
        obligation;
 NHSC clinicians include significantly higher percentages of 
        underrepresented minorities than the nation's workforce, and 53 
        percent of the patients who receive care from NHSC clinicians 
        are minorities; and
 NHSC clinicians provide care to millions of Americans in 
        community health centers, hospital clinics, county health 
        departments, and Indian health clinics.
                      rural health and telehealth
    HRSA remains sensitive to the needs of America's rural populations, 
who often lack ready access to health care providers. HRSA's Office of 
Rural Health Policy coordinates rural health policy issues within the 
HHS and is the Department's focal point for coordinating public- and 
private-sector efforts to strengthen and improve the delivery of health 
services to populations in rural areas nationwide.
    HRSA's Rural Health Outreach grants emphasize health care service 
delivery through creative strategies that require each grantee to form 
a network with at least two additional partners. By developing new 
health care delivery systems, these grants have improved access to care 
for more than 2.9 million citizens in rural areas.
    The Rural Health Network Development grants assist in developing 
organizational capacity in the rural health care sector through formal 
collaborative partnerships that involve shared resources. Through these 
grants, communities can acquire staff, technical experts, and other 
resources needed to build successful health care networks.
    Bringing health care to rural areas means creating and building 
medical infrastructure and allowing patients to heal in their own 
communities. We know that patients tend to do better when they are 
treated closer to their homes. Friends and family can visit them, and 
show them their encouragement. And knowing that the physician lives in 
your home community, that he sees the same things that you do, and that 
she is an active participant in the school, increases confidence, and 
cultural competence.
    Also to increase the strength of the safety net we will look to 
more tightly weave telehealth into areas where physicians do not have 
the experience in treating specific diseases. Since 1988, our growing 
telehealth network continues to provide increasing access to health 
care expertise to emerging communities and rural areas. As we link 
these offices using state-of-the-art equipment and advanced technology 
to expert centers of disease and sickness management, we are providing 
critical, life-saving information to health care providers who would 
otherwise lack the specific expertise.
                        community access program
    As outlined in the President's FY 2002 Budget, the Administration 
proposes the elimination of the Community Access Program (CAP). After a 
careful review, the Administration concluded that further fragmenting 
the resources available to public health providers by establishing yet 
another funding stream was not the most effective or efficient way to 
improve health care access for the uninsured. Rather, the 
Administration believes we should invest in proven programs like 
Community Health Centers and Medicaid.
    HRSA provides communities with access to existing funding resources 
that would enable them to pursue the same goals as CAP. For example, 
Community Health Center funding already supports an Integrated Service 
Delivery Initiative (ISDI), which provides funding to health centers to 
encourage them to integrate functions with other centers and safety net 
providers in their communities. In addition, in FY 2000, HRSA targeted 
$41 million of its funding increase for a Health Center investment 
process to fund existing health center grantees that demonstrate 
effectiveness at serving a disproportionate share of uninsured and 
under-insured patients.
    As I mentioned in the beginning of my testimony, HRSA and the 
Administration are committed to ensuring access to basic, quality 
health care now and in the future. We have spent a great deal of time 
and effort to strengthen and streamline HRSA programs and services that 
will lead to a tighter, stronger health care safety net.

    Mr. Bilirakis. Thank you, Dr. Duke.
    Dr. Wiltz.

                 STATEMENT OF GARY MICHAEL WILTZ

    Mr. Wiltz. Chairman Bilirakis, Ranking Member Brown, Ms. 
Capps and Mr. Pitts, I am Gary Wiltz. I am a Board-certified 
internal medicine physician and Clinical Director of the Teche 
Action Clinic, a federally supported health center in the rural 
bayou country of Louisiana. I appreciate the opportunity to 
speak to you on behalf of the National Service Corps and the 
National Association of Community Health Centers in caring for 
the uninsured and underserved people of this country.
    To meet the challenge of the President and the Congress 
have set out in doubling the capacity of health centers to care 
for the uninsured, we ask that this subcommittee and Congress 
act without delay to reauthorize these programs and make needed 
changes to strengthen them.
    I want to thank this subcommittee for the incredible 
support it has given health centers. Chairman Bilirakis and 
Ranking Member Brown, thank you for actively and 
enthusiastically leading the efforts of the House to increase 
funding over the last 4 years. I particularly want to thank my 
Representative, Chairman Tauzin, for the unwavering support he 
has given to our health center and all health centers.
    I am here today to tell you about both of these programs 
and how they have had a profound impact on the health in our 
community, and that health centers around the country are ready 
to meet the challenge that we face. We have a 35-year-old 
commitment to quality health care that vulnerable populations 
can take to the bank.
    In 1976, I was a first-year medical student at Tulane, and 
my only collateral in life were my dreams. I was fortunate 
enough to be selected to become a member of the National 
Service Corps, and after completing my training in 1982 I was 
assigned to Teche in Franklin. Looking over the last 19 years, 
I can see the fruits of our labor, a priceless gift in one's 
lifetime.
    My experiences can best be reflected in a remark made by 
the daughter of one of my patients, who I had just seen through 
a life-threatening episode. She asked me how did I come to be 
in Franklin, and I responded that I came via the Corps. She 
responded, ``I never heard of it, but thank God for the 
Corps.'' I also thank God for the Corps and for the health 
centers program, and the wonderful, often miraculous, effects 
they are having on the people across America. We stand ready, 
willing and able to meet the challenges of caring for the 
underserved, but to do so Health Centers request that this 
Subcommittee and the Congress help us in the following ways:
    First, reauthorize and make key improvements to the health 
center program, including restoration of facility construction 
and expansion as allowable uses of funds. A recent survey found 
that almost two-thirds of health centers currently need to be 
upgraded, expanded, or replace their facilities.
    Second, reauthorize and strengthen the National Health 
Service Corps program and streamline it to work more 
effectively with all safety net providers to improve health 
care access. The Corps has brought thousands of health care 
professionals to underserved areas over the past 30 years.
    Third, continue your support to fulfill the long-range plan 
endorsed by the President and Congress to double the number of 
people served and a doubling of the Corps over the next 5 
years, which will bring quality health care to more than 20 
million individuals by the year 2006.
    Finally, support the efforts of local safety net providers 
to better organize care for uninsured and underserved such as 
those funded under the new Community Access Program, taking 
care that these efforts complement existing Federal programs 
and include local safety net providers as Corps decisionmakers 
and grant recipients.
    The success of health centers can be traced to the Corps 
elements of Section 330, which require that we be located in 
and serve medically underserved communities; ensure the proper 
targeting of Federal resources on areas of greatest need; make 
services available to all residents of the community with 
regard to ability to pay, with charges based on family income; 
provide comprehensive primary and preventive care services 
which improve both the accessibility and effectiveness of care; 
and be governed by a Board of Directors, the majority of whose 
members are active patients. Nowhere are these elements more 
deeply routed than at Teche where 51 percent of our Board is 
composed of everyday people who are interested in making the 
center a success.
    Our president and several board members are also leaders in 
the local faith community. Our board also includes local 
business owners, educators, and government officials. The 
community board has viewed our compassion to provide care that 
is closely attuned to the values that reflect the spirit of our 
community.
    In 1999, nearly 1,000 health centers served more than 11 
million people in 3,200 communities across the country, 
including 1 of every 9 uninsured Americans, 1 of every 6 low-
income children, 1 of every 10 rural Americans, and more than 
7.5 million people of color, in addition to 600,000 farm 
workers, 600,000 homeless people. Last year, we provided 22,438 
visits to 6,403 at our center, 46 percent of those patients 
were uninsured.
    Health Centers are a God-send for communities in providing 
a patient-centered, culturally competent program with an 
interdisciplinary team of providers in one location. Our center 
boasts four Board-certified primary care physicians, a 
Physician Assistant, two dentists, two pharmacists, and a full 
complement of support staff that provide services 5-days-a-week 
and after-hours coverage.
    Our newest physician, Dr. Tammy Mitchell, has dreams of 
establishing a preventive health program in area churches that 
will be linked to our center. They would monitor hypertension 
and diabetes, as well as conduct health education sessions to 
reduce morbidity stemming from poor diet and other lifestyle 
risk factors.
    Health centers are subject to stringent Federal monitoring 
of their cost-effectiveness, quality of care and management. We 
provide quality comprehensive primary care to some of the 
hardest to reach patients in the health system at a price 
second to none. The average cost of health center services 
amounts to less than $350 annually, which is less than a dollar 
a day for each person served.
    We also recognize the power of collaboration, and we have 
developed a coordinated health care delivery system network 
that is trying to connect through the use of the Internet and 
telemedicine several centers of community providers across 
Bayou country.
    I would like to take this opportunity to thank you for the 
opportunity to present our views and look forward to working 
with you to improve and expand health care access to the 
uninsured and underserved across the country.
    [The prepared statement of Gary Michael Wiltz follows:]
  Prepared Statement of Gary Michael Wiltz, Clinical Director, Teche 
Action Clinic on Behalf of the National Association of Community Health 
                                Centers
    Chairman Bilirakis, Ranking Member Brown, and Members of this 
Subcommittee: My name is Gary Michael Wiltz. In 1976 I was a first year 
medical student at Tulane Medical School, at that time my only 
collateral in life was my dreams. In seeking to make those dreams a 
reality I was fortunate enough to be selected to become a member of the 
National Health Service Corps. It was through that relationship that I 
was assigned to Teche Action Clinic in Franklin, Louisiana in 1982. 
Nineteen years later I sit before you as a Board Certified Internal 
Medicine Physician and Clinical Director for the Teche Action Board, 
Inc. TAB as we refer to it, is the not for profit governing body of 
Teche Action Clinic, a federally-supported health center in rural south 
Louisiana, in St. Mary parish. St. Mary parish like most areas of 
Louisiana is rich both culturally and historically. For example the 
name of our health center reflects the Native American heritage in our 
community as in the term ``Bayou Teche'' which means a snake-like or 
winding river and the ``Action'' reflects the period in which our 
health center was born. We were incorporated in 1974 on the heels of 
the civil rights movement, which motivated us to take ``action'' on the 
needs of our community.
    I appreciate the opportunity to speak with you today, on behalf of 
the National Association of Community Health Centers, about the work of 
health centers and the National Health Service Corps in caring for 
uninsured and underserved people in our country. I am here today to 
tell you that both of these programs have had a profound impact in 
helping our community in Louisiana take care of our health care needs, 
and to let you and the Congress know that we, and health centers around 
the country, are ready to meet the challenge the President and Congress 
have set for us: to double the capacity of health centers to care for 
the underserved over the next five years.
    I want to thank this Subcommittee for the incredible support it has 
given health centers in carrying out their mission. Chairman Bilirakis 
and Ranking Member Brown, thank you for actively and enthusiastically 
leading the efforts of the House to increase funding for health centers 
over the last four years, as well as to establish a prospective payment 
system for health centers that will provide them a stable base when 
they care for Medicaid patients. Chairman Bilirakis, thank you also for 
leading the Health Center Caucus, with Representatives Danny Davis, 
Mike Capuano, and Henry Bonilla. I particularly want to thank my 
representative, Committee Chairman Billy Tauzin, for inviting me here 
today and for the unwavering support he has given to our health center 
and all of the health centers around the country.
    My testimony today will focus on the following:

1. As my personal experience at our center demonstrates, health centers 
        are doing the job expected of them by this Subcommittee and the 
        Congress--providing quality health services at low cost for 
        millions of low-income Americans.
2. The National Health Service Corps is a critical tool that has 
        successfully brought thousands of health care professionals to 
        underserved areas over the past 30 years.
3. Health centers need the continued support of this Subcommittee, and 
        indeed of the entire Congress, in order to continue fulfilling 
        the long-range plan endorsed by the President and the Congress 
        to double the number of people served by health centers over 
        the next 5 years, and a doubling of the NHSC is an integral 
        part of this plan.
4. To meet this goal, health centers request that the Subcommittee and 
        Congress act without delay to reauthorize the health centers 
        program and the National Health Service Corps, and to make 
        needed changes to strengthen the ability of these programs to 
        care for the uninsured and underserved.
       health centers are high quality, cost-effective providers
    Health centers today represent more than 35 years of federal, 
state, and local community investment in primary care infrastructure 
for medically underserved people and communities. Most community, 
migrant, homeless and public housing health centers receive grants 
under section 330 of the Public Health Service (PHS) Act, which is 
authorized by this Subcommittee. Other community-based health centers 
are designated as Federally qualified health centers (FQHCs) under the 
Medicare and Medicaid laws because they meet all the requirements 
applicable to health centers that receive Federal grant assistance, but 
sufficient grant funds are not available to provide them with Federal 
support. These health centers have improved access to care and have 
reduced health care costs, while sustaining and enhancing the quality 
of care provided.
    Health centers were established to provide access to quality 
preventive and primary health care for the medically underserved--
including the millions of Americans without health insurance, low 
income working families, members of minority groups, rural residents, 
homeless persons, and agricultural farm workers. Since their inception, 
health centers have served as a prototype for effective public-private 
partnerships, demonstrating their ability to involve a wide range of 
community members to meet local health needs while being held 
accountable for meeting national performance standards.
    The success of the health centers program is due in great part to 
the core elements found in Section 330 of the Public Health Service 
Act, its authorizing statute. These elements stipulate that each 
federally-supported health center must:

 Be located in, and serve, a community that is designated as 
        ``medically underserved,'' thus ensuring the proper targeting 
        of federal resources on areas of greatest need.
 Make its services available to all residents of the community, 
        without regard to ability to pay, and make those services 
        affordable by discounting charges for otherwise uncovered care 
        to low-income families in accordance with family income.
 Provide comprehensive primary health care services, including 
        preventive care (such as regular check-ups and pap smears) and 
        care for illness or injury, as well as services that improve 
        both the accessibility of care (such as transportation and 
        translation services) and the effectiveness of care (such as 
        health/nutrition education).
 Be governed by a board of directors, a majority of whose 
        members are active, registered patients of the health center, 
        thus ensuring that the center is responsive to the health care 
        needs of the community it serves.
    51% of our Board of Directors is composed of everyday people in the 
community who are interested in making the center a success. Our Board 
President, as well as prior Board Leaders and Executive Committee 
members are also leaders in the local faith community. Our Board also 
includes local business owners, educators, and government officials. 
The community board has fueled our compassion and desire to provide 
care that is closely attuned to the values that reflect the spirit of 
our community.
    Health centers have an impressive record of using the federal grant 
investment to care for underserved Americans. In 1999, nearly 1000 
health centers served more than 11 million children and adults in 3200 
communities across the country. More than 9 million people obtained 
care from health centers that receive funding from the federal health 
centers grant program, while another 2 million people received care 
from designated FQHCs that do not receive grant funds. Health center 
patients include:

 4.6 million uninsured persons, 1 of every 9 uninsured 
        Americans;
 4.6 million children, 1 of every 6 low-income American 
        children, including 1 of every 4 low-income uninsured children 
        (1.6 million);
 4 million children and adults with Medicaid or CHIP coverage, 
        1 of every 9 Medicaid/CHIP recipients;
 More than 7.5 million people of color, two-thirds of all 
        health center patients;
 5.4 million people living in rural communities, 1 of every 10 
        rural Americans;
 More than 600,000 agricultural farm workers; and
 More than 600,000 homeless persons.
    Health centers are community owned and operated businesses--
professional health care organizations providing a comprehensive range 
of high quality preventive and primary health care services under one 
roof, in a ``one stop caring'' system. We offer care, both for 
prevention and for treatment of illness or injury, and in addition 
provide diagnostic laboratory and x-ray services, as well as prescribed 
medications in many cases. In our center we have a substantial pharmacy 
program. Health center clinicians make referrals to specialists and 
admit and follow their patients in the hospital, when necessary. Health 
centers provide continuous care to their patients, regardless of 
changes in their insurance coverage or their health status. Many of the 
medically underserved come from different cultures and have primary 
fluency in languages other than English. According to the Bureau of 
Primary Health Care, some 23 percent of all health center patients fit 
this description--and for them, health centers employ multilingual and 
multicultural providers or provide translators to ensure that the care 
provided is both clearly understood and culturally appropriate. I think 
that community health centers are a Godsend for communities because we 
provide a humanistic, culturally competent program with an inter-
disciplinary team of providers. Our team consists of 4 board certified 
primary care physicians, 1 physician assistant, 2 dentists, and 2 
pharmacists, with a full complement of support staff that provide 
services five days per week with after hours coverage.
    Each local health center is unique in terms of the range of 
services it offers and its hours of operation, reflecting local 
decisions on how best to meet the health care needs of that health 
center's patients. At the same time, all of the health centers are 
subject to ongoing federal monitoring of their cost-effectiveness, 
quality of care, and management at a level which is more stringent than 
that applied to any other provider. And I'm pleased to report that, to 
date, more than 250 health centers--including ours--have received full 
accreditation from the Joint Commission on the Accreditation of 
Healthcare Organizations (JCAHO)--an excellent, independent measure of 
the quality of their care.
    The care that health centers provide is financed by a variety of 
sources. The federal health center grants provide, on average, about 28 
percent of a health center's budget. Medicaid and CHIP payments account 
for about 38 percent percent, on average, of a health center's budget. 
State and local government support, and private donations, provide 14 
percent of health center revenues nationally, while 7 percent comes 
from private insurance, and 6 percent from Medicare. Every health 
center patient contributes to the cost of his or her care, and on 
average, 7 percent of income comes from patient fees. These averages 
will vary for each health center, depending on the financing sources 
available to people in the local community. At Teche, our program 
budget has grown over the years from $250,000 when I started in 1982 
with 8 staff to a $2.5 million dollar budget in 2000 with 41 staff. We 
provided 22,438 visits in 2000 to 6,403 patients. Forty-six percent of 
our patients are uninsured, and these patients pay on a sliding fee 
scale discount according to their household income and family size. 
Seventeen percent of our patients have Medicaid coverage; 21 percent, 
Medicare; and 16 percent, private insurance.
    Health centers are one of the best health care and taxpayer 
bargains anywhere. The combination of locally responsive health care 
delivery and consistent federal oversight has proved to be a winning 
formula. Health centers provide comprehensive services to their 
patients at an astonishingly low cost. The average total cost of health 
center services amounts to less than $350 annually--less than $1 a 
day--for each person served.
    As a community health center physician for the past nineteen years, 
I have experienced firsthand the immense value of this model of care 
for our patients. Everyday in our center we see hundreds of patients 
who are uninsured and are plagued with diseases that demand continuity 
of care. For example, one couple that I treat are on a combined fixed 
income of less than $10,000 per year, and both of them have the same 
medical problems--diabetes, hypertension, hyper-lipidemia, coronary 
artery disease, and osteo-arthritis. Together, they are on about 15 
medications, the total cost of which would normally exceed their entire 
income. However, because of our special pharmacy program, this couple 
is able to avert the life threatening effects of uncontrolled disease.
    Dozens of studies and reports show that health centers 
substantially improve the health of individuals in their communities 
and provide care in a highly cost-effective manner. The impacts health 
centers have had on the health of individuals in their communities 
include lower hospital admission rates, shorter lengths of stay and 
less inappropriate use of emergency room services, significantly lower 
infant mortality rates and reduced incidence of low birth weight, 
higher childhood immunization rates, and better use of preventive 
health services (like Pap smears, mammography, and glaucoma screening), 
resulting in lower rates of preventable illnesses.
    Several studies over the last decade have found that Medicaid 
patients who regularly use health centers receive care of equal or 
greater quality and cost significantly less than those who use private 
primary care providers, such as HMOs, hospital outpatient units or 
private physicians. These findings are consistent with those from 
dozens of previous studies on the cost-effectiveness and quality of 
care provided through the health center model, and in particular 
documenting their substantial savings to state Medicaid programs. The 
record is clear that health centers provide quality, comprehensive 
primary care to some of the hardest-to-reach patients in the health 
system at a price second to none.
    Health centers have joined with each other and with other local 
providers to form integrated service networks to coordinate and improve 
their purchasing power and/or to better organize the continuum of care, 
especially for those who are uninsured. These include practice 
management networks, designed to improve quality through shared 
expertise (such as centralized pharmaceutical or laboratory services, 
clinical outcomes management, or joint management/administrative 
services), to lower costs through shared services (such as unified 
financial or management information systems, or joint purchasing of 
services or supplies), or to improve access and availability of health 
care services provided by the health centers participating in the 
network. Today, nearly 400 health centers are involved in some 50-plus 
local networks across more than 35 states, each designed to lower costs 
and/or to improve care. Separately, some 250 or more health centers are 
participating in state-wide or regional collaboratives designed to 
significantly improve health care management for patients with chronic 
conditions like asthma, hypertension, diabetes, cardiovascular 
diseases, HIV infections, depression and environmental health 
conditions. In addition, health centers all across the country have 
taken steps to form networks with other local providers and to develop 
the financial, legal and business acumen necessary to function 
effectively in managed care. Almost three-fourths of all health centers 
are participating in managed care as subcontracting providers to 
managed care plans, serving more than 2 million managed care enrollees.
    Our organization recognizes the importance and the power in 
collaboration. We work cooperatively with several organizations in our 
community, some of which receive federal grant support. We have formed 
the Bayou Teche Community Health Network and our collective vision is 
to build a coordinated delivery system that will reduce duplication of 
services and ultimately reduce the cost of care for the population in 
our respective service area. We want to do this by devising an 
information technology infrastructure that uses the power of the 
Internet and telemedicine technology to connect several essential 
community providers across Bayou country. These providers include local 
social service agencies that will be able to provide transportation and 
case management so as to complete or close the gaps in the present 
delivery system. We also want to use this framework to develop more 
community health centers that tie into a larger system of care. This is 
important because we recognize that as the Congress continues to 
support these programs it is imperative that they are sufficiently 
integrated into the larger systems to ensure their effectiveness and 
the quality of their care.
    We also believe in collaborating with other community 
organizations. One of our newest physician staff members is Dr. Tammy 
Mitchell. I encountered this young lady's family early in my practice, 
as both of her parents are my patients. As soon as I learned of her 
interest in becoming a physician I can say proudly that I was able to 
do for her what my mentor Dr. Cherie Epps did for me as a medical 
school student at Tulane University. Today she is practicing as a 
Family Medicine Physician in our clinic. Her family also includes 
several strong ministerial leaders in our community. Her dream and 
desire is to establish preventive health programs in area churches that 
will be linked into our community health center. Her program would be 
modeled after the American Heart Association's ``Search Your Heart'' 
program which is a church-based heart and stroke prevention clinic. It 
would consist of monitoring hypertension and diabetes, as well as 
health education sessions to raise awareness and reduce morbidity 
stemming from poor diet and other lifestyle risk factors.
        the essential role of the national health service corps
    The National Health Service Corps (NHSC) plays a critical role in 
providing care for underserved individuals by placing clinicians in 
urban and rural communities with serious shortages of health care 
providers. Without the National Health Service Corps I would not have 
had the opportunity to touch the lives that I have. Also, I would not 
have been sensitized to the larger issues that affect this country 
relative to the uninsured and the underserved populations. I have 
learned so much about health policy and how taking a systems approach 
is essential to finding a solution to the problems that plague our 
communities across this nation.
    Currently 2,500 NHSC clinicians, including physicians, dentists, 
nurse practitioners, physician assistants, nurse midwives, and mental 
and behavioral professionals, provide health care services to 4.6 
million Americans, including 2.2 million health center patients. Caught 
up in a backlog of legislative issues, the authorization for the NHSC 
unfortunately expired last year. This important program is in peril 
without Congressional action this year.
    While the NHSC program has proven successful in addressing health 
professional shortages in many areas, severe lack of funding has 
undermined the program's ability to meet its primary goal. Only $129.4 
million was provided for the NHSC for FY 2001. According to HHS, more 
than 12,000 physicians would be needed to place sufficient providers in 
all health professions shortage areas (4 times the current number of 
NHSC providers), and more than 20,000 (8 times the current number of 
NHSC providers) would be needed to bring all areas of the country to 
the same staffing ratios for providers that are used by both managed 
care organizations and health centers. If health centers are to meet 
the challenge of doubling their capacity to serve the underserved, the 
National Health Service Corps needs to be doubled to provide the health 
professionals needed to staff health centers and other health 
professional shortage areas.
    The NHSC also needs to be streamlined to work more effectively with 
safety net providers, including health centers, which share the goal of 
improving health care access in underserved areas. The placement of 
NHSC providers at health centers should be simplified in order to 
better meet the health care needs of the uninsured and low-income 
individuals who reside in medically underserved areas. Currently, 
health centers must apply for designation as a Health Professional 
Shortage Area (HPSA) in order to be eligible for NHSC placements, 
although the law already mandates that health centers be located in 
Medically Underserved Areas (MUA). This duplicative and bureaucratic 
mandate hinders the ability of health centers to recruit medical 
professionals in a timely manner.
  health centers need the support of congress to fulfill their mission
    Health centers request that this Subcommittee and the Congress act 
to support our work in several specific ways. We have been, and will 
continue to fulfill our mission of providing high quality health 
services to the medically underserved at low cost. We will continue to 
bring needed health care professionals to underserved communities, and 
to work in partnership locally to meet community needs and to improve 
health outcomes for the people we serve. Specifically, we need your 
help in four key ways:

 First and foremost, we need the stability that comes from 
        knowing that you will reauthorize and strengthen our health 
        centers program, which provides the core support for our 
        operations.
 Second, we need you to reauthorize and strengthen the National 
        Health Service Corps program, a vital partner in the plan to 
        double the number of people we serve.
 Third, we ask for your help in securing the funding increases 
        needed by health centers and the NHSC to double the number of 
        people served by health centers over the next 5 years.
 Finally, we ask you to support the efforts of local safety net 
        providers and others to better organize care for the uninsured 
        and underserved, such as those funded under the new Community 
        Access Program (CAP).
Reauthorize and Strengthen the Health Centers Program
    In 1996, the Congress consolidated four separate targeted primary 
care programs (Migrant Health, Health Care for the Homeless, Public 
Housing Health Centers, and Community Health Centers) under a single 
authority, extending the consolidated program for five years. The new 
authority also included a limited new provision to fund health center-
led networks and a new federal loan guarantee program for managed care. 
The consolidated health centers authority, at Section 330 of the Public 
Health Service Act, expires on September 30, 2001, and therefore 
requires reauthorization this year. Moreover, several key improvements 
are needed in the current health centers law, including:

 Restoration of facility construction, modernization, and 
        expansion as allowable uses of funds. Many health centers 
        operate in facilities that desperately need renovation or 
        modernization. In some cases, rapidly growing patient 
        populations have strained the capacity of existing facilities; 
        other facilities are old, or inadequate for the efficient 
        delivery of primary health care. Almost 65 percent of all 
        health center facilities are more than 10 years old, and 30 
        percent are more than 30 years old. A recent survey of health 
        centers found that almost two-thirds of them currently need to 
        upgrade, expand or replace their current facilities. Moreover, 
        many needy communities are not yet served by health centers--
        new facilities will have to be built (or existing facilities 
        modernized, expanded or replaced) in order to extend health 
        center services there. Restoring the government's ability to 
        make grants for capital projects is critical to enabling health 
        centers to maintain, modernize and expand their current 
        facilities--or to replace old facilities or build new ones--to 
        meet the growing demand for their safety net services.
 Enhancement of current Section 330 loan guarantee authority to 
        cover facility loans. Health centers' capital needs could also 
        be more successfully met by enhancing the current federal loan 
        guarantee authority in Section 330--which only permits the 
        issuance of loan guarantees to support the development of 
        managed care networks and plans--to include loan guarantees for 
        facility construction, modernization, and expansion, and for 
        acquisition of facilities and equipment.
 Clarification of authority to support health center-controlled 
        networks. As noted in my earlier discussion of our Bayou Teche 
        Community Health Network, many health centers currently 
        collaborate with each other, and with other community 
        providers, in a variety of different networks and partnerships 
        designed to improve their cost-effectiveness and to improve 
        access to and the quality of care for their patients, 
        especially uninsured patients. However, support for the ongoing 
        operation of such networks is not authorized under current law, 
        a shortcoming that needs to be addressed, especially in light 
        of the increasing opportunities for health centers to 
        collaborate for the benefit of their patients and communities.
    We also support action to: restore a requirement to continue 
allocating overall health centers program funding across the community, 
migrant, homeless, and public housing sub-authorities in the same 
manner as BPHC has done over the past 5 years; ensure a continued focus 
and targeting of funds on these vulnerable populations; and clarify 
that certain individuals are eligible for care under the Homeless and 
Migrant Health programs.
Reauthorize and Strengthen the National Health Service Corps
    Health centers strongly support action to reauthorize and increase 
funding for the NHSC this year. The NHSC also needs to be streamlined 
to work more effectively with safety net providers, including health 
centers, which share the goal of improving health care access in 
underserved areas. Today, some 15 percent of the 6500 clinical 
providers working at health centers are NHSC Scholarship and Loan 
Repayment recipients--and the ability of health centers to serve 
additional people will depend directly on the continued growth of the 
NHSC. Several key improvements are needed in the program, including:

 Automatically designate all Federally Qualified Health Centers 
        and Federally Certified Rural Health Clinics that meet the 
        accessibility and affordability requirements (above) as Health 
        Professional Shortage Area (HPSA) facilities. The NHSC and the 
        health centers programs are intended to address the same goal 
        (to meet the health care needs of underserved populations). As 
        noted earlier, providing automatic HPSA facility status to 
        health centers and rural health clinics, thus making them 
        eligible for placement of NHSC personnel, will reduce 
        bureaucratic barriers and allow coordinated use of federal 
        resource in meeting the health care needs of areas that lack 
        sufficient health care services.
 Ensure fairness in priority consideration for NHSC placements. 
        While intended to ensure that all Corps placements were made in 
        areas of highest need, the current criteria used to determine 
        whether a site is included on the high priority placement list 
        has actually had the effect of discriminating against health 
        centers and other similar entities, because it severely 
        restricts the Secretary's flexibility to consider certain 
        factors as indicators of need, including documented access 
        barriers such as linguistic or cultural isolation, 
        transportation barriers, and other factors highly correlated 
        with underservice--such as large uninsured, elderly, disabled, 
        or minority populations. Thus, an area or population 
        distinguished by the above-noted characteristics, but with a 
        relatively low infant mortality rate or what appears to be an 
        adequate supply of health professionals, for example, would be 
        penalized by being deemed a low priority for the placement of a 
        new NHSC assignee.
 Establish due process rights in cases of HPSA de-designations 
        and priority list development. Under current law, the Secretary 
        is required to notify interested organizations and individuals 
        in an area of that area's de-designation as a HPSA, but is not 
        required to follow the same procedure in the case of a 
        population group's or facility's de-designation. Furthermore, 
        while current law requires the Secretary to publish annually 
        list of priority placement sites for new NHSC assignments, it 
        does not require notice to entities that are not included on 
        the list, nor does it provide any due process rights to such 
        entities to provide supplemental information or to file an 
        appeal of their exclusion. Such due process rights are a 
        central part of many other statutes, and should be included in 
        the NHSC law, particularly in view of the consequences of the 
        loss of HPSA designation or priority status to areas that had 
        previously been considered high-priority shortage areas.
 Require all NHSC Scholarship and Loan Repayment recipients, as 
        well as all NHSC placement sites, to (1) serve all residents 
        regardless of ability to pay (2) bill and collect from third 
        party payers for care furnished to covered individuals and (3) 
        discount normal charges for out-of pocket costs based on 
        ability to pay. Section 334 currently requires that Corps 
        personnel ``. . . to the maximum extent feasible, provide . . . 
        services . . . to all individuals in, or served by, such HPSA 
        regardless of their ability to pay for services . . .'' These 
        provisions need to be applied to all NHSC placements and to be 
        clarified to reinforce the principle that a vital purpose of 
        the NHSC is to reduce access barriers for everyone living in 
        communities lacking health professionals, regardless of their 
        income or ability to pay for services. In addition, language is 
        needed to require the Department of Health and Human Services 
        to monitor this requirement to determine whether Corps 
        personnel and their sites are actually meeting these 
        requirements and to enforce compliance.
 Eliminate duplication of effort in the placement of NHSC 
        personnel. After completing their taxpayer-funded medical 
        education, many NHSC Scholars request--and HHS often approves--
        a waiver of their NHSC service obligation if they agree to 
        establish a ``private practice option (PPO)'' in a designated 
        HPSA. In most such cases, the Scholar is free to practice in 
        virtually any HPSA (whereas those who fulfill their service 
        obligation through assignment are targeted to high-need HPSAs). 
        Currently, these ``private practice option'' clinicians are not 
        subject to the requirement that they open their practice to all 
        in the community regardless of ability to pay; and, in some 
        cases, these NHSC-subsidized for-profit practices have been 
        found to resist caring for uninsured--and even Medicaid-
        covered--patients, instead referring them to nearby health 
        centers and other local safety net providers. Congress should 
        remedy this by restricting PPO placements to HPSAs that are not 
        currently being served by a health center or rural health 
        clinic, except where the PPO clinician is placed at the center 
        or clinic.
    We also support action to: allow NHSC scholarship and loan 
repayment recipients to fulfill their service obligation on a part-time 
basis, so long as both the recipient and the placement site agree and 
the total obligation is fulfilled; assist NHSC communities and sites in 
developing incentives--such as locum tenens, mini-sabbaticals, and 
continuing professional education--to support the retention of NHSC 
providers after their service obligation ends; and eliminate the 
community cost-sharing provision, which is routinely waived for 95 
percent of all sites and poses an undue burden both on economically 
hard-pressed communities and on the NHSC program.
Support increased resources to meet an ever-growing need for care.
    Health centers are doing their part to address this problem, but 
more must be done to serve the growing number of families who do not 
have access to health care services. More than 16.5 million uninsured 
individuals currently do not have access to a regular source of health 
care. We urge the Committee to actively support the increased funding 
that is needed to at least double access to care for uninsured and 
underserved patients in the next five years. This can be achieved by 
increasing federal appropriations for health centers--and for the NHSC 
program as well--by at least 15 percent per year over the next 5 years. 
This plan would ensure access to quality health care for 20 million 
individuals by FY 2006, including 9 million uninsured persons.
    In Louisiana, our community health center system consists of 
twenty-six delivery sites across the state. This is far too few for a 
state that has most of the worse health indicators in the nation and a 
place where every county or parish is deemed medically underserved and 
a health professional shortage area. Louisiana is one of the more 
blatant examples of the need to double the number of people served by 
health centers. As our state Secretary of Health has indicated its time 
to invert the pyramid in our state so that primary care becomes the 
foundation and we build up and out from there. The Teche Action Clinic 
has already demonstrated the efficacy of this concept by conducting the 
first public health clinic conversion to that of a community health 
center. We have also engaged in a planning process with a neighboring 
parish, St. John the Baptist, to continue this effort in our region of 
the state. This type of collaboration and partnership goes to the 
essence of the community health center model.
Assist and support efforts by the core safety net and other providers 
        to better organize care for the uninsured locally.
    Last year, Congress provided $125 million in second-year funding 
for the Community Access Program (CAP), a relatively new effort 
designed to encourage collaboration among health care providers and 
other community organizations to improve access to care for the growing 
number of Americans without health insurance. This new effort is 
patterned after two similar initiatives undertaken in recent years by 
major philanthropic foundations (the Kellogg Foundation and the Robert 
Wood Johnson Foundation). As members of the principal federal program 
directed at providing access to health care for uninsured and 
underserved Americans over the past 35 years, we offer the following 
points for your consideration:

 Health centers welcome any effort that holds the promise of 
        improving access to needed care for the uninsured and for other 
        underserved populations, especially for efforts to help get 
        other local providers to commit to providing needed services 
        for our uninsured patients and others in an organized fashion. 
        Accordingly, we strongly recommend that this Subcommittee 
        support the continuation of efforts such as those funded under 
        the CAP demonstration;
 At the same time, we strongly believe that that any such 
        efforts should complement and do not duplicate the work of 
        other federal programs that are already targeted at providing 
        desperately-needed services and care to low income, largely 
        uninsured populations--like health centers, the NHSC, Ryan 
        White CARE Act programs, and others as well; and
 Because true safety net providers--those, I repeat, with a 
        legal obligation to provide care to persons who cannot afford 
        to pay--are at the very core of health care delivery for the 
        uninsured in local communities today, and have years of 
        experience and the resulting expertise in organizing the 
        provision of care for this population, then we believe that 
        these local efforts must clearly include local safety net 
        providers, not just as participants but as core decision-makers 
        and grant recipients.
                               conclusion
    In summary, health centers are doing their level best to fulfill 
the expectations of this Subcommittee--and indeed of this Congress and 
our President. With your continued help and support, we will continue 
to meet these expectations even as we grow to meet more of the most 
pressing health care needs in communities all across the country.
    As I look over the last 19 years of my career I can honestly say 
that I can see the fruit of our labor, a priceless gift in one's 
lifetime. As I work and plan with the staff at home our aim is to have 
greater than a one-generational impact, not only on our own patient 
population, but also on the larger community. I think that my 
experiences can best be reflected in a remark made by one of my 
patients who I had just seen through a life threatening episode whose 
visiting daughter asked me how did I come to be in Franklin, Louisiana. 
I responded that I came via the National Health Service Corps. Her 
response was while I don't know much about the program you are 
referring to; all I can say is thank God for the National Health 
Service Corps. I also thank God for the NHSC and for the health centers 
program, and the wonderful, often miraculous effects they are having on 
people and communities all across America.
    Thank you for this opportunity to present my views. I and my health 
center colleagues across the country look forward to working with all 
the members of the Subcommittee to improve and expand access to vital 
health care services for many more of America's uninsured and 
underserved.

    Mr. Bilirakis. Thank you very much, Doctor.
    Ms. Benjamin.

                  STATEMENT OF KATHRYN BENJAMIN

    Ms. Benjamin. Chairman Bilirakis, Ranking Member Brown, and 
members of the subcommittee, my name is Kathryn Benjamin, and I 
am the Executive Director of SouthEast Lancaster Health 
Services, an independent community health center, located in 
the poorest and most diverse section of the city of Lancaster, 
in Lancaster County, Pennsylvania. Almost 60 employees serve 
over 11,000 patients each year with high quality, culturally 
competent medical and dental services, and are dedicated to 
eliminating all barriers to care as we continually strive to 
improve the lives of the underserved in our community.
    I want to thank you for the opportunity to come here today 
and testify in support of the reauthorization of the Section 
330 health centers program and the National Health Service 
Corps, and on the importance of these programs in providing 
care to the uninsured and underserved in our community. On 
behalf of the center and our patients, I ask you and the 
subcommittee to reauthorize these programs this year without 
delay.
    I particularly want to thank my Congressman, the Honorable 
Joseph Pitts, for your support of our health center and your 
kindness in asking Chairman Bilirakis if I could come and 
testify before the subcommittee today. Mr. Pitts, all of us at 
SouthEast appreciate that you took time from your busy schedule 
last week and came and visited our center to see our work, and 
we look forward to working with you on these important 
programs.
    Our center began humbly 30 years ago, with an all-volunteer 
staff. Despite these modest beginnings, we have worked hard to 
achieve successes that would not have been possible without the 
support and guidance of the Section 330 health center program 
and the National Health Service Corps. These programs helped 
thousands of health centers like ours to deliver high quality 
health care to the most vulnerable populations.
    We support the changes suggested by the National 
Association of Community Health Centers to improve the health 
centers program. The recommendations include an increase in the 
level of funding of health centers, expansion of construction 
authority to build facilities in new communities, enhancement 
of current loan guarantee authority in Section 330 to cover 
facility loans, and a clarification of funding authority for 
networks. Without the Section 330 program, SouthEast would not 
be able to adapt to the rapid changes in the health care 
industry.
    We also support National Association of Community Health 
Centers suggested changes for improving the National Health 
Service Corps, including an increase in the level of funding, 
automatic designation of all federally qualified health centers 
and federally certified rural health centers that meet the 
accessibility and affordability requirements as health 
professional shortage area facilities, and the option of 
participants in the loan repayment program to fulfill their 
service obligations on a part-time basis.
    What is it about the health center program that I think 
makes it so successful? The health center law and program 
expectations, which we at the center refer to as ``The Rules.'' 
The Rules provide a well thought through recipe to ensure that 
patients are given expert care when they are in the clinical 
areas, that all members of the community are able to access 
this care when they need it, that patients understand their 
providers and their providers understand them, that chronic 
illnesses are prevented rather than simply treated, and that 
racial and ethnic health disparities will soon become a 
condition of the past.
    The health center program expectations are the embodiment 
of our mission to care for our most vulnerable patients and 
ensure that Federal investment in our center is used wisely and 
cost-effectively.
    Eliminating racial disparities and providing culturally and 
linguistically appropriate care to our patients is of 
particular importance to us. In the past 20 years, our 
Southeast neighborhood, like many neighborhoods in your 
districts, has changed significantly in its cultural make-up. 
Once predominantly African-American, our community is now 
mostly Hispanic, with a large African-American and a smaller 
Asian population. Most Hispanic residents are recent immigrants 
from Puerto Rico and the Dominican Republic and speak little 
English.
    With Section 330 funding, we have the ability to employ bi-
lingual nurses who work intensely with expectant mothers weekly 
throughout their pregnancies. They provide nutrition 
counseling, smoking cessation classes, preventive health 
training, home visits, birthing and parenting classes, all 
services that ensure that the mother is her healthiest and is 
prepared to bring a healthy life into this world.
    One of our biggest success stories is that last year, for 
the first time, we eliminated racial and ethnic disparities in 
our newborns. There were no statistical differences between the 
newborn weights of African-American, Hispanic, and White 
babies. This goal, which took us 10 years to achieve, simply 
would not have been possible without support and funding from 
the Section 330 program. Our Medical Director, who implemented 
the program, came to us at the National Health Service Corps 
and is still with us today.
    Also, increased levels of funding have allowed us to employ 
more diverse and highly trained providers and nurses. Through 
an increase in our base grant and with the help of the National 
Health Service Corps, we were able to hire an African-American 
dentist this year, who has implemented a new outreach program 
to encourage people of color to access dental services. In one 
instance, the dentist convinced a 70-year-old African-American 
woman to come in for a dental visit for the first time in her 
life, and she happens to be the wife of a very influential, 
well-educated and prominent person in the community.
    I would like to talk specifically about the role of the 
community in our health center. Like every health center, 
SouthEast is governed by a board from the community. The 
composition of our board of directors reflects the diversity of 
our community and the patients we serve. Over half of our board 
members are patients of the center, and more than two-thirds 
represent minorities. Our board members offer substantial 
expertise in the areas of business, finance, health care, 
faith-based community organizations, human resources, law, 
local and regional government. Three pastors sit on the board 
of SouthEast, representing large minority congregations. They 
provide valuable insight into the health care needs of the 
community. As a result of this relationship, the planning has 
begun to open and operate a clinic in the new community 
building to be built next year adjacent to the largest African-
American church in Lancaster.
    Construction funding is greatly needed, as well as ongoing 
operating funds to provide not only acute health services, but 
also onsite screening for chronic diseases such as diabetes, 
heart disease and HIV, as well as preventive health programs 
such as smoking cessation, nutrition counseling, health 
lifestyle and community education programs.
    Our role as a safety net provider in our community has been 
strengthened by recent increases in base funding, and will 
continue to be fortified if we are allowed to use Section 330 
funds to expand our existing facilities and to build new sites.
    Our community is facing the closure of two large medical 
clinics in the next 1\1/2\ years. This will leave approximately 
15,000 residents without a medical home. Two years ago, two 
dental clinics closed in the community, and left about 6,000 
current patients without dental homes. Our center and one other 
small center in the county are the only providers right now to 
low-income patients in the community, and there are 29,000 
Medicaid recipients in the county, and we only have enough 
resources to provide about 8,000 patients with care, so it is a 
very difficult situation we are facing right now. With 
expansion funds, last year we were able to hire a new dentist 
to help serve, and now we need to build new sites.
    In order to respond to ever-increasing numbers of uninsured 
and underinsured in our community, we must have the resources 
to cast an even larger safety net through the reauthorization 
of the Health Center and National Health Service Corps 
programs.
    In summary, SouthEast and its community are grateful for 
the support of this subcommittee and this work. We cannot 
continue to eliminate disparities in our health care system 
without the reauthorization and improvement of the Health 
Centers Program and the National Health Service Corps. We urge 
the subcommittee to act as soon as possible to reauthorize 
these important programs. Thank you for the opportunity to 
appear today. I will be glad to answer any questions.
    [The prepared statement of Kathryn Benjamin follows:]
 Prepared Statement of Kathryn Benjamin, Executive Director, Southeast 
                       Lancaster Health Services
    Chairman Bilirakis, Ranking Member Brown, and Members of the 
Subcommittee: My name is Kathryn Benjamin. I am Executive Director of 
SouthEast Lancaster Health Services (SELHS). SELHS is an independent 
community health center, located in the poorest and most diverse 
section of the City of Lancaster, Pennsylvania. Almost 60 employees 
serve over 11,000 patients each year with high quality, culturally 
competent medical and dental services, and are dedicated to eliminating 
all barriers to such care as we strive to continually improve the 
quality of life for the underserved.
    I want to thank you for the opportunity to come here today and 
testify in support of the reauthorization of the section 330 health 
centers program and the National Health Service Corps, and on the 
importance of these programs in providing care to the uninsured and 
underserved in our community. I particularly want to thank my 
congressman, the Honorable Joseph Pitts, for your support of our health 
center and your kindness in asking Chairman Bilirakis if I could come 
before this Subcommittee today. Mr. Pitts, all of us at SELHS 
appreciated that you took time from your busy schedule last week to 
come and visit our center and see our work. We look forward to working 
with you on these important programs.
                    the community that selhs serves
    SELHS is situated in the middle of a diverse, urban, and medically 
underserved community. The South East area neighborhood is comprised of 
over 22,000 people from whom the health center draws most of its 
patients. In the past twenty years this neighborhood has changed 
significantly in its cultural make-up. Whereas twenty years ago most of 
the residents were African American, today it is comprised of 54% 
Hispanic residents, 32% African American, 5% Asian/Pacific Islanders or 
American Indian, and 9% white. A majority of the Hispanic residents in 
Lancaster are recent immigrants from Puerto Rico and the Dominican 
Republic and, because of this, many of them have little or no English 
language proficiency. At our health center, 64% of our patients are 
Hispanic, and 17% are African American.
    It was estimated in 1999 that 63% of the residents of the South 
East Lancaster MUA and HPSA had incomes below 200% of the poverty 
level, and 35% had incomes below 100% of the poverty level. 95% of our 
patients live below 200% of the poverty level, and 62% live below 100% 
of the poverty level. In this community there is only one full-time 
physician providing services to Medicaid patients for every 6,642 
residents, and one full-time dentist providing services to Medicaid 
patients for every 4,580 residents, indicating the area is a low-income 
Health Professional Shortage Area or HPSA. The remaining sections of 
the City of Lancaster that lie outside the HPSA are comprised of less 
than 7% minority and low-income residents.
                         history of the center
    SELHS had humble beginnings. Thirty years ago two physicians and a 
nurse volunteered to provide desperately needed care to patients who 
were not welcome in private practices because they had no money. Small 
donations from local organizations and philanthropists covered their 
supply costs. As the noble gesture of these efforts spread, more 
donations came. Grant funding was applied for and received and in 1980 
SELHS became a community health center when it received a grant under 
section 330 of the Public Health Service Act. Slowly, more services 
were offered, staff began to receive compensation and more were hired. 
The organization has not stopped growing during its 30-year lifespan.
 the importance of the health center program to selhs and the community
    Our participation in the Community Health Center (CHC) program has 
been invaluable for SELHS, both from a financial and a programmatic 
standpoint. The Bureau of Primary Health Care provides not only 
monetary support for the center to achieve its mission, but it also 
provides key technical assistance necessary to develop a voluntary 
organization into one with a continually, financially viable business 
plan and appropriate managerial organizational structure. Without the 
section 330 program, SELHS would not be able to adapt to the rapid 
changes in the health care industry.
    The section 330 health center requirements and program expectations 
(``the program rules'') are stringent. They cover areas such as board 
composition and responsibilities, management and financial practices, 
medical and dental standards of care, best practices and treatment 
protocols, culturally and linguistically competent staff, and the 
provision of services that eliminate barriers to accessing care. The 
rules provide a well thought through recipe to ensure that: patients of 
SELHS are given expert care when they are in the clinical areas; all 
members of the community are able to access this care when they need 
it; that patients understand their providers and that their providers 
understand them; that chronic illnesses are prevented rather than 
simply treated; and that racial and ethnic health disparities will soon 
become a condition of the past. The rules ensure that the federal 
investment in the program and our health center is used wisely and 
cost-effectively.
        selhs provides comprehensive primary and preventive care
    SELHS' primary medical services include two family practice 
physicians, two internists, and four mid-level practitioners. Services 
are provided in ``pods'', each staffed by a provider, an LPN, a medical 
assistant, and a patient care coordinator during each session. Patients 
are immediately taken into a private room and all services are provided 
to the patient in that room. Weights, labs, provider visits, social 
services, treatments, billing and collections are all provided in the 
privacy of the patient room. This has dramatically increased patient 
satisfaction, privacy, and efficiency. The patient no longer needs to 
move from station-to-station during the visit and wait for staff to be 
``freed up'' to take care of their needs. Our staff go to where the 
patient is.
    Additionally, we have part time contractual agreements with a part-
time pediatrician, obstetrician/gynecologist, cardiology group, 
nephrologist, and chiropractor, all of whom treat referral patients at 
our main site. The availability of these services has dramatically 
improved our ability to diagnose and treat a fuller range of diseases, 
as well as remove several access barriers for our patients who would 
otherwise not be able to see a specialist in his/her office.
    Our prenatal care program is just one example of how SELHS has 
thrived under the CHC program rules, as have our patients. The prenatal 
program alone has all but eliminated racial and ethnic disparities in 
the area of low birth-weight babies. Last year the average Black, 
Hispanic and White baby of SELHS weighed the same healthy weight. Why 
does a program like this work? In addition to the bi-weekly and weekly 
visits with medical providers, SELHS offers an intense, nurse driven 
perinatal program.
    Unlike in private practice medicine, SELHS' perinatal nurses work 
intensively with each expecting mother on a bi-weekly and weekly basis 
throughout her pregnancy. These nurses evaluate every aspect of the 
expecting mother's life and lifestyle. A few of the areas covered are 
nutrition counseling and the provision of vitamins, stop smoking 
programs, home visits, preventive health training, birthing classes, 
parenting classes, and dental care. The goal of our program is to 
ensure the mother is at her healthiest throughout the pregnancy, is 
prepared to bring a healthy life into this world, and is prepared to 
raise a child in a mentally and physically healthy environment. School 
aged moms are taught how to raise a child while completing their 
educations. Rarely are babies not wanted by our patients, but if this 
situation should arise, nondirective counseling on all alternatives, 
including adoption, is provided.
    Programs such as these are expensive and only partially funded by 
the CHC program. Other local organizations contribute to the costs. 
Each of these organizations realizes how valuable preventive care is, 
and that the return on the investment is almost astronomical if we can 
prevent the use of the neonatal intensive care unit, prevent 
developmental delay, and ensure that when a child is born it is as 
healthy as possible. Local donors realize that SELHS cares for the most 
at-risk population in the community, and that our programs, tailored to 
the patients' cultural, linguistic, and financial needs, far surpass 
any other services available in the community. Eliminating barriers is 
the key to our success.
    In addition to our medical services, primary dental services are 
offered on-site by three, full-time general dentists and a part-time 
pediadontist. Preventive and screening services for children are 
offered by our hygienist, who works with the local Head Start Program. 
The dental and prenatal departments work closely together. The prenatal 
staff refer patients to the dental department as soon as they enter the 
program. Our dentists not only treat them, but also teach them about 
taking care of their baby's teeth. Additional dental education is 
provided in specific courses that are a part of the prenatal/birthing 
classes.
    SELHS has a pharmacy program funded partially by the health centers 
program, but primarily by local organizations and private donors. The 
most common acute medicines are purchased in bulk, kept in the clinical 
areas, and dispensed as needed by the providers, at the center's cost. 
The auxiliary of the local medical society coordinates the pick-up of 
unused pharmaceutical samples from area physicians, organizes them, and 
delivers them to the center at least twice a year. And SELHS has a 
staff member who coordinates our large pharmaceutical company ``chronic 
disease'' medicine program. Low income, uninsured and under-insured 
patients with chronic diseases are eligible to receive free medicines 
from many of the large pharmaceutical companies. The requirements are 
not as difficult as they are cumbersome. On a frequent basis the 
patient's physician must complete forms verifying that the patient is 
in need of the medicines, and SELHS must verify the patient's income 
level and insurance status. The medicines are then mailed to SELHS 
where staff coordinate patient pick-up and dispensing.
    The other major part of our pharmacy program is the acute medicine 
voucher program. About $10,000 per year is donated from local 
businesses, organizations and private donors, to pay for 100% of 
individual acute prescriptions for patients who do not have the 
immediate funds to pay for them.
    SELHS offers free prostate screening annually with the help of a 
local hospital that provides nurses and covers promotional expenses, 
and a group of volunteer urologists. This year 174 men were screened 
who might otherwise have not received this valuable check-up. Excellent 
communication to the community through our board's close relationship 
with the faith-based organizations has increased the success of this 
program significantly.
    Free HIV screening and counseling is provided on a daily basis in a 
dedicated office at our main site. The local AIDS Community Alliance 
provides trained counselors, who work closely with the medical 
providers, greatly enhancing compliance with treatment protocols and 
the continuity of care.
                       comprehensiveness of care
    SELHS provides more than episodic medical and dental care, and 
continues to care for patients during periods when they lose their 
health insurance. There are many services that SELHS provides uniquely 
in the community. Social services, nutritional counseling, incentives 
for up-to-date immunizations, and the Reach Out And Read program are 
highlights of some of the other services that contribute to our 
success.
    Recognizing that many of our patients face challenges in their 
daily lives that limit their ability to comply with treatment regimens, 
SELHS employs clinical support staff who follow the patients after 
their visits, and provide assistance when barriers come up. Case 
managers, social workers, eligibility specialists, physician assistants 
and nurse practitioners intervene when needed. All patients with 
chronic diseases are ``tracked'' or followed by staff who find out if 
they keep specialist appointments, fill their prescriptions, get their 
laboratory work done at appropriate intervals, and keep appointments at 
SELHS. When a patient faces trouble in any of these areas our staff 
offer assistance. Sometimes a simple reminder phone call helps, and 
sometimes our social worker gets involved, and other times a visit to 
the patient's home is necessary.
    Our experience has shown that once an individual has begun to fully 
comply with healthy lifestyle changes and/or is following treatment 
protocols for a period of time, they not only establish life-time 
patterns of behavior, but they affect their entire family and social 
network. This is why we are so strongly dedicated to changing the lives 
of our patients and our commuity, one life at a time.
    Environmental issues, such as lead paint, the existence of fire-
arms in households, and home safety hazards are all discussed in office 
visits. School aged children from underserved homes often do not have 
many of their own books, so we give each child a book of their own at 
each visit. And we have started the Reach Out and Read program, which 
provides additional, age appropriate books and readers in our pediatric 
waiting rooms as well.
              culturally and linguistically competent care
    From our board of directors to our translators, SELHS is committed 
to providing healthcare and education to our patients and the community 
in a culturally and linguistically friendly manor. Studies continue to 
support the theory that people learn best and are most likely to comply 
with suggested lifestyle changes and treatment programs when they are 
delivered in their primary language and in a manner that respects and 
acknowledges their traditional cultural beliefs.
    SELHS is the only provider in the community that ensures the 
availability of translators in the clinical area for those providers 
who are not bilingual. Employees at SELHS can provide medical 
translation in almost a dozen languages. Quarterly staff meetings 
target various cultures and their health beliefs, as part of a program 
to continually educate, update, and brainstorm on ways to improve our 
services to all members of the diverse population we serve.
    Recruiting bicultural and bilingual providers has been difficult 
for SELHS. Whereas in the past, the National Health Service Corps 
(NHSC) has successfully provided loan repayment opportunities to 
several of our providers, this year we lost a bilingual and bicultural 
physician because of the shortage of funds in the NHSC program. A year 
prior we had the good fortune to hire a multi-lingual, bi-cultural, 
board certified, family practitioner. He would only agree to an 
extended contract if he would be able to receive loan repayment through 
the NHSC. Five months after he began employment he received bad news: 
NHSC was under-funded and, although he qualified for the loan repayment 
program, there were insufficient funds for that year, and he was 
welcome to apply the following year. He graciously completed a full 
year of employment, and then, having no faith in the NHSC, he left our 
employ.
    Hiring bilingual and bicultural, or minority providers has always 
been a challenge for SELHS. The NHSC offered us a great recruiting tool 
in the past. The fact that its funding has not been dependable has all 
but crippled the center's recruitment efforts. Bilingual and bicultural 
providers are recruited with significant compensation packages all over 
the country. The fact that the cost of living is significantly lower in 
Lancaster, PA than the large urban areas is not a sufficient draw. 
Knowing, without a doubt, that the NHSC loan repayment program is 
sufficiently funded is paramount to our efforts in recruiting 
culturally and linguistically competent providers at SELHS. If there is 
anything you can do to help assist with this problem, we would greatly 
appreciate it. Please reauthorize the NHSC program and strengthen it as 
suggested by the National Association of Community Health Centers. I 
have attached their recommendations to my testimony.
           the community determines the care it will receive
    Like every health center, SELHS is governed by a board from the 
community. The composition of our board of directors reflects the 
diversity of our community and the patients we serve. Over half of our 
board members are patients of the center and more than two thirds 
represent minorities. Board members offer substantial expertise in the 
areas of business, healthcare finance, faith-based community 
organizations, human resources, law, and local and regional government. 
Three pastors sit on the board of SELHS, representing large minority 
congregations. They provide valuable insight into the healthcare needs 
of the underserved community. As a result of this relationship, the 
planning has begun to operate a clinic in the new ``community 
building'' to be built next year, adjacent to the largest African 
American church in Lancaster. Construction funding is greatly needed, 
as will be ongoing operating funds to provide not only acute health 
services, but also on-site screening for chronic diseases such as 
diabetes, heart disease and HIV, as well as preventive health programs 
such as smoking cessation, nutrition counseling, healthy lifestyle and 
community education programs.
the health centers program investment in selhs helps eliminate barriers 
                                to care
    The patients SELHS serves are very poor and have few financial 
resources: 40% percent are uninsured; 42% have Medicaid coverage; 5% 
Medicare; and 13% private insurance (including the SCHIP program). We 
cared for 11,344 patients last year, with 28,360 patient visits. No 
other organization in our community offers patients a sliding fee based 
on family size and income. 95% of our patients qualify for some level 
of reduced fees, most fees being reduced to the minimum fee of $6 for a 
visit.
    The health center grant is the financial underpinning of our 
ability to care for our patients. Last year, our $864 million grant 
helped us to write off uncompensated care for the uninsured and 
underinsured and to provide translation services. Private donations and 
Medicaid and Medicare payments also support the services we provide. 
Other grants and private donations contribute to our other enabling 
programs, such as the outreach programs, perinatal program, Reach Out 
and Read, our mammogram fund, and our pharmacy fund.
         the role of the center in the future of the community
    SELHS is seen as an organization that touches the lives of almost 
all, if not all, of the underserved in this community. It therefore 
serves as a vital link to these individuals from the perspective of 
many other organizations. The barriers we eliminate come in many shapes 
and sizes. Financial barriers were the first ones SELHS sought to 
eliminate. The underserved community knows that they can come to SELHS 
at any time and never be refused acute treatment for financial reasons. 
Additional barriers, such as transportation, language, culture, 
obtaining medications, and scheduling conflicts are all minimized if 
not eliminated at SELHS.
    What is the future of care for the residents of our community? 
Current market trends have left thousands of underserved members of the 
community without essential medical and dental services. As more and 
more people go off of the Welfare rolls, the number of uninsured and 
underinsured people increases. Few of these people gain employment in 
organizations that offer medical and dental coverage, and when coverage 
is available, annual out-of-pocket expenses are high.
    SELHS remains the safety net provider for many people who are newly 
enrolled in managed care plans and assigned to a specific primary care 
provider. Many are assigned to a provider without their 
``understanding'' because of linguistic issues. These individuals still 
come here, and we help them navigate the managed care world. We help 
them make and carry out choices and take care of their needs while they 
move through the system.
    SELHS will remain the safety net provider to patients whose 
providers stop accepting Medicaid. For decades local providers referred 
their Medicaid and uninsured patients to SELHS. As private managed care 
grew, physicians soon realized that Medicaid paid as well as the 
private HMOs, and began opening their doors to the Medicaid recipients 
once again. With Medicaid HMOs being mandatory this year, two of the 
three local hospitals have begun to close down their outpatient 
clinics. Many private physicians in the community are pulling out of 
the Medicaid program. Two hospital sponsored dental clinics closed last 
year, leaving over 5,000 Medicaid patients without a dental home.
    SELHS is the designated safety net provider whenever these changes 
occur. We expanded our dental staff when the hospital clinics closed 
and have had to prioritize on emergency dentistry first, and preventive 
dentistry second. We have plans to open a new clinic with some local 
financial support, but need additional health center grant funds for 
construction and to ensure continued financial viability.
    As more clinics close and physicians refuse to treat Medicaid 
patients, we must plan to expand to fill the void. And, as we continue 
to screen and provide outreach education to those with undetected 
chronic diseases we must be prepared to provide comprehensive care for 
them in our system. We are ready to continue to meet the challenges of 
caring for our community--but we need your help to do so.
  why the proposed changes to the community health center program are 
                           important to selhs
    We support the changes suggested by the National Association of 
Community Health Centers to improve the health centers program. I have 
included them as an attachment to my statement. I want to address 
specifically how some of these will help our center.
1. Reauthorize the program and increase the level of funding
    I want to thank you for everything Congress has done to increase 
funding for health centers over the past few years. We used what we 
received from increased funding to stabilize and expand services at 
SELHS, and to begin to fill the void left when other local providers 
closed their doors to the underserved. SELHS has received service 
adjustment awards and several increases to our base grant over the past 
5 years equaling almost half a million dollars. We received increases 
in 1999 of $100K, in 2000 of $70K, and $100K for 2001. These increases 
have made a substantial difference in our community.
    SELHS is in a position to triple its capacity to care for the 
underserved, but will need additional continued financial support to 
sustain the physical expansions and programs. As more outreach and 
community education is provided, SELHS must grow to bring these 
previously untreated members of the community into programs of ongoing 
medical and dental care. Current projects planned by SELHS that would 
utilize these funds include the clinic in the African American church, 
a new medical site without construction costs to serve 5,000 patients, 
and a new site with construction costs to house both medical and 
dental, and education services, for 10,000 patients. We cannot do this 
without the reauthorization and expansion of the program.
2. Expansion of construction authority to build facilities in new 
        communities
    SELHS has long recognized the need for a community health center in 
a neighboring community, in which almost 5% of the center's current 
patients reside. A new clinic would have to be built to extend services 
to this community and not only would some construction costs be 
necessary, but some ongoing operational assistance will be necessary as 
well. Restoration of the ability for health centers to use a small 
portion of grant funds for construction down payments will enable us to 
meet the needs of this neighboring community. Also, if we take on some 
of the clinics being closed by a local hospital, we will need funds for 
renovation.
3. Enhancement of current Loan Guarantee Authority in Section 330 to 
        cover facility loans.
    As well as a down payment, the facility construction and renovation 
needs I discussed above and expansions will all require facility 
financing. Of paramount importance will be the availability of low cost 
loans with guarantees that would cover a substantial percentage of the 
cost of this financing--so revision of the loan guarantee program is 
critical to our work.
4. Clarification of funding authority for networks.
    SELHS is a member of CISNP (Community Integrated Services Network 
of Pennsylvania), a community health center owned network that provides 
shared expertise in the areas of clinical outcomes management, 
operations benchmarking, management tools, and managed care 
contracting. One current CISNP program we hope to participate in is a 
Management Information Systems program that will lower our costs by 
jointly contracting for an MIS program and sharing technical expertise. 
Permitting the grant funds to be used for these purposes would greatly 
help us reach this goal.
    In summary, SELHS and the community it serves is grateful for the 
support of this Subcommittee for this work. We cannot continue to 
eliminate disparities in our health care system without the 
reauthorization and improvement of the health centers program and the 
NHSC. We urge the Subcommittee to act as soon as possible to 
reauthorize these important programs. Thank you for the opportunity to 
appear today. I would be glad to answer any questions.
 Explanation of Proposed Changes in the National Health Service Corps 
                                Statute
                               background
    The National Health Service Corps (NHSC) plays a critical role in 
providing care for underserved populations by placing clinicians in 
urban and rural communities with severe shortages of health care 
providers. Currently 2500 NHSC clinicians, including physicians, 
dentists, nurse practitioners, physician assistants, nurse midwives, 
and behavioral health professionals, provide health care services to 
4.6 million Americans, including 2.2 million Health Center patients.
    While the NHSC program has proven successful in addressing health 
professional shortages in many areas, funding limitations have 
restricted the program's ability to meet its primary goal. According to 
HHS, more than 12,000 physicians would be needed to place sufficient 
providers in all health professions shortage areas (4 times the current 
number of NHSC providers), and more than 20,000 would be needed to 
bring all areas of the country to the same staffing ratios for 
providers that are used by both managed care organizations and Health 
Centers (8 times the current number of NHSC providers). The NHSC also 
needs to be streamlined to work more effectively with safety net 
providers, including Health Centers, which share the goal of improving 
health care access in underserved areas.
      proposed changes to national health service corps authority
1. Reauthorize the National Health Service Corps for five-years at not 
        less than $150 million for the first year and for such sums as 
        are necessary for each subsequent fiscal year.
Explanation
    Although the NHSC's most recent reauthorization was for a ten-year 
period, most parties agree that five years is preferable this time. A 
five-year reauthorization demonstrates continued support for the 
purpose and role of the NHSC as a federal safety net program; provides 
for continuity in the administration of the program; and also allows 
for a more timely opportunity for Congress to review and make 
modifications in response to changes in the health care environment. 
The NHSC also warrants a substantial funding increase to address the 
significant need in designated underserved areas for NHSC Scholarship 
and Loan Repayment program recipients, and to support other critical 
activities such as site development, evaluation, faculty and student 
placement, retention incentives and research.
2. Automatically designate all Federally Qualified Health Centers and 
        Federally Certified Rural Health Clinics that meet the 
        accessibility and affordability requirements (above) as Health 
        Professional Shortage Area (HPSA) facilities.
Explanation
    The NHSC and the Health Centers Programs are intended to address 
the same goal (to meet the health care needs of underserved 
populations) and are administered by the same federal agency, the 
Bureau of Primary Health Care. Requiring a health center to obtain a 
Health Professional Shortage Area (HPSA) designation, even though each 
health center already serves a ``medically underserved area or 
population'' creates a bureaucratic hurdle to placement of NHSC 
personnel at health centers. Providing automatic HPSA facility status 
to health centers and rural health clinics, thus making them eligible 
for placement of NHSC personnel, will reduce bureaucratic barriers and 
allow coordinated use of federal resource in meeting the health care 
needs of areas that lack sufficient health care services.
3. Eliminate duplication of effort in the placement of NHSC personnel.
Explanation
    After completing their taxpayer-funded medical education, many NHSC 
Scholars request--and HHS often approves--a waiver of their NHSC 
service obligation if they agree to establish a ``private practice 
option (PPO)'' in a designated HPSA. In most such cases, the Scholar is 
free to practice in virtually any HPSA (whereas those who fulfill their 
service obligation through assignment are targeted to high-need HPSAs). 
Currently, these ``private practice option'' clinicians are not subject 
to the requirement that they open their practice to all in the 
community regardless of ability to pay; and, in some cases, these NHSC-
subsidized for-profit practices have been found to resist caring for 
uninsured--and even Medicaid-covered--patients, instead referring them 
to nearby health centers and other local safety net providers. Congress 
should remedy this by restricting PPO placements to HPSAs that are not 
currently being served by a health center or rural health clinic, 
except where the PPO clinician is placed at the center or clinic.
4. Ensure fairness in priority consideration for NHSC placements.
Explanation
    While intended to ensure that all Corps placements were made in 
areas of highest need, the current criteria used to determine whether a 
site is included on the high priority placement list has actually had 
the effect of discriminating against health centers and other similar 
entities, because it severely restricts the Secretary's flexibility to 
consider certain factors as indicators of need, including documented 
access barriers such as linguistic or cultural isolation, 
transportation barriers, and other factors highly correlated with 
underservice--such as large uninsured, elderly, disabled, or minority 
populations. Thus, an area or population distinguished by the above-
noted characteristics, but with a relatively low infant mortality rate 
or what appears to be an adequate supply of health professionals, for 
example, would be penalized by being deemed a low priority for the 
placement of a new NHSC assignee.
5. Establish due process rights in cases of HPSA de-designations and 
        priority list development.
Explanation
    Under current law, the Secretary is required to notify interested 
organizations and individuals in an area of that area's de-designation 
as a HPSA, but is not required to follow the same procedure in the case 
of a population group's or facility's de-designation. Furthermore, 
while current law requires the Secretary to publish annually list of 
priority placement sites for new NHSC assignments, it does not require 
notice to entities that are not included on the list, nor does it 
provide any due process rights to such entities to provide supplemental 
information or to file an appeal of their exclusion. Such due process 
rights are a central part of many other statutes, and should be 
included in the NHSC law, particularly in view of the consequences of 
the loss of HPSA designation or priority status to areas that had 
previously been considered high-priority shortage areas.
6. Allow NHSC scholarship and loan repayment program recipients to 
        fulfill their commitment on a part-time basis. This option 
        would only be available if such service is agreed to by 1) the 
        placement site or sites as well as the scholarship and loan 
        repayment recipients and 2) so long as the total obligation is 
        fulfilled.
Explanation
    Flexibility should be provided to enable Scholarship or Loan 
Repayment program recipients to complete their service obligation on a 
full-time or part-time basis, with the approval of the placement site. 
Many small rural communities may not have sufficient volume to support 
a full-time health care practitioner. In addition, some sites may not 
need particular types of providers on a full-time basis. Flexibility 
should be given to the Department to permit part-time service in 
meeting community needs. In addition, some practitioners may find part-
time service more attractive, which in turn could improve both 
recruitment and retention at these sites.
7. Include a specific allocation for site development and community 
        needs assessment.
Explanation
    The NHSC was created to meet the needs of communities that lack 
access to health care services. In many cases, those shortage 
communities require physical, oral, and mental/behavioral health care 
services. Over the years, the NHSC has recognized that each community 
has unique health needs and has placed a wide variety of health 
professionals in sites to meet those needs. However, many believe that 
the NHSC needs to dedicate additional resources to inform and educate 
communities about the variety of placement opportunities provided by 
the NHSC, and to assess the real health care needs of communities that 
are applying for placement of personnel. In order to ensure that 
communities receive the maximum benefit from the program, the NHSC 
should allot adequate resources to inform communities of the variety of 
health care resources available through the NHSC and how those 
resources can best be used to meet the unique health needs of 
communities, in collaboration with those communities and other health 
partners.
8. Assist communities and sites in developing incentives to support the 
        retention of NHSC providers beyond their obligation.
Explanation
    Many current and former NHSC recipients have expressed concerns 
about professional isolation and burnout during their term of obligated 
service. While most initially declare their intent to remain after 
completing their obligation, many change their minds by the time their 
assignments are completed. In many communities, the NHSC recipient may 
be the only health care professional. As such, they are ``on'' 24 hours 
per day, 7 days per week. Providing scheduled breaks for professional 
development or personal time will increase the likelihood that 
recipients will remain in these communities beyond the period of their 
assignment. Examples of incentives might include support for locum 
tenens, mini-sabbaticals, continuing professional education, and 
increased practice management technical assistance for current 
scholarship and loan repayment recipients.
9. Eliminate the community cost-sharing provision (Section 334 of the 
        Public Health Service Act).
Explanation
    Section 334 of the Public Health Service Act (``Cost Sharing'') 
requires that an entity to which a member of the NHSC is assigned must 
reimburse the Federal government for the cost of that NHSC member. In 
practice, this requirement is waived in almost all cases. In 1998, the 
cost-sharing requirement was waived in at least 95% of cases and the 
cost of collecting the remaining 5% of payments exceeded the funds 
received. This provision should be eliminated because it creates an 
undue burden on communities (which are economically unstable by 
definition) in seeking an NHSC clinician, and it poses an unnecessary 
administrative burden on the NHSC. Clearly, these dollars could be 
better used in providing access to care. This action is consistent with 
the spirit of the Paperwork Reduction Act and will facilitate increased 
usage of NHSC' clinicians by underserved communities.
10. Require all NHSC Scholarship and Loan Repayment recipients, as well 
        as all NHSC placement sites, to (1) serve all residents 
        regardless of ability to pay (2) bill and collect from third 
        party payers for care furnished to covered individuals and (3) 
        discount normal charges for out-of pocket costs based on 
        ability to pay.
Explanation
    Section 334 (repealed above) included language requiring that Corps 
personnel ``. . . to the maximum extent feasible, provide . . . 
services . . . to all individuals in, or served by, such HPSA 
regardless of their ability to pay for services . . .'' These 
provisions need to be retained elsewhere in the NHSC statute and to be 
clarified to reinforce the principle that a vital purpose of the NHSC 
is to reduce access barriers for everyone living in communities lacking 
health professionals, regardless of their income or ability to pay for 
services. In addition, language is needed to require DHHS to monitor 
this requirement to determine whether Corps personnel and their sites 
are actually meeting these requirements and to enforce compliance.
                        related recommendations:
1. Exclude from Federal income, FICA, and self-employment taxation 
        tuition, fees and related educational expenses to individuals 
        participating in the NHSC Scholarship, Loan Repayment, 
        Community Scholarship and State Loan Repayment program (group 
        with other retention provisions).
    Although this falls under the jurisdiction of other Congressional 
Committees, and must therefore be moved through separate legislation, 
all parties agree with the NHSC and the NHSC Advisory Council that 
taxing students adversely affects the financial incentive to 
participate in the NHSC and provide health care services in underserved 
communities, many of which are frontier communities.
   Explanation of Proposed Changes in the Current Section 330 Health 
                           Centers Authority
                               background
    In the 35 years since their creation, America's Community Health 
Centers have proven their durability as a model health care program and 
their resilience in adapting to a dramatically changed American 
healthcare system while maintaining their original mission and purpose.
    Health centers were established to provide access to quality 
preventive and primary health care for the medically underserved--
including the millions of Americans without health insurance, low 
income working families, members of minority groups, rural residents, 
homeless persons, agricultural farmworkers, and those living with HIV 
or with mental health needs. Since their inception, health centers have 
served as a prototype for effective public-private partnerships, 
demonstrating their ability to meet pressing local health needs while 
being held accountable for meeting national performance standards. The 
success of the Health Centers program can be directly traced to the 
core elements found in Section 330 of the Public Health Service Act, 
its authorizing statute. These elements stipulate that each federally-
supported health center must:

 Be located in, and serve, a community that is designated as 
        ``medically underserved,'' thus ensuring the proper targeting 
        of federal resources on areas of greatest need;
 Make its services available to all residents of the community, 
        without regard to ability to pay, and to make those services 
        affordable by discounting charges for otherwise uncovered care 
        to low income families in accordance with family income;
 Provide comprehensive primary health care services, including 
        preventive care (such as regular check-ups and pap smears), 
        care for illness or injury, services which improve the 
        accessibility of care (such as transportation), and the 
        effectiveness of care (such as health/nutrition education);
 Be governed by a board of directors a majority of whose 
        members are active, registered patients of the health center, 
        thus ensuring that the center is responsive to the health care 
        needs of the community it serves.
    In 1996, the Congress consolidated four separate targeted primary 
care programs (Migrant Health, Health Care for the Homeless, Public 
Housing health centers, and Community Health Centers) under a single 
authority, extending the consolidated program for five years. The new 
authority also included a limited new provision to fund health center-
led networks and a new federal loan guarantee program. The consolidated 
Health Centers authority, at Section 330 of the Public Health Service 
Act, expires on September 30, 2001, and therefore requires 
reauthorization this year.
        proposed changes to section 330 health centers authority
1. Extension/reauthorization of Section 330 Health Centers authority 
        for at least 5 years, at not less than $1.344 billion for FY 
        2002 and ``such sums'' for all future years
Explanation
    President Bush has publicly unveiled a multi-year plan to double 
the number of people served by health centers. More than 60 percent of 
Members of Congress have endorsed a similar plan. The Congress began 
that effort by providing $1.169 billion for FY 2001 for Section 330, a 
$150 million (15 percent) increase from the previous year. This year, a 
funding increase of at least $175 million will be needed to sustain and 
continue that effort. Under this plan, more than 10 million Americans 
will gain access to health center services in thousands of communities 
across the country.
2. Restoration of facility construction, modernization, and expansion 
        as allowable uses of funds (both Planning/Development and 
        Operational grants)
Explanation
    Many health centers operate in facilities that desperately need 
renovation or modernization. In some cases, rapidly growing patient 
populations have strained the capacity of existing facilities--these 
facilities must be expanded. Other facilities are old, or inadequate 
for the efficient delivery of primary health care--these facilities 
must be modernized or replaced. A recent survey of health centers in 12 
states found that almost two-thirds of them currently need to upgrade, 
expand or replace their current facilities. Moreover, many needy 
communities are not yet served by health centers--new facilities will 
have to be built (or existing facilities modernized, expanded or 
replaced) in order to extend health center services there.
    However, most health centers have limited financial capacity to 
undertake needed facility improvements, expansions or new site 
development. Because health centers serve a large and growing uninsured 
patient base, operating margins are slim to non-existent for most 
health centers. That means that most health centers have only a very 
limited ability to support loans for their facility needs, and thus 
must rely on grants and charitable contributions. Yet, because they 
serve low-income individuals who generally cannot contribute 
significantly to capital campaigns, health centers have great 
difficulty raising charitable contributions.
    At the same time, construction costs have soared in the strong 
economy. As a result, the gap between what health centers can afford 
and the cost of capital projects is growing. Restoring the government's 
ability to make grants for capital projects is critical to enabling 
health centers to maintain, modernize and expand their current 
facilities--or to replace old facilities or build new ones--to meet the 
growing demand for their safety net services.
3. Enhancement of current Loan Guarantee authority in Section 330 to 
        cover facility loans
Explanation
    Health centers' capital needs could also be more successfully met 
by enhancing the current federal Loan Guarantee authority in Section 
330--which only permits the issuance of loan guarantees for managed 
care-related purposes--to include loan guarantees for facility 
construction, modernization, and expansion, and for acquisition of 
facilities and equipment. In 1997 and 1998, Congress earmarked, out of 
appropriations made for Section 330, a total of $14 million for loan 
guarantees to 330-funded health centers, both for managed care purposes 
authorized under Section 330 and for capital purposes as authorized 
under Title XVI of the PHS Act (although Title XVI continues to exist 
in the PHS Act, Congress has not directly appropriated funding for 
Title XVI programs in years). Enhancing the current Loan Guarantee 
authority to cover facility loans would be consistent with 
Congressional intent to provide capital loan guarantees for health 
centers without having to appropriate funds against an otherwise 
dormant legislative authority, and would also permit other improvements 
to address shortcomings in current loan guarantee policy, including:

 Allowing the guarantee to cover more than 80% (and up to 100%) 
        of the outstanding principal amount would allow lenders to 
        price the loans at significantly lower interest rates by 
        reducing the risk to them. Currently, OMB has determined that 
        the federal loan guarantee for facilities can cover only 80% of 
        the outstanding loan amount provided by a lender. Financial 
        experts have stated clearly that partial guarantees are not 
        sufficient to leverage capital at below-market interest rates, 
        because lenders still perceive significant risk in these loans 
        and fear that, in the event of default, they may not be able to 
        collect even a small amount of the unsecured debt they 
        financed.
 Refinancing of existing loans is currently not an eligible use 
        for loan guarantee funds. If the refinancing results in 
        significantly lower interest rates, the savings would benefit 
        both the health center and the government. In addition, some 
        health centers that have experienced financial difficulties are 
        not able to obtain loan renewals from lenders without 
        guarantees, severely limiting their use where they are most 
        needed.
 Permitting federal loan guarantees to be used with tax-exempt 
        debt financing mechanisms would allow health centers to access 
        the lowest cost capital available to nonprofit institutions, 
        benefiting both health centers and the government. Because the 
        interest income from tax-exempt bonds is exempt from federal 
        (and sometimes state) taxation, investors require lower returns 
        on their investments than would otherwise be the case for 
        taxable investments. That tax-savings would translate into 
        lower interest rates, allowing health centers to invest more of 
        their operating resources into programs and services for 
        vulnerable populations.
    In combination with the restored capital grant authority discussed 
above, a revised loan guarantee program would be more effective in 
meeting the pressing capital needs of health centers.
4. Clarification of funding authority for networks at least majority 
        controlled and, as applicable, at least majority owned by 
        health centers funded under Section 330
Explanation
    Health centers currently collaborate with each other, and with 
other community providers, in many different forms of networks and 
partnerships designed to improve access to and quality of care for 
their patients, especially uninsured patients. These include practice 
management networks, designed to improve quality through shared 
expertise (such as centralized pharmaceutical or laboratory services, 
clinical outcomes management, or joint management/ administrative 
services), to lower costs through shared services (such as unified 
financial or Management Information systems, or joint purchasing of 
services or supplies), or to improve access and availability of health 
care services provided by the health centers participating in the 
network. Most of these networks, once developed, need ongoing 
operational support to continue and further enhance their benefits. 
However, current law only authorizes support for the planning and 
development of managed care networks and plans. Expanding the types of 
health center-directed networks that can receive planning and 
development support, and allowing limited operational support for 
networks that are owned and/or controlled by Section 330-funded health 
centers, would substantially aid in achieving the health centers' 
mission and objectives.
5. Restoration of proportional funding allocation requirement for 
        Community, Migrant, Homeless, and Public Housing Health Centers
Explanation
    When four separate health center programs (Community, Migrant, 
Homeless, and Public Housing) were consolidated under a single Section 
330 authority in 1996, the law included a requirement for allocating 
funds appropriated under Section 330 for each of the consolidated 
programs in accordance with the proportion of total funding they each 
had received in FY 1996. Despite the fact that this statutory funding 
allocation requirement expired in 1998, BPHC has continued to adhere to 
the methodology in distributing overall Health Centers funding among 
the Community, Migrant, Homeless, and Public Housing health centers. 
Vulnerable populations have benefited from BPHC's actions, and would be 
best served by restoring the original funding allocation methodology to 
the overall statute, thus ensuring the continued distribution of 
Section 330 funds to key underserved populations such as farmworkers, 
homeless persons, and public housing residents.
6. Clarification of eligible populations under Migrant and Homeless 
        Health Center sub-authorities
Explanation
    During consolidation of the health center authorities in 1996, 
coverage for formerly homeless individuals during the first 12 months 
following their transition to permanent housing was inadvertently 
dropped. Also, current authority fails to specify homeless youth as 
eligible for services, even though they remain a key homeless 
population. In addition, current law fails to recognize as eligible for 
services many farmworkers who, due to changes in agricultural 
employment, migrate for employment purposes but remain in farm work all 
year. Clarifying the eligibility of farmworkers employed on a year-
round basis, as well as homeless youth and formerly homeless persons 
following their transition to permanent housing would ensure that the 
program remains appropriately targeted to the most vulnerable 
populations.
7. Clarification on provision of required services
Explanation
    Under Section 330, all federally-supported health centers are 
required to provide or arrange for certain key health and related 
services, including medical, diagnostic lab and radiology, 
pharmaceutical, preventive dental, and patient case management 
services. Centers may also furnish additional services if needed by 
their patient populations, if resources are available.
    Despite the statutory requirement, many health centers (especially 
newer centers and those serving rural communities) have not been 
adequately funded to support the provision of all required services. 
While this disparity has been reduced somewhat in recent years and may 
eventually be eliminated, and while the statutory requirement to 
provide comprehensive services remains a vital part of the health 
center model, clarification is needed to ensure that federally-
supported health centers are expected ``to the maximum extent 
practicable'' to provide all required services, subject to available 
resources (both federal grant and other resources).

    Mr. Bilirakis. Thank you very much, Ms. Benjamin.
    Mr. Brewton.

                   STATEMENT OF DAVID BREWTON

    Mr. Brewton. Chairman Bilirakis, Ranking Member Brown, and 
members of the committee, my name is David Brewton. I am 
Director of Development for the East Liberty Family Health Care 
Center, a faith-based community health center that has 
successfully provided quality, whole-person health care for 
residents of the city of Pittsburgh for nearly 20 years, 
without regard to ability to pay. While I have been employed by 
the Center for 5 years, my family and I have been patients 
there since literally the first day the Center opened in 1982, 
so I am well-acquainted with the quality, compassionate, and 
accessible care the Center provides each day to all who come.
    I want to thank you for the unwavering support this 
subcommittee has given our health center and our colleagues 
around the country in our work to care for the uninsured and 
underserved. I come in support of the National Association of 
Community Health Centers' position in regard to the extension, 
reauthorization and expansion of the Section 330 community 
health centers program and the National Health Service Corps.
    I want to emphasize today that we are a demonstration of 
how a faith-based health center can produce effective health 
outcomes for the underserved by combining the power of faith-
based care with the institutional strength that comes from full 
participation in the Section 330 health care centers program.
    Our Center was incorporated as a 501(c)(3) non-profit 
corporation in 1982. Our founding physician, Dr. David Hall, 
had a deep sense of calling to provide health care holistically 
for the poor in his hometown of Pittsburgh, and to do so as an 
expression of his conviction that true healing incorporates the 
physical, mental, emotional and spiritual dimensions of the 
human person. A local pastor shared his vision and so in 1982 
the Center opened up a small office in the basement of 
Eastminster Presbyterian Church in the heart of East Liberty.
    Today, the Center operates two much larger offices in the 
East End, and last year provided more than 27,000 patient 
encounters in home, office and hospital, without regard to 
ability to pay for more than 5,000 individuals. The Center now 
employs a staff of 760 with a budget of more than $3 million, 
and provides more than 10 distinct forms of outreach to the 
low-income community it serves to meet needs beyond the walls 
of its two welcoming, culturally sensitive offices.
    Faith-based and federally funded, we at the Center believe 
these two forces are a powerful combination to effectively 
serve everyone in our community: insured, uninsured, Medical 
Assistance, Medicare, homeless, and even those who are 
privately insured but want quality care with a difference.
    Here is the difference that our faith-based perspective 
makes: Our faith reminds us of the dignity in every human 
being, created in God's image, even perhaps especially those 
who do not share our particular religious values. That is why 
we are in an underserved community and why we never turn anyone 
away.
    Our faith provides a motivation that makes our 
practitioners stay with us longer than in most such demanding 
settings. In our 19-plus years, we have had four National 
Health Service Corps participants, all of whom are still 
serving at the Center today out of a sense of God's calling. So 
they develop relationships with their patients, most of whom 
have never had a primary care physician before, and were used 
to relying solely on strangers in emergency rooms for care. 
This relationship with a family doctor is something that most 
of us take for granted.
    Our faith perspective means that we offer prayer with every 
visit, and please, we do not force or require prayer, we simply 
offer it at the conclusion of each visit, gently and 
respectfully. Some patients decline, and we fully respect that 
decision. There is no pressure. Sometimes a patient from a 
different religious background, including Jewish and Muslim, 
will also ask for prayer, and we are careful to do so in a way 
that respects our similarities and differences.
    Finally, our faith-based perspective means that we have not 
just a compassion for people, but a passion for quality care. 
It should not surprise you then that we have been innovators 
and results-producers since our inception. Our Homebound 
Elderly Outreach Program has been named a ``Best Practice in 
Faith-based Health Care'' underwritten by the Bureau of Primary 
Health Care.
    A few years back, we documented 92 percent compliance with 
State immunization requirements for all patients through age 2, 
when the region's largest Medicaid HMO had a rate of just 62 
percent.
    We participate in research studies at Pittsburg's fine 
universities to help improve our patients' care. And we are on 
the cutting edge in some administrative areas, implementing a 
computerized medical records system, the bane of our 
practitioner's existence currently, which will, we trust, 
enable us to measure health outcomes. And we are a founding 
member of the nationally recognized integrated health care 
delivery system called the ``Coordinated Care Network'', or 
CCN, that is transforming the way managed care works in 
Pittsburgh for those on Medical Assistance and the uninsured. I 
would mention that this is a CAP-funded program.
    The CCN achieves its goal by recapturing savings generated 
by reduced hospital admissions because of primary care, and it 
enables us to put that money back into better wraparound 
preventative care for these high-cost users of the medical 
system in Pittsburgh. And to demonstrate these achievements I 
have included our annual and Health Care and Business Plans 
from our 330 proposal.
    Please be clear: our faith never, never leads us to exclude 
anyone, in fact, just the opposite, it compels us to be open to 
all. If we did exclude anyone, you would have a right to judge 
us harshly for we would not be supporting the goals that we all 
share, 100 percent access to care and zero disparities, which 
brings me to my second and final point.
    Here is the difference that Federal support makes. For our 
first 17 years, we relied solely on private charitable support 
to make up the difference between the cost of the care we 
provide and what our patients can pay. Most of that comes from 
church-going people--and, by the way, those folks continue 
today to provide well over $1 million per year to pay for the 
parts of care that no one else will. But in 1999, we were one 
of the top ten applicants in the country in a competitive 
cycle, and became a fullfledged CHC, and without this reliable, 
renewable support we could never have grown to meet the real 
needs in our community.
    Private support, while significant, is just not enough. 
Without CHC funding we couldn't have opened our second office 
in a more underserved community than our first. We couldn't 
have started our dental program, our addiction outreach 
program, or our important programs in obstetrics, gynecology 
and parent education. We couldn't have seen our annual visit 
more than double from just 12,000 in 1996 to 27,000 last year. 
And about now we would have been overrun and had to close our 
doors by the more than 1,000 new patients who were added to our 
rolls just this year because of Welfare Reform and 
Pennsylvania's Managed Care Initiative for those on Medical 
Assistance.
    Beyond that, we would like to say that the guidelines and 
regulations of the Community Health Center Program, while 
sometimes seeming to be onerous, are actually strong 
encouragements for us to be more accountable and more outcome-
oriented in all we do. It is often tempting to grumble about 
``the Rules'', but our view is this: If we are going to be 
faithful, we should see government standards as minimum 
standards and do our best to achieve or even exceed them.
    So, I urge you, therefore, to extend, reauthorize, and 
expand the vital 330 program and the National Health Service 
Corps to strengthen these programs in accordance with the 
proposed improvements of the National Association, and I have 
included these in my written statement.
    Thank you so much for the opportunity and honor to present 
my views here today.
    [The prepared statement of David Brewton follows:]
  Prepared Statement of David Brewton, Director of Development, East 
                   Liberty Family Health Care Center
    Chairman Bilirakis, Ranking Member Brown, and Members of the 
Subcommittee: My name is David Brewton, and I am Director of 
Development for the East Liberty Family Health Care Center, a faith-
based community health center that has successfully provided quality, 
whole-person health care for residents of the City of Pittsburgh for 
nearly twenty years, without regard to ability to pay. While I have 
been employed by the Center for five years, I and my family have been 
patients there since literally the first day the Center opened in 1982, 
so I am well acquainted with the quality, compassionate, and accessible 
care the Center provides every day to all who come.
    I want to thank you all for the unwavering support this 
Subcommittee has given our health center and our colleagues around the 
country in our work to care for the uninsured and underserved. I come 
in support of the National Association of Community Health Center's 
position in regard to the extension, reauthorization, and expansion of 
the Section 330 community health centers program and the National 
Health Service Corps (NHSC). The unique perspective that I wish to 
emphasize in my comments is that we are a demonstration of how a faith-
based health center can produce effective health outcomes for the 
underserved by combining the power of faith-based (or what we call 
``whole-person'') care with the institutional strength that comes from 
full participation in the section 330 health centers program.
    Our Center was incorporated as a 501(c)(3) non-profit corporation 
in 1982. Our founding physician, Dr. David Hall, had a deep sense of 
calling to provide health care wholistically for the poor in his 
hometown of Pittsburgh, and to do so as an expression of his conviction 
that true healing incorporates the physical, mental, emotional, and 
spiritual dimensions of the human person. The Rev. Douglas A. 
Dunderdale, Senior Pastor of Eastminster Presbyterian Church, had been 
praying for a health ministry out of his church, located in the heart 
of a severely medically-underserved community in Pittsburgh's East End. 
When the two came together, they knew that it was a confirmation of 
their visions, and in 1982, the Center opened up a small office in the 
basement of Eastminster Presbyterian Church. It is important to note 
that while a Presbyterian Church provided us our start, the Center is 
non-denominational, and an expression of ministry supported by persons 
of many different faiths who share a common sense of mission.
    Today, the East Liberty Family Health Care Center operates two 
offices in the East End, and last year provided more than 27,000 
patient encounters without regard to ability to pay for more than 5,000 
individuals. The Center employs a staff of 60 with a budget in excess 
of $3 million, and provides more than ten distinct forms of outreach to 
the low-income community it serves to meet needs beyond the walls of 
its two welcoming, culturally-sensitive offices.
    Faith-based and federally funded, we at the Center believe that 
these two forces are a powerful combination to effectively serve 
everyone in our community: the insured and the uninsured, those on 
Medical Assistance and Medicare, the homeless, and yes, even those who 
are privately insured but want quality care with a difference.1Here's 
the difference our faith-based perspective makes:

 It provides a value system with deep historical roots that 
        helps us to care not only for the physical, but all dimensions 
        of human existence. It reminds us of the dignity of every human 
        being, who is created in God's image--even, and perhaps, 
        especially, those who do not share our particular religious 
        values. That is why we are in an underserved community, and why 
        we never turn anyone away.
 It provides a motivation that makes our practitioners by and 
        large stay with us for longer than in most such demanding 
        settings. In our 19+ years, we have had four NHSC participants, 
        all of whom are still serving at the Center today out of a 
        sense of God's calling. (How's that for retention!) This 
        enables them to develop lasting relationships with their 
        patients, most of whom NEVER had a primary care physician 
        before, and were used to relying solely on strangers at 
        emergency rooms for care. Because of this spiritually motivated 
        commitment, our ``poor'' patients develop the kind of lasting 
        relationships with their own family doctors at the Center that 
        most of us take for granted.
 It means we spend time--lots of it--with each patient to get 
        to know the whole person, even when insurance and federal 
        subsidy won't pay for that time. This is why one patient spoke 
        for many when she said recently: ``When I'm with Dr. Hall, I 
        feel like I'm his only patient.''
 It means we offer prayer with every visit--and please note--we 
        do not force or require prayer, we simply offer it at the 
        conclusion of each visit, gently, and respectfully. Some 
        patients decline, and we fully respect their decision. There is 
        no pressure. Others specifically request it and will testify 
        that it is the primary reason they come to us for care (never 
        mind that we employ 11 outstanding board certified physicians 
        with years of experience and from some of the best medical 
        schools in the country). Sometimes, our patients from different 
        religious backgrounds, including Jewish and Muslim, will also 
        ask for prayer, and we are careful to do so in a way that 
        respects our similarities and differences.
    Finally, it means that we have not just a compassion for people, 
but a passion for quality care. Our faith motivates us to provide the 
best care we can and to strive to measure the results. So, it should 
not surprise you that we have been innovators and results-producers 
since our inception: All of our physicians are Board certified. Our 
founder has received numerous awards in the community for community 
outreach. Our Homebound Elderly Outreach Program has been named a 
``Best Practice in Faith-based Health Care'' in a national competition, 
underwritten by the Bureau of Primary Health Care (BPHC). A few years 
back, we documented 92% compliance with State immunization requirements 
for all our patients through age 2, when the region's largest Medicaid 
HMO had a rate of 62%. We participate in research studies at 
Pittsburgh's fine universities to help improve our patients' care. And, 
we are on the cutting edge in some administrative areas, implementing a 
computerized medical records system to measure outcomes among our 
populations, and being the founding member agency of a nationally-
recognized integrated healthcare delivery system (the ``Coordinated 
Care Network,'' or CCN) that is transforming the way managed care works 
for those on Medical Assistance and the uninsured. Simultaneously, the 
CCN is re-capturing the savings generated to provide even better wrap-
around, preventive care for these high cost users of the medical system 
in Pittsburgh. (To demonstrate our achievements, I have included as 
Attachments A and B of my statement our 2000 Annual Report and our 
Health Care and Business Plans.)
    Please be clear: our faith NEVER leads us to exclude anyone, in 
fact, just the opposite: It compels us to be open to all. Period. If we 
did exclude folks, you would have a right to judge us harshly, for we 
would not be supporting the goals of the community health center 
program which we all share: 100% access to care and zero health 
disparities.
    Which brings me to my second and final point. Here's the difference 
federal support makes:
    For our first 17 years, we relied solely on private charitable 
support to make up the difference between the cost of the care we 
provide and what our patients can pay. Most of it comes from church-
going people, by the way, who continue today to provide well over $1 
million per year to pay for those parts of the care we provide that no 
one else can or will.
    But in 1999, we were one of the top ten applicants for health 
center funding in a very competitive cycle, and so became a full-
fledged CHC. Without this reliable, accountable, and renewable support, 
we never could have grown to meet the real needs in our community. 
Private support--while significant--is simply not enough!
    Without CHC funding, we couldn't have opened our second office in 
the even more underserved community of Lincoln-Lemington, two miles 
from our home office. We couldn't have started a dental program, our 
addiction outreach program, or our important programs in ob/gynecology 
and parent education. We couldn't have seen our annual visits more than 
double from 12,000 in 1996 to more than 27,000 in the year 2000. And 
about now, we would have been overrun and had to close our doors to the 
more than 1,000 new patients who were added to our rolls just this 
year, because of welfare reform and PA's managed care initiative for 
those on Medical Assistance.
    Beyond that, we would like to say that the guidelines and 
regulations of the community health center program, while sometimes 
seeming(!) to be onerous, are actually strong encouragements for us to 
be more accountable and more outcome-oriented in all we do. It is often 
tempting to grumble about regulations and standards, but our view is 
this: if we are going to be faithful to our God, we should see 
government standards as MINIMUM standards, and do our best to achieve 
or even exceed them.
    Through our participation in the CHC program, we have had the 
opportunity to pursue JCAHO accreditation (we hope to complete this 
process in the next year or two), to participate in collaboratives with 
other groups around specific issues to improve our handling of high-
incidence diseases such as diabetes and hypertension, and just the 
accountability that comes through knowing that we are responsible for 
meeting the goals we set for ourselves in our annual federal review 
process.
    Are there areas of tension in this alliance of faith and government 
funding? Undoubtedly. But as long as we focus on our common objective 
(100% access, 0 disparities); and recognize that both church and state 
have a role in the promotion of the public good, and are clear about 
the distinctions of those roles, we believe that we are a forthright 
demonstration of how the two can work together in integrity and 
accountability.
    I urge you to extend, reauthorize, and expand the vital Section 330 
Health Centers and the National Health Service Corps programs, and to 
strengthen these programs in accordance with the proposed improvements 
of the National Association of Community Health Centers. I have 
included these proposals as Attachment C of my statement.
    Thank you again for the opportunity to present my views here today. 
I would be pleased to answer any questions you may have.

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

    Mr. Bilirakis. Thank you so much, Mr. Brewton, that is 
quite a story.
    Mr. Singer, please proceed, sir.

                    STATEMENT OF JEFF SINGER

    Mr. Singer. Mr. Chairman, ranking member, members of the 
audience, my name is Jeff Singer. I am the President and CEO of 
Health Care for the Homeless of Maryland. I am also here as the 
Policy Chair of the National Health Care for the Homeless 
Council, and I am joined by our distinguished Executive 
Director, Mr. John Lozier, as well as our Health Policy 
Analyst, Bob Reed, who has done an enormous amount of work on 
these reauthorization issues, and we thank Bob for that.
    I am also here representing some folks who couldn't be 
here. Willie, the merchant seaman, who is bound to his 
wheelchair by a head injury, and spent the last winter on the 
streets of Baltimore in that wheelchair because there is no 
shelter that is handicapped-accessible; Harold, the coalminer 
from West Virginia, who had been sleeping in an abandoned 
Merdeces Benz, wrapped only in his depression and his 
alcoholism; John, Mary, and their daughter, Dreesen, stranded 
in Baltimore when their car broke down on their way from their 
old home in Oklahoma to their new job in Connecticut, without 
the money for health insurance, their savings eaten away by a 
motel.
    Homelessness is harmful to people's health. It causes 
health problems--the infections on Willie's back from being in 
the wheelchair 24-hours-a-day. It exacerbates health problems--
Harold's cold turned into pneumonia, sleeping in a car in the 
winter. And it complicates treatment. Where does the homeless 
person with diabetes store her insulin and syringes?
    Fortunately, there is an effective Federal program to 
address this program, and that is the Health Care for the 
Homeless Program, one of the four Community Health Center 
programs run by the Bureau of Primary Health Care. It provides 
the resources to 137 Health Care for the Homeless Programs in 
every State, in the District of Columbia, and in Puerto Rico, 
to provide a comprehensive array of services enabling us to go 
out on the streets, to get people off of the streets, and back 
into the mainstream.
    These 137 programs last year served 500,000 different 
people. Unfortunately, that is only about a seventh of our 
friends, neighbors and relatives who are experiencing 
homelessness, and yet we provide very significant services. 
Sixty percent of the people we see are men, and men tend to be 
uninsured at higher rates than women and, in fact, 73 percent 
of the people served were uninsured. Sixty percent were members 
of minorities, and 15 percent were actually children.
    This is an effective program, and it is a program that, in 
part, is represented by the National Health Care for the 
Homeless Council. The Council is a membership organization. It 
provides technical assistance in education to homeless health 
care providers around the Nation, but it also is interested in 
public policy. We recently heard the Secretary of the 
Department of Housing and Urban Development, Secretary 
Martinez, say, ``After $10 billion spent on homeless services, 
why does homelessness persist?'' It is a very important 
question and, in fact, it has a relatively simple answer. Until 
all Americans have the right to health insurance and adequate 
health care, until we have a sufficient supply of affordable 
housing, and until incomes permit people to live with dignity, 
whether people are working and earning a living wage, or 
disabled and receiving disability assistance that permits them 
to purchase housing, until these things happen, homelessness 
will persist. But until they happen, we are very happy to have 
a Health Care for the Homeless program that reaches out to 
people who need help.
    In Maryland last year, we served 9,000 different people. We 
had 45,000 patient encounters. In the 16 years in which we have 
been in operation, we have assisted more than 70,000 different 
people. We provide comprehensive care--that includes medical 
care, mental health services, we are a certified outpatient 
addiction treatment center, and social work services as well. 
We are the first independent Health Care for the Homeless 
program to be certified by JCAHO, the Joint Commission on the 
Accreditation of Health Care Organizations, so we try to meet 
the highest quality standards, but it is a very difficult 
challenge. It is difficult in part because the costs keep 
rising. We pay 30 percent more for prescriptions this year than 
we did last year, and we haven't heard of any prescription 
initiatives in Congress this year that will address our problem 
because it is not people who are elderly, it is ordinary 
Americans.
    The nursing shortage has affected us. We have lost five 
nurses this year to hospitals because they pay a lot more money 
than we can. But these challenges can be met with your help.
    We are very supportive of the reauthorization of the 
program at the highest level as possible. There are particular 
issues that we call to your attention. One is to maintain the 
proportionality of the distribution of funds. Health Care for 
the Homeless programs receive 8.6 percent of the Community 
Health Center funds, and we would like to keep it that way, and 
there is universal support for that.
    We would also like to be able to serve people who have been 
housed for 12 months after they have left the streets. We used 
to be able to do that, but the reauthorization in 1996 
eliminated that capacity and we would like to have it again. 
And we would like to expand the definition of addiction 
programs to include the outpatient treatment that most of us 
can provide. And we would like to be sure that youth are 
included as a target population.
    I thank you very much for your assistance. The stories I 
told you in the beginning all had good endings. Willie is now 
in a wheelchair and we delivered a television to him the other 
day. Harold, after 5 years we were able to get him Medicaid and 
SSI. He had an apartment. He listened to his country music and 
ate his scrapple and cleaned up the florist shop around the 
corner. And John and Mary, their daughter recovered. John found 
a job and, in fact, he became a Legislative Aide to Congressman 
Elijah Cummings of Maryland's 7th District. We can make a 
difference and, with your help, we will. Thank you.
    [The prepared statement of Jeff Singer follows:]
Prepared Statement of The National Health Care for the Homeless Council
                              introduction
    The National Health Care for the Homeless Council (the National 
Council) is a membership organization comprised of health care 
professionals and agencies that serve homeless people in communities 
across America. The National Council works to improve the delivery of 
care to people experiencing homelessness, and to reduce the necessity 
for dedicated health care for the homeless programs by addressing the 
root causes of homelessness. Our organizational members receive funds 
through the federal Health Care for the Homeless (HCH) Program. The HCH 
program is part of the Consolidated Health Centers account of the 
Health Resources and Services Administration (HRSA), U.S. Department of 
Health and Human Services.
    Our statement covers the following points:

 explanation of the intersection of health and homelessness;
 review of the success of the federal government's primary 
        policy response to the immediate health services needs of 
        people experiencing homelessness--the HCH program;
 discussion of the challenges facing HCH projects, including 
        increasing demand and decreasing services;
 recommendations for reauthorizing and strengthening the HCH 
        program;
 recommendations for reauthorizing and strengthening the 
        Community Health Center (CHC) program;
 recommendations for reauthorizing and strengthening the 
        National Health Service Corps (NHSC) program; and
 comments on the Community Access Program (CAP).
    Before we begin, the National Council expresses its profound regret 
that there is still a need for discussion in this day and age about 
health care access barriers facing poor people and people without 
insurance. It is tragic that our nation continues to fail to guarantee 
access to health insurance as a fundamental right for every American. 
Ultimately, Americans' health care access challenges, including those 
facing people without stable housing, must be redressed through a 
universal health care system. We favor a single-payer mechanism.
    Yet even universal health insurance would not preclude the need for 
HCH projects. The abdication of public responsibility for affordable 
housing is a two-decade long tragedy that is the fundamental factor 
perpetuating homelessness. Until our nation invests in a housing stock 
sufficient for and affordable to all of our neighbors, the economic, 
social, and human costs of homelessness will mount.
                        health and homelessness
    Poor health and lack of access to health care are among the causes 
of homelessness. For people struggling to pay for housing and other 
needs of daily living, the onset of a serious illness or disability can 
easily result in homelessness following the depletion of financial 
resources.
    Homelessness is a health hazard. The experience of homelessness 
causes poor health, exacerbates existing illness, and seriously 
complicates treatment. Conditions such as frostbite, leg ulcers, and 
respiratory infections are a direct result of living on the street. 
Homelessness precludes good nutrition, good personal hygiene, and basic 
first aid. People without a regular place to stay are also at great 
risk of emotional trauma due to familial estrangement, multiple losses, 
and the chaos of an itinerant lifestyle. Children and youth are 
particularly affected by the chaos of homelessness with greater risk of 
childhood depression, malnutrition, immunization delay, repeated 
infections, developmental delay, and discontinuity of school/learning 
experiences. People without a regular place to stay are also at greater 
risk of physical and emotional trauma resulting from muggings, 
beatings, and rape. Conditions that require regular, uninterrupted 
treatment, such as tuberculosis, HIV, diabetes, hypertension, 
addiction, mental illness, and pregnancy are extremely difficult to 
treat or manage in the absence of a stable residence.
    The consequences of restricted access to comprehensive health care 
are reflected in extremely high rates of both chronic and acute health 
problems among people experiencing homelessness. The Institute of 
Medicine has determined that those without a regular place to stay are 
far more likely to suffer from most categories of chronic health 
problems in comparison to the general population.1 Research 
also demonstrates that the cost of acute care for people experiencing 
homelessness is significantly higher than for the general 
population.2
---------------------------------------------------------------------------
    \1\ Institute of Medicine. ``Homelessness, Health and Human 
Needs.'' 1988.
    \2\ National Health Care for the Homeless Council. ``Utilization 
and Cost of Medical Services by Homeless Persons: A Review of the 
Literature and Implications for the Future.'' April 1999.
---------------------------------------------------------------------------
    Access to appropriate treatment and care is hindered dramatically 
by a lack of a national health care system. National data gathered by 
the HCH program 3 reveals that 73 percent of HCH patients 
have no source of health insurance. Inaccessible public transportation, 
inflexible clinic hours, fees and payments, and residency and 
documentation requirements may also present barriers to health care.
---------------------------------------------------------------------------
    \3\ U.S. Department of Health and Human Services, Health Resources 
and Services Administration, Bureau of Primary Health Care, Uniform 
Data System (UDS) Report for Fiscal Year 1999.
---------------------------------------------------------------------------
                  health care for the homeless program
Origins and Current Status
    The first federal response to the crisis of homelessness was the 
passage of the Stewart B. McKinney Homeless Assistance Act of 1987. 
Recognizing that homelessness restricts access to mainstream health 
care services, Congress established through the McKinney Act a health 
services program specifically designed to circumvent these barriers--
Health Care for the Homeless (HCH). The federal program extended the 
success of an earlier Robert Wood Johnson/Pew Charitable Trusts 
program, which demonstrated that health care services specifically 
targeted to people experiencing homelessness could dramatically improve 
access to care for this vulnerable population.
    Congress last reauthorized the HCH program in 1996 via the Health 
Centers Consolidation Act. That law consolidated community health 
centers, migrant health centers, public housing primary care centers, 
and HCH projects under a single, five-year authorization, but retained 
each of the four programs as a distinct activity. Authorization of the 
consolidated health centers account expires in September 2001.
Program Summary
    The HCH program (Section 330(h) of the Public Health Service Act 
[PHSA]) makes grants to community-based organizations (referred to as 
``projects'' or ``grantees'') in order to assist them in planning and 
delivering high-quality, accessible health care to people experiencing 
homelessness. HCH projects assure access to primary care and related 
services through integrated systems of care. Projects provide primary 
health, mental health, addiction, and social services with intensive 
outreach and case management to link clients with appropriate services.
    Formal evaluations of the HCH program, including a 1995 evaluation 
conducted for the Department of Health and Human Services, indicate 
that the projects are meeting the health care and support service needs 
of people experiencing homelessness--at levels that are unprecedented 
in the mainstream indigent health care and public health insurance 
systems.
Eligible Population
    Projects are required to use their HCH funds to serve people 
experiencing homelessness, who are defined in the PHSA as ``an 
individual who lacks housing (without regard to whether the individual 
is a member of a family), including an individual whose primary 
residence during the night is a supervised public or private facility 
that provides temporary living accommodations and an individual who is 
a resident in transitional housing.''
    In 1999, HCH projects served nearly 500,000 patients. 59 percent of 
patients were male; 41 percent female. 60 percent were people of color. 
15 percent were children and youth under age 19.
Eligible Projects
    HCH projects are initiated, designed, and managed at the community 
level. Any local public or private, nonprofit entity is eligible to 
apply for HCH funds, including freestanding nonprofit community-based 
and faith-based organizations, community health centers, hospitals, 
local health departments, shelters, and homeless coalitions.
    The HCH program currently funds 137 grantees in all states, the 
District of Columbia, and Puerto Rico. 50 percent of projects are 
sponsored by community health centers. Public health departments 
sponsor 19 percent. 25 percent are sponsored by private, nonprofit 
organizations, and the remaining six percent are sponsored by 
hospitals.
Required Services
    HCH projects, like other health centers, are required to provide 
the following health and enabling services:

 basic health services related to family medicine, internal 
        medicine, pediatrics, obstetrics, and gynecology;
 diagnostic laboratory and radiologic services;
 preventive health services, including prenatal and perinatal 
        screening; screening for breast and cervical cancer; well child 
        services; immunizations against vaccine-preventable diseases; 
        screenings for elevated blood lead levels, communicable 
        diseases, and cholesterol; pediatric eye, ear, and dental 
        screenings to determine the need for vision and hearing 
        correction and dental care; voluntary family planning services; 
        and preventive dental services;
 emergency medical services;
 pharmaceutical services;
 referrals to providers of medical services and other health-
        related services;
 patient case management services (including counseling, 
        referral and follow-up) and other services designed to assist 
        health center patients in establishing eligibility for and 
        gaining access to Federal, State, and local programs that 
        provide or financially support the provision of medical, 
        social, educational, or other related services;
 services that enable individuals to use the services of the 
        health center (including outreach, transportation, and 
        translation);
 education of patients and the general population served by the 
        health center regarding the availability and proper use of 
        health services; and,
 addiction services.4
---------------------------------------------------------------------------
    \4\ This required service is unique to HCH projects. Other health 
centers are not required to provide addiction services.
---------------------------------------------------------------------------
    In addition, most HCH projects surpass this scope of services. For 
example, many HCH projects offer mental health services to their 
patients. Others have secured resources from other federal programs, 
state and local government, and the nonprofit and private sectors to 
develop housing for their patients.
Service Delivery Locations
    HCH service delivery sites vary by project, but include fixed-site 
health clinics, services provided at homeless shelters and soup 
kitchens, mobile medical units, and street outreach teams. Services are 
provided either directly, by contract with other organizations, or by 
referral to another organization.
Award Process
    HCH funds, like funds for other health center programs, are 
distributed via a competitive award process. Applications for HCH funds 
are reviewed by an independent expert panel consisting of HRSA staff 
and outside experts. The applicant must:

 describe the target population;
 demonstrate the target population's health services need;
 outline a plan to provide the health services required by the 
        Consolidated Health Centers law; and,
 agree to a number of requirements that are a condition for 
        receiving funds.
    Those conditions include:

 establishing a governance body that includes significant 
        participation from consumers of the health services offered by 
        the project, including people who are experiencing or who have 
        experienced homelessness;
 making the statutorily-required primary health services 
        available and accessible promptly, as appropriate, and in a 
        manner which assures continuity;
 establishing and maintaining relationships with other health 
        care providers;
 developing an ongoing relationship with at least one hospital;
 having an arrangement with the State Medicaid agency to be 
        reimbursed for health services provided to Medicaid 
        beneficiaries;
 making every reasonable effort to collect appropriate 
        reimbursement for health services provided to people entitled 
        to public or private health insurance;
 establishing a schedule of fees or payments for the provision 
        of services and a schedule of discounts based on a 
        participant's ability to pay;
 having an ongoing quality improvement system; and
 developing a plan, budget, and data collection system.
Appropriations
    In FY 2001, Congress appropriated $1.169 billion for the 
consolidated health center account, which amounted to $100 million for 
the HCH program.5
---------------------------------------------------------------------------
    \5\ The HCH program customarily receives 8.6 percent of the total 
consolidated health center appropriation, consistent with the portion 
allocated to it by Congress in the first year of authorization in the 
Consolidated Health Centers Act
---------------------------------------------------------------------------
                     challenges facing hch projects
    The fundamental challenge facing HCH projects--as well as all 
health centers and other health care safety net providers--is one of 
insufficient resources to sustain and expand services to people with 
limited or no means to pay for health care.
    The failure to appropriately invest in the nation's health care 
safety net prevents HCH projects from fully responding to the following 
dynamics among and needs of people without stable housing.
    Increasing Homelessness--As an increasing number of people have 
incomes that fall below federal poverty guidelines and find themselves 
living with friends, relatives, in shelters and the streets, more 
people are seeking services from HCH projects. Among the new patients 
of HCH services are families with children exiting the welfare system, 
people with disabling addictions who have been denied access to 
Medicaid and Supplemental Security Income, ``working poor'' individuals 
whose earnings are insufficient to afford housing or health insurance, 
emancipated and unaccompanied youth, and veterans unable to obtain 
Department of Veterans Affairs health services. HCH projects do not 
receive sufficient funds to adequately serve their current caseloads, 
much less address the increased demand for services from these emerging 
homeless subpopulations.
    Financial Distress of HCH Projects--Many HCH projects report 
decreasing revenues, especially from Medicaid. The enrollment of 
Medicaid beneficiaries in managed care organizations has resulted in a 
dramatic decrease not in the number of Medicaid beneficiaries served by 
HCH providers, but in the reimbursements received from Medicaid. 
Consequently, HCH projects have been forced to use federal grant and 
other funds now designated for services to uninsured patients to 
balance the cost of care for Medicaid patients, thereby reducing or 
eliminating services for patients who lack health insurance. HCH 
projects do not receive sufficient funds to adequately serve both their 
Medicaid and uninsured patients.
    Untreated Addiction and Mental Illness--HCH projects are required 
by statute to provide access to addiction services. Many also provide 
mental health services. Regrettably, inadequate funding levels have 
prevented many projects from providing such services at more than an 
elemental level, even though projects report that that addictions and 
mental illnesses are among the most prevalent diagnoses of their 
patients. Mainstream addiction and mental health services programs are 
also underfunded and oversubscribed, and are also not designed 
appropriately for people in homeless situations, further restraining 
willing homeless patients from accessing treatment for these chronic 
conditions. HCH projects do not receive sufficient funds to adequately 
meet their patients' comprehensive health services needs.
    Lack of Supervised Medical Care for People in Recuperation--In the 
absence of a safe place in which to recuperate from illness, medical 
interventions often prove ineffective for people experiencing 
homelessness. The unavailability of appropriate accommodations for 
those requiring supervised medical care, but not ill enough to remain 
hospitalized, makes it difficult for individuals to recover from 
illness and resolve their homelessness. Several HCH projects have 
pioneered responses to this service gap in the form of medically-
supervised ``recuperative care.'' HCH projects do not receive 
sufficient funds to develop or expand recuperative care arrangements 
for patients in desperate need of such services. In most communities, 
there is no other source of funding to pay for recuperative care 
services to people experiencing homelessness.
    reauthorize and strengthen health care for the homeless program
    The HCH program, the statutory authority of which expires September 
30, 2001, is still needed to ensure access to health services for 
people experiencing homelessness. We urge Congress and the 
Administration to reauthorize HCH for a five-year period as a distinct 
program within the Consolidated Health Centers account.
    In addition, we urge Congress and the Administration to amend the 
HCH statute as follows:

 Establish an authorization level of at least $172 million in 
        FY 2002 as part of a $2 billion FY 2002 authorization level for 
        the Consolidated Health Centers account.
 Maintain current distribution of Consolidated Health Centers 
        appropriations among component programs within the account.
 Restore ability of HCH grantees to temporarily continue to 
        provide services to their formerly homeless patients.
 Expand range of addiction services that HCH grantees may 
        provide to include harm reduction, outpatient treatment, 
        complementary modalities, and rehabilitation, in addition to 
        detoxification and residential treatment.
 Explicitly identify homeless youth as an eligible target 
        subpopulation for innovative homeless children outreach and 
        comprehensive primary health services grants.
       reauthorize and strengthen community health center program
    Mainstream indigent health care programs have historically 
underserved the homeless population. Congress recognized this reality 
and established the HCH program. Due to funding limitations, however, 
the HCH program is able to serve only about \1/7\ of the population 
estimated to experience homelessness each year. Consequently, a 
majority of people experiencing homelessness relies on mainstream 
indigent health care providers, including community health centers, for 
their health care.
    Just as they do in other mainstream indigent health care systems, 
people experiencing homelessness face multiple challenges in accessing 
and utilizing community health centers. For example, the General 
Accounting Office, in a 2000 report (Homelessness: Barriers to Using 
Mainstream Programs, GAO/RCED-00-184), found that community health 
centers: 1) may not be organized to make some of the special 
accommodations homeless people may require, such as walk-in 
appointments; 2) may not thoroughly address other needs that are 
inextricably linked to a patient's health care needs, such as housing, 
food, clothing, and other services; 3) do not tend to outstation health 
services at locations and settings where homeless people congregate. 
Denials of or delays in service based on inability to pay have also 
been reported.
    To redress the barriers that people experiencing homelessness are 
facing in accessing and using community health center services, we urge 
Congress and the Administration to amend the health centers statute as 
follows:

 Require community health centers to develop outreach and 
        services plans for the homeless population to ensure that 
        community health centers factor the complex medical and social 
        needs of people experiencing homelessness into their service 
        system design and implementation in anticipation of the 
        inevitability that people without housing will be seeking care 
        from them.
 Ensure access to health center services regardless of ability 
        to pay by codifying in statute the long-standing principle that 
        health center services are to be available to patients 
        regardless of their ability to pay and by restoring provisions 
        of prior law that assured that extremely poor people would not 
        have fees or payments imposed on them.
 Ensure that health centers provide assistance in obtaining 
        housing in parity with current law requirements that they 
        assist their patients in obtaining other public benefits (e.g., 
        Medicaid, Food Stamps).
 Add addiction and mental health services as optional 
        additional services to encourage all health centers to expand 
        their scope of services to include treatment for these chronic 
        conditions to the extent practicable.
 Add recuperative care as an optional additional service to 
        encourage all health centers to expand their scope of services 
        to include this service to the extent practicable.
    reauthorize and strengthen national health service corps program
    The National Health Service Corps (NHSC) program, the statutory 
authority of which has expired, is still needed to ensure that Health 
Care for the Homeless projects and other safety net providers are able 
to recruit and retain the health services professionals necessary to 
operate their programs. We urge Congress and the Administration to 
reauthorize the NHSC for a five-year period.
    In addition, we urge Congress and the Administration to amend the 
NHSC statute as follows:

 Establish an authorization level of at least $232 million in 
        FY 2002 for NHSC.
 Automatically designate all federally-qualified health 
        centers, including Health Care for the Homeless projects, as 
        Health Professional Shortage Area facilities for placement of 
        Corps personnel.
 Ensure access to health services provided by NHSC 
        professionals regardless of the patient's ability to pay by 
        codifying in statute that services provided by entities with 
        NHSC placements and NHSC private practice option placements are 
        to be available to patients regardless of their ability to pay 
        and by waiving or reducing charges for people who are unable to 
        pay.
              recommendations on community access program
    Health Care for the Homeless projects share the common belief among 
health care safety net providers and public officials that patients 
derive improved health and other benefits and that the health care 
safety net system operates more efficiently when collaboration occurs 
among disparate providers serving the same people. As the principal 
health care safety net providers to people with the most complex and 
interrelated medical and social conditions possible, HCH projects have 
had to foster collaboration among health, housing, and support service 
providers in their communities. For HCH projects, collaboration and 
linkages are intuitive processes.
    The National Council has neither supports nor opposes authorization 
of the Community Access Program or equivalent initiatives. Our members' 
views on this topic differ. Some HCH projects believe that new federal 
safety net health care resources should be directed to the support of 
services rather than to interactive functions. Other HCH projects have 
reported positive collaborative experiences that are occurring in their 
communities as a result of CAP projects.
    Should Congress choose to authorize CAP or an equivalent health 
care safety net collaboration program, we recommend that the following 
principles guide the program's development.
     The program should facilitate improved and expanded access 
to a full range of health and support services for all people without 
health insurance, with a focus on those hardest to ensure or hardest to 
serve.
     Funds should be directed to health and support service 
access improvement and expansion rather than to the establishment of 
planning and collaboration infrastructure.
     Applicants should be permitted to propose population-
focused projects (e.g., improving access to targeted, 
disproportionately affected and historically underserved groups, such 
as homeless, migrant, or youth) as well as geography-based projects 
(e.g., improving access to all people in a given service area).
     Funds should be permitted for both individual level and 
system level service interventions. Examples of individual level 
interventions include outreach and engagement, public health insurance 
assistance and advocacy, patient case management, and direct payment 
for services. Examples of system level interventions include system 
integration, care coordination, and patient record exchange.
     Grantees should be the community-based primary health 
provider or network of providers that is most closely connected to the 
intended beneficiaries. Primary health providers are the most 
appropriate, and most common, gateways to other health and support 
services. They are also key players in treating patients and addressing 
their basic health needs before they present at emergency and specialty 
care providers.
     As a condition for receiving funds, grantees should be 
expected to demonstrate collaboration with other health care safety net 
providers in the community, such as community, migrant, homeless, and 
public housing health centers, public and charitable hospitals, local 
public health departments with service delivery components, free 
clinics, academic health centers providing uncompensated care, 
addiction service providers, mental health service providers, HIV/AIDS 
service providers, and family planning clinics.
     The scope of health systems, programs, and providers that 
should be involved in community collaboration include primary, 
addiction, mental, HIV/AIDS, maternal and child, oral, vision, 
emergency, and other secondary and tertiary health services.
     Community collaborations resulting from the initiative 
should include support systems, programs, and providers (such as 
housing providers) that are essential to the effective delivery of 
health services to intended beneficiaries.
     Representatives of intended beneficiaries should be 
involved at the community level in need identification, project design, 
and implementation monitoring.

    Mr. Bilirakis. Thank you, Mr. Singer.
    Ms. Monson.

                 STATEMENT OF HON. ANGELA MONSON

    Ms. Monson. Good morning, Mr. Chairman, Mr. Brown and other 
distinguished members of the committee. I am very happy to be 
here with you again today, and I promise I won't have to leave 
early. I will be here as long as you need me today, Mr. Chair.
    My name is Angela Monson. I am a member of the State Senate 
in Oklahoma where I chair the Senate Finance Committee. I have 
the pleasure today of representing the National Conference of 
State Legislatures, where I serve as Vice President, soon to be 
President-elect, in 1 year President of that great 
organization. I also have the privilege of serving as Chair of 
the National Advisory Council to the National Health Service 
Corps. And I also want to note that I got my start in health 
care policy as a board member of the Mary Mahoney Community 
Health Center more than 20 years ago, in the eastern part of my 
Senate district, so I am very pleased to be here with you to 
talk about, I think, is one of the most important subjects 
facing the United States today, and that is health care, health 
care access, and why should the National Conference of State 
Legislatures pass a policy endorsing and encouraging and 
promoting the reauthorization of the National Health Service 
Corps, therefore, my remarks today will primarily be geared in 
that direction, but do know we support the continuation and 
expanded funding of the Community Health Centers.
    I have had the pleasure of supporting and authoring 
legislation in Oklahoma that has provided a substantial amount 
of money to our Community Health Centers, State money to our 
Community Health Centers.
    We realize that President Bush's proposal and the support 
received for the expansion of the number of Community Health 
Centers will be good, it will do good, but it will also place a 
greater burden on the need for clinicians in underserved areas. 
The National Health Service Corps stands ready to meet that 
need. It is important that we recognize that the value of the 
National Health Service Corps does extend beyond the value to 
those clinicians that receive an opportunity to serve and those 
individuals who receive health care services, but truly impact 
the true nature of communities. The substantial change in 
communities as a result of these services provided truly last a 
lifetime.
    It is important also to recognize that the National Health 
Service Corps provides an opportunity to meet the culturally 
diverse needs in our communities. The Corps facilitates the 
placement of practitioners that look like the communities in 
which they serve. They provide the kind of cultural competency 
that is necessary to ensure that health status is improved.
    I would like to spend just a few minutes, however, making 
some comments on recommendations that focus on changes in ten 
National Health Service Corps that I think are important to 
improve the benefits of that program. First of all, increased 
funding. I think we all are aware that although the National 
Health Service Corps does a wonderful job in providing 
clinicians in underserved communities, there is a huge demand, 
a great need, that is unmet, and that need will only be met if 
we are able to increase the number of clinicians that are 
provided to these communities. That means additional dollars.
    The Loan Repayment Program is an excellent program. We are 
aware of the articles that were written last year about 
problems with clinicians in communities. That problem could 
have been addressed with additional revenue, with our ability 
to place more loan repayers.
    The Scholarship Program, which is an excellent program in 
terms of recruiting and retaining clinicians who otherwise 
would not be given the opportunity to enter into health care 
professions need additional revenue. There is a demand there 
that we cannot meet with the current funding levels.
    Two other areas I would like to mention, greater 
flexibility in the National Health Service Corps Program. 
Greater flexibility helps meet community needs. It helps 
communities identify what they really need, where those 
services must be provided, how those services should be 
provided, but flexibility, increased flexibility, is important 
so those particular community needs might be met.
    It is important also that we create flexibility in the 
program to meet the needs of participating providers to allow 
clinicians to serve in situations that require less than full-
time service. It is important that we also continue to look at 
necessary tax relief, particularly for the Loan Repayment 
Program.
    Thank you for addressing the issue in our Scholar Program 
last year, but it is also an issue that must be addressed in 
the program across the board.
    Let me simply summarize to you by encouraging you to 
continue to provide this kind of attention, this kind of 
guidance and leadership in the area of health care. States have 
entered into the arena of attempting to provide services and 
coverage for many uninsured and underinsured citizens. However, 
we cannot do it alone. It is a partnership. And as we continue 
to expand coverage opportunities, the need for clinicians for 
these underserved and uninsured populations will even become 
more evident.
    Let me encourage you that as you look at the CAP program 
and the National Health Service Corps and the Community Health 
Centers Programs and new initiatives to meet clinician needs 
the needs of communities, that we focus on coordination of 
programs. The need is great. Coordination of activities and 
policies is fundamental if we are going to create the kinds of 
efficiencies and revenue.
    Truly, the health of our country is dependent upon the 
actions taken in our State Legislatures and the actions taken 
by you. So, I encourage you to, for the health and well being 
of our country, to take the appropriate action. I thank you for 
listening today.
    [The prepared statement of Hon. Angela Monson follows:]
 Prepared Statement of Hon. Angela Monson, Oklahoma State Senate, Vice-
     President, NCSL on Behalf of the National Conference of State 
                              Legislatures
    Chairman Bilirakis and distinguished members of the subcommittee: 
My name is Angela Monson. I am a state senator in Oklahoma where I 
chair the Senate Finance Committee. I am the Vice-President of the 
National Conference of State Legislatures (NCSL) and also have the 
privilege of serving on the National Advisory Council of the National 
Health Service Corp (NHSC). It is a pleasure to be here today on behalf 
of NCSL to talk about reauthorizing the National Health Service Corps.
    Last year NCSL adopted policy urging you to make the 
reauthorization of the NHSC a priority. The support for this program is 
broad, uniting state legislators across urban/rural and racial/ethnic 
lines. I am particularly pleased to be a part of the effort to move 
this important reauthorization forward.
    The reauthorization of the NHSC is even more important this year. 
President Bush's proposal to expand the number of Community Health 
Centers will create an even greater need for clinicians to serve in 
underserved areas. Just last month a provision that excludes from gross 
income certain amounts received under the NHSC Scholarship Program was 
enacted as part of the tax relief package. This benefit is an added 
incentive to program participation.
    The NHSC will be a valuable partner in the effort to expand the 
number of Community Health Centers, but the value of the NHSC extends 
far beyond the health profession shortage areas and the uninsured and 
underinsured individuals and families who benefit from the service 
requirement. The NHSC facilitates the training of health professionals 
who, through their service and training, will bring special skills to 
all the venues they practice in over their lifetime. As our population 
becomes more diverse, the importance of culturally competent health 
practitioners will grow. The NHSC is certain to be an important asset.
           the mission of the national health services corps
    NHSC represents a model framework for providing health care 
services to uninsured and underinsured individuals and families across 
this nation--a unique collaboration between the federal government, the 
states, and local communities. Since its development in 1970, the NHSC 
has played a vital role in expanding access to needed primary health 
care in communities throughout the United States. Investment in the 
NHSC pays continuing dividends to the communities in which its 
clinicians are placed, since two-thirds of these clinicians remain in 
the community after completion of their service.
    Since 1972, NHSC has recruited more than 21,000 health care 
clinicians to work in areas where, because of financial, geographic, 
cultural or language barriers, individuals have only limited access to 
primary medical care. The Corps' focus on minority recruitment has 
resulted in a significantly greater representation of African-American 
and Hispanic clinicians in the Corps than exists in the national health 
care force. These clinicians make an immediate and significant 
contribution to the overall health of a community.
    The program attracts individuals from a variety of primary health 
care professions, including physicians and physician assistants, nurse 
practitioners, certified nurse midwives, dentists and dental 
hygienists, and mental health professionals.
State Loan Repayment Program
    In addition to the NHSC Loan Repayment program, 34 states (Alabama, 
Arizona, California, Colorado, Connecticut, Delaware, Georgia, 
Illinois, Iowa, Kentucky, Louisiana, Maine, Maryland, Massachusetts, 
Michigan, Minnesota, Missouri, Nevada, New Hampshire, New Jersey, New 
Mexico, New York, North Dakota, Ohio, Pennsylvania, Rhode Island, South 
Carolina, South Dakota, Texas, Utah, Virginia, Washington, West 
Virginia, and Wisconsin) currently receive grants to operate state-
based loan repayment programs. These grants match state and local 
community funds to assist in the repayment of qualified educational 
loans for primary health care clinicians who, in return for this 
assistance, agree to practice full time in public or non-profit health 
facilities in Health Professional Shortage Areas (HPSAs). The specific 
benefit and eligibility requirements vary by state.
NHSC Loan Repayment Program
    The NHSC Loan Repayment Program provides benefits to both the 
clinician and the health facility. The clinician receives an 
opportunity to retire debt associated with their health-related 
training while gaining valuable experience. The health care facilities 
are able to immediately fill vacancies when loan repayment program 
participants are available. Everybody benefits.
NHSC Scholarships
    The Scholarship Program provides a unique educational opportunity 
for non-traditional students, especially minority students, low-income 
students, and students living in rural areas, who might not otherwise 
be able to pursue a career in primary health care. In 1998, for 
example, 46.2 percent of medical students awarded scholarships were 
African-American and Hispanic. Upon graduation, students have an 
opportunity to make a real difference in the lives of their patients. 
In 1999, one-third of all patients treated by NHSC personnel had 
incomes at or below the poverty live. Many others are uninsured and 
have little access to medical care through traditional providers.
State Initiatives
    State efforts to provide primary health care services for their 
under-served populations are long-standing and encompass a variety of 
approaches. Not the least important of these approaches are state 
programs to increase the number of primary health care professionals. 
The State of Florida, for example, provides 26 scholarship and loan 
programs for disadvantaged and/or financially needy health professions 
students. In addition, Florida provides training grants designed 
specifically to improve access to health care by under-served 
populations, including training for primary care physicians, dentists, 
and nursing professionals, as well as training grants to improve public 
health.
    Texas and New Mexico have developed innovative programs using 
promotoras, or ``health promoters,'' neighborhood women who act as 
health care advisors for others in the community. These women, in 
addition to bringing more people into the health care system, help 
break down language and cultural barriers contributing invaluably to 
improving the ``cultural competence'' of all who work beside them.
    Many states are exploring, or have already developed, opportunities 
to use advances in telecommunications to enhance the provision of 
medical training and health care services, including the provision of 
mental health, pharmacy, and ``telemedicine.'' These efforts contribute 
significantly to solutions for solving what has become a crisis in 
access to primary health care in many communities.
    State and local governments continue to explore the full range of 
approaches to improve access to affordable, quality health care 
services. These approaches include expansions of coverage through 
Medicaid and SCHIP, as well as insurance reforms and innovative state-
funded programs. Despite the substantial efforts of the National Health 
Service Corps and the states to develop creative approaches to 
providing access to primary health care, there remains a significant 
unmet need for primary health care. The National Health Service Corps, 
at current funding levels, is able to meet barely twelve percent of 
this unmet need.
                            recommendations
Increase NHSC Funding
    Appropriations should be sufficient to allow the NHSC to expand to 
meet the growing demand for placement by clinicians to provide primary 
health care services in federally designated underserved areas. The 
Corps has been successful in recruiting a large number of trained 
clinicians to its Loan Repayment Program, but funding for the program 
has not kept pace.
Greater Program Flexibility to Better Meet Community Needs
    The goal of NHSC is to be able to educate and recruit primary 
health care professionals for service in communities experiencing 
critical shortages of health care providers. Many of these communities 
consist largely of individuals with specific cultural experiences or 
ethnic backgrounds. These communities can present special challenges in 
recruiting and retaining health care providers sensitive to the 
particular needs of the community. The NHSC recognizes the importance 
of training culturally-competent and responsive primary health care 
providers.
    Reauthorization of NHSC provides an opportunity to:
 develop additional mechanisms to recruit and retain minority 
        participants;
 augment informal efforts to match communities with specific 
        cultural traditions with health care providers with shared 
        cultural experiences, or who are specifically trained in 
        culturally diverse community-based systems of care;
 increase and formalize efforts to recruit and place health 
        professionals who represent racial and ethnic minorities in 
        communities who request them;
 improve training to encompass cultural competency that 
        considers geographical/regional differences that may affect the 
        health delivery system;
 more directly involve communities in the recruitment, 
        selection and retention of health care professionals through 
        community sponsorships;
 increase the emphasis on public/private partnerships, 
        including faith-based institutions, to enhance community 
        involvement and contractual arrangements with independent 
        health care providers;
 develop programs to assist remote communities, those too small 
        for community health centers, but large enough to need 
        assistance in obtaining primary health care for its citizens; 
        and
 provide technical assistance to states and local communities 
        in implementing NHSC programs and maximizing resources.
Greater Program Flexibility to Better Meet the Needs of Participating 
        Providers
    Retaining clinicians in the Corps continues to be a challenge. The 
reauthorization provides a unique opportunity to explore innovative 
options to encourage clinicians to stay in the program. Two ideas come 
to mind.

 Part-Time Service--The establishment of demonstration projects 
        and pilot programs allowing participants to work less than full 
        time. The opportunity to serve on a part-time basis could be an 
        important tool in attracting non-traditional providers, 
        including minority health care providers, and prove to be 
        especially attractive in rural areas where traditional health 
        care centers may be not be available.
 Tax Relief--Extend to the NHSC Loan Repayment Program, the 
        favorable tax treatment recently afforded to the NHSC 
        Scholarship program in P.L. 107-16. The opportunity to exclude 
        from gross income for federal income tax purposes the amounts 
        of loan payments received from the NHSC would provide an 
        important incentive to clinicians and also provides increased 
        resources to the loan repayment program.
In Conclusion
    I look forward to working with this committee and your colleagues 
in both the House and the Senate to reauthorize the National Health 
Services Corps this year. I thank you for this opportunity to discuss 
these important issues with you today and would be happy to answer 
questions.

    Mr. Bilirakis. Thank you, Senator.
    Mr. Hall.

                    STATEMENT OF ROBERT HALL

    Mr. Hall. Honorable chairman and committee members, and 
Vice Chairman Brown, thank you for the opportunity to present 
to you this morning. My name is Bob Hall. I am President of the 
National Council of Urban Indian Health, and a member of the 
three affiliated tribes of Fort Berthal, North Dakota--the 
Arikara, Hidatsa, and Mandan. I am also Executive Director of 
the South Dakota Urban Indian Health Clinic which operates 
three clinics in South Dakota. We would like to offer a few 
remarks on the reauthorization of the legislation.
    NCUIH is the only membership organization representing 
urban Indian Health programs. Our members provide a wide range 
of health care and referral services in 34 cities, to a 
population of approximately 332,000 urban Indians. We are often 
the main source of health care and health information for these 
urban Indian communities.
    According to the 1990 census, 58 percent of American 
Indians live in urban areas. We expect that the 2000 census is 
going to indicate that is over 60 percent now live in urban 
areas. Like their reservation counterparts, urban Indians 
historically suffer from poor health and substandard health 
care services.
    In 1976, Congress passed the Indian Health Care Improvement 
Act. The original purpose of this act, as set forth in a 
contemporaneous report, was to ``raise the status of health 
care for American Indians and Alaska Natives over a 7-year 
period to a level equal to that enjoyed by American citizens.'' 
It has been 25 years since Congress committed to raising the 
status of Indian health care, and 18 years since the deadline 
has passed for achieving the goal of equality with other 
Americans, and yet Indians, whether reservation or urban, 
continue to occupy the lowest rung on the American health care 
ladder.
    Although the road to equal health care still appears to be 
a long-time coming, NCUIH believes that Section 330 programs, 
the Community Access Programs and the National Health Service 
Corps are all steps in the right direction. NCUIH would like to 
emphasize, however, the unique characteristics of providing 
health care to the American Indian population, and the 
necessity for continuing to support urban Indian health 
programs that focus nearly exclusively on the urban Indian 
community.
    Many Indians live in urban areas, some permanently, some 
periodically. It is generally not practical for any one tribal 
government to set up health service for only its own tribal 
members in an urban area. In fact, in some urban centers, there 
are as many as 40 tribal governments nearby, with members of 
more than 80 different tribes participating in a single urban 
program.
    Urban Indian health programs have arisen specifically to 
address the uniqueness of Indians in the urban setting, by 
providing a culturally sensitive, highly supportive 
environment. Urban Indian health programs have been 
extraordinarily successful, despite limited resources, at 
reaching the urban Indian population. Many Indians are not 
trustful of ``mainstream'' institutions. Urban Indian programs 
bridge this distrust and, in so doing, are able to more 
effectively address the health care issues of the Indian 
community than non-Indian health care providers. In fact, in 
the State of South Dakota, the Family Planning Office of the 
State has made three major attempts in the last 10 years to 
increase the number of Native American women participating in 
family planning programs. They have not come close to reaching 
their goal. This past July 1st, we entered into a contract with 
them to help achieve that. We already have 25 new enrollees in 
the family planning program.
    In fiscal year 2001, urban Indian health programs received 
1.14 percent of the total Indian Health Service budget, 
although urban Indians constituted at least 50 percent of the 
total American Indian population and 18 percent of Native 
Americans served by IHS dollars. NCUIH acknowledges that there 
are some sound reasons why the lion's share of the IHS budget 
should go to reservation Indians, however, the health of Indian 
people in urban areas affects the health of Indian people on 
reservations and vice-versa. Disease knows no boundaries. NCUIH 
strongly believes that the health problems associated with the 
Indian population can only be successfully combatted through a 
significant funding directed at the urban Indian population as 
well as at the reservation population.
    We hope that as you consider the future of America's health 
safety net programs you will give consideration to additional 
support for the urban Indian health program. NCUIH plans to 
work more closely with the Section 330 Community Health 
Centers. We are convinced that cooperation will lead to better 
results for Native peoples, however, we ask for your support in 
maintaining the independence and uniqueness of urban Indian 
health programs.
    We know from hard-won experience the value of providing a 
culturally sensitive environment for urban Indians in order to 
best address the health care needs of this community. America 
is nowhere near the lofty goal set by the Congress in 1976 of 
achieving equal health care for American Indians, whether 
reservation or Indian. NCUIH challenges this committee to think 
in terms of that goal as it considers its future of health care 
programs that operate in underserved communities.
    NCUIH thanks this committee for this opportunity to testify 
concerning urban Indian health. I would be happy to answer any 
questions the committee may have. Thank you.
    [The prepared statement of Robert Hall follows:]
Prepared Statement of Robert Hall, President, National Council of Urban 
                             Indian Health
        ``Between the intentions of the lawmakers and the reality of 
        regulatory actions lies the service gap that confronts the 
        urban Indian. The result is untold desperation and waste of 
        human resources.''
                            Final Report of the American Indian    
         Policy Review Commission, Vol. 1, p. 436 (emphasis added).
                            i. introduction
    Honorable Chairman and Committee Members, my name is Robert Hall. I 
am the president of the National Council of Urban Indian Health (NCUIH) 
and a member of the three affiliated tribes of North Dakota: Arikara, 
Mandan and Hidatsa. I am also the Executive Director of the South 
Dakota Urban Indian Health Clinic. On behalf of NCUIH, I would like to 
express our appreciation for this opportunity to address the Committee 
on community health centers and urban Indian programs.
    NCUIH is the only membership organization representing urban Indian 
health programs. Our programs provide a wide range of health care and 
referral services in 34 cities to a population of approximately 332,000 
urban Indians. Our programs are often the main source of health care 
and health information for urban Indian communities. According to the 
1990 census, 58% of American Indians live in urban areas, up from 45% 
in 1970 and 52% in 1980.1 We expect that the 2000 census 
will show that over 60% of American Indians now live in urban areas. 
Like their reservation counterparts, urban Indians historically suffer 
from poor health and substandard health care services. NCUIH is the 
successor organization to the American Indian Health Care Association 
which provided advocacy and educational services on behalf of urban 
Indian health organizations for nearly 15 years prior to the 
establishment of NCUIH.
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    \1\ According to the 1990 census, 62.3% of American Indians and 
Alaska Natives reside off reservation. At that time, that figure 
represented 1.39 million of the 2.24 million American Indians and 
Alaska Natives. The updated 1990 census identified 58% of American 
Indians and Alaska Natives as living in urban areas (the other off-
reservation Indians live in rural areas). This percentage has probably 
increased significantly since 1990.
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  ii. section 330, community access programs and urban indian health 
                                programs
    NCUIH strongly supports the Community Access Program, the National 
Health Service Corps, and those programs authorized under Section 330 
of the Public Health Service Act. NCUIH would like to emphasize, 
however, the unique characteristics of providing health care to the 
American Indian population, and the necessity of continuing to support 
urban Indian health programs that focus nearly exclusively on the urban 
Indian community.
    Many Indians live in urban areas; some permanently, some 
periodically.2 It is generally not practical for any one 
tribal government to set up health service for only its own tribal 
members in an urban area. In fact, ``in some urban centers, there are 
as many as 40 tribal governments nearby, and representation of tribes 
on urban Indian programs might include over 80 different tribes.'' 
3 Urban Indian health programs have arisen specifically to 
address this situation. By providing a culturally-sensitive, highly 
supportive environment, urban Indian health programs have been 
extraordinarily successful, despite limited resources, at reaching the 
urban Indian population. Many Indians are not trustful of 
``mainstream'' institutions. By providing a familiar environment, urban 
Indian programs bridge this cultural disconnect and, in so doing, more 
effectively address health care issues of the Indian community than can 
generally be achieved by non-Indian health care providers.
---------------------------------------------------------------------------
    \2\ One Federal court has noted that the ``patterns of cross or 
circular migration on and off the reservations make it misleading to 
suggest that reservations and urban Indians are two well-defined 
groups.'' United States v. Raszkiewicz, 169 F.3d 459, 465 (7th Cir. 
1999)
    \3\ U.S. Congress, Office of Technology Assessment, Indian Health 
Care, OTA-H-290 (Washington, DC: U.S. Government Printing Office, April 
1986), p. 38.
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               iii. federal policies and the urban indian
        ``Most Indians who migrate to the cities say they would have 
        preferred not to do so at all.''
                            Final Report of the American Indian    
             Policy Review Commission, Vol. 1., p. 436.4
---------------------------------------------------------------------------
    \4\ ***
---------------------------------------------------------------------------
    The urban Indian is an Indian who has become physically separated 
from his or her traditional lands and people, generally due to Federal 
policies. Some of these federal policies were designed to force 
assimilation and to break-down tribal governments; others may have been 
intended, at some misguided level, to benefit Indians, but failed 
miserably. The result of this ``course of dealing,'' however, is the 
same: a Federal obligation to urban Indians.5
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    \5\ The unique legal relationship of the United States with Indian 
tribes and people is defined not only in the Constitution of the United 
States, treaties, statutes, Executive orders, and court decisions, but 
also in the ``course of dealing'' of the United States with Indians. As 
the Supreme Court noted in a major Indian law case, ``[f]rom their very 
weakness and helplessness, so largely due to the course of dealing of 
the federal government with them, and the treaties in which it has been 
promised, there arises the duty of protection and with it the power.'' 
United States v. Kagama (1886) (emphasis added). Congress acknowledged 
this in its findings to the Native American Housing Assistance and 
Self-Determination Act: ``The Congress through treaties, statutes and 
the general course of dealing with Indian tribes, has assumed a trust 
responsibility . . . for working with tribes and their members to 
improve their housing conditions and good economic status so that they 
are able to take greater responsibility for their own economic 
condition.'' 25 U.S.C. 4101(4). Notably, NAHASDA also applies to state-
recognized tribes. 25 U.S.C. 4103(12)(A).
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    A. The Federal Relocation of Indians. The BIA's Relocation program 
originated in the early 1950s as a response to adverse weather and 
economic conditions on the Navajo reservation. A limited program was 
initiated to relieve the distress by finding jobs for Navajos who 
wanted to work off the reservation. Little or no job opportunities 
existed on the reservation, so an employment campaign was developed for 
off-reservation employment. Shortly afterward, the BIA converted its 
Navajo program into a full-fledged Bureau of Indian Affairs program 
applicable to many Indian tribes.
    The BIA employees who developed the program made many mistakes and 
miscalculations. Even before the 1950's had ended there was concern 
that many relocatees were experiencing great difficulty adjusting to 
life in a large city, or to their jobs. Some felt they were being 
stranded far away from home. Solving reservation economic problems by 
relocating Indians off of their tribal lands is roughly the equivalent 
of the Federal government, during the Depression, sending Americans 
oversee to find work--something the Federal government would never have 
done. Many understood the relocation program as just another form of 
``termination.'' A Jesuit priest on the Fort Belknap Reservation noted 
that relocation programs drained the reservation of much of its 
potential leadership, further weakening tribal governments.
    All told, between 1953-1961, over 160,000 Indians were relocated to 
cities.6 Where they quickly joined the ranks of the urban 
poor.7 Today, the children, grandchildren and great-
grandchildren of the 160,000 Indians relocated by the BIA are still in 
the cities. They maintain their Indian identity even if, in some cases, 
these ``descendants have been unable to re-establish ties (including 
membership) with their tribes.'' 8
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    \6\ 1992 Roundtable Conference, Urban Indian Health Programs, 
Indian Health Service, ``Working in Unity Toward our Future.'' p.2.
    \7\ ``Unfortunately, far too many Indians who move to the cities, 
because of inadequate academic and vocational skills, merely trade 
reservation poverty for urban poverty.'' H.Rep. No. 9-1026, 94th Cong., 
2d Sess. 18, reprinted in 1976 U.S. Cong. & Admin. News (USCAN) 2652, 
p. 2747.
    \8\ See Office of Planning, Evaluation and Legislation, Indian 
Health Service, Impact of the Final Rule Final Report, Contract No. 
282-91-0065, ``Health Care Services of the Indian Health Service'' 42 
CFR Part 36, p. 22-23.
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    B. Failure of Federal Efforts to Economically Develop the 
Reservations. The second major reason Indians have moved to the city is 
the near total failure of Federal programs to promote economic 
development on Indian lands, coupled with the ongoing success of the 
Federal efforts in the 1800's to undermine the economic way of life of 
Indian peoples, locking nearly all Indians into hopeless poverty which 
still plagues most reservations today. The long history of treaty-
breaking by the Federal government is an important part of this tale. 
As a result, out of desperation, a number of Indians have left their 
homelands to go to the cities in search of work, even without the 
dubious benefit of the BIA's relocation program. Generally, these 
Indians were no better equipped to handle life in the city than the BIA 
relocatees and quickly joined the ranks of the urban poor. Congress has 
noted the correlation between the failure of Federal economic policies 
and the swelling of the ranks of urban Indians: ``It is, in part, 
because of the failure of former Federal Indian policies and programs 
on the reservations that thousands of Indians have sought a better way 
of life in the cities. His difficulty in attaining a sound physical and 
mental health in the urban environment is a grim reminder of this 
failure.'' 9
---------------------------------------------------------------------------
    \9\ Pub. L. 94-437, House Report No. 94-1026, June 8, 1976, 94th 
Cong., 2d Sess. 18, reprinted in 1976 U.S. Cong. & Admin. News (USCAN) 
2652,at p. 2754.
---------------------------------------------------------------------------
    C. Termination of Tribes. In 1953, Congress adopted a policy of 
terminating the Federal relationship with Indian tribes. Essentially, 
this was an abrogation of the Federal government's numerous 
commitments, in treaties, laws, executive orders, and through the 
``course of dealing'' with Tribes, to protect their interests. Many 
tribes were coerced to accept termination in order to receive money 
from settlements for claims against the United States for 
misappropriation of tribal land, water or mineral rights in violation 
of treaties.10 The results of termination were devastating: 
having lost Federal support, and without tribal sovereign authority 
over an established land basis, and with tribal members no longer 
eligible for Federal programs and IHS services, the Tribes collapsed. 
Some members remained in the area of their old reservations; many went 
to the cities, where they, too, joined the ranks of the urban poor.
---------------------------------------------------------------------------
    \10\ Office of Planning, Evaluation and Legislation, Indian Health 
Service, Impact of the Final Rule Final Report, Contract No. 282-91-
0065, ``Health Care Services of the Indian Health Service'' 42 CFR Part 
36, p. 23.
---------------------------------------------------------------------------
    D. Indian Patriotism--World War I and World War II. Many Indians 
served the United States in time of war 11 and, 
subsequently, were stationed in or near urban centers. At the end of 
their service to the United States, seeing the poor economic conditions 
on their reservations (resulting from the Federal war on Indians), many 
chose not to go back. The fact that they chose to stay in an urban area 
did not make them any less Indian, nor did it reduce the Federal 
government's obligation to them.
---------------------------------------------------------------------------
    \11\ It is in part because of their gallant service in World War I 
that the U.S. Congress granted U.S. citizenship as a group to American 
Indians in 1924.
---------------------------------------------------------------------------
    E. The General Allotment Act. The General Allotment Act (``Dawes 
Act'') had two principal goals: (1) by allocating communal tribal land 
to individual Indians it would breakdown the authority of the tribal 
governments while encouraging the assimilation of Indians as farmers 
into mainstream American culture; and (2) it provided for unalloted 
land (two-thirds of the Indian land base) to be transferred to non-
Indians. CITE. The General Allotment Act succeeded at transferring the 
majority of Indian land to non-Indians and further disrupting tribal 
culture. For the purposes of this testimony, we only need to note that 
some Indians who received allotments became U.S. Citizens and, after 
losing their lands, moved into nearby cities and towns.
    F. Non-Indian Adoption of Indian Children. The common practice of 
adopting Indian children into non-Indian families has created another 
group of Indians in urban areas who, because of the racial bias of the 
courts, have lost their core cultural connection with their tribal 
people and homelands. Many of the adopted Indians have successfully 
sought to restore those connections, but because of their upbringing 
are likely to remain in urban areas.12
---------------------------------------------------------------------------
    \12\ In recognition of the severity of this problem, Congress 
passed in 1978 the Indian Child Welfare Act to give Tribes and Indian 
parents a greater say in the adoption process for Indian children. See 
Indian Child Welfare Act of 1978, 25 U.S.C. Sections 1901-1963.
---------------------------------------------------------------------------
    G. Boarding Schools. The Federal program of taking Indian children 
and educating them away from their reservations in boarding schools 
where they were prohibited from speaking their native language and 
otherwise subject to harsh treatment, created a group of Indians who 
struggled to fit back into the reservation environment. Eventually, 
some moved to the cities. The boarding school philosophy of ``Kill the 
Indian, Save the Man'' epitomizes the thinking behind this approach and 
the racist Federal effort to assimilate American Indians which, as a 
result, led to a number of Indians moving to urban areas.
    H. The Fracturing of the Indian Nations. The result of these, and 
other Federal Indian policies, has been the fracturing of Indian tribes 
and the creation, in the urban setting, of highly diverse Indian 
communities with members who fall into one or more of the following 
categories: Federal relocatees; economic hardship refugees; members of 
Federally recognized tribes, terminated tribes, state recognized 
tribes, and unrecognized Tribes (that is, unrecognized by the Federal 
government); 13 and adoptees.
---------------------------------------------------------------------------
    \13\ There are still scores of tribes working their way through the 
byzantine and labyrinthine acknowledgement process, which is widely 
criticized for its glacial pace and alleged bias against certain Indian 
groups. Some tribes, like the Lumbee Tribe of North Carolina, have been 
declared ineligible to go through the administrative process and, 
therefore, are awaiting Congressional action on their long-prepared, 
extensively documented petition for federal recognition.
---------------------------------------------------------------------------
 iv. the federal government and the provision of health care to urban 
                                indians
    The Congress has long recognized that its obligation to provide 
health care for Indians, includes providing health care off the 
reservation.
        ``The responsibility for the provision of health care, arising 
        from treaties and laws that recognize this responsibility as an 
        exchange for the cession of millions of acres of Indian land 
        does not end at the borders of an Indian reservation. Rather, 
        government relocation policies which designated certain urban 
        areas as relocation centers for Indians, have in many instances 
        forced Indian people who did not [want] to leave their 
        reservations to relocate in urban areas, and the responsibility 
        for the provision of health care services follows them there.''
    Senate Report 100-508, Indian Health Care Amendments of 1987, Sept. 
14, 1988, p. 25 (emphasis added).14 Congress has ``a 
responsibility to assist'' urban Indians in achieving ``a life of 
decency and self-sufficiency'' and has acknowledged that ``[i]t is, in 
part, because of the failure of former Federal Indian policies and 
programs on the reservations that thousands of Indians have sought a 
better way of life in the cities. Unfortunately, the same policies and 
programs which failed to provide the Indian with an improved lifestyle 
on the reservation have also failed to provide him with the vital 
skills necessary to succeed in the cities.'' House Report No. 94-1026 
on Pub. Law 94-437, p. 116 (April 9, 1976).
---------------------------------------------------------------------------
    \14\ ``The American Indian has demonstrated all too clearly, 
despite his recent movement to urban centers, that he is not content to 
be absorbed in the mainstream of society and become another urban 
poverty statistic. He has demonstrated the strength and fiber of strong 
cultural and social ties by maintaining an Indian identity in many of 
the Nation's largest metropolitan centers. Yet, at the same time, he 
aspires to the same goal of all citizens--a life of decency and self-
sufficiency. The Committee believes that the Congress has an 
opportunity and a responsibility to assist him in achieving this goal. 
It is, in part, because of the failure of former Federal Indian 
policies and programs on the reservations that thousands of Indians 
have sought a better way of life in the cities. His difficulty in 
attaining a sound physical and mental health in the urban environment 
is a grim reminder of this failure.''
    ``The Committee is committed to rectifying these errors in Federal 
policy relating to health care through the provisions of title V of 
H.R. 2525. Building on the experience of previous Congressionally-
approved urban Indian health prospects and the new provisions of title 
V, urban Indians should be able to begin exercising maximum self-
determination and local control in establishing their own health 
programs.''
    Pub. L. 94-437, House Report No. 94-1026, June 8, 1976, reprinted 
in 1976 U.S. Cong. & Admin. News (USCAN) 2652 at p. 2754.
---------------------------------------------------------------------------
    The Supreme Court has also acknowledged the duty of the Federal 
government to Indians, no matter where located: ``The overriding duty 
of our Federal Government to deal fairly with Indians wherever located 
has been recognized by this Court on many occasions.'' Morton v. Ruiz, 
415 U.S. 199, 94 S.Ct. 1055, 39 L.Ed.2d 270 (1974) (emphasis added), 
citing Seminole Nation v. United States, 316 U.S. 286, 296 (1942); and 
Board of County Comm'rs v. Seber, 318 U.S. 705 (1943). In other areas, 
such as housing, the Federal courts have found that the trust 
responsibility operates in urban Indian programs. ``Plaintiffs urge 
that the trust doctrine requires HUD to affirmatively encourage urban 
Indian housing rather than dismantle it where it exists. The Court 
generally agrees.'' Little Earth of United Tribes, Inc. v. U.S. 
Department of Justice, 675 F. Supp. 497, 535 (D. Minn. 
1987).15
---------------------------------------------------------------------------
    \15\ Federal responsibility for Indian health care is frequently 
declared ``primary'' but it is not exclusive and preemptive of state 
responsibility. See McNabb v. Bowen, 829 F.2d 787, 792 (9th Cir. 1987). 
Congress enunciated its objective with regard to urban Indians in a 
1976 House Report: ``To assist urban Indians both to gain access to 
those community health resources available to them as citizens and to 
provide primary health care services where those resources are 
inadequate or inaccessible.'' H.Rep. No. 9-1026, 94th Cong., 2d Sess. 
18, reprinted in 1976 U.S. Cond Cong. & Admin. News (USCAN) 2652, 2657.
---------------------------------------------------------------------------
    Congress enshrined its commitment to urban Indians in the Indian 
Health Care Improvement Act where it provided:
        ``that it is the policy of this Nation, in fulfillment of its 
        special responsibility and legal obligation to the American 
        Indian people, to meet the national goal of providing the 
        highest possible health status to Indians and urban Indians and 
        to provide all resources necessary to effect that policy''
    25 U.S.C. Section 1602(a)(emphasis added). In so doing, Congress 
has articulated a policy encompassing a broad spectrum of ``American 
Indian people.'' Similarly, in the Snyder Act, which for many years was 
the principal legislation authorizing health care services for American 
Indians, Congress broadly stated its commitment by providing that funds 
shall be expended--for the benefit, care and assistance of the Indians 
throughout the United States for the following purposes: . . . For 
relief of distress and conservation of health.'' 25 U.S.C. Section 13 
(emphasis added).
    The courts have also stated that there is a trust responsibility 
for individual Indians. ``The trust relationship extends not only to 
Indian tribes as governmental units, but to tribal members living 
collectively or individually, on or off the reservation.'' Little Earth 
of United Tribes, Inc. v. U.S. Department of Justice, 675 F. Supp. 497, 
535 (D. Minn. 1987)(emphasis added). ``In light of the broad scope of 
the trust doctrine, it is not surprising that it can extend to Indians 
individually, as well as collectively, and off the reservation, as well 
as on it.'' St. Paul Intertribal Housing Board v. Reynolds, 564 F. 
Supp. 1408, 1413 (D. Minn. 1983) (emphasis added).
        ``As the history of the trust doctrine shows, the doctrine is 
        not static and sharply delineated, but rather is a flexible 
        doctrine which has changed and adapted to meet the changing 
        needs of the Indian community. This is to be expected in the 
        development of any guardian-ward relationship. The increasing 
        urbanization of American Indians has created new problems for 
        Indian tribes and tribal members. One of the most acute is the 
        need for adequate urban housing. Both Congress and Minnesota 
        Legislature have recognized this. The Board's program, as 
        adopted by the Agency, is an Indian created and supported 
        approach to Indian housing problems. This court must conclude 
        that the [urban Indian housing] program falls within the scope 
        of the trust doctrine . . .''
                                 Id. At 1414-1415 (emphasis added).
    This Federal government's responsibility to urban Indians is rooted 
in basic principles of Federal Indian law. The United States has 
entered into hundreds of treaties with tribes from 1787 to 1871. In 
almost all of these treaties, the Indians gave up land in exchange for 
promises. These promises included a guarantee that the United States 
would create a permanent reservation for Indian tribes and would 
protect the safety and well-being of tribal members. The Supreme Court 
has held that such promises created a trust relationship between the 
United States and Indians resembling that of a ward to a guardian. See 
Cherokee Nation v. Georgia, 30 U.S. 1 (1831). As a result, the Federal 
government owes a duty of loyalty to Indians. In interpreting treaties 
and statutes, the U.S. Supreme Court has established ``canons of 
construction'' that provide that: (1) ambiguities must be resolved in 
favor of the Indians; (2) Indian treaties and statutes must be 
interpreted as the Indians would have understood them; and (3) Indian 
treaties and statutes must be construed liberally in favor of the 
Indians. See Felix S. Cohen's Handbook of Federal Indian Law, (1982 
ed.) p. 221-225. Congress, in applying its plenary (full and complete) 
power over Indian affairs, consistent with the trust responsibility and 
as interpreted pursuant to the canons of construction, has enacted 
legislation addressing the needs of off-reservation Indians.
    The Federal courts have also found, that the United States can have 
an obligation to state-recognized tribes under Federal law. See Joint 
Tribal Council of Passamaquoddy v. Morton, 528 F.2d 370 (1st Cir. 
1975). Congress has provided, not only in the IHCIA, 16 but 
also in NAHASDA, that certain state-recognized tribes or tribal members 
are eligible for certain Federal programs. 25 U.S.C. Section 
4103(12)(A).
---------------------------------------------------------------------------
    \16\ As originally conceived, the purpose of the Indian Health Care 
Improvement Act was to extend IHS services to Indians who live in urban 
centers. Very quickly, the proposal evolved into a general effort to 
upgrade the IHS. See, A Political History of the Indian Health Service, 
Bergman, Grossman, Erdrich, Todd and Forquera, The Milbank Quarterly, 
Vol. 77, No. 4, 1999.
---------------------------------------------------------------------------
  v. barriers to mainstream health care experienced by urban indians 
                             17
---------------------------------------------------------------------------
    \17\ This section is based on the September 30, 1989 report 
prepared for the American Indian Health Care Association, by Ruth 
Hograbe, R.D., M.P.H., Program Analyst and Donna Isham, Program 
Analyst. The framework for the report is the 1988 report Minority 
Health in Michigan: Closing the Gap.
---------------------------------------------------------------------------
        ``The lack of employment opportunities leads to a downward 
        spiral that reduces the urban Indian's life to a struggle for 
        subsistence. For example, the private practice system of health 
        care is certainly beyond the financial reach of most newly 
        arrived urban Indian families. They must depend on public 
        services. Yet here, the service gap reveals itself again.''
             Final Report of the American Indian Policy    
                Review Commission, p. 437 (emphasis added).
    The status of Urban Indian health is as poor as that for 
reservation Indians.18 This section describes the many 
barriers that are still faced by Urban Indians in their efforts to 
access adequate health care in the urban environment:
---------------------------------------------------------------------------
    \18\ See Health Status of Urban American Indians and Alaska 
Natives, Grossman et. al, Journal of the American Medical Association, 
Vol. 271, No. 11, p. 845.
---------------------------------------------------------------------------
    Physical/geographic barriers can include (1) telephone 
availability; less access to transportation; and (3) high mobility. 
Many Native Americans do not have phones, increasing the difficulty in 
making appointments. For example, in Arizona, thirty percent of urban 
Indians have no household access to phone services. Indian people have 
much less access to private vehicles than the general population. Not 
having a vehicle creates barriers for people who must make arrangements 
with others to bring them to appointments. Public transportation (if 
available) makes for a longer travel time and can be costly. The high 
mobility of Indian people is another barrier to care. People who move 
often are not able to follow with the same provider, and this disrupts 
continuity of care and can lead to a decrease in the quality of care. 
When a person moves to another area, they must go through the system 
again to qualify for benefits, locate a provider, and receive care. In 
addition, movement back and forth between the reservation is common, 
which can significantly affect the ability of health professionals to 
provide prompt, quality follow-up care.
    Financial/Economic barriers also contribute to the poor quality of 
urban Indian health care. People who do not have the resources, either 
through insurance or out-of-pocket, to pay for prevention and early 
intervention care may delay seeking treatment until a disease or 
condition has advanced to the stage where treatment is more costly and 
the probability of survival or correction is lower.
    Medicaid is available for urban Indians, but difficult to access. 
Applying for Medicaid or other medical assistance is a long and 
detailed process, presenting many barriers to people who don't 
understand the system or lack the necessary skills to complete the 
paperwork involved. Furthermore, the required documentation is 
difficult for many urban Indians to obtain. For example, if one does 
not have a car, one may not have a drivers license. With high mobility 
among urban Indians, there is likely to be no documentation with the 
current address; or if they have just moved to the city from the 
reservation, there may be no birth certificate or identification. Once 
an individual is accepted, access to care is not guaranteed. Because of 
Medicaid reimbursement rates and restrictions, many providers are 
reluctant to accept Medicaid patients.
    Health insurance coverage does not automatically remove financial 
barriers to care. Many persons, particularly those employed at or near 
minimum wage, have coverage through plans that do not cover preventive 
or major medical care. While professional positions generally provide 
health insurance, service and laborer positions generally do not. Urban 
Indians hold more of those occupations that do not provide health 
insurance benefits. Deductibles and co-payments are high enough that 
many persons who do have health insurance cannot afford to pay them and 
consequently do not seek care.
    No insurance or assistance is another common barrier. Those who 
have no means to pay for care are often turned away. There is a high 
rate of urban Indians who are uninsured. For example, in Boston, 87% of 
the Boston Indian Center's clients have no health insurance, and two 
out of every three urban Indians in Arizona are uninsured.
    Emergency room use is high among the poor, minorities and the 
uninsured. Unfortunately, emergency room use as a primary medical 
resource is costly and compromises quality care. Follow-up and 
preventive services are not possible with emergency room personnel 
serving as primary care providers. In Arizona, urban Indians use the 
emergency room 250% more often than the general public.
    Cultural/structural barriers also exist for urban Indians receiving 
health care. The Indian Health Service conducted a survey which 
concluded that the majority of state, county and city health 
departments do not have the resources to meet the health care needs of 
urban Indians. Major stumbling blocks are inadequate funds and lack of 
staff trained to work with American Indians in a culturally sensitive 
way. Indians may be reluctant or unable to describe their health needs 
to strangers outside their own culture. Frequently, mainstream 
providers misunderstand or misinterpret the reticence and stoicism of 
some Indians. Other factors include a lack of trained Indian health 
professionals that get placed in urban Indian health programs and 
inadequate Indian outreach.
                             vi. conclusion
    Notwithstanding all the difficulties, urban Indian health 
organizations, working with limited funds, have made a great difference 
in addressing the health care service gap for urban Indians. There is 
much more work to be done. NCUIH thanks the Committee for this 
opportunity to provide testimony on urban Indian health programs.

    Mr. Bilirakis. Thank you very much, Mr. Hall. We have a 
vote coming up in a few minutes. I am trying to get this worked 
out somehow where maybe we can have someone run over, cast 
their vote, to see if we can keep it rolling. Three votes. That 
is going to be a problem then. We will have to recess when that 
takes place. I will start the questioning, if I may.
    Ms. Monson, very quickly, you failed to mention--you heard 
my opening statement and I mentioned the fact that the National 
Health Service Corps volunteers have the opportunity to buy-out 
of their contract. Do you have a quick comment on that?
    Ms. Monson. Yes, Mr. Chair. If you look at some of the 
statistics that I have seen provided by the National Health 
Service Corps, generally, our participants have met their 
obligation. I know there has been some discussion about HMOs 
buying out on behalf of the practitioner, their contracts, but 
the default rate and the buy-out rate for the programs, I 
think, if you look at the numbers, are substantially low.
    Mr. Bilirakis. Should they have the right to do that? After 
all, there is an obligation there that the taxpayers sent them 
to school.
    Ms. Monson. I guess, Mr. Chair, when the program was 
initially created, that someone felt that it was important to 
give some flexibility to the practitioners for varying reasons. 
Maybe there should be specific reasons or circumstances within 
which a clinician could buy-out or pay back their obligation.
    I truly believe, however, because of our screening 
techniques and when you look at those individuals that 
participate in the program, they come into the program not just 
because of the free education in terms of the Corps Scholarship 
Program or the Loan Repayment Program, but they come because 
they are committed to service in underserved areas. And I would 
imagine that situation exists more than 98 or 99 percent of the 
time.
    Mr. Bilirakis. You may be right about those percentages, 
but I have personally experienced this situation in one of the 
clinics in my district, and it hurt the clinic badly.
    Ms. Monson. Let me suggest one thing that we have talked 
about as a Council----
    Mr. Bilirakis. Well, let me just continue on. Please 
consider that. You are right, maybe it is probably 98, 99 
percent, I don't know what that percentage is, but I don't know 
that it should be just 98, 99, I think it ought to be 100.
    Ms. Monson. It should be 100 percent.
    Mr. Bilirakis. Yes. So will you offer the committee 
suggestions, any ideas that you may have in writing to us on 
changing that, if you believe in it. If you don't, that is a 
different story.
    Ms. Monson. We certainly have, and we as a Council have 
discussed options to address that situation. We would be happy 
to provide that information.
    Mr. Bilirakis. Great. Thanks, Senator.
    Dr. Duke, do your statistics include the private clinic, 
the non-330 clinics that exist around the country?
    Ms. Duke. The statistics I used in my testimony this 
morning reflect the health centers that are under the 330 
progam, so that when we talk about the statistics on care for 
the minorities and so forth, those are our health care clinics.
    Mr. Bilirakis. So, in other words, we do not know--there is 
no way to know how many clinics are out there who are doing 
essentially the same type of work, that are not part of the 330 
program?
    Ms. Duke. We are aware of the--there are a lot of providers 
that are called ``look-a-likes.'' We also have rural health 
clinics and small rural hospitals that provide services as 
well, so that there is a network of provision of care that goes 
beyond the health centers about which my statistics spoke this 
morning.
    Mr. Bilirakis. So the answer then is we don't know how many 
there might be. For instance, there is a Clearwater Free Clinic 
in Clearwater, Florida. Are you aware of that?
    Ms. Duke. Sir, I don't know the specifics of that 
particular area, but I can get back to you with a fuller answer 
that could lay that out, and I would be delighted to do that.
    Mr. Bilirakis. Would you do that, I think that would be 
very helpful.
    Continuing in that vein, Ms. Benjamin and Mr. Brewton 
particularly, Ms. Benjamin, your clinic, its history was in 
being about 10 years before you decided to apply for 330 
funding.
    Ms. Benjamin. Yes.
    Mr. Bilirakis. All right. And, Mr. Brewton, you indicated 
that your clinic was operating a few years before apply for 330 
funding. Have you seen substantial changes in terms of the 
intent of the clinic? In other words, a lot of these clinics 
that I have referred to, Dr. Duke, they tell me they just don't 
want any government involvement. They don't want the government 
telling them what to do, in spite of the fact that they need 
the funding and could probably serve a lot more people, and be 
able to hire some providers, whereas now they are all 
volunteers, literally all volunteers, including the people at 
the front desk. Can you both put in the record what changes you 
have seen? Have you seen any reason why you should not have 
gone into Federal funding?
    Ms. Benjamin. There is absolutely no reason why we 
shouldn't have gone--no, it has supplemented our services 
tremendously to have----
    Mr. Bilirakis. You haven't seen any change in terms of the 
intent in terms of how you wanted to serve the public?
    Ms. Benjamin. Not a negative intent, but a more positive 
intent.
    Mr. Bilirakis. Mr. Brewton, of course, did speak very 
powerfully about the positive----
    Mr. Brewton. Same answer. It has actually, I think, helped 
us create stronger commitments, and I would also argue that 
when it comes to cumbersome regulations and paperwork, compared 
to managed care, you guys are amateurs.
    Mr. Bilirakis. We have heard that 2 or 3 times over the 
years.
    Ms. Benjamin. I would also like to say that initially when 
the clinic started with volunteer staff, it really started to 
address the huge needs of people with children with ear 
infections and things like that, that acutely needed attention. 
And after Section 330 funding, the whole impetus of the center 
really changed toward preventive health care, and it has 
continued on in those directions, and that is how we eliminate 
disparities.
    Mr. Bilirakis. That is what we want, of course.
    Mr. Brewton. 330 required us to form a Quality Assurance 
Committee, and as a result of that committee we are taking the 
individual observations of practitioners and building them into 
systems that more effectively deal with all our patients, not 
just hit-or-miss.
    Mr. Bilirakis. I would like to spend a lot more time on 
that particular subject, but my time is long over. Mr. Brown.
    Mr. Brown. Thank you, Mr. Chairman. Mr. Singer, than you 
especially for your testimony, it was just terrific, one of the 
best I have heard here in a long time, so thank you for that, 
and thank you for being with us, to all of you.
    I don't normally do commercials like this, but I listened 
to your comments about the homeless, about housing issues, 
about health care issues, and I recently read a book by Barbara 
Aronwright called ``Nickel and Dime,'' which I suggest to 
everyone in this room. I have not financial interest in this, 
but suggest everyone in this room that they read. And she talks 
about the working poor. She actually took jobs several places 
around the country, very low-paying, $6-an-hour, $7-an-hour 
jobs, talked about the working poor, and especially talked 
about housing and how to rent an apartment, you need the 
security deposit. You often need the first and last months' 
rent, so people making $6 and $7 an hour in maid service, or 
Wal-Mart or in a nursing home, end up staying at terrible 
hotels, paying $25 a night, end up--don't have refrigerators 
and stoves, so it cost more to be poor, in many ways, because 
they can't cook a batch of lentil soup and freeze and eat it 
all week, they have to go to convenience stores and grocery 
stores, and then their food spoils if they try to keep it, and 
whatever. And she talked about one young man who got hurt at 
work, he had an infection in his foot. He couldn't afford the 
antibiotic. He didn't show up at work for 3 days, and he was 
fired as a result. And when you talk about--you know, we talk 
about health disparities in this country, we are 5 percent of 
the world's population. We consume 45 percent of health care 
expenditures in this world, yet we have so many people that 
don't get the kind of care they should. We have the best health 
care system in the world for the affluent, but for others we 
often don't, unless they are lucky enough to get service from 
Mr. Brewton or many of the rest of you, but we are not reaching 
them. We should be ashamed of ourselves, and I don't see the 
commitment in this Congress and this administration to move 
forward with the way--or, for that matter, most of the last 
several years, to move forward the way that we should, to not 
just eliminate the health care disparities, but the income 
disparities that so much go with it. And that being said, thank 
you again for joining us.
    Dr. Duke, I would like to ask you a question. I also want 
to apologize, I have a markup in another committee, and if I am 
moving in and out, it is not for a lack of interest, it is 
because I have to go vote occasionally.
    Dr. Duke, I was pleased to hear you affirm your agency's 
commitment to the mission. I have heard, however, that you 
intend to abandon the 100 percent/zero campaign. I note on your 
Website the campaign name is now called ``Improving expanding 
access.'' So, a copy of a memo from Laura Perki, with the 
Bureau of Primary Health Care, dated July 6, ``Effective 
immediately, all publications with the phrase `100 percent 
access, zero health disparities,' should be changed to 
`improving and expanding access to health care for all 
Americans nationwide' ''.
    In Ohio, the infant mortality rate for African-Americans is 
2.5 times that of whites, 10 percent higher than the national 
average for African-American infants, and 3.5 times higher than 
the Healthy People 2010 goal. Ohio, as many other States, to be 
sure, has a long way to go to reach the Healthy People 2010 
goal, and I am concerned about your mission statement change. 
What is HRSA's mission? Why the reason, are we just lowering 
our expectations, is that what we as a government, we as a 
society, this administration wants to do? Explain it to me, if 
you would.
    Ms. Duke. This morning, I represent President Bush and 
Secretary Thompson, who are both committed to enhancing access 
to quality care for all Americans and eliminating disparities 
in health care, and I spoke in a cleared statement that said 
that HRSA's mission is to work toward 100 percent access to 
health care and zero disparities, and we are committed to 
working toward that.
    As a manager, one of my concerns is to set realistic goals 
in the short-term that we can bite off, chew, and accomplish. 
And so as we go through each year, our goal will be to 
accomplish meaningful progress toward--as the statement says, 
working toward 100 percent access and zero disparities. Our 
goal this year is to expand our health care network across the 
country, and we have committed to a budget in 2002 that would 
allow us to increase and expand access points by 200 and to 
increase care for 1 million people in the year 2002. That is a 
down payment on a 5-year program of 5 years of expansion of our 
health centers that will increase those health centers by 1200 
sites and eventually double the number of patients served. We 
are committed to working toward quality health care for all 
Americans.
    Mr. Brown. Mr. Chairman, if I could do one more question. I 
hear you, but I also see sort of the direction that we may be 
moving, and I look at the Title 7 program, and my understanding 
is the administration is eliminating all funding for Title 7. 
That includes student loans, it includes health professions, 
training for diversity, it includes health professions, public 
health workforce, also opposing funding for the Community 
Access Programs. Were these decisions--was this downgrading of 
goals--lowering of expectations might be a less judgmental way 
to say it--lowering of expectations and eliminating the funding 
for these programs, are these decisions made by the President, 
or by Secretary Thompson, or by Dr. Duke, or who makes these 
decisions--or OMB--to eliminate the funding for those to send a 
message that we are not going to fund student loans, help 
professions train for diversity, and these very important 
Community Access Programs? Tell me that.
    Mr. Bilirakis. A very brief response, please, Dr. Duke, 
much briefer than the question.
    Mr. Brown. Much briefer than the question. That is why the 
chairman and I get along so well.
    Ms. Duke. The administration's position is that they have 
made decisions oriented toward the best use of available 
funding. In the area of the Community Access Program, hard 
choices were made to target funding for direct care of patients 
and, thus, the goal of increasing by 1 million people in 2002 
the number of patients who could be served from our Community 
Health Center network. And that is as a commitment, a 5-year 
commitment to expanding that available health care so that 
eventually over 20 million people will have direct health care 
as a result of the decisions reached.
    The decision of the administration was that to build 
another funding stream in the CAP program was not the most 
efficient or effective way to bring about the improvement of 
health care for the most vulnerable in our Nation.
    Mr. Bilirakis. I hate to--we have this vote coming up and 
it would be great if we could finish up with this panel and let 
them go home, except for possibly Dr. Duke or one of your 
representatives. We always like to have someone from the 
administration sort of staying for the next panel so they can 
sort of take notes and learn from it. If you would do that, I 
would appreciate it.
    Ms. Duke. I would be delighted.
    Mr. Bilirakis. Mr. Pitts, to inquire.
    Mr. Pitts. Thank you, Mr. Chairman. I apologize, I had to 
step out. I am in a markup in another committee, and I missed 
Mr. Hall's testimony, but I would like to start with you, Mr. 
Hall.
    Is it a requirement that someone who seeks care at an IHS 
facility be an enrolled member of a federally recognized tribe 
and, if so, don't the facilities, in effect, discriminate on 
the basis of race?
    Mr. Hall. It is true for the IHS facilities, that you have 
to be an enrolled member of federally recognized tribes, but 
the urban Indian clinics, because most of us are federally 
qualified health clinics, that requirement is not on us. So we 
see non-Indians in the urban clinic.
    Mr. Pitts. How many facilities in the Indian Health 
Services receive Section 330 funding?
    Mr. Hall. I don't think any of them receive them direct. 
Two or three of our urban clinics do have a relationship with 
some of the 330 clinics in their area.
    Mr. Pitts. Do you know, in your home State of South Dakota, 
how many clinics receive Section 330 funding?
    Mr. Hall. I believe there are 21 clinics in South Dakota, 
under seven organizations that receive 330 money. Sioux Falls 
has one 330 clinic, Rapid City has two, one a medical service, 
one a homeless, and then the remainder of the 330 clinics are 
all very rural clinics.
    Mr. Pitts. Thank you. Mr. Brewton, some of the members and 
staff are concerned that someone with a religious faith or 
faith-based community service would somehow turn away certain 
patients or refuse medical care. Can you expand a little bit on 
your written testimony so that once and for all you can 
disabuse any of us from any misapprehension we may have on 
that?
    Mr. Brewton. The best way to do that would be to invite you 
to the office and to meet the practitioners who carry out the 
mission, but again it is our faith perspective that says all 
people are created in God's image, and so there are no barriers 
to walking through the door. There is no question about what 
kind of insurance you have when you first come in, nor is there 
a question about are you religious or do you want to pray? Our 
concern is what is your need and how can we meet that need? So 
it is hard to prove a negative, but discrimination and 
exclusion are just the polar opposites of what we are about.
    Mr. Pitts. Thank you. Ms. Benjamin, thank you for coming 
today, and I wanted to ask you to expand a little bit on 
something you mentioned in the testimony, and that is your 
efforts to offer service at satellite health services, and how 
you work with other institutions. I think you mentioned a 
Baptist Church. Can you expand on your cooperation with other 
organizations in providing service?
    Ms. Benjamin. Sure. In particular, we work very closely 
with faith-based organizations in the community. Several of 
them are represented on our board. Some of the larger 
organizations are represented on our board. And some of the 
discussions at the board level about accessing services have 
reflected the fact that there are a lot of people in our 
community who are walking around with diabetes and hypertension 
that is undiagnosed, and the only way that we can probably 
reach these people is to go to where they are, and they won't 
be coming to the health center because they don't even know 
that they need the services. So we have talked to several of 
the churches about opening clinics at their churches, and one 
in particular will be opening next year. So we are really 
excited about being able to reach those people who are walking 
around undiagnosed right now.
    Mr. Pitts. In reauthorizing Community Health Centers, are 
there steps that Congress can take to improve coordination 
between community health centers and hospitals or between 
community health centers themselves?
    Ms. Benjamin. The Community Access Program will be 
extremely instrumental for us. We have already, in Lancaster, 
developed an infrastructure--actually all the health care 
providers, including the hospitals and private physicians, the 
Health Care for the Homeless group, we are all working together 
and we have built an infrastructure, but we don't have funding 
to staff permanently, on a daily basis, anyone to really carry 
out the work, although that is very important. And, really, I 
guess, National Health Service Corps will certainly help as 
well.
    Mr. Pitts. Thank you very much. Thank you, Mr. Chairman.
    Mr. Bilirakis. I thank the gentleman. Ms. Capps. Let us 
stay within the 5 minutes, please, so we can finish up. I 
wasn't talking to you, specifically.
    Ms. Capps. That is my goal because I have two different 
kinds of questions, so I am going to try to be brief on this. 
One of the witnesses--the trouble with these panels is that 
they are related, though different topics, so if I could segue 
into the next panel, one of the witnesses, Dr. Russell Roberts, 
argues--he is from Washington University. He argues that 
government funding designed to encourage the development of 
health care professionals is where I am headed, and his written 
statement indicates that the market would provide the optimum 
mix of doctors, nurses and other health care professionals.
    First, I would like to hear what the administration thinks 
of the notion of removing all government funding of health 
professional education and training, and then perhaps one 
panel, maybe Dr. Wiltz, just to keep it to the time, and then I 
want to switch to flexibility in funding of NAHC, too.
    Ms. Duke. Thank you very much. The market may produce an 
aggregate number over the long-run, but then Cain said in the 
long-run, you are all dead, so I will pick up that theme. Our 
concern as a Nation has to be the way we produce a full-fledged 
range of health care providers, including the other health 
professions that don't always get mentioned, so we need to look 
at all the other health care providers in addition to the 
shortage areas. And shortage areas are also interesting 
phenomenon as well because you may have in aggregate enough 
providers, but they may not be geographically distributed, 
which is one very big problem.
    And a second problem is the relative diversity of the 
provider population to the population at-large. And so while 
the concept of the market over the long-run might be 
sufficient, I think when you step back and look at the 
diversity of the professions themselves, the diversity of the 
population and the whole issue of geographic distribution, I 
think there is a role for government. Further, there is a role 
for government in actually understanding what those 
availabilities are, and that is one of the roles of government, 
to provide the data by which we know what professions are in 
emerging shortages so that we have an opportunity as a society 
to make decisions about how we will handle those.
    Ms. Capps. Thank you.
    Mr. Wiltz. I can tell you who I am and where I am because 
of the National Health Service Corps. I was just sharing with 
Dr. Duke, I found a periodical produced in 1972 which was a 
period when I was a medical student. It was because of National 
Health Service Corps and Scholarship Program that I was able to 
attend Tulane University and serve the people that I have 
served for the last 19 years.
    If market forces would have solved this problem--we use the 
Star Trek motto about the ``boldly go where no one else will 
go''--if that were true, then profit-margin driven practices 
would have gone to these areas. I do believe that government 
plays a role, a vital role. We believe in population parity, 
that our workforce should reflect what we are represented in 
this Nation, and we have always been committed to that.
    I would just like to summarize and say that we have built 
them, they have come, and once they come there, we need the 
people to serve them, and we need the people that can serve 
them that are culturally competent and qualified to do so.
    In addressing ours, I think the mantra to our State 
Legislature, local problems deserve local solutions by local 
people, and we need to be at the foremost front of that 
argument by serving the communities that we represent, putting 
the patient first, using a team approach not with a Doc at the 
top, faced in the center, building the circle with all the 
providers and all the wraparound services.
    Ms. Capps. Thank you. And you provide a segue for my next 
question which is more specific. Perhaps, Dr. Duke, to the goal 
of flexibility, more flexibility in the NHSC, and this is about 
nurse-practitioners. That is what you were talking about 
perhaps in a way, Dr. Wiltz.
    Before 1990, nurse-practitioners, midwives, physician's 
assistants, got very little support from the NHSC. If there is 
flexibility in the set-asides, if there is a waiver again, what 
do anticipate will happen? What can we do to prevent shortfalls 
in this area?
    Ms. Duke. The area of shortfalls in nursing, pharmacists 
and other health providers is a concern. We are trying to 
document what those shortfalls are. And the Secretary has been 
very concerned about, for example, the emerging nursing 
shortage that we face as a Nation. He visited us for a week and 
spent time with us looking at various problems that we are 
grappling with every day. And he met for over an hour with a 
group of representatives of the nursing profession, for 
example, to look at what are the problems in the different 
phases of nursing education, nursing recruitment, nursing 
training, and he is very committed.
    We have in our 2002 budget money for increasing the 
diversity of the nursing workforce and increasing the basic 
nurse training program. And also, as a result of the 
Secretary's visit with us, in which we spent a good deal of 
time on the subject of the emerging nursing shortage, the 
Secretary went back to the Department and basically used his 
transfer authority to give us an additional $5 million this 
year, in 2001, for us to make available nurse education loan 
repayment opportunities which we will use this year to put 400 
new nurses in underserved areas, as a result of what he heard 
about this shortage. So, it is an area we are very concerned 
about.
    Mr. Bilirakis. Thank you.
    Ms. Capps. If I could get one more yes or no. The 
flexibility won't eliminate the standards for nurse-
practitioners?
    Ms. Duke. I am not sure I understood that question, I am 
sorry.
    Ms. Capps. The set-aside.
    Ms. Duke. We have not put in any discussion of set-asides, 
so I really am not in a position to talk about that, but I will 
try to get back to you on that.
    Mr. Bilirakis. We will have written questions, as we 
customarily do, after the hearing, and we would expect that you 
would be willing, within just a matter of a few days, respond 
to those. Possibly, Ms. Capps, you can broach it that way. Mr. 
Bryant. And we do have three votes, so right after Mr. Bryant 
we are gone for a little while.
    Mr. Bryant. Thank you, Mr. Chairman. Mr. Brewton, I don't 
know what your political background is, but I want you running 
my next campaign. Put that on your calendar.
    Mr. Bilirakis. He is a Pittsburgher, I can probably guess 
his affiliation. I am sorry, go ahead.
    Mr. Bryant. One of my housemates is also from Pittsburgh 
and has another persuasion, too.
    Ms. Benjamin, you mentioned in either your oral testimony 
or your written testimony that a majority of the Hispanic 
residents that you serve have little or no English proficiency, 
and I don't think there is any question that that would impact 
the patient-doctor communication relationship.
    My question is, what challenges, very quickly, do you face 
in hiring bilingual, bicultural health professionals, and do 
you have any recommendations for us?
    Ms. Benjamin. Our largest challenge is the financial 
challenge, and additional funding will remedy that. It is very 
difficult to hire bilingual and bicultural providers, 
especially physicians and physician assistants and nurse-
practitioners, actually all of them, with the amount of funding 
that we can afford. And actually bilingual and bicultural 
African-American providers generally cost us about 30 percent 
more than non-African-American. So that is just the economy 
that we have right now, and the high demand that there is for 
bilingual and bicultural people.
    Mr. Bryant. Thank you. Dr. Duke, several questions and, as 
the chairman has indicated, you can respond in writing. I will 
read through a couple of these very quickly. Is there evidence 
that employers stop insuring low-wage workers once a community 
health center moves into the area? And if that is the case, 
what would be your suggestion on how we could address that 
issue here in Congress? You could give us your answer in 
writing on that one, as well as the extent to which you are 
able to determine, what amount of fraud is taking place in that 
area of community health center programs?
    And let me move on to a couple of quick comments and, 
finally, a question or two for you to answer because I am 
concerned about some of the numbers. Generally, as I 
understand, two programs involved here in the NHSC regarding 
payment for education, one is a scholarship which obviously you 
don't pay back, the other is I guess a loan type which is 
repaid, and statistically I am seeing numbers that show 
actually more people who are recipients of the loan repayment 
stay in the area longer after their commitment expires than 
people who are on scholarships, and it is something like 79.2 
percent versus 61.9 percent overstay, which is what we want 
them to do, their commitment. Do you have any quick answer on 
that because I have another one I want to ask you, so I don't 
want to take the rest of my time on that one, but do you have a 
quick response to that?
    Ms. Duke. The concern we have is to increase our retention 
rate for both our scholars and our loan-repayers, and I will 
get you more information on the difference in that ratio in 
writing.
    Mr. Bryant. Would you also address whether--I assume it is, 
but I want to confirm it--the financial status for these 
applicants for the loan program or the scholarship, if their 
financial status plays a role in what they get, and I am 
assuming it does, but I need to know that also.
    One final question--again, on the same program, NHSC 
program--our numbers show that 22 percent of the shortage 
areas, when they receive doctors in this situation, actually 
are enough to lift them over into another category of provider-
to-population ratio, while 65 percent of the areas, the 
shortage areas, never receive any providers at all and, to me, 
that shows that there is not maybe enough thought being given 
to where people are assigned--when you are sending them to 
areas that are already marginal almost to the point where they 
don't need these types of doctors, they are not underseved 
areas once they get there--to the point where you have got 65 
percent of the shortage areas not receiving any doctors, 
clearly underserved areas that need those. Again, if you could 
address that with any comments you have now, or--since the 
caution light is on and the red light is about to come on, it 
would be better if you address that in your written, late-filed 
testimony.
    Ms. Duke. I will provide the information in writing, and 
this is an area of our concern and we are looking at the 
shortage designation definition.
    Mr. Bryant. Thank you.
    Mr. Bilirakis. I thank the gentleman, and I thank the 
panel. You really have been a terrific panel, and we have 
learned an awful lot from you. We have a second panel coming 
up.
    I am going to go ahead and recess until 12:45, give the 
second panel a chance to grab a bite to eat, and the rest of 
us, too. Thank you again so very much.
    [Recess]
    Mr. Bilirakis. The hearing will come to order. The second 
panel consists of Janet Heinrich, of the General Accounting 
Office; Linda O'Leary, I have already mentioned her, she is 
with the Federation of American Health Systems, the Chief 
Nursing Officer at the Regional Medical Center in Bayonet 
Point, Florida, part of my congressional district--welcome, 
Linda. Mr. Brown would like to introduce the next witness.
    Mr. Brown. I am glad to say Diana Baker works as a urology/
gynecology nurse at the Cleveland Clinics, from Newton Falls, 
Ohio, which, if you check the address, is the only community in 
the whole country that has a single digit zip code, 44444. So, 
if you learn nothing else today, you know that. Welcome, Ms. 
Baker.
    Mr. Bilirakis. I probably should not have done that.
    Mr. Brown. A little local color, Mr. Chairman.
    Mr. Bilirakis. Dr. Cory Roberts, Director of Anatomic 
Pathology, St. Paul Medical Center, Department of Pathology, 
Dallas, Texas; Ms. Adele Pietrantoni, a Trustee at the American 
Pharmaceutical Association, and Dr. Russell Roberts, a John M. 
Olin Senior Fellow at the Weidenbaum Center on the Economy, 
Government and Public Policy, Washington University, St. Louis, 
Missouri. Welcome, Doctor.
    As per usual, your written statement is a part of the 
record, and we would appreciate it if you would supplement, or 
whatever the case might be. I will set the clock at 5 minutes. 
I would appreciate if you would try to keep your remarks within 
that 5 minutes but, obviously, if you go over slightly, I won't 
cut you off, but we do want to try to finish up. We have the 
energy bill on the floor, and there is generally an awful lot 
of amendments to that, so we might have some interruptions, but 
hopefully not. Ms. Heinrich, please proceed.

   STATEMENTS OF JANET HEINRICH, DIRECTOR, HEALTH CARE-PUBLIC 
 HEALTH ISSUES, U.S. GENERAL ACCOUNTING OFFICE; LINDA O'LEARY, 
 FEDERATION OF AMERICAN HEALTH SYSTEMS, CHIEF NURSING OFFICER, 
REGIONAL MEDICAL CENTER, BAYONET POINT, HUDSON, FLORIDA; DIANA 
 BAKER; CORY ROBERTS, DIRECTOR OF ANATOMIC PATHOLOGY, ST. PAUL 
 MEDICAL CENTER, DEPARTMENT OF PATHOLOGY, DALLAS, TEXAS; ADELE 
PIETRANTONI, TRUSTEE, AMERICAN PHARMACEUTICAL ASSOCIATION; AND 
RUSSELL ROBERTS, JOHN M. OLIN SENIOR FELLOW, WEIDENBAUM CENTER 
   ON THE ECONOMY, GOVERNMENT AND PUBLIC POLICY, WASHINGTON 
                UNIVERSITY, ST. LOUIS, MISSOURI

    Mr. Chairman and members of the subcommittee, we are 
pleased to be here today as you discuss issues related to the 
health care workforce and the reauthorization of the Federal 
safety net programs to improve access to care. My testimony 
will discuss growing concern about the adequacy of the health 
care workforce and emerging shortages especially among nurses 
and nurse aides, and focus on some lessons learned from the 
experience of the National Health Service Corps in addressing 
the maldistribution of available health care professionals.
    While current data on workforce supply and demand are not 
adequate to determine the magnitude of any imbalance, available 
evidence suggests emerging shortages for the largest categories 
of health care workers, nurses and nurse aides. Both the demand 
for and supply of health workers are influenced by many 
factors. For example, with respect to registered nurses, demand 
not only depends on the care needs of the population, but also 
on how providers--hospitals, nursing homes, and others--decide 
to use nurses in delivering care.
    In the past, providers have changed staffing patterns, 
employing fewer or more nurses relative to other workers at 
various times. Recent studies suggest that hospitals and other 
providers in many areas of the country are experiencing greater 
difficulty in recruiting health care workers. For example, a 
survey in Maryland reported a statewide average RN vacancy rate 
for hospitals of 14.7 percent in 2000, up from 3.3 percent in 
1997. The same survey reported a 12.4 percent vacancy rate for 
pharmacists, and a 13.6 percent vacancy rate for laboratory 
technicians. Many States are also reporting that nurse aide 
recruitment and retention is a major workforce issue, 
especially in nursing homes and home health care.
    Job dissatisfaction has been identified as a major factor 
contributing to the current problems in recruiting and 
retaining nurses and nurse aides. Among nurses, inadequate 
staff, heavy workloads, and the increased use of overtime are 
frequently cited as key concerns. Low wages, few benefits, and 
difficult working conditions are linked to high turnover among 
nurse aides.
    The demand in health care is expected to grow dramatically 
in the coming years as the population continues to age. The 
Bureau of Labor Statistics predicts that demand for laboratory 
technologists, RNs, and nurse aides will grow by approximately 
20 percent by 2008, compared to 14 percent in all other 
occupations. The growth for personal and home health aides is 
predicted to grow by more than 58 percent. During this time, 
the number of women between 25 and 54 years of age, who have 
traditionally formed the core of the nursing workforce, is 
expected to remain relatively unchanged.
    In addition to concerns about the overall supply of health 
care professionals, the distribution of available workers 
across geographic areas is an ongoing public health concern. 
The National Health Service Corps is one safety net program 
that directly places primary care professionals in these 
medically needy areas. Some have proposed expanding the Corps 
or developing similar programs to address additional health 
care disciplines, such as Registered Nurses, pharmacists, and 
medical laboratory personnel.
    While the Corps has had some success in addressing the 
geographic distribution of physicians and other providers, our 
past work has identified several lessons to consider in 
developing national workforce policies. These include how the 
Corps identifies and measures the need for health care workers, 
how the Corps placements are coordinated with other programs 
and with its own placements, and what incentives, scholarships 
or loan repayments, are a better approach to attract 
practitioners to targeted geographic areas.
    We have identified numerous problems with the way that HHS 
decides whether an area is a health professional shortage area, 
a HPSA, a designation required for the Corps placement. The 
current approach does not count some practitioners already 
working in the area, such as nurse practitioners or current 
Corps members. The Corps also needs to coordinate its placement 
with other efforts to attract physicians to needy areas, such 
as the J-1 visa waiver program for non-U.S. citizens who have 
just completed their graduate medical education in the United 
States.
    Another issue is how to most effectively attract health 
care professionals to the Corps. We found that the loan 
repayment program costs less per year of service, that loan 
repayment recipients are more likely to complete their service 
obligations, and that loan repayment recipients are more likely 
to continue practicing in the underserved community after 
completing their obligation. Therefore, it may be effective to 
target a larger portion of funds to loan repayment instead of 
scholarships.
    In conclusion, providers' current difficulty recruiting and 
retaining health care workers could worsen if demand increases 
in the future. More detailed data are needed to delineate the 
extent and nature of workforce shortages to assist in targeting 
corrective efforts. Programs like the National Health Service 
Corps can play a role in improving the distribution of health 
care workers, however, it is important that we evaluate the 
performance of this program adequately so that it is structured 
to maximize impact.
    Mr. Chairman, this concludes my prepared statement, and I 
will, of course, be happy to answer questions.
    [The prepared statement of Janet Heinrich follows:]
  Prepared Statement of Janet Heinrich, Director, Health Care-Public 
                Health Issues, General Accounting Office
    Mr. Chairman and Members of the Subcommittee: We are pleased to be 
here today as you discuss issues related to the health care workforce 
and the reauthorization of federal safety net programs to improve 
access to care for medically underserved populations. As you know, 
there is growing concern that many Americans will go without needed 
health care services because worker shortages or geographic 
maldistribution of certain types of health care professionals may 
develop.
    Changes in the U.S. health care system over the past two decades 
have affected the environment in which a variety of health 
professionals and paraprofessionals provide care. For example, while 
hospitals traditionally were the primary providers of acute care, 
advances in technology, along with cost controls, have shifted much 
care from traditional inpatient settings to ambulatory or community-
based settings, nursing facilities, and home health care settings. In 
addition, the transfer of less acute patients to nursing homes and 
community-based-care settings created a broader range of health care 
employment opportunities. These changes have led to concerns regarding 
the adequacy of the health care workforce. And while the adequacy of 
the health care workforce is an important issue nationwide, the 
distribution of available health professionals is a particularly acute 
issue in certain locations. These medically underserved areas, ranging 
from isolated rural areas to inner cities, have problems attracting and 
retaining health care professionals.
    My testimony will discuss (1) growing concerns about the adequacy 
of the health care workforce and emerging shortages in some fields, 
particularly among nurses and nurse aides, and (2) the lessons learned 
from the experience of one federal program--the Department of Health 
and Human Services' (HHS) National Health Service Corps (NHSC)--in 
addressing the maldistribution of health care professionals. My 
comments are based on our previous work in these areas and limited 
follow-up work we conducted to update the findings and recommendations 
contained in earlier reports.1
---------------------------------------------------------------------------
    \1\ See appendix I for a list of these reports.
---------------------------------------------------------------------------
    In brief, while current data on supply and demand for many 
categories of health workers are limited, available evidence suggests 
emerging shortages in some fields, for example, among nurses and nurse 
aides. Many providers are reporting rising vacancy and turnover rates 
for these workers, contributing to growing concerns about recruiting 
and retaining qualified health professionals. These concerns are likely 
to increase in the future as demographic pressures associated with an 
aging population are expected to both increase demand for health 
services and limit the pool of available workers such as nurses and 
nurse aides.
    Regarding the experience of the NHSC, while the program has placed 
thousands of health professionals in needy communities since its 
establishment in 1970, our work has identified several areas for HHS 
and the Congress to consider in discussing NHSC reauthorization. For 
example, we found problems with HHS' system for identifying and 
measuring the need for NHSC providers. In addition, the NHSC placement 
process is not well coordinated with other efforts to place physicians 
in underserved areas and does not assist as many needy areas as 
possible. Finally, regarding the financing mechanism used to attract 
health care professionals to the NHSC, our analysis found that 
educational loan repayment is preferable over scholarships in most 
situations.
             health workforce issues are a growing concern
    Recruitment and retention of adequate numbers of qualified workers 
are major concerns for many health care providers today. While current 
data on supply and demand for many categories of health workers are 
limited, available evidence suggests emerging shortages in some fields, 
for example, among nurses and nurse aides. Many providers are reporting 
rising vacancy and turnover rates for these worker categories. In 
addition, difficult working conditions and dissatisfaction with wages 
have contributed to rising levels of dissatisfaction among many nurses 
and nurse aides. These concerns are likely to increase in the future as 
demographic pressures associated with an aging population are expected 
to both increase demand for health services and limit the pool of 
available workers such as nurses and nurse aides. As the baby boom 
generation ages, the population of persons age 65 and older is expected 
to double between 2000 and 2030, while the number of women age 25 to 
54, who have traditionally formed the core of the nursing workforce, 
will remain virtually unchanged. As a result, the nation may face a 
caregiver shortage of different dimensions from those of the past.
Evidence Suggests Emerging Health Worker Shortages in Some Fields
    Nurses and nurse aides are by far the two largest categories of 
health care workers, followed by physicians and 
pharmacists.2 While current workforce data are not adequate 
to determine the magnitude of any imbalance between supply and demand 
with any degree of precision, evidence suggests emerging shortages of 
nurses and nurse aides to fill vacant positions in hospitals, nursing 
homes, and other health care settings. Hospitals and other providers 
throughout the country have reported increasing difficulty in 
recruiting health care workers, with national vacancy rates in 
hospitals as high as 21 percent for pharmacists in 2001. Rising 
turnover rates in some fields such as nursing and pharmacy are another 
challenge facing providers and are suggestive of growing 
dissatisfaction with wages, working environments, or both.
---------------------------------------------------------------------------
    \2\ In 1999, there were approximately 2.2 million nurse aides, 2.2 
million registered nurses, 688,000 licensed practical or vocational 
nurses, 313,000 physicians, and 226,000 pharmacists employed in the 
United States according to the Bureau of Labor Statistics.
---------------------------------------------------------------------------
Data on Health Workforce Supply and Demand Are Limited
    There is no consensus on the optimal number and ratio of health 
professionals necessary to meet the population's health care needs. 
Both demand and supply of health workers are influenced by many 
factors. For example, with respect to registered nurses (RN), demand 
not only depends on the care needs of the population, but also on how 
providers--hospitals, nursing homes, clinics, and others--decide to use 
nurses in delivering care. Providers have changed staffing patterns in 
the past, employing fewer or more nurses relative to other workers at 
various times. National data are not adequate to describe the nature 
and extent of nurse workforce shortages nor are data sufficiently 
sensitive or current to allow a comparison of the adequacy of nurse 
workforce size across states, specialties, or provider types.
    With respect to pharmacists, there are also limited data available 
for assessing the adequacy of supply, a situation that has led to 
contradictory claims of a surplus of pharmacists a few years ago and a 
shortage at the present time. While several factors point to growing 
demand for pharmacy services such as the increasing number of 
prescriptions being filled, a greater number of pharmacy sites, and 
longer hours of operation, these pressures may be moderated by 
expanding access to alternative dispensing models such as Internet and 
mail-order delivery services.
Providers Report High Vacancy Rates for Many Health Care Workers
    Recent studies suggest that hospitals and other health care 
providers in many areas of the country are experiencing increasing 
difficulty recruiting health care workers.3 A recent 2001 
national survey by the American Hospital Association reported an 11 
percent vacancy rate for RNs, 18 percent for radiology technicians, and 
21 percent for pharmacists.4 Half of all hospitals reported 
more difficulty in recruiting pharmacists than in the previous year, 
and three-quarters reported greater difficulty in recruiting RNs. Urban 
hospitals reported slightly more difficulty in recruiting RNs than 
rural hospitals. However, rural hospitals reported higher vacancy rates 
for several other types of employees. Rural hospitals reported a 29 
percent vacancy rate for pharmacists and 21 percent for radiology 
technologists compared to 15 percent and 16 percent respectively among 
urban hospitals.
---------------------------------------------------------------------------
    \3\ Caution must be used when comparing vacancy rates from 
different studies. While nurse vacancy rates are typically the number 
of budgeted full-time RN positions that are unfilled divided by the 
total number of budgeted full-time RN positions, not all studies 
identify the method used to calculate rates.
    \4\ American Hospital Association, The Hospital Workforce Shortage: 
Immediate and Future, (Washington, D.C.: AHA, 2001).
---------------------------------------------------------------------------
    A recent survey in Maryland conducted by the Association of 
Maryland Hospitals and Health Systems reported a statewide average RN 
vacancy rate for hospitals of 14.7 percent in 2000, up from 3.3 percent 
in 1997.5 The Association reported that the last time 
vacancy rates were at this level was during the late 1980s, during the 
last reported nurse shortage. Also in 2000, Maryland hospitals reported 
a 12.4 percent vacancy rate for pharmacists, a 13.6 percent rate for 
laboratory technicians, and 21.0 percent for nuclear medicine 
technologists. These same hospitals reported taking 60 days to fill a 
vacant RN position in 2000 and 54 days to fill a pharmacy vacancy in 
1999.
---------------------------------------------------------------------------
    \5\ Association of Maryland Hospitals & Health Systems, MHA 
Hospital Personnel Survey 2000, (Elkridge, MD: MHA, 2001).
---------------------------------------------------------------------------
    Several recent analyses illustrate concerns over the supply of 
nurse aides. In a 2000 study of the nurse aide workforce in 
Pennsylvania, staff shortages were reported by three-fourths of nursing 
homes and more than half of all home health care agencies.6 
Over half (53 percent) of private nursing homes and 46 percent of 
certified home health care agencies reported staff vacancy rates higher 
than 10 percent. Nineteen percent of nursing homes and 25 percent of 
home health care agencies reported vacancy rates exceeding 20 percent. 
A recent survey of providers in Vermont found high vacancy rates for 
nurse aides, particularly in hospitals and nursing homes; as of June 
2000, the vacancy rate for nurse aides in nursing homes was 16 percent, 
in hospitals 15 percent, and in home health care 8 percent. In a recent 
survey of states, officials from 42 of the 48 states responding 
reported that nurse aide recruitment and retention were currently major 
workforce issues in their states.7 More than two-thirds of 
these states (30 of 42) reported that they were actively engaged in 
efforts to address these issues.
---------------------------------------------------------------------------
    \6\ Joel Leon, Jonas Marainen, and John Marcotte, Pennsylvania's 
Frontline Workers in Long Term Care (Jenkintown, Pa.: Polisher Research 
Institute at the Philadelphia Geriatric Center, 2001).
    \7\ North Carolina Division of Facility Services, Comparing State 
Efforts to Address the Recruitment and Retention of Nurse Aide and 
Other Paraprofessional Aide Workers (Raleigh, N.C.: Sept. 1999).
---------------------------------------------------------------------------
High Rates of Turnover Experienced in Some Fields
    Rising turnover rates in many fields are another challenge facing 
providers and suggest growing dissatisfaction with wages, working 
environments, or both. According to a recent national hospital survey, 
rising rates of turnover have been experienced, particularly in nursing 
and pharmacy departments.8 Turnover among nursing staff rose 
from 11.7 percent in 1998 to 26.2 percent in 2000. Among pharmacy 
staff, turnover rose from 14.6 percent to 21.3 percent over the same 
period. Nursing home and home health care industry surveys indicate 
that nurse turnover is an issue for them as well.9 In 1997, 
an American Health Care Association (AHCA) survey of 13 nursing home 
chains identified a 51-percent turnover rate for RNs and licensed 
practical nurses (LPN).10 A 2000 national survey of home 
health care agencies reported a 21-percent turnover rate for 
RNs.11
---------------------------------------------------------------------------
    \8\ Hospital & Healthcare Compensation Service, Hospital Salary and 
Benefits Report 2000-2001 (Oakland, N.J.: Hospital & Healthcare 
Compensation Service, 2000).
    \9\ As with vacancy rates, caution should be used when comparing 
turnover rates from different studies. Nurse turnover rates are 
typically the number of nurses that have left a facility divided by the 
total number of nurse positions. However, there is no standard method 
for calculating turnover, and methods used in different studies may 
vary.
    \10\ American Health Care Association, Facts and Trends 1999, The 
Nursing Facility Sourcebook (Washington, D.C.: AHCA, 1999).
    \11\ Hospital & Healthcare Compensation Service, Homecare Salary 
and Benefits Report 2000-2001 (Oakland, N.J.: Hospital & Healthcare 
Compensation Service, 2000).
---------------------------------------------------------------------------
    Many providers also are reporting problems with retention of nurse 
aide staff. Annual turnover rates among aides working in nursing homes 
are reported to be from about 40 percent to more than 100 percent. In 
1998, a survey sponsored by AHCA of 12 nursing home chains found 94-
percent turnover among nurse aides.12 A more recent national 
study of home health care agencies identified a 28 percent turnover 
rate among aides in 2000, up from 19 percent in 1994.13
---------------------------------------------------------------------------
    \12\ American Health Care Association, Staffing of Nursing Services 
in Long Term Care: Present Issues and Prospects for the Future 
(Washington, D.C.: AHCA, 2001).
    \13\ Homecare Salary and Benefits Report, 2000-2001, 2000.
---------------------------------------------------------------------------
    High rates of turnover may lead to higher provider costs and 
quality of care problems. Direct provider costs of turnover include 
recruitment, selection, and training of new staff, overtime, and use of 
temporary agency staff to fill gaps. Indirect costs associated with 
turnover include an initial reduction in the efficiency of new staff 
and a decrease in nurse aide morale and group productivity. In nursing 
homes, for example, high turnover can disrupt the continuity of patient 
care--that is, aides may lack experience and knowledge of individual 
residents or clients. When turnover leads to staff shortages, nursing 
home residents may suffer harm because there remain fewer staff to care 
for the same number of residents.
Working Conditions and Wages Contribute to Job Dissatisfaction Among 
        Nurses and Nurse Aides
    Job dissatisfaction has been identified as a major factor 
contributing to the current problems providers report in recruiting and 
retaining nurses and nurse aides. Among nurses, inadequate staffing, 
heavy workloads, and the increased use of overtime are frequently cited 
as key areas of job dissatisfaction. A recent Federation of Nurses and 
Health Professionals (FNHP) survey found that half of the currently 
employed RNs surveyed had considered leaving the patient-care field for 
reasons other than retirement over the past 2 years; of those who 
considered leaving, 18 percent wanted higher wages, but 56 percent 
wanted a less stressful and less physically demanding job.14 
Other surveys indicate that while increased wages might encourage 
nurses to stay at their jobs, money is not generally cited as the 
primary reason for job dissatisfaction. The FNHP survey found that 55 
percent of currently employed RNs were either just somewhat or not 
satisfied with their facility's staffing levels, while 43 percent 
indicated that increased staffing would do the most to improve their 
jobs.
---------------------------------------------------------------------------
    \14\ Federation of Nurses and Health Professionals, The Nurse 
Shortage: Perspectives from Current Direct Care Nurses and Former 
Direct Care Nurses (opinion research study conducted by Peter D. Hart 
Research Associates)(Washington, D.C.: 2001).
---------------------------------------------------------------------------
    For nurse aides, low wages, few benefits, and difficult working 
conditions are linked to high turnover. Our analysis of national wage 
and employment data from the Bureau of Labor Statistics (BLS) indicates 
that, on average, nurse aides receive lower wages and have fewer 
benefits than workers generally. In 1999, the national average hourly 
wage for aides working in nursing homes was $8.29, compared to $9.22 
for service workers and $15.29 for all workers. For aides working in 
home health care agencies, the average hourly wage was $8.67, and for 
aides working in hospitals, $8.94. Aides working in nursing homes and 
home health care are more than twice as likely as other workers to be 
receiving food stamps and Medicaid benefits, and they are much more 
likely to lack health insurance. One-fourth of aides in nursing homes 
and one-third of aides in home health care are uninsured compared to 16 
percent of all workers. In addition, other studies have found that the 
physical demands of nurse aide work and other aspects of the 
environment contribute to retention problems. Nurse aide jobs are 
physically demanding, often requiring moving patients in and out of 
bed, long hours of standing and walking, and dealing with patients or 
residents who may be disoriented or uncooperative.
Demand for Most Health Workers Will Continue to Grow While Demographic 
        Pressures May Limit Supply
    Concern about emerging shortages may increase as the demand for 
health care services is expected to grow dramatically with the 
continued aging of the population. In most job categories, health care 
employment is expected to grow much faster than overall employment, 
which BLS projects will increase by 14.4 percent from 1998 to 2008. As 
shown in Table 1, total employment for personal and home care aides is 
expected to grow by 58 percent, with 567,000 new workers needed to meet 
the increased demand and replace those who leave the field. Employment 
of physical therapists is expected to grow by 34 percent, and 
employment of RNs is projected to grow by almost 22 percent, with 
794,000 new RNs expected to be needed by 2008.

                    Table 1: Projected Employment Growth for Selected Occupations, 1998-2008
----------------------------------------------------------------------------------------------------------------
                                                                                                 Total projected
                                                                     1998        Percent growth   job openings,
                          Occupation                           employment  (in   in employment    1998-2008 (in
                                                                  thousands)       1998-2008      thousands) \1\
----------------------------------------------------------------------------------------------------------------
All occupations..............................................          140,514             14.4           54,622
Physicians...................................................              577             21.2              212
Dentists.....................................................              160              3.1               38
Registered nurses............................................            2,079             21.7              794
Pharmacists..................................................              185              7.3               64
Physical therapists..........................................              120             34.0               59
Clinical laboratory technicians and technologists............              313             17.0               93
Radiology technicians and technologists......................              162             20.1               55
Nurse aides, orderlies and attendants........................            1,367             23.8              515
Personal and home health aides...............................              746             58.1              567
----------------------------------------------------------------------------------------------------------------
\1\ Total projected openings are due to both growth in demand and net replacements.
Source: U.S. Department of Labor, Bureau of Labor Statistics, ``Occupational Employment Projections to 2008,''
  Monthly Labor Review, November 1999.

    Demographic pressures will continue to exert significant pressure 
on both the supply and demand for nurses and nurse aides. A more 
serious shortage of nurses and nurse aides is expected in the future, 
as pressures are exerted on both supply and demand. The future demand 
for these workers is expected to increase dramatically when the baby 
boomers reach their 60s, 70s, and beyond. Between 2000 and 2030, the 
population age 65 years and older will double from 2000 to 2030. During 
that same period the number of women age 25 and 54, who have 
traditionally formed the core of the nurse and nurse aide workforce, is 
expected to remain relatively unchanged. Unless more young people 
choose to go into the nursing profession, the workforce will continue 
to age. By 2010, approximately 40 percent of nurses will likely be 
older than 50 years. By 2020, the total number of full time equivalent 
RNs is projected to have fallen 20 percent below HRSA's projections of 
the number of RNs that will be required to meet demand at that 
time.15
---------------------------------------------------------------------------
    \15\ ``Peter I. Beurhaus, Douglas O. Staiger, and David I. 
Auerbach, ``Implications of an Aging Registered Nurse Workforce,'' 
JAMA, Vol. 283, No. 22 (June 14, 2000).
---------------------------------------------------------------------------
     nhsc illustrates challenges in addressing shortages of health 
                   professionals in certain locations
    In addition to concerns about the overall supply of health care 
professionals, the distribution of available providers is an ongoing 
public health concern. Many Americans live in areas--including isolated 
rural areas or inner city neighborhoods--that lack a sufficient number 
of health care providers. The National Health Service Corps (NHSC) is 
one safety-net program that directly places primary care physicians and 
other health professionals in these medically needy areas. The NHSC 
offers scholarships and educational loan repayments for health care 
professionals who, in turn, agree to serve in communities that have a 
shortage of them. Since its establishment in 1970, the NHSC has placed 
thousands of physicians, nurse practitioners, dentists, and other 
health care providers in communities that report chronic shortages of 
health professionals. At the end of fiscal year 2000, the NHSC had 
2,376 providers serving in shortage areas. Since the NHSC was last 
reauthorized in 1990, funding for its scholarship and loan repayment 
programs has increased nearly 8-fold, from about $11 million in 1990 to 
around $84 million in 2001.16
---------------------------------------------------------------------------
    \16\ In addition to funding for scholarship and loan repayment 
awards, the NHSC receives funding for support of its providers and 
operations. In fiscal year 2001, this field budget was about $41 
million.
---------------------------------------------------------------------------
    Some have proposed expanding the NHSC or developing similar 
programs to include additional health care disciplines, such as nurses, 
pharmacists, and medical laboratory personnel. In considering such 
possibilities, HHS and the Congress may want to consider our work that 
has identified several ways in which the NHSC could be improved. These 
include how the NHSC identifies the need for providers and how it 
measures that need, how the NHSC placements are coordinated with other 
programs and with its own placements, and which financing mechanism--
scholarships or loan repayments--is a better approach to attract 
providers to those areas.
Current System for Identifying Need is Inadequate
    Over the past 6 years, we have identified numerous problems with 
the way HHS decides whether an area is a health professional shortage 
area (HPSA), a designation required for a NHSC placement.17 
In addition to identifying problems with the timeliness and quality of 
the data used, we found that HHS' current approach does not count some 
providers already working in the shortage area.18 For 
example, it does not count nonphysicians providing primary care, such 
as nurse practitioners, and it does not count NHSC providers already 
practicing there. As a result, the current HPSA system tends to 
overstate the need for more providers, leading us to question the 
system's ability to assist HHS in identifying the universe of need and 
in prioritizing areas.
---------------------------------------------------------------------------
    \17\ Only areas designated as a HPSA may apply for NHSC providers. 
Currently, HHS considers a HPSA generally to be a location or area with 
less than one primary care physician for every 3,500 persons. As of 
June 30, 2001, HHS identified 2,968 primary care HPSAs. To eliminate 
these HPSA designations, HHS identified a need of over 6,000 full-time 
physicians. HHS has different criteria for dental and mental health 
HPSAs.
    \18\ See Health Care Shortage Areas: Designations Not a Useful Tool 
for Directing Resources to the Underserved (GAO/HEHS-95-200, Sept. 8, 
1995).
---------------------------------------------------------------------------
    Recognizing the flaws in the current system, HHS has been working 
on ways to improve the designation of HPSAs, but the problems have not 
yet been resolved. After studying the changes needed to improve the 
HPSA system for nearly a decade, HHS published a proposed rule in the 
Federal Register in September 1998. The proposed rule generated a large 
volume of comments and a high level of concern about its potential 
impact. In June 1999, HHS announced that it would conduct further 
analyses before proceeding. HHS continues to work on a revised shortage 
area designation methodology; however, as of July 2001, it did not have 
a firm date for publishing the proposed new regulations.
    The controversy surrounding proposed modifications to the HPSA 
designation system may be due, in large part, to its use by other 
programs. Originally, it was only used to identify an area as one that 
could request a provider from the NHSC. Today many federal and state 
programs--including efforts unaffiliated with HHS--use the HPSA 
designation in considering program eligibility. These areas want to get 
and retain the HPSA designation in order to be eligible for such other 
programs as the Rural Health Clinic program or a 10 percent bonus on 
Medicare payments for physicians and other providers.
Better Coordination of Placements With Waivers for J-1 Visa Physicians 
        Is Needed
    The NHSC needs to coordinate its placements with other efforts to 
attract physicians to needy areas. There are not enough providers to 
fill all of the vacancies approved for NHSC providers. As a result, 
underserved communities are frequently turning to another method of 
obtaining physicians--attracting non-U.S. citizens who have just 
completed their graduate medical education in the United 
States.19 These physicians generally enter the United States 
under an exchange visitor program, and their visas, called J-1 visas, 
require them to leave the country when their medical training is done. 
However, the requirement to leave can be waived if a federal agency or 
state requests it. A waiver is usually accompanied by a requirement 
that the physician practice for a specified period in an underserved 
area. In fiscal year 1999, nearly 40 states requested such waivers. 
They are joined by several federal agencies--particularly the 
Department of Agriculture, which wants physicians to practice in rural 
areas, and the Appalachian Regional Commission, which wants to fill 
physician needs in Appalachia.
---------------------------------------------------------------------------
    \19\ See Foreign Physicians: Exchange Visitor Program Becoming 
Major Route to Practicing in U.S. Underserved Areas (GAO/HEHS-97-26, 
Dec. 30, 1996).
---------------------------------------------------------------------------
    Waiver placements have become so numerous that they have 
outnumbered the placements of NHSC physicians. In September 1999, over 
2,000 physicians had waivers and were practicing in or contracted to 
practice in underserved areas, compared with 1,356 NHSC physicians. In 
1999, the number of waiver physicians was large enough to satisfy over 
one-fourth of the physicians needed to eliminate HPSA designations 
nationwide. Our follow-up work in 2001 with the federal agencies 
requesting the waivers and 10 states indicates that these waivers are 
still frequently used to attract physicians to underserved areas.
    Although coordinating NHSC placements and waiver placements has the 
obvious advantage of addressing the needs of as many underserved 
locations as possible, this coordination has not occurred. In fact, 
this sizeable domestic placement effort--using waiver physicians to 
address medical underservice--is rudderless. Even among those states 
and agencies using the waiver approach, no federal agency has 
responsibility for ensuring that placement efforts are 
coordinated.20 The Administration has recently stated that 
HHS will enhance coordination between the NHSC and the use of waiver 
physicians; however HHS does not have a system to take waiver physician 
placements into account in determining where to put NHSC physicians. 
While some informal coordination may occur, it remains a fragmented 
effort with no overall program accountability. As a result, some areas 
have ended up with more than enough physicians to remove their shortage 
designations, while needs in other areas have gone unfilled.
---------------------------------------------------------------------------
    \20\ Historically, HHS has not supported the waiver approach as a 
sound way to address underservice needs in the United States. While HHS 
is considering the issue, the agency still takes the position that 
physicians should return home after completing their medical training 
to make their knowledge and skills available to their home countries.
---------------------------------------------------------------------------
    As the Congress considers reauthorizing the NHSC, it also has the 
opportunity to address these issues. We believe that the prospects for 
coordination would be enhanced through congressional direction in two 
areas. The first is whether waivers should be included as part of an 
overall federal strategy for addressing underservice. This should 
include determining the size of the waiver program and establishing how 
it should be coordinated with other federal programs. The second--
applicable if the Congress decides that waivers should be a part of the 
federal strategy--is designating leadership responsibility for managing 
the use of waivers as a distinct program.
Better Placement Process is Needed
    While congressional action could foster a coordinated federal 
strategy for placement of J-1 waiver physicians, our work has also 
shown that congressional action could help ensure that NHSC providers 
assist as many needy areas as possible. We previously reported that at 
least 22 percent of shortage areas receiving NHSC providers in 1993 
received more NHSC providers than needed to lift their provider-to-
population ratio to the point at which their HPSA designation could be 
removed, while 65 percent of shortage areas with NHSC-approved 
vacancies did not receive any providers at all.21 Of these 
latter locations, 143 had unsuccessfully requested a NHSC provider for 
3 years or more.22 In response to our recommendations, the 
NHSC has subsequently made improvements in its procedures and has 
substantially cut the number of HPSAs not receiving providers. However, 
these procedures still allow some HPSAs to receive more than enough 
providers to remove their shortage designation while others go without.
---------------------------------------------------------------------------
    \21\ To calculate oversupply, we counted physicians as one full-
time provider and nonphysicians (nurse practitioners, nurse midwives, 
or physician assistants) as one-half a full-time provider. If only 
physician placements are counted, 6 percent of these shortage areas 
would still be identified as oversupplied. We consider these estimates 
of oversupply to be conservative because our analysis does not include 
NHSC providers placed in prior years who were still in service during 
vacancy year 1993.
    \22\ See National Health Service Corps: Opportunities to Stretch 
Scarce Dollars and Improve Provider Placement (GAO/HEHS-96-28, Nov. 24, 
1995).
---------------------------------------------------------------------------
    NHSC officials have said that in making placements, they need to 
weigh not only assisting as many shortage areas as possible, but also 
factors--such as referral networks, office space, and salary and 
benefit packages--that can affect the chance that a provider might stay 
beyond the period of obligated service. Since the practice sites on the 
NHSC vacancy list had to meet NHSC requirements, including requirements 
for referral networks and salary and benefits packages, such factors 
should not be an issue for those practice locations. And while we agree 
that retention is a laudable goal, the impact of the NHSC's current 
practice is unknown, since the NHSC does not routinely track how long 
NHSC providers are retained at their sites after completing their 
service obligations. The Congress may want to consider clarifying the 
extent to which the program should try to meet the minimum needs of as 
many shortage areas as possible, and the extent to which additional 
placements should be allowed in an effort to encourage provider 
retention.
Loan Repayment Is a Better Approach than Scholarships
    Another issue that is fundamental to attracting health care 
professionals to the NHSC is the allocation of funds between 
scholarships and educational loan repayments. Under the NHSC 
scholarship program, students are recruited before or during their 
health professions training--generally several years before they begin 
their service obligation. By contrast, under the NHSC loan repayment 
program, providers are recruited at the time or after they complete 
their training. The scholarship program provides a set amount of aid 
per year while in school, while the loan repayment program repays a set 
amount of student debt for each year of service provided. Under the 
Public Health Service Act, at least 40 percent of the available funding 
must be for scholarships.
    We looked at which financing mechanism works better and found that, 
for several reasons, the loan repayment program is the better approach 
in most situations.23
---------------------------------------------------------------------------
    \23\ See GAO/HEHS-96-28.

 The loan repayment program costs less. On average, each year 
        of service by a physician under the scholarship program costs 
        the federal government over $43,000 compared with less than 
        $25,000 under loan repayment.24 A major reason for 
        the difference is the time value of money. Because 7 or more 
        years can elapse between the time that a physician receives a 
        scholarship and the time that the physician begins to practice 
        in an underserved area, the federal government is making an 
        investment for a commitment for service in the future. In the 
        loan repayment program, however, the federal government does 
        not pay until after the service has begun. The difference in 
        average cost per year of service could increase in the future 
        as a result of a recent change in tax law.25
---------------------------------------------------------------------------
    \24\ Amounts are in 1999 dollars. This cost analysis is based on 
new scholarship and new federal loan repayment awards made in fiscal 
year 1999.
    \25\ In analyzing the net cost differences, we took into account 
the federal income tax liability associated with scholarship and loan 
repayment awards. In essence, loan repayment awards are increased to 
provide for the resulting increased federal tax liability; scholarship 
awards are not. However, as a result of the Economic Growth and Tax 
Relief Reconciliation Act of 2001 (P.L. 107-16, Sec. 413), beginning 
January 1, 2002, scholarship payments of tuition, fees, and other 
reasonable educational costs will not be subject to federal income tax. 
As a result, the net cost to the federal government of a year of 
service under the NHSC scholarship program will increase.
---------------------------------------------------------------------------
 Loan repayment recipients are more likely to complete their 
        service obligations. This is not surprising when one considers 
        that scholarship recipients enter into their contracts up to 7 
        or more years before beginning their service obligation, during 
        which time their professional interests and personal 
        circumstances may change. Twelve percent of scholarship 
        recipients between 1980 and 1999 breached their contract to 
        serve, 26 compared to about 3 percent of loan 
        repayment recipients since that program began.
---------------------------------------------------------------------------
    \26\ This includes scholarship recipients who defaulted and paid 
the default penalty, those who defaulted and subsequently completed or 
are serving their obligation, and those who defaulted and have not 
begun service or payback.
---------------------------------------------------------------------------
 Loan repayment recipients are more likely to continue 
        practicing in the underserved community after completing their 
        obligation. How long providers remain at their sites after 
        fulfilling their obligation is not fully clear, because the 
        NHSC does not have a long-term tracking system in place. 
        However, we analyzed data for calendar years 1991 through 1993 
        and found that 48 percent of loan repayment recipients were 
        still at the same site 1 year after fulfilling their 
        obligation, compared to 27 percent for scholarship recipients. 
        Again, this is not surprising. Because loan repayment 
        recipients do not commit to service until after they have 
        completed training, they are more likely to know what they want 
        to do and where they want to live or practice at the time they 
        make the commitment.
    These reasons support applying a higher percentage of NHSC funding 
to loan repayment. The Congress may want to consider eliminating the 
current requirement that scholarships receive at least 40 percent of 
the funding. Besides being generally more cost-effective, the loan 
repayment program allows the NHSC to respond more quickly to changing 
needs. If demand suddenly increases for a certain type of health 
professional, the NHSC can recruit graduates right away through loan 
repayments. By contrast, giving a scholarship means waiting for years 
for the person to graduate.
    This is not to say that scholarships should be eliminated. One 
reason to keep them is that they can potentially do a better job of 
putting people in sites with the greatest need because scholarship 
recipients have less latitude in where they can fulfill their service 
obligation. However, our work indicates that this advantage has not 
been realized in practice. For NHSC providers beginning practice in 
1993-1994, we found no significant difference between scholarship and 
loan payment recipients in the priority that NHSC assigned to their 
service locations. This suggests that the scholarship program should be 
tightened so that it focuses on those areas with critical needs that 
cannot be met through loan repayment. In this regard, the Congress may 
want to consider reducing the number of sites that scholarship 
recipients can choose from, so that the focus of scholarships is 
clearly on the neediest sites.27 While placing greater 
restrictions on service locations could potentially reduce interest in 
the scholarship program, the program currently has more than six 
applicants for every scholarship--suggesting that the interest level is 
high enough to allow for some tightening in the program's conditions. 
If that approach should fail, additional incentives to get providers to 
the neediest areas might need to be explored.
---------------------------------------------------------------------------
    \27\ The law provides for three vacancies for each scholar in a 
given discipline and specialty, up to a maximum of 500 vacancies. For 
example, if there are 10 pediatricians available for service, the NHSC 
would provide a list of 30 eligible vacancies for that group if there 
were 500 or fewer vacancies in total.
---------------------------------------------------------------------------
                        concluding observations
    Providers' current difficulty recruiting and retaining health care 
professionals such as nurses and others could worsen as demand for 
these workers increases in the future. Current high levels of job 
dissatisfaction among nurses and nurse aides may also play a crucial 
role in determining the extent of current and future nursing shortages. 
Efforts undertaken to improve the workplace environment may both reduce 
the likelihood of nurses and nurse aides leaving the field and 
encourage more young people to enter the nursing profession. 
Nonetheless, demographic forces will continue to widen the gap between 
the number of people needing care and the nursing staff available to 
provide care. As a result, the nation will face a caregiver shortage of 
different dimensions from shortages of the past. More detailed data are 
needed, however, to delineate the extent and nature of nurse and nurse 
aide shortages to assist in planning and targeting corrective efforts.
    Regarding the NHSC, addressing needed program improvements would be 
beneficial. In particular, better coordination of NHSC placements with 
waivers for J-1 visa physicians could help more needy areas. In 
addition, addressing shortfalls in HHS systems for identifying 
underservice is long overdue. We believe HHS needs to gather more 
consistent and reliable information on the changing needs for services 
in underserved communities. Until then, determining whether federal 
resources are appropriately targeted to communities of greatest need 
and measuring their impact of these reasons will remain problematic.
    Mr. Chairman, this concludes my prepared statement. I would be 
pleased to respond to any questions you or members of the Subcommittee 
may have.
                   gao contacts and acknowledgements
    For further information regarding this testimony, please call Janet 
Heinrich, Director, Health Care--Public Health Issues, at (202) 512-
7119 or Frank Pasquier, Assistant Director, Health Care, at (206) 287-
4861. Other individuals who made key contributions to this testimony 
include Eric Anderson and Kim Yamane.

                    Appendix I--Related GAO Reports

    Nursing Workforce: Emerging Nurse Shortages Due to Multiple Factors 
(GAO-01-944, July 10, 2001)
    Nursing Workforce: Multiple Factors Create Nurse Recruitment and 
Retention Problems (GAO-01-912T, June 27, 2001)
    Nursing Workforce: Recruitment and Retention of Nurses and Nurse 
Aides Is a Growing Concern (GAO-01-750T, May 17, 2001)
    Health Care Access: Programs for Underserved Populations Could Be 
Improved (GAO/T-HEHS-00-81, Mar. 23, 2000)
    Community Health Centers: Adapting to Changing Health Care 
Environment Key to Continued Success (GAO/HEHS-00-39, Mar. 10, 2000)
    Physician Shortage Areas: Medicare Incentive Payments Not an 
Effective Approach to Improve Access (GAO/HEHS-99-36, Feb. 26, 1999)
    Health Care Access: Opportunities to Target Programs and Improve 
Accountability (GAO/T-HEHS-97-204, Sept. 11, 1997)
    Foreign Physicians: Exchange Visitor Program Becoming Major Route 
to Practicing in U.S. Underserved Areas (GAO/HEHS-97-26, Dec. 30, 1996)
    National Health Service Corps: Opportunities to Stretch Scarce 
Dollars and Improve Provider Placement (GAO/HEHS-96-28, Nov. 24, 1995)
    Health Care Shortage Areas: Designations Not a Useful Tool for 
Directing Resources to the Underserved (GAO/HEHS-95-200, Sept. 8, 1995)

    Mr. Bilirakis. Thank you very much, ma'am.
    Ms. O'Leary.

                   STATEMENT OF LINDA O'LEARY

    Ms. O'Leary. Good afternoon, Mr. Chairman and members of 
the committee. My name is Linda O'Leary. I am the Vice 
President and Chief Nursing Officer at Regional Medical Center 
Bayonet Point in Hudson, Florida. I am pleased to testify this 
afternoon on behalf of the Federation of American Hospitals on 
the critical issue of the growing health care workforce 
shortage.
    At Bayonet Point, we have a 290-bed acute care facility 
that is part of a larger hospital system, HCA, which owns 200 
hospitals across the country. As the CNO, I would like to 
convey my personal experiences in maintaining an adequate 
workforce as well as a snapshot of the shortage as a whole.
    The shortages of nurses and other health care providers 
within health care facilities is a growing problem across this 
country. In some areas, the crisis is imminent; in others, it 
has arrived.
    According to a recent survey by the American Hospital 
Association, hospitals have up to 168,000 open positions, 
126,000 of which are Registered Nurses. The decline in new 
nurse graduates in combination with the rapid aging of the 
existing pool of nurses and the aging population paints a 
picture of health care delivery in significant stress.
    The Florida Hospital Association recently released their 
nurse staffing report which details the extent of this 
shortage. The study revealed an overall vacancy rate for RNs of 
15.6 percent, and because of the shortage the survey found that 
the use of temporary agencies was reported by 83 percent of the 
hospitals surveyed.
    At HCA, our company's contract labor costs have increased 
an average of 28 percent over the last year, and the labor wage 
costs have gone up 7 percent in the first 6 months of this year 
alone. At my hospital, our current vacancy rate for RNs is 25 
percent, which translates to about 80 open RN positions.
    We also have a number of recruitment efforts underway. At 
our hospital, we offer tuition reimbursement for all employees 
who pursue health care careers. Bayonet Point and six other 
hospitals in our area have a new partnership with Pasco-
Hernando Community College. We have agreed to fund additional 
teachers in the nursing program, and each hospital has the 
opportunity to provide scholarship money for up to 25 students 
at a time. In return, each student agrees to work for us 2 to 3 
years for return of the scholarship money. We currently have 16 
students joining us in August.
    Another outreach effort we have underway is educating 
career counselors at the junior high school and high school 
levels, about the field of nursing and the opportunities within 
the health care field.
    Beyond recruitment, we must also focus on nurse retention. 
Bayonet Point has instituted bonus programs, and we often 
modify work schedules to meet personal needs. One very 
important component of retaining nurses is asking their 
opinion. We seek out ways to involve nurses in care and 
treatment options and we look for devices to reduce the 
difficult physical demands of the profession.
    Our nurses are dealing with an increased acuity level and 
limited resources. My job as a CNO is to listen to my staff, to 
understand their concerns, and to work in partnership with them 
to resolve issues as quickly as possible. I also use every 
opportunity to promote nursing as a very rewarding career.
    Beyond what we are doing locally, we are also focusing 
efforts on recruitment of nurses abroad. Dr. Frank M. Houser, 
M.D., HCA's Senior Vice President and Medical Director, just 
returned from travel to India in an effort to recruit nurses, 
however, the opportunities for international recruitment are 
extremely limited. Regular green card applicant nurses are 
still coming into the United States, but at an extremely low 
rate. The H-1C and H-1B programs are extremely limited.
    We would like to work with Congress and the Department of 
Labor to review and expand existing visa programs so the United 
States is not at a competitive disadvantage in terms of 
recruiting nurses from abroad.
    The problems of the shortage are so vast and so complex 
that we are looking to Congress and the administration for 
help. Broadly, the Federation supports legislation that seeks 
to improve recruitment, nursing faculty, and community 
outreach, the development of the Nurse Service Corps, eliminate 
regulatory burden, and reviewing and expanding the immigration 
laws. Specifically, members of this committee have introduced 
legislation that would attempt to increase the number of 
workers entering the nursing workforce and provide 
opportunities and incentives to alleviate the shortage. The 
Nurse Reinvestment Act introduced by Representatives Capps and 
Kelly, has many valuable ideas, however, as written, all 
Federation members would be excluded, many of which serve rural 
and underserved populations. We are working to amend the 
legislation to ensure that their creative solutions to the 
workforce crisis are helpful to all hospitals.
    The promising piece of legislation introduced by members of 
this committee in the Nurse of Tomorrow Act, introduced by 
Representatives Engel and Bono, the Federation applauds the 
bill's sponsors for including all facilities in this 
legislation.
    In conclusion, I have been a nurse for over 30 years and, 
frankly, I cannot imagine doing anything else. Federation 
members and all health care facilities are facing a workforce 
crisis. Our hospitals are on the front lines of delivering 
patient care, but our most precious resource, our workers, are 
in very short supply. We look forward to working with you to 
attempt to solve this complex and growing problem. I would be 
happy to answer any questions at this time.
    [The prepared statement of Linda O'Leary follows:]
 Prepared Statement of Linda O'Leary, Vice President and Chief Nursing 
             Officer, Regional Medical Center Bayonet Point
    Good morning Mr. Chairman and members of the Committee, my name is 
Linda O'Leary and I am Vice President and Chief Nursing Officer at 
Regional Medical Center Bayonet Point in Hudson Florida. I am pleased 
to testify this morning on behalf of the Federation of American 
Hospitals (FAH) on the critical issue of the growing healthcare 
workforce shortage.
    The Federation is the national trade association representing some 
1,700 privately-owned and managed community hospitals and health 
systems providing health care across the acute and post-acute spectrum. 
Our member hospitals provide care for patients in both urban and rural 
America.
    At Bayonet Point, we have a 290 bed acute care facility that is 
part of a larger hospital system owned by HCA, Inc. We have adopted a 
range of activities in my hospital, and at the corporate level to 
recruit and retain an adequate supply of RNs and other caregivers. As 
the Chief Nursing Officer I would like to convey my personal 
experiences in maintaining an adequate workforce at Bayonet Point, as 
well as a snapshot of the shortage as a whole.
                              the problem
    The issue of shortages of nurses and other health care providers, 
and retention of them within healthcare facilities, is a growing 
problem across the country. In some areas, the crisis is imminent, in 
others--it has arrived. Nurses in specialty areas such as operating 
room nurses, emergency room nurses and intensive care nurses are in 
particularly short supply.
    The Federation recently convened an ad hoc task force to assist in 
gathering information regarding the depth and breath of the shortage 
and to solicit its members' ideas and action plans to address the 
shortage. The task force has members from all Federation companies and 
is composed of professionals representing a range of specialties within 
their corporations.
    Essentially our member hospitals have told us that:

 The shortage is hitting hospitals across the country 
        geographically, in rural, urban and suburban settings;
 Worker shortages are primarily in the field of nursing 
        (especially those in the critical care areas), but also extend 
        to radiological technologists, operating room technologists, 
        and pharmacists, to name a few;
 Hospitals have undertaken a wide range of creative recruitment 
        and retention activities including mentoring programs, modified 
        work schedules, community outreach partnerships with vocational 
        schools, and nursing programs, providing sites for clinical 
        rotations, scholarship programs, subsidizing nursing faculty 
        salaries and web advertising;
 The issue of state licensure complicates the ability of 
        workers to practice across state lines;
 Hospitals are employing a range of approaches to counteract 
        the shortage, including signing and retention bonuses.
    A new report by Fitch, IBCA, Duff & Phelps entitled ``Health Care 
Staffing Shortage'' states ``The fundamental problem is the decreasing 
relative supply of nurses in this country. As of March 2001, there were 
2.7 million licensed registered nurses (RNs) in the U.S., with 2.2 
million employed in nursing. ``Currently, 80%-85% of hospitals have 
reported a nurse shortage, and nationwide there is a 10%-12% vacancy 
rate of nurses in health care facilities.''
    The American Hospital Association recently completed a survey of 
more than 700 hospitals across the country. Their study revealed that 
``Hospitals have up to 168,000 open positions--126,000 of those are for 
registered nurses.'' Also, according to the survey, 21% of hospitals 
have openings for pharmacists, while 18% had unfilled positions for 
radiological technologists.
    The problem will grow worse as the nursing population ages. 
According to the Health Resources & Services Administration (HRSA) and 
the American Organization of Nurse Executives (AONE), the average age 
of nurses in the year 2000 was 48. (See attached chart #1). According 
to the American Nurses Association (ANA) ``Approximately 50% of nurses 
are entering their 50s, and many will leave the workforce within the 
next 10 years. As of 1996, only 9% of nurses were under the age of 
30.'' The shortage has attracted attention across the country as 
hospitals report growing vacancies and their advocates in Washington 
call for action. The Federation is certainly not alone in calling for 
federal assistance in this area, the American Hospital Association, the 
American Nurses Association and the American Medical Association have 
all issued statements recognizing the extent of the problem.
    The job of an RN has changed over the last twenty years. With a 
higher proportion of patients with complex care needs and greater 
acuity, there has been an increased demand for nurses with specialized 
training. Many nurses entered the profession because of its nurturing 
nature, patient stays are now shorter and more care is delivered on an 
outpatient basis, thus limiting the nurse-patient relationship. Also, 
the increased use of technology demands a different and more advanced 
skill set. As you in Congress are well aware hospitals and their staff 
spend countless hours dealing with burdensome regulatory requirements 
and filling out paperwork. This takes nurses away from the bedside 
where they belong. There has also been an expansion of care delivery 
settings in which nurses can work, thereby spreading the existing 
workforce more thinly. Hospitals are now competing with home health 
agencies, health maintenance organizations, pharmaceutical companies, 
and recruitment firms to hire nurses and other providers.
    Of course, while the job of a nurse has evolved, so too has the 
field of opportunity for women who traditionally filled these jobs. 
Fewer and fewer young women are entering the nursing profession, and to 
date there has been little success in reaching out to men and 
minorities to join the profession. According to a study by Peter 
Buerhaus, ``Policy Responses to an Aging Registered Nurse Workforce,'' 
women graduating from high school in the 1990s were 35 % less likely to 
become RNs than women who graduated in the 1970's.
    The decline in new nurse graduates in combination with the rapid 
aging of the existing pool of nurses and the aging population paint a 
picture of health care delivery in significant stress. The existing 
workforce shortage is projected to get much worse. Predictions for 
workforce employee vacancies are difficult to nail down, however, the 
Bureau of Labor Statistics states that 450,000 additional registered 
nurses will be needed to fill the present demand through the year 2008. 
According the General Accounting Office congressional testimony before 
the Senate Government Affairs Committee on June 27, 2001, ``. . . 
Enrollments in registered nursing programs have declined over the last 
5 years, shrinking the pool of new workers to replace those who are 
leaving or retiring. The problem is expected to be more serious in the 
future as the aging of the population substantially increases the 
demand for nurses.''
The State of Florida
    I would like to draw your attention to some specific examples 
within the state of Florida in order to illustrate the depth and 
breadth of the shortage. The Florida Hospital Association recently 
released their annual nurse staffing report which details the extent of 
the shortage in my state. Because of the shortage--the survey found 
that the use of temporary agencies was reported by 83% of the hospitals 
surveyed, and that 74% of those surveyed utilized nurse travelers and 
73% used on-call staff. This is a growing phenomenon. The survey found 
that many hospitals used financial incentives including sign-on bonuses 
and seasonal bonuses. During the survey week of February 18th-24th of 
this year, the survey found that 3,087 RN positions were vacant within 
the hospitals surveyed. This represents a 15.6% RN vacancy rate in the 
hospitals responding. (See attached chart #2.)
    The problem is further detailed by studying the vacancy rates by RN 
Specialty. (See attached chart #3) Not only are we experiencing RN 
shortages in Florida at a rate of 15.6%, but hospitals are experiencing 
a shortage of Pediatric Critical Care nurses at a rate of 17.1%, Adult 
Critical Care nurses at 16.8%, and a shortage of Medical-Surgical 
nurses at a rate of 17.2%. These vacancy rates reflect a dramatic 
increase from rates just a year ago. The Pediatric Critical Care 
vacancy rate increased by an alarming 10%.
    Experts agree that hospitals are competing with other health care 
providers for their workforce. In the state of Florida, the vast 
majority of nurses are still employed in the hospital setting--over 59% 
in the year 2000. The other practice settings are: 18% in the 
community/home health arena, 10% in ambulatory care, 7% in nursing 
homes, 2% in nursing education and 4% in some other category. (See 
attached chart #4)
Bayonet Point
    At my hospital, our current vacancy rate for RN's is between 25 and 
27%, which translates into roughly 80 open RN positions. Currently, I 
have 14 RN's in specific training courses for specialties such as 
operating room and critical care nurses--that number would be double if 
I could find more nurses to undergo this training.
    We have a number of recruitment efforts underway. HCA offers 
tuition reimbursement for all employees who pursue health care careers. 
Bayonet Point and seven other hospitals in our area have a new 
partnership with Pasco-Hernando Community College. We have agreed to 
fund additional teachers in the nursing school and have purchased the 
school a full-size mannequin as a teaching tool. In return, each 
hospital has the opportunity to provide scholarship money for up to 25 
students at a time. Each student agrees to work for us for 2 to 3 years 
in return for the scholarship money--we have 16 students joining us in 
August.
    Another outreach effort we have underway is educating career 
counselors at the junior high and high schools about the field of 
nursing and opportunities and careers within the health care field 
generally. We have found that many career counselors have little 
information about the career paths available.
    Beyond recruitment, we must also focus on nurse retention. Bayonet 
Point has instituted bonus programs for staff to increase their working 
hours and we often modify work schedules to meet personal needs. We 
offer a variety of pay and incentive practices to meet the specific 
individual needs of our workers. One very important component of 
retaining nurses is asking their opinion. We seek out ways to involve 
nurses in care and treatment options and look for devices to reduce the 
difficult physical demands of the profession.
    The issue we all face as nurses is that it is a physically 
demanding profession that requires night and weekend work. Our nurses 
are dealing with an increased acuity level, demanding patients and 
families and limited resources. My job as a CNO is to promote nursing 
as a rewarding career, listen to my staff, understand their concerns 
and work in partnership with them to resolve issues as quickly as 
possible.
                          short term solutions
Nurse Travelers and Staffing Companies
    A side effect of workforce shortages is the development and growth 
of two staffing innovations: nurse travelers and nurse staffing 
agencies across the country. Although both entities have been in 
existence for a number of years, new companies are now recruiting 
thousands of traveler nurses who work at a facility for a period of 
months, weeks or days and then move on. These nurses travel the country 
to locations based on pay, specialty, weather, and whim. According to 
an article in The New York Times entitled ``Nurse Shortage Puts a 
Premium on Staff Agencies'', July 17, 2001, ``Hospitals paid $7.2 
billion last year for temporary employees, mainly nurses, according to 
The Staffing Industry Report, an industry news letter. And, spending on 
medical staffing is likely to increase more than 20% a year, it says, 
to $8.7 billion in 2001 and $10.6 billion next year.''
    A number of these traveler companies have begun initial public 
offerings of their stock and are doing quite well financially despite 
the downturn in the stock market. The industry report states that 
traveling nurse companies charge the hospitals between $40-$50 an hour, 
with higher hourly rates in high cost settings. As an added incentive 
to become a traveler, these companies frequently offer other benefits 
such as paid apartments, liability insurance, and health benefits for 
nurses who work a minimum period of time. An executive from one of the 
traveling companies based in Boca Raton, FL, Cross-Country TravCorps, 
estimated the ranks of traveling nurses have doubled in the past five 
years, with 15,000 nurses now crisscrossing the country. (Washington 
Post ``Ranks of Traveling Nurses Grow'' June 7, 2001)
Immigration
    In addition to the growing utilization of nurse travelers and 
staffing agencies, a greater number of hospitals are recruiting their 
workforce abroad. I wanted to provide the subcommittee with some 
background information on the limited opportunities that we have to 
recruit and hire foreign nurses.
    The main recruitment vehicle currently is the Labor Department's 
H1-C visa program. Regular green card applicant nurses are still coming 
into the United States, but at an extremely slow rate. The Department 
of Immigration is notorious for lengthy delays and time consuming 
processes that significantly slow any sort of regular influx of foreign 
nurses into the U.S. During the nursing shortage in the late 1980s, 
Congress created a special visa for nurses called the H-1A visa. Under 
the government program, the industry was able to recruit 6,000-7,000 
nurses a year; the program expired in 1995.
    Since 1995, Congress has not approved a comparable program. In 
fact, in late 2000, it expanded the number of visas that could be 
issued to recruit high-tech workers, but it overlooked healthcare. 
Congress passed the ``Nursing Relief for Disadvantaged Areas Act'' in 
1999; however, it limits the number of foreign RNs to 500 per year. 
This legislation amended the Immigration and Nationality Act to 
establish a four-year nonimmigrant classification (H-1C) for 
nonimmigrant registered nurses in health professional shortage areas. 
The program was created as a temporary, limited solution and will 
expire in 2003.
    The ``Nursing Relief for Disadvantaged Areas Act'' permits up to 
500 foreign nurses to work in the U.S. per aggregate fiscal year. To 
qualify, hospitals must have at least 190 acute care beds, be located 
in federally designated areas with health care worker shortages, and 
meet thresholds on Medicare (35%) and Medicaid patient mix (28%.) 
Hospitals are also limited in how many nurses they can hire under this 
program based on the size of the state. According to the Department of 
Labor, only 14 hospitals benefited from this program. The law directs 
the Secretary of Health and Human Services to recommend 1) and 
alternative to the H-1C program as a permanent remedy to the registered 
nurse shortage; and 2) a more effective program enforcement system.
    As mentioned above, there is some confusion regarding the H-1B Visa 
which was created to permit skilled foreign professionals to work in 
the U.S. for a period of up to six years. The H-1B Visa is also 
employer specific and is for ``professional positions.'' Such positions 
are defined as specialty occupations that require critical and 
practical application of a body of highly specialized knowledge. Many 
medical and health occupations meet this definition, but foreign nurses 
are only eligible for H-1B status if the position would typically be 
filled by a nurse in a supervisory or research position. Due to the 
nursing shortages HCA hospitals are facing, Dr. Frank M. Houser, M.D., 
HCA's Senior Vice President, Quality, and Corporate Medical Director, 
just returned from travel to India in an effort to recruit nurses to 
work in our hospitals. However, as illustrated above, the opportunities 
for international recruitment are extremely limited because of existing 
immigration laws. The United States is also increasingly competing for 
nurses with other countries. For example, British hospitals, with the 
aid of their government, have already gotten a competitive advantage. 
Their recruitment offers include no visa requirements for degreed 
critical care Indian nurses willing to relocate to British hospitals.
              legislative possibilities for the long term
    Federation members have undertaken a wide range of innovative 
activities in order to recruit qualified nurses. But the problems of 
the shortage are so vast and complex that we are looking to Congress 
and the Administration to foster current activities, as well as provide 
support for further development and funding of nursing recruitment, 
education and retention.
    As you know Mr. Chairman, a number of pieces of legislation have 
been introduced that attempt to increase the numbers of individuals 
entering the nursing field, by assisting with education and training, 
and also with retention of trained health care staff. Broadly, the 
Federation supports legislation that seeks to improve the following 
areas:

 Recruitment--We believe that federal leadership to promote and 
        enhance the image of nursing would be very helpful. Many 
        Federation members are already reaching out within their local 
        communities to advance the public image of the profession, but 
        increased federal attention to the critical role nurses play in 
        our health care delivery system is key.
 Faculty--We recognize that in order to ensure a steady supply 
        of the most qualified nurses we need to ensure the development 
        and support of nursing faculty. Greater financial support of 
        nursing programs is also important to ensure an adequately 
        trained workforce.
 Community Outreach--We support federal grants that would 
        foster innovative community/private partnerships in shortage 
        areas. Examples of activities already undertaken by Federation 
        members include outreach to vocational programs, partnering 
        with nursing programs and providing sites for clinical 
        rotations.
 Nurse Service Corps--The Federation supports the development 
        of a nurse service corps that would allow loan repayment for 
        nurses that serve in shortage areas/facilities. Recruits for 
        this program should be able to provide patient care in a wide 
        range of settings irrespective of tax status.
 Immigration--Federal leadership to increase recruitment of 
        nurses is critical, but just as critical is modifying 
        immigration laws to allow more nurses to come to the United 
        States from abroad. Current immigration laws severely limit the 
        number of nurses who can be recruited internationally. Further 
        slowing down the process is the Department of Immigration and 
        Naturalization Services which delays legal immigration for 
        months at a time. We ask Congress to review the current visa 
        programs for nurses and consider expanding the existing H-1C 
        visa program and/or reauthorizing the H-1A program. Immigration 
        reform could help alleviate some of our staffing shortages in 
        short order.
    Specifically, members of this Committee have introduced legislation 
that would attempt to increase the numbers of workers entering the 
nursing workforce and provide opportunities and incentives to alleviate 
the shortage. The ``Nurse Reinvestment Act''--H.R. 1436 was introduced 
by Representatives Lois Capps (D-CA) and Susan Kelly (R-NY). This 
legislation would foster community partnerships and innovative programs 
for recruitment. The bill would also develop a national nurse service 
corps. We believe that this legislation has many valuable ideas and 
could serve as a starting point, however it falls short because it does 
not ensure that nurses could work in the facility of their choice. 
Specifically, all Federation member facilities would be excluded from 
using the Nurse Service Corps, as well as the other sections of the 
bill. We would like to work with Representative Capps and Kelly to 
amend the legislation to ensure that their creative solutions to the 
workforce crisis are helpful to all hospitals.
    The other promising piece of legislation introduced by members of 
this Committee is the ``Nurse of Tomorrow Act of 2001'' H.R. 1897 
introduced by Representatives Eliot Engel (D-NY) and Mary Bono (R-CA). 
HR 1897 would authorize the Secretary of HHS to make grants to health 
care facilities for nurse recruitment and retention activities, as well 
as encourage facilities to assist in nurse education and training. The 
bill also establishes refundable tax credits for nurses. The Federation 
supports the ideas embodied in HR 1897, and applauds the bill's 
sponsors for including all facilities in their legislation.
                               conclusion
    CNO's are a passionate lot who firmly believe in the profession of 
nursing. They work continuously to support their staff and to provide 
them with the tools they need to deliver care. I have been a nurse for 
over 30 years and, frankly, cannot imagine doing anything else. 
Federation members and all healthcare facilities are facing a workforce 
crisis. Our hospitals are on the front lines of delivering patient 
care, but our most precious resource, our workers are in very short 
supply. We look forward to working with Congress and the Administration 
to attempt to solve this complex and growing problem.

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

    Mr. Bilirakis. Thank you very much.
    Ms. Baker.

                    STATEMENT OF DIANA BAKER

    Ms. Baker. Good afternoon, Mr. Chairman and members of the 
subcommittee. My name is Diana Baker. I am a Registered Nurse 
employed as an Assistant Nurse Manager at the Cleveland Clinic 
Foundation in Cleveland, Ohio. I am pleased to be here today 
representing the American Nurses Association in support of your 
efforts to improve the recruitment and retention of America's 
registered nurses. ANA is the only full-service association 
representing the Nation's RNs. I am a member of the Ohio Nurses 
Association, one of the 54 constituent members of the ANA.
    As this subcommittee is very aware, health care 
institutions across the Nation are experiencing a crisis in 
nurse staffing, and we are facing an unprecedented nursing 
shortage. As RNs are the largest single group of health care 
professionals in the United States, nursing shortages pose a 
real threat to our Nation's health care system.
    There has been some debate about the extent of the current 
nursing shortage. Some say it is economic and some say it is 
regional, while others say it is national. One thing is 
certain, the current staffing shortage is nothing in comparison 
to the systemic shortage that will become a reality in the next 
8 to 10 years.
    Today's nursing shortage is compounded by the lack of young 
people entering the nursing profession, the rapid aging of the 
RN workforce, and the impending health care needs of the Baby 
Boom generation. As new opportunities have opened up for young 
women and new stresses have been added to the profession of 
nursing, fewer people have opted to choose nursing as a career. 
New admissions into nursing schools have dropped dramatically 
and consistently for the past 6 years.
    The lack of young people entering nursing has resulted in a 
steady increase in the average age of the working nurse. Today, 
the average working RN is over 43 years old. The national 
average is projected to continue to increase until 2010. At 
that time, large numbers of nurses are expected to retire and 
the total number of nurses in America will begin a steady 
decline.
    At the same time, the demand for nursing care will increase 
over the next 20 years due to the aging of the population, 
advances in technology and other economic and policy factors. 
These combining demographic forces will soon create a true, 
systemic nursing shortage. Current estimates state that the 
number of nurses per capita will fall 20 percent below 
requirements by the year 2020.
    Now is the time to address this impending public health 
crisis. The Nurse Education Act programs administered through 
the Division of Nursing at the Health Resources and Services 
Administration are designed to ensure an adequate supply of 
nurses in underserved areas throughout the Nation. These 
programs have greatly impacted the nurse workforce and have 
enjoyed substantial congressional support. Building on these 
programs is the best way to address concerns about the lack of 
people entering nursing.
    More specifically, ANA strongly supports the Nurse 
Reinvestment Act which was drafted by a member of this 
subcommittee, Representative Lois Capps, a fellow nurse. This 
comprehensive bill addresses many issues in nurse education and 
will greatly help recruitment into the profession. It enjoys 
the broad support of nurses as well as institutional providers 
and educators.
    My written statement contains a more complete summary of 
this bill. Let me just say here that the combination of 
innovative recruitment techniques, curriculum support, 
scholarships, and loan repayments contained in the Nurse 
Reinvestment Act will enhance all aspects of nurse education.
    In addition to nurse recruitment programs, I urge this 
subcommittee to take a deeper look into the nurse workforce 
issues. It is important to realize that demographics are not 
the one and only cause of the emerging nursing shortage. The 
General Accounting Office, the Congressional Research Service, 
academia and private market research have all published reports 
this year that cite nurse dissatisfaction as a major 
contributor to the current and emerging shortage. 
Dissatisfaction is prompting experienced nurses to leave the 
profession and discouraging young people from entering.
    I know that when I was a nursing student, working nurses 
would approach me and ask me, ``Why do you want to be a nurse, 
all we do is get overworked, and we are underpaid'', a clear 
sign of dissatisfaction. My written statement more fully 
examines the causes for nurse dissatisfaction.
    Let me summarize by stating that nurses will remain 
reluctant to accept positions in which we face inappropriate 
staffing, are confronted by mandatory overtime, are 
inappropriately rushed through patient care activities, or are 
otherwise unable to provide the high quality care that we are 
trained to give.
    I encourage this committee to act now to support the Nurse 
Reinvestment Act. The very fabric of our safety net programs 
rely on an adequate supply of well-trained nurses, but we 
cannot stop there. The fact is that the current nursing 
shortage will remain and likely worsen if changes to the 
workplace are not all addressed.
    Thank you for the opportunity to provide this testimony. I 
am happy to answer any questions.
    [The prepared statement of Diana Baker follows:]
  Prepared Statement of Diana Baker on Behalf of the American Nurses 
                              Association
    Good morning Mr. Chairman and Members of the Subcommittee. I am 
Diana Baker, RN, an assistant nurse manager on the urology/gynecology 
unit at the Cleveland Clinic in Cleveland, Ohio. I am pleased to be 
here today representing the American Nurses Association (ANA) in 
support of your efforts to improve the recruitment and retention of 
America's registered nurses (RNs). ANA is the only full-service 
association representing the nation's RNs. I am a member of the Ohio 
Nurses Association, one of the 54 constituent member nurse associations 
of the ANA.
    As this Committee is aware, health care institutions across the 
nation are experiencing a crisis in nurse staffing, and we are standing 
on the precipice of an unprecedented nursing shortage. The current and 
emerging shortage of RNs poses a real threat to the nation's health 
care system. RNs are the largest single group of health care 
professionals in the United States; we underpin the entire health care 
delivery system.
    The Nurse Education Act programs administered through the Division 
of Nursing at the Health Resources and Services Administration are 
designed to ensure an adequate supply of nurses in under served areas 
throughout the nation. These programs have greatly impacted the nurse 
workforce and have enjoyed substantial Congressional support. Building 
on these programs is the best way to address the concerns that we have 
all been hearing about the growing nursing shortage.
    The extent of the concern about this emerging shortage underscores 
the fact that having a sufficient number of qualified nurses is 
critical to the health of our nation. ANA can assure you that the 
emerging nursing shortage is very real and very different from any 
experienced in the past. Hospitals, long term care facilities and other 
health care providers across the nation are reporting problems filling 
nursing positions. Employers are having difficulty finding experienced 
nurses, especially in emergency departments, critical care, labor and 
delivery, and long term care, who are willing to work in their 
facilities. Press reports about emergency department diversions and the 
cancellation of elective surgeries due to short staffing are becoming 
commonplace. In addition, projections show that these current shortages 
are just a minor indication of the systemic shortages that will soon 
confront our health care delivery system.
    It is important to realize that the causes, and therefore the 
answers, for the emerging nursing shortage are complex and 
interrelated. It is critical to examine issues in education, health 
delivery systems and the work environment. ANA maintains that the 
reasons for the current nurse vacancy rates and the impending shortage 
are multifaceted. Therefore, we must approach this shortage from many 
fronts.
                      the emerging nurse shortage
    The current nursing shortage is compounded by the lack of young 
people entering the nursing profession, the rapid aging of the RN 
workforce, and the impending health care needs of the baby boom 
generation. As new opportunities have opened up for young women and new 
stresses have been added to the profession of nursing, fewer people 
have opted to choose nursing as a career. New admissions into nursing 
schools have dropped dramatically and consistently for the past six 
years.
    The lack of young people entering nursing has resulted in a steady 
increase in the average age of the working nurse. Today, the average 
working RN is over 43 years old. The national average is projected to 
continue to increase until 2010. At that time, large numbers of nurses 
are expected to retire and the total number of nurses in America will 
begin a steady decline.
    At the same time, the need for complex nursing services is expected 
to increase. America's demand for nursing care is expected to balloon 
over the next 20 years due to the aging of the population, advances in 
technology and various economic and policy factors. In fact, the Bureau 
of Labor Statistics ranks the occupation of nursing as having the 
seventh highest projected job growth in the United States.
    The increasing demand for nursing services, coupled with the 
imminent retirement of today's aging nurse, will soon create a systemic 
nursing shortage. A recent study published in the Journal of the 
American Medical Association estimates that the overall number of 
nurses per capita will begin to decline in 2007, and that by 2020 the 
number of nurses will fall nearly 20 percent below requirements.
    Now is the time to address this impending public health crisis. ANA 
strongly supports the Nurse Reinvestment Act (S. 706, H.R. 1436), which 
was drafted by a member of this Subcommittee--Representative Lois 
Capps, a fellow nurse. This comprehensive bill addresses many issues in 
nurse education and will greatly aide recruitment into the profession. 
It enjoys the broad support of practicing nurses throughout the nation 
as well as institutional providers and educators.
    The Nurse Reinvestment Act contains funding for public service 
announcements to educate the public about the many rewards of a nursing 
career. It supports grants for health career academies to create 
partnerships between health care facilities, nursing schools, and high 
schools to introduce high school students to nursing curriculum. The 
bill provides nursing recruitment grants to support outreach programs 
in primary, junior, and secondary schools and to support nursing 
students. It establishes a new nurse corps to provide educational 
scholarships in exchange for commitment to serve in a health facility 
determined to have a critical shortage of nurses. It supports career 
ladder grant program to assist individuals, health care providers and 
schools of nursing to enable the nursing workforce to obtain continuing 
education--and, importantly, fosters the development of nursing faculty 
needed to teach these students. It directs the Secretary of HHS to 
establish rules for making payments to non-hospital-based, federally 
certified hospice programs and home health agencies for the reasonable 
costs of providing nurse training, and reauthorizes and modifies the 
federal Medicaid match for nursing home clinical education of nurses.
    The comprehensive combination of innovative recruitment techniques, 
curriculum support, scholarships, and loan repayments will enhance all 
aspects of nurse education. ANA wholeheartedly agrees that the solution 
to the nursing shortage lies in the further development of our nation's 
existing nurse population and the cultivation of our youth into this 
very worthwhile profession.
                   recent changes in nurse employment
    In addition to enhanced nurse education programs, ANA urges this 
Subcommittee to take a deeper look into nurse workforce issues. It is 
important to realize that demographics are not the only cause for the 
emerging nursing shortage. Current staffing problems are inexorably 
tied to changes in nurse employment practices over the last decade.
    Just ten years ago we were emerging from the nursing shortage of 
the late 1980's. Nursing workforce issues had caught the attention of 
the highest reaches of the Reagan and Bush Administrations and the HHS 
Secretary's Commission on Nursing had recently released recommendations 
on methods to improve the work environment for nurses. Very few of 
these workplace initiatives were actually implemented, but health care 
facilities across the nation did institute aggressive recruitment 
campaigns and wages were increased. By the early 1990's reports of 
nurses shortages had significantly diminished.
    Unfortunately, the picture changed abruptly in the mid-1990's. At 
this time, managed care began to exert downward pressure on provider 
margins. In addition, the impact of Medicare prospective payment was 
taking hold. In response to financial pressures, providers eagerly 
sought out and implemented programs designed to reduce expenditures. 
New models of health care delivery were implemented, and highly 
trained, experienced--and therefore higher paid--personnel were 
eliminated or redeployed. As RNs typically represent the largest single 
expenditure for hospitals (averaging 20 percent of the budget), we were 
some of the first to feel the pinch. Lesser-skilled, lower-salaried 
assistive staff were hired as replacements, and RN salaries decreased 
in both actual and real terms.
    Analysis of census data shows that between 1994 and 1997 RN wages 
across all employment settings dropped by an average of 1.5 percent per 
year (in constant 1997 dollars). Between 1993 and 1997, the average 
wage of an RN employed in a hospital dropped by roughly a dollar an 
hour (in real terms). RN employment in the hospital sector reversed to 
the negative. Many providers eliminated positions for nursing middle 
managers and executive level staff. Hospital employment for unlicensed 
aides, however, increased by an average of 4.5 percent a year between 
1994 and 1997.
The Current Employment Situation
    These recent changes in nurse employment served to increase the 
pressure on staff nurses who were required to oversee unlicenced aides 
while caring for a larger number of sicker patients. The elimination of 
management positions shortened the career ladder and decreased the 
support, advocacy and resources necessary to ensure that nurses could 
provide optimum care. At the same time employment security was 
uncertain and wages were being cut. Numerous studies reveal that these 
recent changes in RN employment have negatively impacted patient care, 
the work environment for nurses, the perception of nursing as a career, 
and the staffing flexibility needed to address temporary staffing 
shortages.
    Not surprisingly, these changes have precipitated the current 
downturn in the number of people choosing the nursing profession, and 
growing discontent among those who remain. A recent ANA survey revealed 
that nearly 55 percent of the nurses surveyed would not recommend the 
nursing profession as a career for their children or friends. In fact, 
23 percent of the respondents indicated that they would actively 
discourage someone close to them from entering the nursing profession. 
I know that when I was a nursing student, working nurses would approach 
me and advise me to find another career--a clear sign of 
dissatisfaction.
    A large multi-national survey recently conducted by the University 
of Pennsylvania's Center for Health Outcomes and Policy Research shows 
that America's nurses are particularly dissatisfied. More than 40 
percent of nurses in American hospitals reported being dissatisfied 
with their jobs, as compared to 15 percent of all workers. In addition, 
this report shows that 43 percent of American nurses score higher than 
expected on measures of job burnout. It is a sad fact that staff nurses 
typically burn out and leave hospital bedside nursing after just four 
years of employment.
    This discontent is prompting an alarming number of our experienced 
RNs to abandon nursing. The 2000 National Sample Survey of Registered 
Nurses shows that a large number of nurses (500,000 nurses--more than 
18 percent of the total nurse workforce) who have active licenses are 
not working in nursing. Clearly, something in the practice setting is 
driving these nurses away from their chosen profession.
    Recent reports by the General Accounting Office, the Congressional 
Research Service, academia and private market research indicated that 
job dissatisfaction is a major factor contributing to the current 
nursing shortage. Nurses are, understandably, reluctant to accept 
positions in which we will face inappropriate staffing, be confronted 
by mandatory overtime, inappropriately rushed through patient care 
activities, and unable to provide the high quality care that we were 
trained to give.
                               solutions
    ANA is supporting an integrated state and federal legislative 
campaign to address the many components of the current and impending 
nursing shortage. Key among these is strong support for recruitment and 
education initiatives such as the Nurse Reinvestment Act. In addition, 
we are also supporting improvements to organization of the work of 
nursing. ANA understands that in addition to attracting more young 
people to the profession, we must also create a environment that 
fosters the retention of our experienced nurses. Following are two 
workplace initiatives we hope this Committee will consider.
Adequate Staffing
    The safety and quality of care provided in the nation's health care 
facilities is directly related to the number and mix of direct care 
nursing staff. More than a decade of research shows that nurse staffing 
levels and skill mix make a difference in the outcomes of patients. 
Studies show that when there are more nurses, there are lower mortality 
rates, shorter lengths of stay, better care plans, lower costs, and 
fewer complications. In fact, four HHS agencies--the Health Resources 
and Services Administration, Health Care Financing Administration, 
Agency for Healthcare Research and Quality, and the National Institute 
of Nursing Research of the National Institutes of Health--recently 
sponsored a study on this very topic. The resulting report, released on 
April 20, 2001, found strong and consistent evidence that increased RN 
staffing is directly related to decreases in the incidence of urinary 
tract infections, pneumonia, shock, upper gastrointestinal bleeding, 
and decreased hospital length of stay.
    In addition to the important relationship between nurse staffing 
and patient care, several studies have shown that one of the primary 
factors for the increasing nurse turnover rate is dissatisfaction with 
workload/staffing. ANA's recent survey states that 75 percent of nurses 
surveyed feel that the quality of nursing care at the facility in which 
they work has declined over the past two years. Out of nearly 7,300 
respondents, over 5,000 nurses cited inadequate staffing as a major 
contributing factor to the decline in quality of care. More than half 
of the respondents believed that the time they have available for 
patient care has decreased.
    The University of Pennsylvania research shows that 70-80% of more 
than 43,000 registered nurses surveyed in five countries reported that 
there are not enough RNs in hospitals to provide high quality care. 
Only 33 percent of the American nurses surveyed believed that hospital 
staffing is sufficient to ``get the work done.'' This survey reflects 
similar findings from a national survey taken by the Henry J. Kaiser 
Family Foundation (1999) that found that 69 percent of nurses reported 
that inadequate nurse staffing levels were a great concern. The public 
at large should be alarmed that more than 40 percent of the nurses who 
responded to the ANA survey stated that they would not feel comfortable 
having a family member cared for in the facility in which they work.
    Adequate staffing levels allow nurses the time that they need to 
make patient assessments, complete nursing tasks, respond to health 
care emergencies, and provide the level of care that patients deserve. 
It also increases nurse satisfaction and reduces turnover. For these 
reasons, ANA supports efforts to require acute care facilities to 
implement and use a valid and reliable staffing plan based on patient 
acuity as a condition of participation in the Medicare and Medicaid 
programs. In addition, we support efforts to enhance the current 
minimum nurse-to-patient staff ratios in skilled nursing facilities.
Mandatory Overtime
    ANA is concerned that nurses across the nation are expressing 
concerns about the dramatic increase in the use of mandatory overtime 
as a staffing tool. ANA understands that overtime is the most common 
method facilities are using to cover staffing insufficiencies. 
Employers may insist that a nurse work an extra shift (or more) or face 
dismissal for insubordination, as well as being reported to the state 
board of nursing for patient abandonment. Concerns about the use of 
mandatory overtime are directly related to patient safety.
    It is well established that sleep loss influences several aspects 
of performance, leading to slowed reaction time, failure to respond 
when appropriate, false responses, slowed thinking, and diminished 
memory. In fact, 1997 research by Dawson and Reid at the University of 
Australia showed that work performance is more likely to be impaired by 
moderate fatigue than by alcohol consumption. Their research highlights 
the fact that significant safety risks are posed by workers staying 
awake for long periods. It only stands to reason that an exhausted 
nurse is more likely to commit a medical error than a nurse who is not 
being required to work a 16 to 20 hour shift.
    Nurses are placed in a unique situation when confronted by demands 
for overtime. Ethical nursing practice prohibits nurses from engaging 
in behavior that we know could harm patients. At the same time, RNs 
face the loss of their license--our careers and livelihoods--when 
charged with patient abandonment. Absent legislation, nurses will 
continue to confront this dilemma. For this reason, ANA supports 
legislative initiatives to ban the use of mandatory overtime through 
Medicare provider agreements.
    I can tell you that I have made the personal decision not to use 
mandatory overtime to meet staffing needs in my unit because I believe 
that it fosters an environment rich for medical error and contributes 
to nurse turnover. My experience as a staff nurse and an assistant 
nurse manager has taught me that mandatory overtime is not a safe or 
viable staffing option.
                               conclusion
    ANA and I encourage this Committee to act now to support the Nurse 
Reinvestment Act. The very fabric of our safety net programs rely on an 
adequate supply of well-trained nurses. We can not stop there, however. 
The fact is that the current nursing shortage will remain and likely 
worsen if changes to the workplace are not immediately addressed. The 
profession of nursing will be unable to compete with the myriad of 
other career opportunities available in today's economy unless we 
improve working conditions. Registered nurses, hospital administrators, 
other health care providers, health system planners, and consumers must 
come together in a meaningful way to create a system that supports 
quality patient care and all health care providers.
    ANA looks forward to working with you and our industry partners to 
make the current health care environment conducive to high quality 
nursing care. Improvements in the environment of nursing care, combined 
with aggressive and innovative recruitment efforts will help avert the 
impending nursing shortage. The resulting stable nursing workforce will 
support better health care for all Americans.

    Mr. Bilirakis. Thank you very much, Ms. Baker.
    Dr. Roberts, you are up, sir.

                  STATEMENT OF CORY A. ROBERTS

    Mr. Cory Roberts. Chairman Bilirakis, Congressman Brown, 
members of the subcommittee, my name is Cory Roberts, and I am 
a Board-certified pathologist and Director of Anatomic 
Pathology at St. Paul Medical Center in Dallas, Texas. I am 
here today representing the American Society of Clinical 
Pathologists and I formerly served as a liaison member to its 
Board of Directors.
    You may ask why a pathologist is here to discuss non-
physician personnel shortage issues. ASCP is a unique 
organization, and we have 75,000 members. Of those members 
there are Board-certified pathologists, other physicians, 
clinical scientists, as well as medical technologists and 
technicians. Our certifying board registers over 150,000 
laboratory personnel every year.
    I am here to attest to the shortage, provide you with data 
regarding this, as well as explain the workforce shortage 
problem.
    The United States is approaching a serious shortage of 
laboratory personnel with vacancy rates for seven of ten key 
laboratory positions at an all-time high. Vacancy rates for 
cytotechnologists, the professionals who evaluate Pap smears 
and other cytological material, as well histotechnologists who 
prepare tissue specimens for evaluation, are at an alarming 
high of over 20 percent.
    The American Society of Clinical Pathologists' Board of 
Registry, in conjunction with an independent polling firm, 
MORPACE, out of Detroit, conducts a biennial wage and vacancy 
survey, and has since 1988. We survey over 2500 medial 
laboratory managers. This measures the vacancy for these ten 
key laboratory personnel positions, and compares and contrasts 
these data with the previous year's. The data for 2000 was 
published in the March 2001 issue of the Journal of Laboratory 
Medicine, and I would like to give you a glimpse of what we 
found.
    Vacancy rates for cytotechnologists in the northeast 
average 45 percent, in the east north central region it was 
almost 17 percent, and the far west region showed 33 percent. 
Rural areas overall averaged a 20-percent vacancy rate, and 
large cities a surprising over 28 percent. Private reference 
laboratories have an average vacancy of 20 percent for 
histotechnologists, while hospitals have almost 38 percent 
vacancy rate for these same people.
    By comparison, the vacancy rate for medical technologists 
may not appear to be such a problem, however, it, too, is 
worthy of concern. Vacancy rate overall for medical 
technologists averages 11 percent.
    While the supply of laboratory personnel is dwindling, the 
demand for these professionals is continuing to increase, as 
evidence, in part, by rising wages.
    Median average pay rate increases from 1998 to 2000 were 
larger than comparisons for any other time period in our study. 
Only two laboratory professions had wage increases of less than 
10 percent, and even those were over 8 percent. The 
histotechnologists led the way at 15.4 percent.
    In Dallas, where I practice, we currently have openings for 
12 medical technologists within the University of Texas 
Southwestern system, which includes my St. Paul Medical Center. 
We also have five histotechnologist openings, that, in spite of 
our offering signing bonuses as well as a recent across-the-
board 10 percent pay raise to our histotechnologists. I don't 
want to give too many more specifics simply because of the 
fierce competition among the hospitals in the region for this 
limited pool of applicants.
    One of the logical solutions to this would be to simply 
train more professionals for these positions. That said, the 
programs are in fact decreasing in number. For example, in 
Michigan, the number of programs for medical technologists has 
decreased from 27 to 8 in less than two decades. In California, 
with its large population base, there are only two programs in 
the entire State to train cytotechnologists.
    According to the Health Professions Education Directory 
published by the American Medical Association, from 1994 to 
1999, the number of programs and the number of graduates for 
medical technologists has decreased by 30 percent.
    There are several reasons why the vacancy rate is 
increasing. Some program directors report that their graduates 
are taking positions outside of the traditional laboratory with 
companies that are involved with laboratory information 
systems, dot.coms, and corporations that manufacture or 
distribute diagnostic reagents, supplies and materials.
    With limited resources, hospitals have merged, thus 
decreasing the opportunities for training sites for medical 
laboratory programs. Yet, the continued demand for laboratory 
services is real and, in fact, will probably grow. For example, 
in Florida, the population by the year 2020 is projected to 
grow by 29 percent. Those over age 65, though, will grow at a 
rate of 66 percent. This disproportionate growth of those over 
65 is borne out in other States as well.
    Given the country's aging population, the number and 
complexity of biopsy specimens and the use of molecular 
techniques will likely increase during the next decade. The 
average age for a medical technologist currently is 45, many 
are approaching retirement. The threat of bioterrorism calls 
for trained laboratory professionals to respond. The laboratory 
workforce will have to be able to react accordingly with 
appropriate numbers of trained professionals.
    I greatly appreciate this opportunity to discuss this 
problem with you all today. As a practicing pathologist, who 
works with a team of medical professionals including medical 
technologists and technicians, I know there is a growing 
concern over this problem, and the facts bear this to be true. 
Thank you again for your time and consideration.
    [The prepared statement of Cory A. Roberts follows:]
Prepared Statement of Cory Roberts, Director of Anatomic Pathology, St. 
   Paul Medical Center on Behalf of the American Society of Clinical 
                              Pathologists
    Chairman Bilirakis, Congressman Brown, members of the Subcommittee, 
my name is Cory Roberts, MD, FASCP. I am a pathologist serving as 
Director of Anatomic Pathology at St. Paul Medical Center in Dallas, 
Texas, and also am a partner at ProPath Associates in Dallas. I am here 
today representing the American Society of Clinical Pathologists (ASCP) 
where I served as a liaison member to its Board of Directors.
    You may ask why a pathologist is here to discuss the shortage of 
non-physician medical laboratory personnel. Well, ASCP is a unique 
organization. It is a nonprofit medical specialty society organized for 
educational and scientific purposes. Its 75,000 members include board 
certified pathologists, other physicians, clinical scientists, and 
certified technologists and technicians. These professionals recognize 
the Society as the principal source of continuing education in 
pathology and as the leading organization for the certification of 
laboratory personnel. ASCP's certifying board registers more than 
150,000 laboratory professionals annually.
    I am here to attest to the shortage, provide you with national data 
on the subject as well as an explanation for this workforce shortage 
problem. Finally, I would like to outline some current solutions to 
this growing concern.
The Problem
    The United States is approaching a serious shortage of laboratory 
medical personnel with vacancy rates for seven of ten key laboratory 
medicine positions at an all time high. Vacancy rates for 
cytotechnologists, the professionals who evaluate Pap smears and other 
cellular material, and histotechnologists, the individuals who prepare 
tissue specimens for cancer biopsies, are at an alarming high of over 
20%.
    The American Society of Clinical Pathologists' Board of Registry, 
in conjunction with MORPACE International, Inc., Detroit, conducts a 
biennial wage and vacancy survey of 2,500 medical laboratory managers. 
The survey measures the vacancy rates for 10 medical laboratory 
positions, and compares and contrasts these data with that from 1988, 
1990, 1992, 1994, 1996, and 1998 studies. The data for 2000 was 
published in March 2001, and I'd like to give you a glimpse of what was 
found.
    Vacancy rates for cytotechnologists in the northeast average 45 
percent, 16.7 percent for the east north central, and 33.3 percent for 
the far west. Rural areas average a 20 percent vacancy rate for 
cytotechnologists, and large cities a rather surprising 28.3 percent 
rate.
    Private reference laboratories have an average vacancy rate of 20 
percent for histotechnologists, and hospitals have a 37.7 percent 
shortage of the same profession.
    The west south central region of the country has a 73.7 percent 
vacancy rate for histotechnologists, and the south central Atlantic 
states have an average vacancy rate of 16.7 percent.
    By comparison, the vacancy rate for medical technologists will not 
appear to be a problem, but it too is reason for concern. Medical 
technologist vacancy rate averages 11.1 percent, but rural areas show 
21.1 percent vacancy and hospitals with 100-299 beds have a rate of 
17.6 percent.
    While the supply of laboratory personnel is dwindling, the demand 
for these professionals is increasing--as evidenced, in part, by the 
rise in wages.
    Beginning wage increases from 1998 to 2000 were the largest 
experienced since comparisons from the 1990 to 1992 studies. Pay for 
nine of the 10 employee positions increased at least 6.9% from 1998 to 
2000, with histotechnologist pay increasing 15.8%. Median average pay 
rate increases from 1998 to 2000 were larger than comparisons for any 
other time period. Only medical technologist supervisors (at 8.6%) and 
medical laboratory technician staff (at 8.5%) had wage increases of 
less than 10%. Histologic technicians (at 13.3%) and histotechnologists 
(at 15.4%) experienced the largest increases.
    In Dallas, where I practice, we currently have 12 positions 
available for medical technologists within the University of Texas 
Southwestern medical system (this includes Parkland Memorial Hospital 
and St. Paul Medical Center). There are 5 histotechnologist positions 
available. We offer signing bonuses and increased wages to attract 
laboratory personnel to our facility. I am reluctant to mention exactly 
what we offer because, frankly, laboratory personnel are in such demand 
that neighboring health care institutions will often ``one-up'' each 
other in order to draw from the same pool of applicants.
Medical Laboratory Programs
    One of the logical solutions to this vacancy rate problem is to 
train more students; however, the number of programs are decreasing. 
For example, in Michigan, we have seen the number of programs plummet 
from 27 to 8 in less than two decades. In California, there are no 
programs available for histologic technicians or specialists in blood 
banking. There are only two programs for cytotechnologists, one program 
for medical laboratory technicians, and one for phlebotomists in that 
entire state.
    It is important to note that education programs for training 
medical laboratory personnel are sponsored by a variety of 
organizations and institutions, ranging from hospitals to degree-
granting colleges and universities.
    According to the Health Professions Education Directory published 
by the American Medical Association, the number of medical technology 
programs decreased from 383 in 1994 to 273 in 1999. The number of 
graduates in medical technology has similarly decreased from 3563 in 
1994 to 2491 in 1999, a 30 percent decline in five years.
Assessment
    There are several reasons why the vacancy rate is increasing and 
the number of program enrollees is decreasing. A number of available 
positions are outside the traditional clinical laboratory. Some program 
directors have reported that graduates are gaining employment in 
laboratory information systems companies, ``dot.coms,'' and 
corporations that manufacture or distribute diagnostic reagents, 
supplies or equipment. With limited resources, hospitals have merged, 
thus decreasing the availability of training sites for medical 
laboratory programs. Some programs have responded by increasing access 
to other laboratory training sites, such as forensics laboratories, 
blood centers, physician offices, and outpatient clinics. Yet, with 
these shifts, the continued demand for laboratory services is real and 
is expected to grow.
    In Florida, according to the Bureau of the Census, the population 
is projected to grow by 29% by 2020, and the population over age 65 is 
projected to grow by 66% in the same time period. In Ohio, the 
population is projected to grow by 3% by 2020, and the population over 
age 65 is projected to grow by 34% in the same time period.
    Given the country's aging population, the number and complexity of 
biopsy specimens and the use of molecular techniques will likely 
increase during the next decade. Laboratory professionals who entered 
the workforce in the 1960s and 1970s will be retiring soon as the 
average age for a medical technologist now is 45 years old. The threat 
of bioterrorism calls for trained laboratory professionals to respond. 
The laboratoryallied health workforce will need to be able to react 
accordingly with appropriate numbers of trained and educated personnel.
Current Working Solutions
    There are solutions to these problems. As a professional 
organization, ASCP believes it holds a responsibility to address the 
workforce shortage. As such, ASCP offers scholarships to medical 
laboratory technology students each year to relieve some of the 
financial burden of higher education, but this does not come close to 
fulfilling the need. We produce career brochures and audiovisual 
materials for high school students and younger children to learn about 
opportunities in the laboratory. ASCP also exhibits and advertises at 
the annual conference for the National Association of Biology Teachers 
in an attempt to help these educators guide interested students to 
careers in the laboratory.
    On the public side, there are grants available to help attract 
laboratory professionals to the field, especially minorities and 
individuals in rural and underserved communities. The Allied Health 
Project Grants program, administered by the Health Resources and 
Services Administration, has been successful in effectively attracting 
new allied health professionals into the laboratory field.
    For example, the University of Nebraska Medical Center, my alma 
mater, established medical technology education sites in four 
communities in rural Nebraska, including a student laboratory in 
central Nebraska, under an Allied Health Project Grant. As of 1999, of 
69 graduates, 99% took their first job in a rural community, and 74% 
took their first job in rural Nebraska.
    The grants are also designed to create successful minority 
recruiting and retention programs for medical technologists. This was 
the focus of a University of Maryland, Baltimore project initiated by 
allied health grant funding in 1991. Through utilizing a four phase 
design, which begins with career awareness activities for elementary 
and middle school students, this model provides a continuum of 
activities that progressively focuses on identifying, retaining, and 
advancing interested students to the completion of a baccalaureate 
degree. Because of this program, the University of Maryland, Baltimore 
has attained a current 70% minority medical technology student 
enrollment at a majority institution, and an average 89% student 
retention rate, placing it among the highest in the country. 95% of the 
graduates of this program receive immediate placement.
    Most allied health grant projects continue after federal funding 
ends, making them a longlasting, worthwhile investment in the future of 
allied health.
    I greatly appreciate this opportunity to discuss this concern over 
the medical laboratory personnel shortage with you. As a practicing 
pathologist, who works as part of the laboratory team with medical 
technologists and technicians, I know there is a growing concern over 
this shortage and the data certainly bears this to be true. Thank you 
again for your time and consideration.

    Mr. Bilirakis. Thank you very much, Dr. Roberts.
    Ms. Pietrantoni. Did I pronounce that all right?

                 STATEMENT OF ADELE PIETRANTONI

    Ms. Pietrantoni. Very close.
    Mr. Bilirakis. In other words, no.
    Ms. Pietrantoni. Good afternoon, Mr. Chairman, Ranking 
Member Brown, and members of the subcommittee. Thank you for 
the opportunity to present the views of pharmacist caregivers 
in hospitals, long-term care facilities, community pharmacies 
and other practice settings across the country.
    My name is Adele Pietrantoni. I am a pharmacist, immediate 
part President and current Chair of the Massachusetts 
Pharmacists Association, and am currently a trustee for the 
American Pharmaceutical Association, the national professional 
society of pharmacists.
    I am here to speak about the acute shortage of pharmacists 
in the United States today. In December of 2000, HRSA released 
a report identifying and quantifying the degree of the current 
shortage. A shortage of pharmacists is a serious problem, as 
pharmacists are a valuable resource for ensuring the safety, 
efficacy, and cost-effectiveness of medication therapy for the 
millions of Americans who rely on medications to cure disease, 
resolve symptoms and maintain health. Nurses provide the most 
public face in the health care system and medical technologists 
perform vital functions to support the system, pharmacists are 
the patient's last line of defense to ensure the appropriate 
use of medications. Pharmacists work with patients to ensure 
that medications work, and to minimize the situations where 
this valuable technology causes harm.
    The shortage stems from a hyper-demand for medication and 
medication therapy management services. This demand is evident 
in the dramatic growth in the number of prescriptions prepared 
daily, growth that is sure to continue, and the significant 
expansion of the pharmacist's role in patient care. As the 
population ages, the shortage of pharmacists and other health 
care professionals will continue. Congress can play a valuable 
role in helping address this serious issue.
    According to the HRSA study, the number of prescriptions 
dispensed in ambulatory settings increased 44 percent between 
1990 and 1999. The number of pharmacists per 100,000 people, a 
standard measurement, rose 5 percent in that period, and this 
level of growth is expected to remain the same over the next 10 
years.
    This disconnect between the demand and supply of 
pharmacists has yielded an increased in open positions. 
According to the National Association of Chain Drug Stores, the 
estimated number of full and part-time unfilled pharmacist 
positions in chain drug stores grew by 159 percent from 1998 to 
2000, and the shortage is not limited to the community setting. 
A recent American Hospital Association survey of 715 rural and 
urban hospitals found that 21 percent of hospital pharmacist 
positions are unfilled.
    As noted, the shortage affects every setting where 
pharmacists practice. Approximately 60 percent of pharmacists 
work in community pharmacies. This where patients encounter 
pharmacists the most and rely on most often, so the community 
setting is where most Americans see the effects of the shortage 
through longer waits, less time with the pharmacist, and 
service that is as good as it can be under trying 
circumstances.
    Hospitals also face similar problems because the monitoring 
of hospital-based medications is extremely demanding and time-
consuming, but absolutely vital. Shortages of other health 
professionals compound the challenges hospitals face.
    Additionally, the Federal services, including the military, 
Veteran's Affairs, and the Public Health Service are important 
settings where pharmacists practice. As the lowest paying of 
pharmacist employers, the Federal Government has been hit hard 
by the shortage. Federal pharmacist vacancy rates are estimated 
as high as 18 percent, while the Public Health Service 
pharmacist vacancy rate more than doubled from 5 percent in 
1996 to 11 percent in 2000. The result of these vacancies have 
been cutbacks in services as well as the hiring of pharmacist 
consultants who are significantly more expensive than uniformed 
or civilian pharmacists.
    The pharmacist shortage is not simply a result of the 
greater volume of prescriptions, but also the expanded role of 
the pharmacist in today's health care system. The role of the 
pharmacist has shifted from making medications for patients to 
working with patients to make sure that medications work. There 
are numerous pressures within the system that pharmacists work 
through every day and are becoming less available to answer 
important questions that patients have in pharmacies.
    While we are proud to provide these services to our 
patients and cost-containment, there simply aren't enough of us 
to do it. Demand has outstripped supply, and the need for 
licensed pharmacists is considerable.
    The recent introduction of H.R. 2173, the Pharmacy 
Education Aid Act, is an important step in addressing the 
pharmacist shortage. By providing financial aid to students and 
monies for faculty and buildings and physical facilities, the 
bill will ensure that pharmacist services are available to 
everyone by requiring participating schools to establish 
clinical rotations in underserved areas.
    H.R. 2173 will provide further resources to rural and 
underserved areas by mandating the inclusion of pharmacists and 
pharmacist services in the National Health Service Corps.
    We are extremely pleased to be here talking about this 
issue, and to be able to voice our support for the Pharmacy 
Education Aid Act. Recognizing the problem is a significant 
step toward the solution. Both the public and private sector 
have begun to take the necessary initial action to ensure that 
we have enough pharmacists to manage drug therapies that 
already have a significant impact on the health of millions of 
Americans, and hold so much promise for the future.
    We look forward to working toward this end, and strongly 
encourage your continuing efforts. Thank you for listening to 
the views of the Nation's pharmacists.
    [The prepared statement of Adele Pietrantoni follows:]
   Prepared Statement of Adele Pietrantoni on Behalf of the American 
                       Pharmaceutical Association
    Good morning. Mr. Chairman and Members of the Committee, thank you 
for the opportunity to present the views of pharmacist caregivers in 
hospitals, long term care facilities, community pharmacies and other 
practice settings across the country. I am Adele Pietrantoni; I am a 
pharmacist, immediate past president and current Chair of the 
Massachusetts Pharmacists Association and am currently a trustee for 
the American Pharmaceutical Association (APhA), the national 
professional society of pharmacists.
    I am here to speak about the acute shortage of pharmacists in the 
United States today. In December of 2000, in response to Congressional 
concern about the imbalance between the demand for and the supply of 
practicing pharmacists, the Health Resources and Services 
Administration (HRSA) released a report entitled ``The Pharmacist 
Workforce: A Study of the Supply and Demand for Pharmacists.'' The 
report identified and quantified the degree of the current shortage.
    A shortage of pharmacists is a serious problem, as pharmacists are 
a valuable resource for ensuring the safety, efficacy, and cost 
effectiveness of medication therapy for the millions of Americans who 
rely on medications to cure disease, resolve symptoms and maintain 
health. While nurses provide the most public face in the healthcare 
system and laboratory technicians perform vital functions to support 
the system, pharmacists are the patient's last line of defense to 
ensure the appropriate use of medications. Pharmacists work with 
patients to ensure that medications work--and to minimize the 
situations where this valuable technology causes harm.
    How did this shortage emerge? The shortage stems from a hyper-
demand for medications and medication therapy management services, and 
thus pharmacists. This demand is evident in the dramatic growth in the 
number of prescriptions prepared daily--growth that is sure to 
continue--and the significant expansion of the pharmacist's role in 
patient care. As the population ages, the shortage of pharmacists and 
other health care professionals will continue. Congress can play a 
valuable role in helping address this serious issue.
                               the facts
    First, let me review a few statistics:
    According to the HRSA study, the number of prescriptions dispensed 
in ambulatory settings increased by 44% between 1990 and 1999. The 
number of pharmacists per 100,000 people, a standard measurement, rose 
5% in that period,1 and a study published recently in the 
Journal of the American Pharmaceutical Association estimates that this 
level of growth will remain the same over the next ten 
years.2
---------------------------------------------------------------------------
    \1\ ``The Pharmacist Workforce: A Study of the Supply and Demand 
for Pharmacists,'' Department of Health and Human Services, Health 
Resources and Services Administration, Bureau of Health Professions; 
December 2000, p. 4.
    \2\ Gershon SK, Cultice JM, Knapp KK. ``How Many Pharmacists Are in 
Our Future? The Bureau of Health Professions Projects Supply to 2020,'' 
JAmPharm, Vol. 40, No. 6, p. 760.
---------------------------------------------------------------------------
    This disconnect between the demand and supply of pharmacists has 
yielded an increase in open positions. According to the National 
Association of Chain Drug Stores, the estimated number of full and 
part-time unfilled pharmacist positions in chain drug stores grew by 
159% from 1998 to 2000.3
---------------------------------------------------------------------------
    \3\ NACDS member surveys, 1998-2000.
---------------------------------------------------------------------------
    And the shortage is not limited to the community setting. A recent 
American Hospital Association survey of 715 rural and urban hospitals 
found that 21% of hospital pharmacist positions are 
unfilled.4
---------------------------------------------------------------------------
    \4\ AHA Special Workforce Survey--June 5, 2001.
---------------------------------------------------------------------------
    At a local level, we have seen a slight decline in the number of 
pharmacists licensed in Massachusetts from June 2000 to June 2001, 
while the number of prescriptions dispensed continues to 
rise.5
---------------------------------------------------------------------------
    \5\ Massachusetts Board of Registration in Pharmacy.
---------------------------------------------------------------------------
    As noted, the shortage affects every setting where pharmacists 
practice. Approximately 60% of pharmacists work in community 
pharmacies.6 These are the pharmacists who most patients 
encounter and rely on most often, so the community setting is where 
most Americans see the effects of the shortage through longer waits, 
less time with the pharmacist, and service that is as good as it can be 
under trying circumstances.
---------------------------------------------------------------------------
    \6\ ``The Pharmacist Workforce: A Study of the Supply and Demand 
for Pharmacists'', pg 14.
---------------------------------------------------------------------------
    And similar to the community setting, drug therapy in hospitals has 
become an integral part of treating disease, and often the drug 
regimens are potentially toxic and must be very closely monitored. The 
monitoring of these hospital-based medications is extremely demanding 
and time consuming, but absolutely vital. Shortages of other health 
professionals compound the challenges hospitals face.
    Additionally the federal services, including the military, 
Veteran's Affairs, and the Public Health service, are important 
settings where pharmacists practice. As the lowest paying of pharmacist 
employers, the federal government has been hit hard by the shortage. 
Federal pharmacist vacancy rates are estimated as high as 18%, while 
the Public Health Service pharmacist vacancy rate more than doubled 
from 5% in 1996 to 11% in 2000.7 The result of these 
vacancies have been cutbacks in services as well as the hiring of 
pharmacist consultants who are significantly more expensive than 
uniformed or civilian pharmacists. A recent article in Stars and 
Stripes outlined the shortage problem, stating that for current 
pharmacy students, ``working for a lower-paying VA medical center may 
be off the post-graduation radar.'' 8
---------------------------------------------------------------------------
    \7\ Ibid., p. 30
    \8\ Fillmore, Randolph. ``Does the Nationwide Pharmacist Shortage 
Threaten VA Patients' Health'', The Stars and Stripes. May 21-June 3, 
2001: p. 9.
---------------------------------------------------------------------------
                  the expanded role of the pharmacist
    As illustrated by those statistics, the pharmacist shortage affects 
every state and every setting in which pharmacists work, from community 
pharmacies to hospitals, from long term care facilities to health 
maintenance organizations. The numbers, however, do not tell the whole 
story.
    The pharmacist shortage is not simply a result of the greater 
volume of prescriptions, but also the expanded role of the pharmacist 
in today's healthcare system. The role of the pharmacist has shifted 
from making medications for patients to working with patients to make 
medications work. An asthma inhaler is not effective if the patient 
hasn't received sufficient training to use it correctly. Pharmacists 
work with patients to explain medication therapy and monitor for side 
effects, working in a collaborative fashion with physicians to 
implement, monitor, and maintain drug therapy. The myth of the 
pharmacist simply dispensing pills is just that, a myth. Pharmacists 
today are best viewed as the clinical managers of medication therapy, 
specialists overseeing one aspect of patient care in a similar manner 
to a pathologist or radiologist. Just as a radiologist working in 
collaboration with a generalist is responsible for interpreting X-rays 
and MRIs in the process of diagnosis and treatment, a pharmacist is 
likewise responsible for implementing and monitoring drug therapies in 
that same process.
    These clinical responsibilities are essential for both patients and 
the profession. Such activities integrate pharmacists into the 
patients' overall care and allow pharmacists to provide critical advice 
and counseling regarding drug regimens that are complex and require 
rigorous compliance. However, these activities take time in what is 
already a very busy day, and demand expertise that cannot be addressed 
by automation or technicians.
    Other pressures come to bear as drug therapy becomes more 
widespread. Pharmacists often have to manage multiple, sometimes 
complicated third party payer situations and health plan specific 
programs. Pharmacists work to manage clinically appropriate, cost-
effective therapy within those programs. Adoption of a Medicare 
pharmacy benefit will increase the number of patients requiring 
assistance with third party payment systems--thus increasing the 
workload. A study conducted by Arthur Andersen in 1999 found that 
``one-fifth of pharmacy personnel time, including pharmacists, is spent 
on activities directly related to 3rd party issues.'' 9 This 
includes data entry, determination of eligibility status, assistance 
with prior authorization requirements, and response to insurance-
related inquiries. Some of these tasks can--and are--delegated to 
personnel such as technicians, but this also diverts that personnel 
from medication preparation activities. Also, patients come to 
pharmacies today having learned about drugs through enticing but brief 
direct-to-consumer ads, and often rely on the pharmacist for the 
details of what the drugs are for and whether they are appropriate. 
Providing this information has become a critical, objective 
counterbalance, but these activities stretch the pharmacist even 
further.
---------------------------------------------------------------------------
    \9\  Arthur Andersen LLP. (1999) Pharmacy Activity Cost & 
Productivity Study, p. 2.
---------------------------------------------------------------------------
    Ultimately, while we are proud to provide these services which 
ensure safety, efficacy, and cost containment, there simply aren't 
enough of us to do it. Demand has outstripped supply, and the need for 
licensed pharmacists is considerable.
                      consequences of the shortage
    The pharmacist shortage has had serious impacts on both pharmacists 
themselves and the services they are able to provide. Obviously, the 
pressure of keeping up with demand has been hard for pharmacists 
personally. Longer hours and less flexibility translate into stressful 
conditions and decreased job satisfaction. This impact is of particular 
concern because it prompts pharmacists to leave the profession or seek 
less stressful work environments.
    Along with a negative impact on the pharmacists themselves, 
consumers suffer when pharmacists' services are limited. The shortage 
is forcing some pharmacies to cut back on services, and these cuts are 
particularly noticeable in medically underserved areas as well as in 
the federal services, where vacancies are more widespread. More 
importantly, the current work environment increases the potential for 
medication error. As pharmacists, we are dedicated first and foremost 
to the safety of our patients, but it is inevitable--as it is in any 
professional situation--that when we are fatigued and under pressure, 
the potential for mistakes increases.
    Additionally, as pharmacists are drawn to higher paying jobs in 
industry and other sectors not involved with direct patient care, there 
is a real danger that faculty vacancies at schools and colleges of 
pharmacy will increase, restricting the capability of these 
institutions to increase class size and increase the supply of 
pharmacists. This shift away from academic institutions hinders the 
primary long term solution to the problem.
               h.r. 2173--the pharmacy education aid act
    The recent introduction of HR 2173, the Pharmacy Education Aid Act, 
is an important step in addressing the pharmacist shortage, and does so 
in a way that will provide relief to every setting where pharmacists 
practice and help patients.
    By providing financial aid to students, HR 2173 will trigger an 
immediate incentive for students who otherwise may not be able to 
afford this education to pursue pharmacy as a career. The bill will 
help schools and colleges recruit new students to study pharmacy, while 
the concurrent emphasis on training in rural and underserved areas will 
help retain these graduates as practicing pharmacists in those 
settings. In many of those settings, pharmacists may be the only 
available health care professional. Maintaining access to those 
professionals is essential.
    By extending that aid to schools and faculty in the form of loan 
forgiveness and expanding existing physical facilities, HR 2173 will 
enhance the long-term ability of schools to expand while maintaining 
adequate faculty staffing. In this sense, the bill mirrors private 
sector efforts of some large chain pharmacies that are currently 
offering to pay tuition for pharmacists willing to work for them after 
graduation.
    Additionally, the bill will ensure that pharmacist services are 
available to everyone by requiring participating schools to establish 
clinical rotations in under-served areas. HR 2173 will provide further 
resources to rural and under-served areas by mandating the inclusion of 
pharmacists and pharmacist services in the National Health Service 
Corps, which provides primary health services in health professional 
shortage areas. This measure will provide immediate assistance to those 
areas with especially critical needs.
    The Pharmacy Education Aid Act is significant in that it addresses 
the fundamental problem we face--an insufficient supply to meet the 
demand for pharmacists. While increasing use of automation and pharmacy 
technicians and other changes within healthcare management systems will 
certainly help deal with the increasing volume of prescriptions 
prepared every day, the future of comprehensive drug therapy requires 
trained pharmacists able to provide patients with valuable clinical 
services. Pharmacy schools represent the only supply of these 
professionals, and thus must be one focus of our efforts to address the 
pharmacist shortage.
                           on the right track
    We are extremely pleased to be here talking about this issue, and 
to be able to voice our support for the Pharmacy Education Aid Act. The 
pharmacist shortage is not a temporary problem, but does not have to be 
a long term one. Recognizing the problem is a significant step toward 
the solution. Both the public and private sector have begun to take the 
necessary initial action to ensure that we have enough pharmacists to 
manage drug therapies that already have a significant impact on the 
health of millions of Americans, and hold so much promise for the 
future. We look forward to working toward this end, and strongly 
encourage your continuing efforts. Thank you for listening to the views 
of the nation's pharmacists.

    Mr. Bilirakis. Thank you, Ms. Pietrantoni. See, I have 
trouble with that extra syllable.
    Mr. Brown. This comes from a guy named Bilirakis.
    I don't mean to show a lack of respect.
    Mr. Bilirakis. If my name were Brown, I think I would 
change it to something less common.
    Dr. Roberts, please.
    Mr. Russell Roberts. That is why we two Roberts on the 
panel, to make it easier for you.

                  STATEMENT OF RUSSELL ROBERTS

    Mr. Russell Roberts. Mr. Chairman, and other members of the 
committee, thank you for allowing me the opportunity to address 
you on the labor market for health care workers. My name is 
Russell Roberts. I am the John M. Olin Senior Fellow at the 
Weidenbaum Center on Economics, Government, and Public Policy, 
at Washington University in St. Louis, and an Adjunct Senior 
Scholar with the Mercatus Center at George Mason University. As 
you might guess, I have a very crowded business card.
    A little over 15 years ago, my mother went back to school 
and became a nurse. Just last month, one of her patients gave 
her a plaque with a poem she had written for my mother because 
of the care she had provided. The poem was called ``Angel on 
the floor.'' My mother is one of millions of angels on the 
floor. They do their jobs with grace, skill and a smile under 
great pressure. As the Baby Boomers age, we are going to need a 
lot more of them, along with other health care workers.
    How can we meet the health needs of Baby Boomers and all 
Americans while maintaining the high quality of health care we 
enjoy here in the United States? Answering this question 
requires an understanding of how the U.S. labor market works. 
During the 20th Century, the U.S. workforce saw tremendous 
growth and tremendous change. For example, in 1900, over 40 
percent of the U.S. workforce was in agriculture. Today, that 
number is under 3 percent.
    While many occupations such as farming became less 
populated over the course of the 20th Century, many others grew 
dramatically. In 1900, there were only 438,000 teachers in 
America. Today, there are over 4.7 million. Other jobs are 
critical today that didn't even exist in 1900. Today, we have 
over 3 million truck drivers. Two million people work in the 
financial sector.
    How did we find the people to fill all those jobs over the 
last 100 years? Who was in charge of making sure that critical 
professions were adequately staffed? No one. No one was in 
charge. Yet, our workplace and economy went through an 
unimaginable set of changes of that century.
    How did the economy manage this transformation without 
supervision? Through supply and demand, the natural working of 
the marketplace. Our economy was able to have a sufficient 
number of cooks and teachers, nurses and doctors, economists 
and dentists, webmasters and genome researchers. No one could 
have predicted accurately how many people in which occupations 
would be necessary by such-and-such a time, but the marketplace 
solved the problem of staffing the needs of new industries and 
old ones that expanded. Employers found the workers they needed 
by offering a sufficiently attractive mix of pay and benefits.
    Let us consider nursing, one of the occupations we are 
concerned with today. In 1900, there were only 12,000 
professional nurses in America. My the middle of the century, 
there were almost 500,000. Today, there are over 2 million. How 
did we manage to fill that need with the skilled and caring 
people that we have? The same ways were used that were used in 
every occupation. To attract qualified employees, employers 
offered a package of wages and benefits sufficient to bring 
people into the profession.
    Today, we are hearing alarming stories about current and 
future shortages in the health care field. If demand does 
indeed threaten to outstrip supply, hospitals, nursing homes 
and others will have to raise the pay and benefits of health 
care workers. Of course, they would prefer not to have to do 
that. Naturally, they favor government policy to make nursing 
more attractive than it is now and have someone else, the 
taxpayer, pay the bill. If Congress does not act, the shortages 
we are worrying about today will disappear as they have always 
disappeared in the past, through a mixture of higher benefits 
and innovations on the part of employers. If Congress 
intervenes, the result will be a program that benefits one 
group at the expense of others. The groups you have heard from 
today will be happy. Who will be unhappy?
    Unfortunately, by artificially aiding one group of health 
care professionals, you may end up harming the very people you 
are trying to help, the patients in hospitals and in long-term 
nursing care. By artificially encouraging people to become 
nurses, pharmacists and technicians, you will have to draw them 
from somewhere.
    What professions will not be filled as they might have been 
because of a subsidy program of one kind or another? What 
innovations will not occur because you have artificially made 
it difficult for other segments of our economy to find workers? 
Because you are increasing the supply of one type of worker, 
you interfere with the ability of the marketplace to cope with 
the inevitable challenge of dealing with the Baby Boom. The 
costs may be dramatic and tragic.
    Imagine sitting in 1970 trying to predict the demand for 
telephone operators, a mere 30 years later, today. Suppose you 
have perfect foresight about the most critical component needed 
to make that prediction, the number of phone calls people are 
going to make in the year 2000? Well, you would predict we 
would need about 4 million telephone operators but, in fact, we 
need only about 200,000 because of the incredible advances in 
telecommunication technology.
    There are two lessons here. The first is that it is very 
difficult to predict the demand for one type of worker or 
another. The second is that it is very difficult to anticipate 
the role of technology and human creativity in response to 
economic changes.
    Imagine the mistake we would have made in 1970 if an alarm 
about an inadequate supply of future telephone operators we had 
subsidized their supply. We would have slowed the 
telecommunications revolution by locking us into a technology 
that would prove to be grossly out-of-date. That would have 
been unfortunate, but not nearly as tragic as making the same 
mistake in the health care sector.
    I would suggest that no one in this room can even begin to 
predict how the health care market will evolve over the next 30 
years. If you artificially stimulate the supply of certain 
segments of health care, you will have unforeseen and negative 
effects on other segments. No one knows where the innovations 
of the next 30 years will come from, and your actions may keep 
those innovations from happening.
    Rather than artificially increasing the supply of certain 
favored groups, it would be more productive to remove any 
existing artificial barriers to supply that currently exist. 
Whatever action you take, I would encourage you to remember the 
Hippocratic oath, ``First, do no harm.''
    In conclusion, the threat of future shortages is going to 
lead to greater compensation for health care workers. Who is 
going to pay for that--Congress, by artificial means, or the 
natural forces of the marketplace? People spend their own money 
more carefully than they spend other people's money. Government 
solutions: spend other people's money and lock-in existing 
technologies. Privately funded solutions provide the incentive 
for unleashing new technology and human creativity. Please, let 
human creativity flourish in response to the threat of 
shortages. Thank you very much.
    [The prepared statement of Russell Roberts follows:]
  Prepared Statement of Russell Roberts, John M. Olin Senior Fellow, 
    Weidenbaum Center on Economics, Government, and Public Policy, 
                         Washington University
    Good morning, Chairman Tauzin, Chairman Bilirakis, Congressman 
Dingell, Congressman Brown, and members of the committee. Thank you for 
allowing me the opportunity to address you on the labor market for 
health care professionals. My name is Russell Roberts. I am the John M. 
Olin Senior Fellow, Weidenbaum Center on Economics, Government, and 
Public Policy, Washington University in St. Louis and an Adjunct Senior 
Scholar with the Mercatus Center at George Mason University.
    The health care workers of America are remarkable and dedicated 
people. A little over fifteen years ago, my mother, after raising her 
children, went back to school and became a nurse. Just last month, one 
of her patients gave her a plaque with a poem she had written for my 
mother because of the care she provided. The poem was called ``Angel on 
the Floor.'' My mother is one of millions of men and women who are 
angels on the floor. They do their jobs with grace, skill and a smile 
under great pressure. Over the next two decades, as the baby boomers 
get older, we're probably going to need a lot more angels on the floor, 
along with other health care workers. How can we meet the health needs 
of baby boomers and all Americans while maintaining the high quality of 
health care we enjoy here in the United States?
                  dynamic nature of u.s. labor market
    Answering this question requires an understanding of how the U.S. 
labor market works. During the 20th century, the U.S economy added 
roughly one million jobs a year. But more impressive than the increase 
in the number of jobs has been the change in the composition of jobs 
over the last century. In 1900, over 40% of the U.S workforce was in 
agriculture. Today that number is under 3%.
    Think about the magnitude of that transition. If the proportions 
had stayed the same, we'd have over 50 million workers in the farm 
sector instead of the 3 million we have today. Somehow, the economy 
provided opportunities for those workers who were no longer needed on 
the farm.
    After agricultural workers, the next most common occupation in 1900 
was ``servant.'' Working in the mining industry was one of the top ten 
occupations in 1900. Dressmakers, tailors, blacksmiths and shoemakers 
were all among the top twenty occupations. Today, all of those 
occupations have dwindled dramatically as a proportion of the workforce 
for the same reason that agriculture is less important as a source of 
employment: the unforeseen explosion in technology, human creativity 
and wealth that transformed our lives in the 20th century.
    While many occupations became much less populated over the course 
of the 20th century, many others grew dramatically. In 1900, there were 
only 438,000 teachers in America. Today, there are over 4.7 million. We 
went from 117,000 cooks in 1900 to over 2 million today. Other jobs are 
critical today that didn't exist in 1900. Today we have over 3 million 
truck drivers. The financial sector employs over 2 million people.
    How did we find the people to fill all those jobs over the last 100 
years? Who was in charge of making sure that critical professions were 
adequately staffed? No one was in charge. And yet our workplace and 
economy went through an unimaginable set of changes over that time 
period. How did the economy manage this transformation without 
supervision?
    Through supply and demand, the natural working of the marketplace, 
our economy was able to have a sufficient number of cooks and teachers, 
nurses and doctors, economists and dentists, webmasters and genome 
researchers. No one could have predicted how many people in which 
occupations would be necessary by such-and-such a time. But the 
marketplace solved the problem of staffing the needs of new industries 
and old ones that expanded. Employers found the workers they needed by 
offering a sufficiently attractive mix of pay and benefits.
    Nursing, one of the occupations we're concerned with today, has an 
interesting and informative history. In 1900, there were only 12,000 
professional nurses in America. By mid-century, as the health care 
industry began to evolve, there were almost 500,000. How did those jobs 
get created? How did we manage to get women and men to fill those jobs? 
Today, there are over 2 million nurses, over a four-fold increase since 
1950. How did we manage to fill that need with the skilled and caring 
people in the nursing profession? The same ways were used that were 
used in every occupation. To attract qualified employees, employers 
offered a package of wages and benefits sufficient to bring people into 
the nursing profession.
    The labor market does not work in a vacuum. Here in the United 
States the government has intervened in the labor market in many ways, 
direct and indirect to affect the attractiveness of work and the 
attractiveness of one industry over another. But the role of the 
government has been less dramatic than it has been in other countries. 
A comparison with Europe over the last 30 years is instructive. Over 
the last 30 years, European governments have been much more involved in 
tinkering with labor markets relative to the US experience. European 
labor markets are more highly regulated. The result has been that 
Europe faces much higher unemployment rates and much slower job growth 
than the United States over the same period.
                the market for health care professionals
    Looking more specifically at the health care market, the coming 
years will bring many changes as the baby boom population changes. The 
existence of the baby boom is well known by many. But no one knows 
precisely how the aging of the baby boomers will affect the demand for 
various professions in and out of health care. The reason such impacts 
are impossible to quantify precisely is because it is impossible to 
predict how technology and human creativity will respond to the 
demographic phenomenon known as the baby boom.
    Today we are hearing alarming stories about current and future 
shortages in the health care field. If demand does indeed threaten to 
outstrip supply, hospitals, nursing homes and others will have to raise 
the pay and benefits of health care workers. Of course, they would 
prefer not to have to pay higher wages. Naturally, they favor 
government policy to make nursing more attractive than it is now and 
have someone else, the taxpayer, foot the bill. If Congress does not 
act, the shortages we are worrying about today will disappear as they 
have always disappeared in the past-through a mixture of higher 
benefits and innovations on the part of employers.
    But suppose Congress cannot resist the temptation to intervene. The 
result will be a program that benefits one group at the expense of 
other groups. The groups you have heard from today will be happy. Who 
will be unhappy?
    Unfortunately, by artificially aiding one group of health care 
professionals over another, you may end up harming the very people you 
are trying to help, the patients in hospitals and in long-term nursing 
care. By artificially encouraging people to become nurses, pharmacists 
and technicians, you will have to draw them from somewhere. What 
professions will not be filled as they might have been because of a 
subsidy program of one kind or another? What innovations will not occur 
because you have artificially made it difficult for other segments of 
our economy to find workers? Because you are increasing the supply of 
one type of worker, you interfere with the ability of the marketplace 
to cope with the inevitable challenge of dealing with the baby boom. 
The costs may be dramatic and tragic.
    Imagine sitting in 1900 and worrying about the supply of telegraph 
operators over the next 70 years. Even if you had perfect knowledge of 
how the U.S. population would grow, you would have done a terrible job 
predicting the demand for telegraph operators because you would have 
been unable to predict the evolution of the telephone and its role in 
our lives. In 1900, telegraph operators and messengers outnumbered 
telephone operators by almost ten to one. But by 1970, telephone 
operators had increased 20-fold and dwarfed the number of workers in 
the telegraph industry by many times.
    Now imagine sitting in 1970 and trying to predict the demand for 
telephone operators by the year 2000. Suppose you have perfect 
foresight about the most critical component needed to make that 
forecast, the number of phone calls people make. Based on the number of 
calls made in 2000, you would predict a need for four million telephone 
operators. In fact, the need is only around 200,000 because of 
incredible advances in technology.
    There are two lessons here. The first is that it is very difficult 
to predict the demand for one type of worker or another. The second is 
that it is very difficult to anticipate the role of technology and 
human creativity in response to economic changes.
    Imagine the mistake we would have made in 1970 if in alarm about an 
inadequate supply of future telephone operators we had subsidized their 
supply. We would have slowed the telecommunications revolution by 
locking us into a technology that would prove to be grossly out of 
date. That would have been unfortunate, but not nearly as tragic as 
making the same mistake in health care. I would suggest that no one in 
this room can even begin to predict how the health care market will 
evolve over the next 30 years. If you artificially stimulate the supply 
of certain segments of health care, you will have unforeseen and 
negative effects on other segments. No one knows where the innovations 
of the next 30 years will come from.
                      is there nothing to be done?
    Is there nothing Congress can do to deal with the challenges in the 
health care labor market that are before us? There is the potential for 
constructive action. Rather than artificially increasing the supply of 
certain favored groups, it would be productive to remove any existing 
artificial barriers to supply that currently exist. One example would 
be the burden of paperwork that reduces the joy and on-the-job 
satisfaction of health care workers. We hear a constant cry that the 
healthcare workplace is too devoted to filling out forms rather than 
caring for patients. Surely there is room for improvement here. But 
whatever action Congress takes, I would encourage you to remember the 
Hippocratic oath: first, do no harm.
    Thank you very much.

    Mr. Bilirakis. Thank you, Dr. Roberts. I should know and I 
did know, but I don't recall, when the National Health Service 
Corps was created, but that was created to cover shortages 
among medical practitioners in rural areas, et cetera, areas 
where they were needed and they weren't available. Do you have 
a problem with that program?
    Mr. Russell Roberts. Oh, the government has done a lot of 
things that has expanded the supply of workers in different 
areas, and it is done at all different levels, the Federal one 
being the obvious one, but the State level is very dramatic in 
the form of subsidizing education.
    In general, when the Federal Government intervenes, it is 
going to do it in a very blunt way. It is not going to be 
generally. You can focus support. I mean, generally is going to 
have trouble dealing with some of the regional problems that we 
have heard about today in the nursing shortages. So, I think 
the general rule is to make sure that you allow the maximum 
flexibility in any program that you design.
    Mr. Bilirakis. I am not sure how to translate that. Ms. 
O'Leary, nurses are covered, are included in the National 
Health Service Corps. Do you have any of those nurses in your 
hospital?
    Ms. O'Leary. No, we do not.
    Mr. Bilirakis. Why?
    Ms. O'Leary. Because we are not allowed to employ them.
    Mr. Bilirakis. Because there is no shortage of health 
professionals in that area, is that why?
    Ms. O'Leary. No.
    Mr. Bilirakis. Why?
    Ms. O'Leary. My understanding is that they are not allowed 
to work at our facilities to pay off their loans.
    Mr. Bilirakis. In your facility, or in your facilities?
    Ms. O'Leary. I can speak for my own facility.
    Mr. Bilirakis. Well, there must be a reason why they are 
not allowed to work there.
    Ms. O'Leary. I would be happy to check that out for you and 
get back to you.
    Mr. Bilirakis. Do you know, Ms. Heinrich?
    Ms. Heinrich. The people in the Corps have to work in a 
designated shortage area, and my guess is that the facility in 
the area is not designated as such.
    Mr. Bilirakis. Well, that is what I thought was the answer, 
but what we are talking about is not a shortage of medical 
doctors in that area. God knows, there are plenty of medical 
doctors in that area, but there is a shortage of nurses. So, 
are we saying that the fact that there is no shortage of 
medical doctors also applies to the nursing profession?
    Ms. Heinrich. The way that the shortage areas are 
designated is for primary care providers, and at this point the 
way they count, they only count physicians. They don't take 
into account the other providers.
    Mr. Bilirakis. That is what I am getting at.
    Ms. Heinrich. But the other point here that I have been 
trying to make, and maybe others have, too, is there is so much 
geographic variability about how many people are willing, 
interested in taking positions in particular facilities, and it 
isn't just actual numbers of people available. I think it is 
really important for us to remember that the actual number of 
nurses is continually increasing, it is not decreasing. The 
rate of growth has slowed down, that is for sure, but at this 
particular point in time you will have different facilities say 
that they have openings, but the other part of that is that not 
so many years ago some of those same facilities were laying 
nurses off.
    Mr. Bilirakis. What I am getting at is, what some of the 
legislation would do, and that is include MTs insofar as the 
National Health Service Corps is concerned, and obviously maybe 
pharmacists. We would have to look into that, but I guess if it 
isn't working where nurses are included, then it isn't going to 
work any better for medical technologists and pharmacists. Dr. 
Roberts, I am not saying that is going to be the decision--but, 
first, we have to cross that particular bridge, as I see it, 
and then possibly consider whether the other shortages should 
be included.
    Ms. Heinrich. If I could make one comment, the nurses that 
are included now in the Corps are nurse-practitioners, so they 
usually have more advanced training. They are considered 
primary care providers.
    The nurses with the experiences that people in acute care 
facilities are looking for have a different skill mix, and so 
we are not talking about the same population of nurses.
    Mr. Bilirakis. So they are not included then in the Service 
Corps.
    Ms. Heinrich. RNs, general RNs are not included.
    Mr. Bilirakis. That is good to know. And I ask questions 
about the aides and poor salaries and ask you what the nurses' 
salaries are these days, but the red light is on. Possibly 
someone else will get to that. Mr. Brown.
    Mr. Brown. Thank you, Mr. Chairman. Six and a half years 
ago, we had something that we referred to around here as the 
``Gingrich revolution'', where most of the people in the class 
of 1994 that were elected to Congress talked a lot like you do, 
Dr. Roberts, and fortunately for the country, most of them got 
over it.
    I was just--I hear you talk about the market taking care of 
everything. How is the market doing in prescription drugs in 
this country, and keeping prices competitive, and getting 
prescription drugs available to people that don't have access? 
Tell me about that a little bit.
    Mr. Russell Roberts. I will agree with you, Congressman 
Brown, that economists do have a tough time running for 
Congress and being successfully elected. There are a couple, 
but it is a tough haul with our world view.
    The pharmaceutical industry is a rather mixed picture, I 
would think. We have the most innovative pharmaceutical 
industry in the world. We have contributed through that 
industry to the world's health, again, in unimaginable ways. If 
you had sat in 1900 and looked at the probability of dying in 
childbirth, the probability of dying from various diseases, our 
ability to intervene and make people's health better, it is a 
pretty dreary picture compared to now.
    As a result, over the last 100 years we have had 
extraordinary, again unimagined, unforeseen innovations that 
have transformed our lives. Everybody in this room probably has 
someone or knows someone who has benefited from that industry's 
innovation.
    Now, how they price it, of course, they want to make a 
profit, that is the way our system works and that is what spurs 
that innovation. Could they do a better job of serving some of 
the population? Sure, they could. Can you help them do that? 
Probably. But I certainly don't think you would want to 
intervene with their incentives to innovate. Certainly wouldn't 
want to have 1950's drugs at 1950's prices, rather have 2001 
drugs at 2001 prices. I think most Americans would prefer that.
    Mr. Brown. It would be nice to have those drugs--you know, 
it is an industry--without belaboring the point--it is an 
industry that is the most profitable in America. They get the 
protection of government patents, they get all kinds of 
research subsidies from the government, and they reward 
American taxpayers by charging us two and three times more what 
they charge in other countries, but that is a whole other 
issue.
    Let me shift to the real issue at hand. Ms. Baker, from 
Newton Falls, and testifying on behalf of the American Nurses 
Association about the shortage, all of us are troubled by that 
shortage, and we hear more and more about it, and we are 
especially thankful to the Nurses Association, the ANA, and to 
Ms. Capps for continuing to put that issue in front of this 
Congress.
    Share some of the specific problems that you have seen at 
the Cleveland Clinic and elsewhere, and talk in some detail--
you kind of went over it fairly quickly because of time 
constraints--the causes of dissatisfaction among nurses.
    Ms. Baker. I can speak to some of the problems that I have 
seen both at the Cleveland Clinic Foundation and elsewhere in 
my career. The one that comes to mind first and foremost is 
something that I think affects the person that we really need 
to think about here and that is the patient, and that is bed 
availability. We have had to close beds for the simple fact 
that we don't have the nurses to give the adequate care and the 
quality of care that we would like to give.
    The dissatisfaction, I think, comes from the lack of 
staffing, especially recently with the shortage we are facing, 
and that is definitely going to get worse before it gets 
better. Would I encourage someone to go into nursing? 
Absolutely. It is a very rewarding, wonderful career, and it is 
very exciting, but we need to get that out to the younger folks 
in the high schools.
    Mr. Brown. Talk a little bit more about the 
dissatisfaction, some of the specific things that you see, that 
fellow nurses talk to you about in terms of their retiring 
early, or moving into other jobs, or moving into less 
stressful, maybe corporate environment, rather than an inner 
city hospital. Talk about that a little bit.
    Ms. Baker. Personally, I can't speak to that. I can speak 
to things that I have heard. I don't have a lot of experience 
with that. I think a lot of dissatisfaction comes from 
salaries. A lot of nurses don't feel that they are paid what 
they are worth, which I am sure that comes with many different 
professions, and the biggest dissatisfaction right now is the 
inadequate staffing.
    Mr. Brown. Thank you. Thank you, Mr. Chairman.
    Mr. Bilirakis. Thank you, Mr. Brown. Mr. Burr, to inquire.
    Mr. Burr. Thank you, Mr. Chairman. It was awfully kind of 
Mr. Brown to point out the class of 1994 since I am the only 
person from that class. Let me assure him and everybody here 
that I haven't forgotten why I came. I came here because I saw 
an institution that never cured anything. They tried to treat 
it, but they never fixed it. And I think that we have an 
unusual opportunity to fix some things. Mr. Roberts, I 
appreciate your comments. I think it is important that when we 
talk about a real cure for something, when we talk about 
solving it so that it is beneficial to everybody, I think that 
it is important to put everything on the table, and part of the 
reason that we never get there is we make off-limits certain 
things before we start the debate, or before we look for the 
options.
    You all have done a very good job of highlighting what I 
think are the shortages that exist, whether it is in nursing, 
whether it is in pharmacy, whether it is in technicians. I 
think that everybody has migrated to low pay and demanding work 
schedule and situations that might present themselves in the 
field.
    Members of Congress have introduced specific legislation 
that addresses specific things that I believe do show some 
promise to recruitment. It may show some promise to retention. 
But I believe that as long as there is a question as to whether 
we have solved the problem, that we have got to understand that 
there is more that we have to do as a Congress, if we truly 
want to fix the problem.
    We have a system called Medicare that sets arbitrary 
reimbursement rates. Those rates are adopted by every other 
health entity within the marketplace, and those are the rates 
that require every person in the health care field to adjust 
their reimbursement to employees based upon the reimbursement 
for services provided. There is no way to solve the overall 
problem if, in fact, we are not willing, if Congress does not 
have the guts to, for once, take the Medicare system and 
modernize it and, at the same time, allow a system to be 
instituted that takes into account not just what we are willing 
to reimburse for service, but what the cost of all the entities 
that goes into providing that service can be. If we are still 
in a marketplace 2 years from now where we have urban markets 
that compete for nurses between urban and rural, what we have 
is smaller hospitals with less variation in their bottom line 
that, in many cases, make a midyear adjustment because there 
was an urban shortage, and when the hospitals there raise their 
pay a dollar an hour, they drain that rural market 30 miles 
away where everybody ran for the higher pay. I can't blame 
those nurses.
    The problem is, how long can that hospital continue to 
exist there when in some cases they take a $.5 to $1 million 
adjustment to their operating budget halfway through a year? It 
is impossible. It cannot last forever. And what we have is a 
real opportunity to solve short-term, I think, the recruitment 
problem. Ms. Capps has contributed to that. I think Mr. 
McGovern, as it relates to pharmacy issues and others, and I 
think this is a very promising thing, to see colleagues engaged 
to this degree, but this will only be short-term unless we show 
the will to fix the entire system.
    GAO reported several years ago--I can't remember--that we 
had a glut of pharmacists. Today, I think most would agree we 
have selective shortages of pharmacists. Were you wrong then, 
or has something happened?
    Ms. Heinrich. We have heard today that there has been a 
dramatic role expansion of pharmacists. Pharmacists are being 
used in a variety of ways, in acute care hospitals and in the 
community. Certainly, what has happened with managed 
prescription drug programs--someone said increased demand--what 
I think is interesting here is that it is very hard to predict 
forward what the demand is going to be because of a potential 
for new technologies.
    We have also heard today that there are major shortages of 
medical technologists. I think in that instance it is a 
question of bright, young people deciding to go in other 
directions.
    When we looked at nursing--again, if you look at 1994 and 
1995, hospitals in fact were laying nurses off, and now in 
1998, 1999, 2000, you see the demand dramatically increasing, 
and I think that, as you say, the environment is very unstable, 
and it is very hard to predict what the future health care 
system----
    Mr. Burr. The environment has contributed greatly to these 
decisions. I would go back to, I think, a statement that Mr. 
Bilirakis made. One of the questions we need to determine is if 
the calculations you used to determine disadvantaged or 
shortage areas are correct, when the only gauge used is 
physicians. It is very realistic to believe that I could point 
to ten areas of my district where I can show you sufficient 
physicians that wouldn't meet the test of shortage, but a 
nursing shortage that really has a quality of care issue tied 
to it because either wages are affected in that overall market, 
or they have to turn to shutting downwards, which affects the 
service that they can provide to the community.
    I think that it is interesting that the Federal Government 
has never recognized pharmacists as a Medicare-approved health 
care professional. I know my time has run out, Mr. Chairman. I 
hope all of you understand there are more questions that we 
have to ask. There are more answers that we have to find if, in 
fact, we don't want to have this exercise on a regular basis, 
and the difference would be that the individuals at the table 
might be representing a different slice of the health care 
professional field.
    Mr. Bilirakis. The gentleman's time has long expired.
    Mr. Burr. My hope, Mr. Chairman, is that you have started 
something extremely good.
    Mr. Bilirakis. Well, I would hope that all members of the 
panel, and the previous panel, particularly this panel, though, 
would consider Dr. Roberts' points. We could put out a fire, 
but that doesn't necessarily mean that the problem is solved 
over the long-haul. We have got to take all that into 
consideration. Ms. Capps, to inquire.
    Ms. Capps. Thank you, Mr. Chairman. I want to thank all of 
you who testified today. It was instructive, and I am glad I 
could be here. Those of you who spoke from your profession's 
experience at the front line, so to speak, I particularly 
appreciate your being part of our probing this issue of 
shortages in various areas.
    I do want to address, Ms. O'Leary, something you 
referenced, and the chairman brought it up as well. I 
appreciate your comments about the Nurse Reinvestment Act. I am 
just going to clarify and hope that I can move on to questions 
for someone else. But you were correct in stating that the 
proposals in the Nurse Reinvestment Act regarding the Nurse 
Corps centers only around non-profit or public institutions, 
and this decision is in the bill, as it presently states, was 
based on past Service Corps practice. And we are in 
conversation with the Federation of Health Care Systems on this 
matter, and will continue to do that. I just wanted to get that 
out there so that that is said.
    I do want to direct my concerns and questions to you, Dr. 
Russell Roberts, because your testimony--we were just advised 
to pay attention to it, and I am concerned that aspects of it 
will dissuade some from our role here because you made comments 
like there is really no one in charge of staffing critical 
professions, and I would beg to differ. That is how I see our 
role as not being in charge, but being very interested in 
certain vital professions that my family members or I can be 
confident when I go into a hospital, that I will get the care. 
And I hate the fact that nurses have told me that they wouldn't 
want their relatives to be patients in the hospitals where they 
worked. The shortages are that personal to them.
    And you were comparing my profession and others, with 
competition for telegraph operators and others, and I get the 
feeling that the free market works with health care professions 
like it does with toothpaste and, you know, which brand of car 
you are going to buy.
    I think there is a piece that is different about some 
professions, and I would maybe equate nurses with educators, 
teachers, and think a little bit about the subsidies that we 
give to higher education institutions because we feel that that 
is the kind of investment we need to make for the future. That 
is talking about the future. But we also need to make sure that 
there is safety and quality care for those who are in need of 
health, of remediation of whatever kind.
    And you mentioned that if we interfere--and then I will let 
you respond--that if we interfere with the market, that--
because we can't really predict and so forth--we will be 
draining the market from other areas and pulling people into 
nursing, and then there will be shortages in other areas, so 
that we are kind of messing with the system. But I have to tell 
you how it feels to be going--and my bill directly deals with 
the whole range of nursing, including certified nurse 
assistants because long-term health care is a critical issue. 
It is not as much on the table today, but we are going to get 
there in this bill, too, but to sit in a nursing home with the 
staff there in my district and have them tell me that the 
biggest competition is McDonald's, and that is the place where 
we are for a lot of our health care workers in this country 
right now.
    So, I just want to get back to saying that--just a 
question, if you would respond--if we trust the market to 
address the shortages, how do you anticipate--how is the market 
going to know? It takes a while to become educated, to become a 
nurse. If today there is a shortage at a particular hospital--
Ms. O'Leary's hospital, Ms. Baker's facility--you can't just 
open the door and have all these people walk in. How would you 
deal with that, the time gap?
    Mr. Russell Roberts. I just want to say the reason--and I 
appreciate your concerns--the reason I especially appreciate 
your passion for the importance of health care in all of our 
lives, and people like my mom and other practitioners here who 
I have tremendous respect for--the reason I mentioned telephone 
operators is not to suggest that nurses are like toothpaste or 
cereal or other goods that we buy and sell in the marketplace. 
There is something important we can learn from the telephone 
example, which is that in cases where technology is advancing 
very rapidly, it is very hard to anticipate what is going to 
happen and how the market is going to evolve and how the needs 
for various parts of the market are going to evolve.
    Any solution--the solutions that you would favor or that 
other people might favor--are going to rely on incentives. It 
doesn't deny that there are emotional, deep, spiritual 
satisfactions people get from their jobs, but we are all going 
to be using either through the marketplace or government 
programs, various carrots and sticks to motivate people to pull 
them into professions that we might think are more important. 
So that is what I think is the important lesson.
    Now, it may be true that right now that McDonald's or other 
opportunities much wider than McDonald's are the things that 
are pulling people away from nursing, but if we subsidize 
nursing enough we will start pulling them away from 
pharmaceutical research, from chemistry, from other professions 
that are mentioned here today, the professions we haven't 
mentioned today that are part of the caring professions that 
motivate people, the teachers and others, and I think that is 
the risk. The risk is that if we artificially stimulate one 
sector of the health care market, we are going to draw people 
in. That is what we will see. That will be the seen impact. 
What will be unseen are the things that don't get developed as 
a result of those subsidies. You will never see those. Those 
people will never be sitting here at this hearing table to 
complain because they won't come into existence. You will have 
forced those industries to deal with those shortages in a 
different way than the ones we are talking about today where 
there are actual people here to complain about them, but that 
is the risk. And I think you just should proceed extremely 
cautiously.
    Ms. Capps. I know the red light is on, but if I could just 
question whether you really do perceive this as an artificial 
shortage?
    Mr. Russell Roberts. I am sorry, maybe I misspoke. It is 
not an artificial shortage. I don't know whether it is a 
shortage or not. The Congressional Research Service, in their 
recent study, says it cannot be stated conclusively based upon 
available labor market indicators that there is an across-the-
board shortage of RNs at the present time. I am sure that if 
nothing else changed and we all got older--I am a Baby Boomer, 
and as I get older and my cohort, there is going to be a need 
for more nurses and other types of health care professionals, 
there is no doubt about that. I am just suggesting that problem 
will be solved and that most of the things that you will do 
will artificially induce people to become nurses. The 
marketplace will do it naturally, if you leave it alone.
    Mr. Bilirakis. Did you have anything further, Mr. Brown?
    Mr. Brown. That is it, Mr. Chairman.
    Mr. Bilirakis. Ms. Capps, anything further--probably an 
awful lot further, but----
    Ms. Capps. Do we have anymore time?
    Mr. Bilirakis. The Chair will yield, without objection, 
another couple of minutes to you, if you have something.
    Ms. Capps. You are doing this because I am a nurse, aren't 
you?
    Mr. Brown. Also because you know more about this than 
anybody else.
    Ms. Capps. I wanted to focus--I didn't want to dwell, put 
Dr. Roberts on the spot the whole time--and I appreciate, Ms. 
Baker, there is talk that the new technology in health care 
field means that we need to be so flexible in how we train 
nurses. It is sort of like--I guess when Dr. Roberts was 
talking, I was thinking, well, maybe 1 day there will be a 
robot that can do all the things that you do so well.
    You have seen changes--others can respond, too. We have all 
seen changes in how we deliver care. Do you think there will be 
the time when there is a need for fewer caregivers?
    Ms. Baker. Personally, no, I don't see that time coming. i 
think as the population ages, with the newer technology, people 
are living longer, there is going to be a greater need for 
nurses as well as other health care givers.
    Ms. Capps. Thank you. And maybe to share this a little bit, 
what about--we have heard statements like those that are in 
hospitals now have more acuity. Tell us, Ms. O'Leary, what does 
that mean?
    Ms. O'Leary. Patients are much sicker than they were when I 
first came out of school, and because of that we are going to 
be requiring more and more RNs to take care of those folks. The 
work is much different. The skill set is much more advanced 
than when I came out of school. It requires critical thinking 
skills, the ability to manage very high technology. It is a 
different job than when we came out of school, and it requires 
a different person in those shoes. So, I agree with you, I 
think that the demand for health care workers is going to 
increase.
    Mr. Bilirakis. We have got to cut it off somewhere, I 
guess.
    Ms. Capps. Right. You have the last word.
    Mr. Bilirakis. What is the role of government? One of you 
made that comment. I kind of say that to myself all the time, 
in trying to make my decisions up here, and there is a role. 
There is a role up to a certain point, and I think it is 
important, by holding this hearing and that we do the best that 
we possibly can up here. But I think it is also important that 
we know that you do the best that you can, and maybe that is 
Dr. Roberts' point, I don't know. I made the comment earlier 
about the beginning salary for pharmacists right out of school, 
in Florida in any case, $70- to $90,000 a year salary. My God. 
It blows my mind. But there is a need there, there is a 
shortage, and they are reaching out for that need. Is the same 
thing happening in the other professions? And I think it is 
just important that they sort of look in the mirror in that 
regard.
    Ms. Capps. No, it isn't.
    Mr. Bilirakis. No, it isn't. That may be part of the 
answer. Part of the answer is what we can do up here, but part 
of the answer is--Pasco-Hernando Community College, for 
instance, down there, has a nursing program. I understand that 
they are not turning out very many nurses, which means 
apparently not many of the young people are going into it, is 
that correct?
    Ms. O'Leary. That is true.
    Mr. Bilirakis. And you probably heard me talk about St. 
Petersburg College, now a 4-year program, again, to try to meet 
that need as well as the teachers need. But somehow--and you 
made a comment that you were trying to recruit and press upon 
the significance and that sort of thing--but somehow we can do 
everything we possibly can, but if we can't get them there, 
then we are not meeting the need.
    Ms. O'Leary. Or if there isn't space for them to attend 
school.
    Mr. Bilirakis. I am on the Veterans Committee, and I have 
always had a great big interest in that regard, and I know that 
an entire bays, entire floors of veterans facilities are shut 
down because of a shortage of personnel, nurses, et cetera. So, 
the shortage, I think, is there, there is no question about 
that, but we all have to try to do the best we can to meet that 
need, not just look to Congress--and I am not suggesting that 
that is the case here--but we can't just look to Congress to 
sort of solve it all.
    Well, please take advantage of the fact that there is great 
interest. We want to try to come up with help. Feel free to 
submit to us any advice that you may have, any ideas that you 
may have you think should be the role of the Congress or should 
be the role of the government, and also, of course, I like to 
think that you would be willing to respond to any written 
questions that we will have of you to help us do our job up 
here.
    Mr. Brown, anything further?
    Mr. Brown. Thank you, Mr. Chairman.
    Mr. Bilirakis. Thank you very much, I appreciate, we all 
appreciate your taking the time to be here. It is going to 
help. The hearing is adjourned.
    [Whereupon, at 2:05 p.m., the subcommittee was adjourned.]
    [Additional material submitted for the record follows:]
   Prepared Statement of Hon. James P. McGovern, a Representative in 
Congress from the State of Massachusetts and Hon. Michael K. Simpson, a 
           Representative in Congress from the State of Idaho
    Mr. Chairman, Ranking Member Brown and Members of the Health 
Subcommittee, thank you for holding this important hearing on safety 
net public health programs. We appreciate the opportunity to present 
our views on this issue.
    We believe the shortage of trained healthcare workers in the United 
States is a looming crisis in our healthcare system. We consistently 
hear from our constituents that there simply aren't enough medical 
professionals to serve patients, and we believe this shortage could 
have serious implications for the future quality of our healthcare 
system. The federal government must act to address this crisis before 
it's too late.
    We welcome the efforts of our colleagues to address the shortage of 
nurses, laboratory technicians and other professionals. We recently 
joined together to address the shortage of pharmacists in the United 
States. We have heard from constituents, from hospitals, from 
independent pharmacies, and from pharmacists themselves about the 
shortage of pharmacists in the workforce. We have learned that there 
are not enough pharmacists who are willing to enter the practice of 
pharmacy. We have seen pharmacists who are overworked because positions 
at pharmacies continue to stay vacant. We have met with pharmacy 
students who tell us they will not enter the practice of pharmacy 
because they can make more money in research or areas other than the 
retail setting where they are most needed.
    There is a common misconception that pharmacists only count the 
pills prescribed by doctors. However, pharmacists are the third largest 
healthcare professional group in the United States, behind doctors and 
nurses. In many cases, the pharmacist is the last contact between a 
trained medical professional and the patient.
    In March 2000, the Institute of Medicine (IOM) released its 
landmark report ``To Err Is Human.'' This report focused on medical 
errors among all medical professionals, including pharmacists. In the 
report, IOM investigators noted that pharmacists cited the following 
factors that led to mistakes-too many phone calls (62%), unusually busy 
day (59%), too many customers (53%), lack of concentration (41%), and 
staff shortage (32%). All of these concerns can be addressed by hiring 
more pharmacists.
    In December 1999, Congress requested that the Department of Health 
and Human Services (HHS) study the extent of the pharmacist shortage. 
``The Pharmacist Workforce: A Study of the Supply and Demand for 
Pharmacists'' was released in December 2000 by the Secretary of HHS. 
This report documented the critical role that pharmacists play in our 
health delivery system and found that there is indeed a shortage of 
these key health providers that is growing increasingly worse. This 
report concluded ``there has been an unprecedented demand for 
pharmacists and for pharmaceutical care services, which has not been 
met by the currently available supply.''
    While we know there are steps that can be taken by the pharmacy 
community, we believe the time has come for Congress to act. As a 
result, we have introduced H.R. 2173, the Pharmacy Education Aid Act of 
2001. Our bill addresses the current shortage of pharmacists in the 
U.S. by providing financial aid to students, faculty and schools of 
pharmacy.
    Our legislation provides scholarships and loan forgiveness to 
students if they enter the practice of pharmacy. It requires most 
students to repay the Federal government by practicing or teaching 
pharmacy where they are most needed, such as medically underserved 
areas and hospitals. Under our bill, funds are made available to 
schools of pharmacy to attract teachers through a loan repayment 
program, to improve their information technology systems and to upgrade 
their physical teaching facilities. In exchange, schools will send the 
majority of their pharmacy students through at least one advanced 
practice/clinical rotation at a safety net provider. By training 
students in this manner, a school will become a ``qualifying school of 
pharmacy'' and will be eligible for funding under the Pharmacy 
Education Aid Act.
    We believe this imminent crisis must be addressed at the source-
recruitment and retention of new pharmacists. For this, we need to 
recruit new students to colleges and universities; we need to ensure 
that enough faculty exist to teach these new students; and we need to 
ensure that there is an incentive for graduates to practice pharmacy 
where they are most needed. These are goals that can and must be 
advanced both by private industry and by Congress.
    By increasing the number of pharmacists, Congress will be 
addressing a number of issues at once. First, more pharmacists in the 
workforce will reduce the number of medication errors. As the last line 
of defense between the patient and the medical world, pharmacists can 
identify dosage errors and potential problems with drug interactions. 
However, it is more difficult for a pharmacist to prevent these errors 
if they are overworked because the pharmacy is understaffed. Second, 
our pharmacy community will be under more pressure as the country 
continues to move from an in-patient healthcare delivery system to an 
outpatient, prescription drug-based system. Our society is aging and 
becoming more reliant on prescription drugs. Pharmacists are becoming 
increasingly important actors in the healthcare delivery system as we 
become more dependent on prescription drugs--especially if and when 
Congress provides a Medicare prescription drug benefit. Third, there 
are 43 million uninsured people in the United States today. Pharmacists 
provide what is called ``Medication Therapy Management Services''--in 
short, pharmacists provide advice both to the insured and the 
uninsured. The role of the pharmacist in relation to the uninsured is 
mostly in an over-the-counter capacity. It is clear that pharmacists 
will continue to play an important role in providing healthcare 
services for the 43 million uninsured, regardless of how Congress or 
the private market ultimately addresses this problem.
    Among the witnesses testifying before you today is Dr. Adele 
Pietrantoni. She will testify about the importance of pharmacists in 
the healthcare delivery system and about the shortage of pharmacists in 
the U.S. We hope she will provide insight to this critical shortage and 
will be a resource to the Committee as it addresses the shortage of 
trained healthcare professionals.
    Thank you for this opportunity to express our concern with the 
shortage of pharmacists and other healthcare professionals. We commend 
the Committee for holding this hearing and we look forward to working 
with you on this critical Issue.
                                 ______
                                 
    Prepared Statement of National Association of Chain Drug Stores
    Mr. Chairman and Members of the Subcommittee. NACDS appreciates the 
opportunity to submit this statement for the record regarding the 
critical shortage of licensed pharmacists in the United States. The 
shortage of pharmacists is having an impact on the ability of your 
constituents and our customers to have ready access to pharmacy 
services in many areas of the United States. In many rural areas, 
pharmacists are often times the only accessible health care 
professional, and in many communities, pharmacists are available 24 
hours a day, 7-days a week. The pharmacist shortage threatens the very 
fabric of this important primary health care system.
    The Institute of Medicine's (IOM) 2000 report ``To Err is Human: 
Building a Safer Health System'' demands improvement in patient care. 
The IOM report confirms the idea that improper use of prescription 
medication jeopardizes patient safety. Pharmacists are professionals 
with specialized training and understanding of medication therapy, 
disease state management and drug administration. In many cases, 
pharmacists are the only health care professionals with which patients 
come in contact. The only way to avoid expansion of the problems 
highlighted in the IOM report is to ensure an adequate supply of 
pharmacists in all health care settings.
       pharmacist shortage creates access problems for americans
    A December 2000, the U.S. Health Resources and Services 
Administration (HRSA) reported to Congress that the ``evidence clearly 
indicates the emergence of a shortage of pharmacists over the past two 
years.'' 1 The report went on to say:
---------------------------------------------------------------------------
    \1\ ``The Pharmacist Workforce: A Study of the Supply and Demand 
for Pharmacists,'' Health Resources and Services Administration, Bureau 
of Health Professions, December 2000.

        ``This shortage is considered a dynamic shortage since it 
        appears to be due to a rapid increase in the demand for 
        pharmacists coupled with a constrained ability to increase the 
        supply of pharmacists. The factors causing the current shortage 
        are of a nature not likely to abate in the near future without 
        fundamental changes in pharmacy practice and education.'' 
        (Italics added.)
    The study found various reasons for the pharmacist shortage, 
including:

 Prescription Medication Use Has Increased: An increase in the 
        use of prescription medications by consumers, especially older 
        Americans, requires that more pharmacists be available to 
        provide these prescriptions. As policymakers consider the 
        inclusion of a pharmacy benefit in Medicare, the need for 
        pharmacists will only increase.
 Prescription Insurance Coverage Has Increased: An increase in 
        private, third-party prescription insurance coverage has helped 
        to make prescription medication more affordable for more 
        Americans. However, it has also required that pharmacists spend 
        more time involved with paperwork and administrative tasks 
        (e.g. verifying insurance coverage) and coverage issues (e.g. 
        drug formulary management) relating to filling the 
        prescription, rather than spending time on patient care 
        activities.
 Pharmacist Workforce Has Changed: More and more females are 
        choosing pharmacy as a career. Evidence suggests that, for 
        family and other reasons, female pharmacists work fewer hours 
        than their male counterparts. Thus, the increase in the female 
        pharmacist workforce has resulted in the need for more 
        pharmacists.
 Pharmacist Educational Requirements Have Changed and 
        Increased: Most pharmacy schools require that the pharmacist 
        complete the Doctor of Pharmacy (Pharm.D.) degree as the 
        ``entry level'' degree to practice pharmacy. Training for this 
        professional program is longer than the traditional B.S. 
        pharmacy program. As a result of lengthening education 
        requirements, some schools did not graduate any pharmacists in 
        a given year, while others have not received additional funds 
        to accommodate these new educational requirements, resulting in 
        a reduction in overall class size.
 Pharmacist Practice Responsibilities Have Changed: Pharmacists 
        and pharmacies are increasing the level and type of patient-
        related prescription services they provide, and assuming 
        greater responsibilities in assuring quality in drug therapy 
        and prevention of medication errors. These services, which are 
        in greater demand because of the increased use of prescription 
        drugs, help to assure that patients obtain the maximum benefit 
        from medication use, and include case and disease management, 
        step therapy protocols, refill reminders, and patient 
        counseling.
    The HRSA study also projects a 20 percent increase in the number of 
retail prescriptions filled to 4 billion by 2004, a number that will 
certainly increase if a Medicare prescription drug benefit is enacted.
            impact of the pharmacist shortage in communities
    The shortage of pharmacists has reached communities across the 
country, and many patients and pharmacy patrons are feeling the 
effects. Many pharmacies are unable to meet the demands of the public, 
and can often end up closing stores for several hours because they 
cannot staff them. The pharmacist' shortage has captured the attention 
of many newspapers, and here is just a sample of the articles that we 
have identified from various communities around the country:
          ``The fact is that there are 10,000 fewer pharmacies 
        nationwide than there were in 1990, and this puts more stress 
        on the stores that are still around . . .'' ``Where are 
        drugstores going? More are closing while the demand rises in 
        North Carolina'', The News & Observer, Raleigh, NC, Thursday, 
        May 31, 2001.
          ``Hardly a day goes by that we don't get someone with a 
        handful of bottles asking for refills . . . they are saying 
        they are sick of the backup of service and of not knowing when 
        the pharmacy is going to be open'', The Hartford Courant, 
        Tuesday, July 3, 2001.
          ``Filling vacancies at hospitals, clinics and nursing homes, 
        already difficult in a strong economy, will only become harder 
        as Northeastern Minnesota's population grows older . . .''
          ``The combination of more people and more drugstores is 
        making it harder to fill vacancies for pharmacists on the Coast 
        and in other parts of Mississippi.'', ``Pharmacists in Demand 
        Coast Growth Seen as Factor in Crunch'', Sun Herald, p.F1, 
        Wednesday, September 20, 2000.
          Headline: ``Pharmacy Schools struggle to fill their classes: 
        Demands on the profession increase, programs become more 
        rigorous, and applications drop.'' The Chronicle of Higher 
        Education, March 2, 2001.
          ``In 1995 the Pew Health Professions Commission predicted 
        that the use of communication and robotics technologies by 
        managed care companies would supplant pharmacists and create an 
        oversupply. But demand for pharmacists is strong . . . and 
        appears to be outpacing supply, defying earlier predictions.'' 
        BNA's Health Care Policy Report, August 2, 1999.
          ``. . . There's no druggist on duty. Now that an increased 
        education requirement has caused a shortage of pharmacists, the 
        law is inconveniencing . . . the education requirement--part of 
        a nationwide professionalization drive--is directly responsible 
        for the sudden pharmacist shortage. Connecticut pharmacy 
        schools didn't graduate any classes this year; would-be 
        graduates instead have . . . a sixth year. At the same time, 
        fewer students are enrolling in pharmacy schools. Neighborhood 
        pharmacist has never been a glamorous career choice, and the 
        position's growing reputation for stress probably isn't adding 
        any allure.'' ``Closing Time'', Readers Guide, 2001.
          Headline: ``No Prescription in Sight for Pharmacist Shortage 
        High Demand For Prescription Drugs, Fewer Applicants to 
        Colleges Create Deficit.'' Duluth New-Tribune, 2000
          ``. . . here, the store has to be closed.--It's the law: A 
        licensed pharmacist has to be in the building if the doors are 
        open.'' ``Pharmacy Competitors Pull Together in a Crisis'', The 
        News Tribune, Tacoma 2001.
   new survey shows pharmacist shortage continues in all health care 
                                settings
    NACDS' January 2001 survey of 81 chain pharmacy companies found 
6,564 open pharmacy positions. This indicates no improvement in filling 
needed pharmacist positions, since the number of pharmacist vacancies 
increased from 6,425 in the July 2000 survey. The pharmacist vacancy 
rate is up from 4,475 open positions in January 1999, and 5,940 
positions in July 1999.
    On June 5, 2001, the American Hospital Association (AHA) published 
the results of a survey, which explored the shortage of health care 
workers in hospitals across the country.2 (AHA((((Responses 
from more than 700 hospitals pointed to substantial vacancies in 
hospital pharmacies. In particular the survey shows a 21% vacancy rate 
for pharmacists.
---------------------------------------------------------------------------
    \2\ ``American Hospitals in Midst of Workforce Shortage'', American 
Hospital Association Press Release, June 2001.
---------------------------------------------------------------------------
 what is the ``market'' response to the pharmacist shortage and is it 
                      enough to solve the problem?
    Can the ``market'' alone solve this pressing problem of the 
pharmacist shortage? Right now, the demand for pharmacist is clearly 
exceeding the supply. We believe that a combination of private and 
public sector responses are needed to alleviate the shortage.
    For example, the market is attempting to respond to this shortage 
in many different ways. Obviously, salaries for pharmacists have 
increased as a result of the shortage as various pharmacy practice 
settings compete with each other to attract pharmacists away from other 
practice settings. While this is clearly a normal market reaction to a 
shortage (when demand outstrips supply), the result is not in the best 
interest of public health since it is leaving key positions vacant in 
health care settings that need the services of a pharmacist. It is also 
draining faculty resources away from schools and colleges of pharmacy.
    Economic theory would argue that, as salaries increased, pharmacy 
would become a more attractive option as compared to other occupations, 
or health professions, and more students would enter pharmacy, helping 
to alleviate the shortage. Salaries would fall as the supply increased, 
and the supply and demand for pharmacists would fall back into 
equilibrium.
    This is true, in part, because there are indications that more 
applicants are starting to apply to schools of pharmacy. However, in 
economic terms, there are certain structural and financial ``barriers 
to entry'' that would argue that the market cannot ``do it alone''. 
Federal intervention is needed in the marketplace to help facilitate 
the restoration of the equilibrium between supply and demand of 
pharmacists.
    For example, even with the salary increases, the nation's 83 
schools and colleges of pharmacy have limited capacity to train 
students, and the implementation of the Doctor of Pharmacy (Pharm.D.) 
program has increased the cost of training each pharmacist. Schools 
have not been able to expand their physical training capacity as 
quickly as the demand has increased. School expansion generally 
requires more physical facilities (i.e., laboratories, classrooms, 
pharmacy clinical practice labs, and clinical practice sights) to 
satisfy pharmacy school accreditation requirements, and pharmacy 
schools often compete with other professional and technical schools for 
limited state or other funding sources for these infrastructure needs. 
Schools need Federal help to expand these training facilities.
    Pharmacy education is further limited by the fact that pharmacy 
faculty are being drawn away by higher salaries from other practice 
settings. Pharmacists that may want to teach may not have the economic 
resources to do so because of their loan obligations. Thus, they may be 
attracted to higher-paying pharmacy practice positions, limiting the 
ability of schools to expand class sizes, even if they were able to 
expand their physical facilities. However, pharmacists may be willing 
to take pharmacy faculty positions if Federal loan repayment was 
available to them to help defray these educational costs. The Federal 
government has successfully operated a faculty loan repayment program 
for many years, focusing primarily on underserved areas and 
disadvantaged students. We believe that a similar program should be 
developed for pharmacy faculty.
    Finally, as noted, pharmacist educational training requirements 
have increased from a minimum of five to a minimum of six years. 
Potential pharmacists have weighed the economic costs to them investing 
in a six year pharmacy education versus other career programs that may 
provide a similar economic reward. Many pharmacy students can access 
Federal loans available to four-year degree college students, such as 
Pell Grants and Stafford Loans.
    However, pharmacists need at least two more years of professional 
training, and Federal educational resources become more scare and 
limited for pharmacy students in the last two professional years. If 
Federal educational loan and scholarship resources were available 
throughout the professional training, fewer pharmacy students would 
drop out of their programs due to financial constraints, and more 
prospective students would be attracted to a career in pharmacy.
    Thus, simply relying on the ``market'' to solve this pharmacist 
shortage problem is unrealistic. The market can and is doing its part. 
However, we believe that Federal policymakers have a vested interest in 
assuring the existence of a strong pharmacy education infrastructure 
that will help improve the use of prescription medications, and reduce 
the tens of billions of dollars each year that the health care system 
spends on the adverse results of inappropriate medication use.
 proposed federal budget cuts will harm existing pharmacy educational 
                                programs
    NACDS believes that new Federal programs are needed to help 
alleviate the pharmacist shortage. But first, we believe that existing 
Federal programs that help to support the development and training of 
health professionals should be retained and strengthened.
    For example, we are concerned that the President's proposed FY 2002 
budget decreases by 60% funding for all Public Health Service (PHS) 
Title VII programs for which pharmacy students and colleges and schools 
of pharmacy are eligible. At a time when the demand for pharmacists far 
exceed the capacity of colleges and schools to increase the supply, 
creating financial and other infrastructure roadblocks (like reductions 
in the faculty loan repayment program), is a matter of great concern. 
Here are some examples of how existing Federal programs helped to 
support pharmacy education:

 In FY 2001, over 25% of pharmacy students were beneficiaries 
        of Title VII ``Scholarships for Disadvantaged Students'' (SDS). 
        Title VII funds helped to ensure the education of many 
        pharmacists, who eventually practiced in community health 
        centers and provided services to many of the nation's 
        culturally diverse populations.
 In FY 2001, colleges and schools of pharmacy received a total 
        of $5,716,718 for SDS. The average award per student was 
        approximately $2250. Therefore, up to 2800 students were able 
        to receive scholarships. The President's reduction decreases 
        the number of students receiving Title VII scholarships by 
        almost 1/3 to no more than 1100 students. This would jeopardize 
        the education of nearly 1,600 pharmacy students, at a time when 
        only 8,000 pharmacists graduate annually.
    One way of solving the pharmacy shortage problem is by educating 
more pharmacists. Programs like SDS make it possible for students to 
take advantage of educational opportunities. Reducing funding to 
existing programs that assist students will likely decrease the number 
of students entering pharmacy schools, and lead less pharmacists 
entering the workforce.
     support the ``pharmacy education aid act of 2001'' (h.r. 2173)
    NACDS strongly supports the bipartisan ``Pharmacy Education Aid Act 
of 2001'' (H.R. 2173), which will help to address the critical shortage 
of pharmacists in the United States. We appreciate the leadership shown 
by Congressmen Jim McGovern and Mike Simpson in introducing this 
important bill. We also appreciate the support of the other 33 Members 
of Congress who are cosponsoring this bill. We respectfully urge that 
other Members show their support for the 83 schools of pharmacy, 
thousands of pharmacy students and faculty, and pharmacists in 
practice, by supporting H.R. 2173.
    The ``Pharmacy Education Aid Act of 2001'' addresses the pharmacist 
shortage problem by:

 Creating Funding Source for Pharmacy School Infrastructure 
        Renovation or Expansion: Many pharmacy schools are in need of 
        funds to help expand or modernize their facilities, install new 
        laboratories, or upgrade computer technology in order to train 
        pharmacists.
    New technology also creates the opportunity to establish or expand 
distance learning programs. This bill would allow the Secretary of HHS 
to establish a program of grants and contracts for these purposes.

 Expanding Existing Federal Funding Programs for Pharmacy 
        Student Education: Other than the grants and scholarships 
        available to all college students, there are very limited 
        Federal programs that specifically help to fund pharmacy 
        student education. This bill would establish new Federal 
        programs to help pharmacy students obtain loans and grants for 
        their education to assure the availability of adequate funding 
        throughout the student's entire professional pharmacy training.
 Assuring Adequate Supply of Pharmacy Faculty: Existing Federal 
        faculty loan repayment and recruiting programs for health 
        professional schools only help a small number of students pay 
        off loans to encourage teaching as a career. This bill will 
        expand these programs to provide Federal funds to schools to 
        help pay the loans of doctoral-level pharmacists that agree to 
        teach at the school for at least two years.
    The Pharmacy Education Act is an important step in the process of 
increasing the number of pharmacists in the workforce, and is the 
appropriate Federal response to work in tandem with the market to 
restore the balance in supply and demand of pharmacists.
                               conclusion
    Mr. Chairman, the available studies documenting the shortage of 
pharmacists, the continuing drumbeat of newspaper stories, and day-to-
day experiences that our patients have with pharmacies that are closed 
or have reduced hours, demonstrate that there is a pharmacist shortage 
that must be addressed with a strong Federal response.
    We urge you to take action this year on H.R. 2173, so that we can 
begin the process of restoring the important supply of pharmacists 
needed by our health care system to meet the increasing demand. We look 
forward to working with you and other Members of Congress on this 
important issue. Thank you.
                                 ______
                                 
        Prepared Statement of National Rural Health Association
    The National Rural Health Association appreciates the opportunity 
to submit the following testimony for the record on strengthening the 
safety net and increasing access to essential health care services in 
rural areas. Most rural providers and facilities play a safety net 
role, taking care of low-income and uninsured patients. In particular, 
we would like to focus on the vital role the National Health Service 
Corps (NHSC) and the Consolidated Health Centers (CHC) programs play in 
providing access to health care services in rural and urban underserved 
areas and the need for reauthorization of both of these programs this 
year, with specific modifications to allow them to better serve a 
greater proportion of rural Americans.
                     national health service corps
    Since 1972, over 20,000 NHSC clinicians have fulfilled a pledge to 
serve rural and urban underserved communities in exchange for 
scholarships or loan repayment. However, the NHSC currently meets only 
about 12% of the overall need for health care in underserved areas. 
Although the program received a modest increase in funding for Fiscal 
Year 2001 to $129.4 million, the NRHA believes that without additional 
funding, the program cannot even begin to meet the needs of rural 
America.
    Reauthorization offers an opportunity to make modifications in the 
NHSC program that would strengthen the program and allow it to better 
fulfill its mission of increasing access to primary care services and 
reducing health disparities for people in health professional shortage 
areas by assisting communities through site development and by the 
preparation, recruitment and retention of community-responsive, 
culturally competent primary care clinicians. Working with a broad 
coalition of health care associations including the American Academy of 
Physician Assistants, American College of Nurse-Midwives, the American 
College of Nurse Practitioners, the American Dental Association, the 
American Dental Education Association, the American Medical Student 
Association, the American Psychological Association, the Association of 
American Medical Colleges, the Association of Clinicians for the 
Underserved, the National Association of Community Health Centers, the 
National Association of Rural Health Clinics and the National 
Organization of Nurse Practitioner Facilities, the NRHA has developed a 
list of recommendations for reauthorization of the NHSC program which 
includes the following:
    1. Reauthorize the National Health Service Corps for five years at 
$300 million for the first year and for such sums as are necessary for 
each subsequent fiscal year.
    2. Continue an annual report to Congress for evaluating the 
effectiveness of the NHSC programs, including community impact, 
allocation of scholarships and loan repayment by discipline, and 
efficacy of site development efforts.
    3. Ensure that Federally Qualified Health Centers and Federally 
Certified Rural Health Clinics, which accept Medicare assignment and 
serve Medicaid patients without restrictions; utilize a sliding fee 
scale for patients below 200% of poverty, and serve all patients 
regardless of their ability to pay, shall be automatically eligible for 
placement of National Health Service Corps personnel.
    4. Allow the NHSC to develop a pilot program under which 
scholarship and loan repayment program recipients could fulfill their 
commitment on a part-time basis. This option would only be available if 
such service is requested by 1) the placement site or sites as well as 
the scholarship and loan repayment recipients and 2) so long as the 
total obligation is fulfilled.
    5. Allow the use of a voluntary ``ready-reserve'' of clinicians to 
serve in locum tenens (temporary relief) placements or to response to 
other episodic national needs.
    6. Authorize funding for site development, which includes community 
needs assessment and technical assistance.
    7. Allow private practice sites that would otherwise qualify as a 
NHSC site to be eligible for placements from the Community Scholarship 
and State Loan Repayment programs.
    In order to be eligible, private practice sites would be required 
to meet the same standards as non-profit sites: 1) accept Medicare 
assignment and serve Medicaid patients without restrictions; 2) utilize 
a sliding fee scale for patients below 200% of poverty, and 3) serve 
all patients regardless of their ability to pay. Placement priority 
shall be given to not-for-profit sites, particularly in cases where 
both non-profit and for-profit sites serve the same population.
    8. Assist communities and sites in developing incentives to support 
the retention of NHSC providers beyond their obligation.
    9. Eliminate the community cost-sharing provision (Section 334 of 
the Public Health Service Act).
    10. If necessary to use such a designation, use a definition of 
frontier which takes into account population density, distance in miles 
to the nearest service market, and travel time in minutes to the 
nearest service market.
Suggested Report Language:
    11. Combine the Divisions of the National Health Service Corps and 
the Scholarship & Loan Repayment into a single division.
Related Recommendations:
    12. Exclude from Federal income, FICA, and self-employment taxation 
tuition, fees and related educational expenses to individuals 
participating in the NHSC Loan Repayment, Community Scholarship and 
State Loan Repayment program. (The tax on NHSC Scholarship payments has 
already been repealed by passage of H.R. 1836 earlier this year.)
    The recommendations outlined above would ensure the viability of 
the NHSC program, and strengthen the program so that it may continue 
serving millions of Americans and more efficiently respond to the needs 
of communities and match those needs with a health professional who 
fits those needs.
                      consolidated health centers
    The Consolidated Health Centers Program is comprised of four parts: 
Community Health Centers, Migrant Health Centers, Health Care for the 
Homeless and Public Housing Primary Care.
    Currently over 1,000 health centers serve more than 11 million 
patients across the nation. Community health centers (CHCs) are an 
important part of the rural safety net, providing care to the uninsured 
and underinsured who would otherwise lack access to health care, 
including 5.4 million rural residents (1 out of 10) and supporting the 
primary care infrastructure in those communities. Community health 
centers focus on wellness and prevention in addition to primary care 
services and foster community bonds through consumer boards governing 
each center.
    The Rural Health Outreach and Network Development Grant Program is 
also authorized within the same legislation as the Consolidated Health 
Centers Program. This program serves to support innovative health care 
delivery systems as well as vertically integrated health care networks 
in rural America. Since 1991, over 2.7 million people in all but 4 
states have been served by the Outreach and Network Development Grant 
Program through grants totaling over $200 million. The grants provide 
up to $200,000 a year for three years to each grantee. About 60 percent 
of grantees have continued to provide services beyond their federal 
grant period.
    The Consolidated Health Centers program should be reauthorized this 
year. The National Rural Health Association advocates reauthorization 
of the CHC Program for five years at $1.344 billion for Fiscal Year 
2002 and such sums as may be necessary for the following four fiscal 
years. As part of the reauthorization of Section 330 of the Public 
Health Service Act, the NRHA advocates the addition of several 
provisions aimed at strengthening this vital program. These changes 
include: the restoration of facility construction, modernization and 
expansion as allowable uses of funds; the expansion of authority to 
support CHC networks designed to improve health care delivery and 
efficiency; and restoration of the statutory requirement for 
proportional allocation of grant funding for the various components of 
the Consolidated Health Centers program. In reauthorizing the program, 
its ability to maintain the primary care infrastructure in rural 
medically underserved areas must be continued.
    The Rural Health Outreach and Network Development Grant Program 
should also be reauthorized and its funding increased so that more 
communities can benefit from these grants and the long-term improvement 
in the rural health care delivery system they foster. In Fiscal Year 
2000, 138 active Outreach grants served over 7,000 rural residents. The 
program received funding of $30.9 million in Fiscal Year 2001, in 
addition to $20.4 in earmarked projects. The National Rural Health 
Association advocates reauthorization and increased funding for these 
grants of $50 million in Fiscal Year 2002.
    The National Rural Health Association looks forward to continuing 
to work with the House Energy and Commerce Health Subcommittee and the 
Congress as a whole on the reauthorization of the National Health 
Service Corps, the Consolidated Health Centers and Rural Health 
Outreach and Network Development Grant Programs, as well as other 
important rural health issues, in the coming months. The NRHA is 
grateful for the attention given to these issues by Chairman Bilirakis 
and members of the Subcommittee and appreciates the opportunity to 
submit testimony on Authorizing Safety Net Public Health Programs.

```