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[Senate Hearing 111-469]
[From the U.S. Government Publishing Office]

                                                        S. Hrg. 111-469
 
                    NOMINATION OF THOMAS A. DASCHLE

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

                                HEARING

                                 OF THE

                    COMMITTEE ON HEALTH, EDUCATION,
                          LABOR, AND PENSIONS

                          UNITED STATES SENATE

                     ONE HUNDRED ELEVENTH CONGRESS

                             FIRST SESSION

                                   ON

 NOMINATION OF THOMAS A. DASCHLE, SOUTH DAKOTA, TO BE SECRETARY, U.S. 
                DEPARTMENT OF HEALTH AND HUMAN SERVICES

                               __________

                            JANUARY 8, 2009

                               __________

 Printed for the use of the Committee on Health, Education, Labor, and 
                                Pensions

  Available via the World Wide Web: http://www.gpoaccess.gov/congress/
                                 senate

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          COMMITTEE ON HEALTH, EDUCATION, LABOR, AND PENSIONS

               EDWARD M. KENNEDY, Massachusetts, Chairman

CHRISTOPHER J. DODD, Connecticut
TOM HARKIN, Iowa
BARBARA A. MIKULSKI, Maryland
JEFF BINGAMAN, New Mexico
PATTY MURRAY, Washington
JACK REED, Rhode Island
BERNARD SANDERS (I), Vermont
SHERROD BROWN, Ohio
ROBERT P. CASEY, JR., Pennsylvania
KAY R. HAGAN, North Carolina
JEFF MERKLEY, Oregon
  

                                     MICHAEL B. ENZI, Wyoming
                                     JUDD GREGG, New Hampshire
                                     LAMAR ALEXANDER, Tennessee
                                     RICHARD BURR, North Carolina
                                     JOHNNY ISAKSON, Georgia
                                     JOHN McCAIN, Arizona
                                     ORRIN G. HATCH, Utah
                                     LISA MURKOWSKI, Alaska
                                     TOM COBURN, M.D., Oklahoma
                                     PAT ROBERTS, Kansas
                                       

           J. Michael Myers, Staff Director and Chief Counsel

     Frank Macchiarola, Republican Staff Director and Chief Counsel

                                  (ii)

                            C O N T E N T S

                               __________

                               STATEMENTS

                       THURSDAY, JANUARY 8, 2009

                                                                   Page
Kennedy, Hon. Edward M., Chairman, Committee on Health, 
  Education, Labor, and Pensions, opening statement..............     1
Johnson, Hon. Tim, a U.S. Senator from the State of South Dakota.     1
Dole, Hon. Robert J., Former U.S. Senator from the State of 
  Kansas.........................................................     2
    Prepared statement...........................................     4
Enzi, Hon. Michael B., a U.S. Senator from the State of Wyoming..     5
    Prepared statement...........................................     7
Daschle, Hon. Thomas A., Former Majority Leader of the U.S. 
  Senate from the State of South Dakota..........................     9
    Prepared statement...........................................    12
Dodd, Hon. Christopher J., a U.S. Senator from the State of 
  Connecticut....................................................    20
    Prepared statement...........................................    23
Burr, Hon. Richard, a U.S. Senator from the State of North 
  Carolina.......................................................    25
    Prepared statement...........................................    27
Harkin, Hon. Tom, a U.S. Senator from the State of Iowa..........    28
Coburn, Hon. Tom, M.D., a U.S. Senator from the State of Oklahoma    29
Mikulski, Hon. Barbara A., a U.S. Senator from the State of 
  Maryland.......................................................    31
Murkowski, Hon. Lisa, a U.S. Senator from the State of Alaska....    34
Murray, Hon. Patty, a U.S. Senator from the State of Washington..    36
Hatch, Hon. Orrin G., a U.S. Senator from the State of Utah......    38
Reed, Hon. Jack, a U.S. Senator from the State of Rhode Island...    40
Sanders, Hon. Bernie, a U.S. Senator from the State of Vermont...    42
    Prepared statement...........................................    44

                          ADDITIONAL MATERIAL

Statements, articles, publications, letters, etc.:
    Senator Inouye...............................................    51
    New York Times, article by Kevin Sack........................    51

                                 (iii)

                    NOMINATION OF THOMAS A. DASCHLE

                              ----------                              

                       THURSDAY, JANUARY 8, 2009

                                       U.S. Senate,
       Committee on Health, Education, Labor, and Pensions,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 10:02 a.m. in 
Room SD-430, Dirksen Senate Office Building, Hon. Edward M. 
Kennedy, chairman of the committee, presiding.
    Present: Senators Kennedy, Dodd, Harkin, Mikulski, Murray, 
Reed, Sanders, Enzi, Burr, Murkowski, Hatch, and Coburn.
    Also Present: Senator Johnson.

                  Opening Statement of Senator Kennedy

    The Chairman. We will come to order. We have an enormously 
interesting hearing today, and one that is important, I think, 
to all of us who care about health and human services. We have 
a wonderful turnout of the members of the committee, and we 
have an extraordinary panel here that has had an incredible 
life and commitment to health and human services, and we are 
just delighted that they are here.
    We will look forward to their statement or testimony, and 
then we will proceed with our Senators right after that. We 
will recognize Senator Dole first.
    Senator Dole. We were going to have Senator Johnson go 
first, if that is OK?
    The Chairman. Fine. They are starting with their strong 
man. Here we go.
    Senator Johnson.
    Senator Johnson. Thank you, Senator Dole.
    The Chairman. It is always good to hear from you, and we 
are very, very appreciative of your presence here and your 
excellent work in the Senate. Thank you.

                      Statement of Senator Johnson

    Senator Johnson. I am still uncertain.
    Chairman Kennedy, Senator Enzi, and members of the 
committee, I am so pleased to introduce my good friend and 
former colleague Tom Daschle as the HELP Committee considers 
his nomination for Secretary of Health and Human Services.
    I have watched and admired Tom's career in public service 
for many years. I remember his first campaign for Congress in 
1978, the same year as my first run for the South Dakota 
legislature. Through the last 30 years, Tom has become one of 
my closest friends, and I marvel at his deep dedication to 
service, relentless work ethic, and unending commitment to 
serving the people of our home State and our Nation.
    Now, Tom has been called upon to return to public service 
as Secretary of Health and Human Services. I know our country 
will be a better place because Tom chose to answer that call.
    His passion for ensuring that all Americans have access to 
quality healthcare is second to none. With Tom's unique 
understanding of the many problems plaguing healthcare in 
America and his commitment to solving them with fresh ideas, we 
have our best chance to actually improve healthcare for all 
Americans.
    I urge the members of this committee and my Senate 
colleagues to confirm Tom Daschle's nomination so that we can 
all get to work reforming healthcare in America.
    Thank you.
    The Chairman. Thank you very much. I really appreciate you 
taking the time to be with us, Senator.
    Now we will hear from Senator Dole.

       STATEMENT OF ROBERT J. DOLE, FORMER U.S. SENATOR 
                    FROM THE STATE OF KANSAS

    Senator Dole. Thank you, Mr. Chairman.
    It is obviously a privilege to be here with my friend Tom 
Daschle and with Tim. Tim has made his statement, and mine is 
very short, but we want to underscore not only Tom's 
qualifications, but the importance of the job he is going to 
assume when he is confirmed. This is, as I understand, the 
first hearing that has been held on any of President-elect 
Obama's nominees.
    Let me first say to Senator Johnson that it is good to be 
with you. I speak personally of how everyone is tremendously 
proud of your meeting a difficult challenge and making a 
recovery that inspired and gave hope to everyone, particularly 
those in the disabled communities.
    It is an honor to be with you and also with the Chairman, 
Senator Kennedy.
    I am here today, as I said, as a friend and a former 
colleague. I served with Tom for 10 years, including 2 years 
when we both served as our party's leader before I left 
voluntarily in 1996.
    I have had a decade of working with Tom in and out of the 
Senate on a number of issues, such as agriculture and energy 
and healthcare and trade and many more. I can testify not only 
to his expertise on issues, but most importantly--to the 
American people and the people he will be dealing with and his 
colleagues and former colleagues in the Senate and the House--
is Tom's integrity and fairness, which I think gives everybody 
confidence, even though you may not agree on a particular 
issue.
    We are now in the same law firm, Alston & Bird, where he 
works and I just show up.
    [Laughter.]
    In addition to advising clients and hosting events and 
telling people what we think we know about the political 
process, we have traveled around the country together 
discussing issues of the day.
    We both pretty much know each other's lines. We are not a 
threat to Leno or Letterman or anybody. Tom should tell you his 
one story about the model senator. I think it is very good, and 
I know they would appreciate it.
    But, along with our former colleagues at the present time, 
Senator Baker and Senator Mitchell and myself and Senator 
Daschle, we have worked for 2 years in the Bipartisan Policy 
Center, and the goal is to address a few of the major important 
challenges and, where possible, reach meaningful consensus 
along with recommendations that we think might be received by 
members of the Congress in both parties.
    For the past 9 months working with the bipartisan policy 
panel, Senator Daschle and I, with Senator Baker and Mitchell, 
have been working on healthcare reform. Senator Baker and 
Mitchell and myself will have to finish the job because Tom 
will be in another position, but we hope we can adopt some 
recommendations that will resonate with many in the Congress 
and with those who have a direct interest, as well as the 
American people.
    We all know from past experience it is a very difficult 
issue, and we probably won't find agreement on everything. We 
certainly appreciated Tom's hard work, his views. He has 
written a book on healthcare, and he has been a tireless worker 
in this area for as long as I can remember.
    He also recently worked on another bipartisan effort with 
another former Senate majority leader, Senator Bill Frist, on 
the One Vote '08 campaign addressing health and poverty in 
developing countries.
    As most of you know, Senator Daschle has spent a good part 
of his career focused on healthcare. He has demonstrated his 
interest in leading on healthcare throughout his career in both 
the House and the Senate. As I have said, he has written a book 
entitled ``Critical'' on reforming the system.
    What is important is that the President-elect has selected 
an individual who begins the important task of reforming 
healthcare with, first, the ability to hit the ground running--
because Tom knows this forwards and backwards, and he really 
understands almost as well as staff experts most of the issues 
when it comes to healthcare--and, second, I think the fact that 
he understands Congress.
    If anybody understands Congress, it is Tom Daschle, serving 
8 years in the House and having been in the Senate and being 
the only Senator to ever serve twice as both majority and 
minority leader in the Senate. He enjoyed being majority leader 
more.
    Senator Daschle and I both believe politics is an honorable 
profession. He is a role model to many because he knows how he 
got here. He knows who he is, and he has not forgotten his 
legion of friends in South Dakota who sent him here.
    I had a call from George McGovern, a fellow South Dakotan, 
just 2 days ago, telling him--talked about being here to 
introduce Senator Daschle and what a privilege it was, and he 
wanted me to express his best wishes and thoughts. I know you 
are long-time friends, and Senator McGovern has done a great 
job in the area of coping with domestic and international 
hunger.
    I was around here for quite a while, and I have a sense 
that the time has come for real constructive bipartisan action 
on healthcare. The American people and Congress are ready to 
address this particular issue about the uninsured and 
accessibility, affordability, the spiraling costs.
    If you feel, as we do, we have a nominee who understands 
bipartisanship is best in the long range, even though with the 
big Democratic majority, he may not need Republicans. I think 
it goes beyond numbers.
    I just again thank the committee for letting me appear on 
behalf of my good friend, and I wish you all a happy new year 
and look forward to what others may have to say.
    Thank you.
    [The prepared statement of Senator Dole follows:]

       Prepared Statement of Hon. Bob Dole, Former Senator from 
                          the State of Kansas

    Thank you, Mr. Chairman.
    It is a privilege to be here this morning, along with Senator 
Daschle's former colleague from South Dakota, Senator Tim Johnson, both 
to introduce Senator Daschle and to emphasize the importance of the 
position he will assume when confirmed.
    Senator Johnson, let me say it is good to be with you and I speak 
personally of how everyone is tremendously proud of you for meeting a 
difficult challenge and making a recovery that inspired and gave hope 
to everyone, particularly the disabled.
    I'm here today as his friend and former colleague. I served with 
Tom for 10 years, including 2 years when we both served as our party's 
Leader before I left voluntarily in 1996. So I have years of experience 
knowing and working with Tom both in and out of the Senate on a number 
of issues, such as agriculture, energy, health care, trade and many 
more. I can testify not only to his expertise on issues, but most 
importantly to his integrity and fairness, which gave his Senate 
colleagues confidence regardless of differences.
    Senator Daschle and I are now together in the same law firm, Alston 
& Bird, where he works and I just show up. In addition to advising 
clients, hosting events, and telling people what we think we know about 
the political process, we have traveled around the country together 
discussing the issues of the day. We both know each other's best lines.
    Senator Daschle and I, along with our two former colleagues, 
Senator Howard Baker and Senator George Mitchell, both former Majority 
Leaders of the Senate, have for 2 years worked together with the 
Bipartisan Policy Center. The goal is to address a few of the major 
important policy challenges and, where possible, reach meaningful 
consensus along with actionable recommendations.
    For the past 9 months, working with the BPC, Senator Daschle and I, 
with Senator Baker and Mitchell, have been working on health care 
reform. Senators Baker, Mitchell and I will complete recommendations 
without further input from Senator Daschle because of his nomination, 
but we are well aware of his views and his tireless work in this area.
    Senator Daschle recently worked on another bipartisan effort with 
another former Senate Majority Leader--Senator Bill Frist--on the ONE 
Vote '08 campaign addressing health and poverty in developing 
countries.
    As most of you know, Senator Daschle has spent a good part of his 
career focused on health care. He has demonstrated his interest in 
leading on health throughout his career in the House and Senate. He has 
written a book, ``Critical,'' on reforming the system.
    What is important is that the President-elect has selected an 
individual who begins the important task of reforming health care with 
(1) the ability to hit the ground running and (2) the understanding of 
the concerns of the members of this committee and this body, being the 
only Senator ever to serve twice as both majority and minority leader. 
His 8 years in the House, will also be a big plus in dealing with 
Congress.
    Senator Daschle and I both believe politics is an honorable 
profession. He is a role model to many because he knows how he got 
here, who he is, and he has not forgotten his legion of friends in 
South Dakota who sent him here.
    Having been around the process a long time, I have the sense that 
the time has come for real constructive, bipartisan action on health 
care. The American people and Congress are ready to address the 
uninsured and the spiraling costs associated with care. If you feel as 
we do, we have a nominee who understands bipartisanship is best in the 
long run, even though with the big Democratic majority he may not need 
Republicans.
    I wish you all a good New Year and look forward to watching Tom's 
progress.
    Thank you.

    The Chairman. Thank you very much, Senator Dole, for your 
words. We would welcome your staying, remaining for the 
committee's hearings. We understand you have other 
responsibilities as well. Thank you very, very much for being 
here.
    The way we are going to proceed is, I will make a brief 
opening statement. Senator Enzi will make a statement. Then we 
will hear from Senator Daschle, who will speak. Then we will go 
through the members of the committee.
    We have a very broad membership here today. What we will do 
is start off with at least 5 minutes as opening statements, and 
then we will continue to move along as other members come here.
    It is an honor to welcome our members to our first hearing 
of the new Congress. I particularly welcome our very special 
witness today, a valued friend and a former colleague.
    Tom Daschle is a leader of great integrity and strong 
dedication. He has served this Nation with distinction both in 
uniform and in the Senate. He has admirers all across the 
country and on both sides of the aisle.
    I commend President-elect Obama for selecting such an 
extraordinary nominee to lead the Nation's healthcare agenda. 
Tom Daschle understands the urgency and the challenge of health 
reform.
    He knows that Americans feel the heavy weight of rising 
costs. He knows that families are afraid that they will lose 
their health insurance. He knows that 46 million Americans do 
not have health insurance at all. Reform is urgently needed, 
and Tom Daschle is just the person for the job.
    In considering healthcare reform, the fundamental question 
before us was once expressed in words far more eloquent than my 
own. Will we honor the unique American ideal that we are 
responsible for passing this country on to a generation in the 
future? Is that better? Or will we forfeit the promise of the 
future for the reward of the moment?
    Those are not my words. They are the words of an 
extraordinary Senate leader as he said farewell to the Senate 4 
years ago. We must answer that question by taking action now to 
provide affordable and quality healthcare for all Americans.
    Senator Daschle, welcome to our committee, and I look 
forward to your early confirmation as the Secretary of Health 
and Human Services. Thank you for being here.
    Senator Enzi.

                   Opening Statement of Senator Enzi

    Senator Enzi. Mr. Chairman, I want to welcome you back to 
the committee and congratulate you on being the first to hold a 
hearing on President-elect Obama's nominees. That is typical 
Senator Kennedy fashion to get right into it right away, be 
first.
    I also want to thank you for, during the time while you 
were gone, the way that you distributed the workload among the 
members of the committee so that we could continue on the 
important things that we have gotten done. I particularly want 
to thank and congratulate Senator Mikulski for her tremendous 
work on the Higher Education Act.
    The Chairman. Yes.
    Senator Enzi. She was a great catalyst and a real staunch 
promoter of getting that done, and as a result, we did. And 
that was due to your leadership.
    I know that the members of this committee take the advice 
and consent clause of the Constitution seriously, and I was 
pleased to learn that the HELP Committee had an aggressive 
hearing schedule on the important Cabinet-level positions that 
will come through this committee.
    I would also like to congratulate Senator Daschle on his 
appointment and welcome this former colleague and member of 
this institution. When former Senators come before this 
institution for confirmation, it is similar, I hope, to 
returning home to family in a way.
    I understand that the Senate Finance Committee, on which 
Senator Daschle served while he was a member of this body, has 
the primary jurisdiction over this nomination to head the 
Department of Health and Human Services. But because of the 
overlap in our work--and in fact, we do probably more in that 
area I think than the Finance Committee does, the number of 
Federal programs which the HELP Committee authorizes that are 
administered by Health and Human Services--the HELP Committee 
has established this tradition of holding a hearing on this 
Cabinet-level position, and I appreciate you participating in 
it.
    I would mention that since 2001, the HELP Committee held 
hearings on both the nominations of former Secretaries Tommy 
Thompson and on Mike Leavitt in January 2001 and 2005, 
respectively. Both of these nominees were confirmed within 2 
weeks of their hearing before this committee. The HELP 
Committee, particularly Senator Kennedy and I have established 
a track record of working quickly on this front.
    Senator Kennedy and I also have a track record of finding 
solutions for problems Americans face on the domestic policy 
front. We try to work together when possible to write 
legislation that focuses on what we can agree on, not what 
divides us.
    That is what we refer to as the 80 percent rule--80 percent 
of the issues the Senate generally agrees on while the 
remaining 20 percent are divisive and the subject of disputes 
on the Senate floor. The same works with any bill. Usually 
there is 80 percent we can agree on and another 20 percent that 
we could discuss forever. We prefer to get the 80 percent done.
    As we begin this nomination hearing today, I want to 
express my hope that Senator Daschle and I will have a strong 
working relationship, as will our staff and as will other 
members of the committee. There are going to be areas in which 
we disagree. But my hope and expectation is that by focusing on 
solutions, we can produce meaningful results for hard-working 
Americans that meet the 80 percent rule and do it through the 
committee process.
    Our healthcare system is broken and fixing it is one area 
where I hope this 80 percent rule comes into play so common 
sense reforms can be made. The American people deserve 
solutions, not just debate.
    I have read Senator Daschle's healthcare book and 
appreciate both the history and the direction. In fact, I have 
directed my staff to read the book as well. Many of them have. 
I know that we have a shared commitment to reducing the number 
of uninsured Americans, containing costs, improving quality, 
and making healthcare more accessible to everyone.
    We got to speak earlier in the month and then considerably 
longer a few days ago, and we have gotten to talk about both 
his book and my ``Ten Steps to Transform Healthcare,'' which is 
on my Web site, which is a collection of ideas that I have 
gathered across the aisle from people.
    While we don't always agree and won't always agree, we have 
both put concrete healthcare proposals on the table for 
discussion, previously. Now my hope and expectation is that in 
this Congress, we will focus on legislating solutions that will 
make a difference in people's lives while, most importantly, 
abiding by the golden rule to do no harm.
    To that end, I have a series of questions, which will begin 
with the question and answer portion of the hearing and then a 
host of follow-up questions for the record. In the spirit of 
helping to accelerate your nomination, I would appreciate your 
quick response and know that you will do that.\1\
---------------------------------------------------------------------------
    \1\ Mr. Daschle withdrew from the nomination before responding to 
committee questions.
---------------------------------------------------------------------------
    In closing, I would like to again welcome Chairman Kennedy 
back to the committee and the Senate and thank you for calling 
this hearing today.
    [The prepared statement of Senator Enzi follows:]

                   Prepared Statement of Senator Enzi

    Mr. Chairman, I would like to begin by thanking you for 
holding this hearing today, and welcoming you back to the 
Senate following your absence. Confirming the President's 
nominees is one of the most important Constitutional duties of 
the Senate. I know that the members of this committee take the 
``advise and consent'' clause of the Constitution seriously--
and I was pleased to learn that the HELP Committee has an 
aggressive hearing schedule on important cabinet level 
positions that will come through this committee.
    I would also like to thank Senator Daschle for joining us 
today, and welcome him as a former colleague and member of this 
institution. When former Senators come before this institution 
for confirmation, it's similar to returning home to see your 
family, in a way. I understand that the Senate Finance 
Committee, on which Senator Daschle served while he was a 
member of this body, has primary jurisdiction over his 
nomination to head the Department of Health and Human Services 
(HHS). But because of the overlap in our work, and the number 
of Federal programs which the HELP Committee authorizes that 
are administered by HHS, the HELP Committee has established a 
tradition of holding a hearing on this cabinet level position.
    In fact, since 2001, the HELP Committee held hearings on 
both the nominations of former Secretaries Tommy Thompson and 
Mike Leavitt in January 2001 and 2005, respectively. Both of 
these nominees were confirmed within 2 weeks of their hearing 
before this committee. So the HELP Committee, particularly 
Senator Kennedy and I, have an established track record of 
working quickly on this front.
    Senator Kennedy and I also have a track record of finding 
solutions for problems Americans face on the domestic policy 
front. We try to work together, when possible, to write 
legislation that focuses on what we can agree on--not what 
divides us. That's what I refer to as the 80-20 rule, 80 
percent of the issues the Senate generally agrees on while the 
remaining 20 percent are divisive and the subject of disputes 
on the Senate floor.
    So as we begin this nomination hearing today, I want to 
express my hope that Senator Daschle and I will have a strong 
working relationship, as will our staff. There are going to be 
areas where we disagree--but my hope and expectation is that by 
focusing on solutions, we can produce meaningful results for 
hard working Americans that meet the test of the 80-20 rule.
    Our health care system is broken, and fixing it is one area 
where I hope the 80-20 rule comes into play so common sense 
reforms can be made. The American people deserve solutions. I 
have read Senator Daschle's health care reform book, and in 
fact have directed many of my staff to do the same. I know that 
we have a shared commitment to reducing the number of uninsured 
Americans, containing costs, improving quality and making 
health care more accessible to everyone. When we spoke earlier 
this month following his nomination, we also discussed the plan 
I introduced last year, ``Ten Steps to Transform Health Care in 
America.''
    So, while we don't always agree, we have both put concrete 
health care reform proposals on the table for discussion in 
previous years. My hope and expectation is that in this 
Congress, we will focus on legislating solutions that will make 
a difference in people's lives--while most importantly abiding 
by the golden rule of ``do no harm.''
    To that end, I will have a series of questions for you when 
we begin the Q and A portion of the hearing, and will have a 
host of follow up questions for the record. And in the spirit 
of helping to accelerate your nomination, I would appreciate 
your quick response in writing to the follow up questions I 
will pose.
    In closing, I would like to again welcome Chairman Kennedy 
back to the committee and to the Senate, and thank him for 
calling this hearing today.

    The Chairman. Thank you, Senator Enzi. As always, you are 
very gracious in extending your warm welcome, and I thank you 
for the continued opportunity to work with you on so many of 
these issues that are important to our whole Constitution.
    It is my desire to introduce each of the members of the 
Daschle family. There are almost as many of them as there are 
Kennedys. If they would be good enough to introduce themselves, 
we would very much appreciate it.
    Will you go the youngest to the oldest or the oldest to the 
youngest? I can tell you in my family how it would score. In 
any event, why don't we start off over here, if we would.
    Ms. Kelly Daschle. Kelly Daschle. I am his eldest daughter.
    The Chairman. Make sure you speak up so we can hear. That 
is good.
    Ms. Kelly Daschle. Kelly Daschle. I am his eldest daughter.
    The Chairman. Fine.
    Mr. Chader. Eric Chader. I am Kelly's husband and son-in-
law.
    Ms. Lindsay Daschle. Lindsay Daschle. I am the youngest 
daughter.
    Mr. Ross. Tommy Ross. I am married to Lindsay.
    Ms. Linda Daschle. Linda Daschle. I am the oldest.
    [Laughter.]
    Ms. Jill Daschle. Jill Daschle. I am Tom's daughter-in-law.
    Mr. Nathan Daschle. Nathan Daschle.
    The Chairman. Let us see, that is about it. Well, we want 
to thank all of you. We want to particularly thank Linda. It is 
good to see you. She is a great friend of so many on this 
committee. Jill Daschle has been a long-time friend of many of 
us on this committee.
    Now if we might proceed, we will hear from Senator Daschle.

 STATEMENT OF THOMAS A. DASCHLE, FORMER MAJORITY LEADER OF THE 
                   U.S. SENATE, ABERDEEN, SD

    Senator Daschle. Mr. Chairman, thank you very much for your 
courtesy and for giving me the opportunity to be with you 
today. I must say how wonderful it is to see you in that chair 
again.
    The Chairman. Thank you very much.
    Senator Daschle. I thank you and I thank Senator Enzi for 
the opportunity to talk about an issue that we care so deeply 
about. Before I get into my statement, let me just thank my 
family especially for being here, and for all of the support 
and affection and encouragement that they have given me over 
these past few weeks and months. It has meant everything to me.
    It also means a great deal that two very, very close and 
dear friends could be here to introduce me. Tim and I have 
known each other for well over 30 years in so many different 
stages in life. I am honored to call him one of my best 
friends, and I am grateful for the extraordinary leadership and 
partnership that he has shown South Dakota these many, many 
years.
    Bob Dole has gone the extra mile to show what it is to be 
friends with somebody on the other side of the aisle. He has 
reached out to me from the very beginning when I came to the 
Senate, when I became leader. When I left the Senate, he was 
the very first person to come to me to talk about post-Senate 
life, and he has been my partner, as he said, for 4 years at 
the law firm. I can't tell you how much I appreciate that 
friendship.
    He mentioned this line that we do. We have kind of 
adopted--when he is not around, I use his lines, and I don't 
think he has ever had to use mine. But we talk about I was 
introduced once as a model politician and a model legislator 
and a model South Dakotan. Linda showed me the word ``model'' 
as it is defined in the dictionary, and there it is defined as 
a small replica of the real thing.
    [Laughter.]
    Well, in the best sense of the word, Bob Dole is a model 
friend and somebody that I have admired and will continue to 
admire the rest of my life.
    I want to thank all of my former colleagues and friends on 
the committee dais as well.
    From keeping our food and medicines safe to tracking 
infectious diseases, to helping families in need, to 
researching the cures of tomorrow, to providing care to 
underserved populations, the Department of Health and Human 
Services has a significant role to play in keeping America 
healthy. This department will also be central to tackling one 
of the greatest challenges of our time, reforming the U.S. 
healthcare system.
    The flaws in our health system are pervasive and corrosive. 
They threaten our health and economic security, and that is why 
the President-elect has crafted the new White House Office of 
Health Reform. I am honored to be chosen to serve in this role 
as well.
    If confirmed, I will use these dual roles to marshal the 
talent and energy necessary to at last succeed in making 
healthcare affordable and accessible for all Americans. I am 
grateful to the President-elect for putting his trust in me, 
and I look forward to returning to public service at a pivotal 
moment in American history.
    Let me begin by again reiterating my gratitude to our Chair 
and Ranking Member, but testifying on the subject of healthcare 
before Ted Kennedy feels a bit like talking about one's 
trumpet-playing skills in front of Louis Armstrong. And Senator 
Enzi, while he may not have been here the same number of years 
as Senator Kennedy, has been an effective voice in sounding the 
call for change through his leadership on the committee as 
well.
    As I know it is for many of you, healthcare is personal to 
me. I ran for Congress 30 years ago to help places like rural 
South Dakota, where people sometimes went without proper 
healthcare because the nearest doctor's office was too far 
away.
    When I came to the Senate, I had the privilege of serving 
with many of you and working on significant healthcare 
legislation, including covering millions of children through 
the Children's Health Insurance Program, improving the ability 
of workers to keep their health insurance if they lost or 
changed a job, and ensuring that advances in genetics didn't 
lead to health and employment discrimination.
    When I left the Senate, I was able to travel around the 
country talking to businesses and community groups and people I 
met about what was broken in our healthcare system and co-wrote 
a book called ``Critical'' about how I thought we might fix it.
    While our investments in research and pioneering work by 
our scientists lead innovation, too often patients don't 
actually get our best. In 1994, we had 37 million Americans who 
were uninsured. Today, that number is 46 million. In 1987, $1 
out of $15 went toward healthcare for the average family. 
Today, it is $1 out of $6.
    President-elect Obama recognizes that many of you have been 
working for many years on these issues and that any effort at 
reform will require very close collaboration with Congress. He 
also realizes that change cannot be dictated from the White 
House or from Washington out, but must come from the grassroots 
of this country and involve as many Americans as possible in 
the process of reform.
    In addition to being collaborative, it also needs to be an 
open, transparent process where people know their voices are 
being heard. We have already begun to listen.
    During the transition, we reached millions of Americans via 
our Web site, Change.gov, to get their input on how best to 
change our healthcare system. Tens of thousands of Americans 
shared their greatest concerns about health reform, and 
thousands more opened their homes to host healthcare community 
discussions.
    We are currently compiling their reports to share with each 
of you and the President-elect and everyone else. One thing was 
crystal clear, America cannot afford more of the same when it 
comes to healthcare in this country, and on this I hope we can 
all agree.
    It is unacceptable that in a nation of approximately 300 
million people, nearly one in six Americans don't have health 
insurance. As we face a harsh and deep recession, the problem 
of the uninsured is likely to grow. The number of uninsured 
only describes part of the problem. Even Americans who do have 
health insurance don't always get the care they need, 
especially high-value preventive care.
    In some cases, this is due to a shortage of providers, 
especially primary care providers in rural areas that we must 
work to address. In other cases, it is simply because our 
healthcare system is not oriented toward prevention and, 
therefore, fails to incentivize the screenings and lifestyle 
changes that can do so much to improve health.
    Any healthcare reform plan must make sure that every 
American has preventive care that prevents disease and 
disability. Coverage after you get sick should be a second line 
of defense. Today, it is often the first line.
    In addition to being sound medicine, this is sound fiscal 
policy. Studies have shown that for every dollar spent on 
prevention we could actually net a return of $5.60 in 
healthcare costs, totaling upwards of $16 billion annually 
within 5 years.
    It is not enough to give every American care. It needs to 
be high-quality care. By some measures, nearly one third of the 
care Americans receive is at best inadequate and at worst 
harmful. Disparities in access and quality produce disparities 
in outcomes.
    On the Pine Ridge Reservation in South Dakota, one half of 
the people over 40 have diabetes, and the life expectancy today 
is just 47 years, or what life expectancy was for the rest of 
the country in 1900. This, too, is unacceptable.
    We need to make sure that every American gets high-quality 
care. If you see fit to support my nomination, I will make sure 
this goal includes the Indian Health Service.
    But, even if every American had good insurance and great 
care, we would still have an overwhelming problem related to 
health costs. Over the past 9 years, health insurance premiums 
rose three times faster than inflation. The fact that 
healthcare premiums have doubled in the last 8 years leaves 
some families to make the awful choice between health insurance 
and rent or heat and food.
    These cost increases are as unsustainable for our national 
budget as they are for our families' budget. By 2025, the 
Congressional Budget Office projects that healthcare will 
account for 25 percent of our GDP. By comparison, the entire 
Federal budget today is about 20 percent of GDP.
    Any healthcare reform plan must achieve the three goals of 
increasing access and quality while containing costs. But 
helping to develop a successful plan is only part of what the 
next Secretary of Health and Human Services must do. I believe 
the agencies of the Department of Health and Human Services can 
do a great deal to promote a system of wellness rather than a 
system of acute care, from the laboratory bench to the bedside.
    Take the example of heart disease. Research funded by the 
NIH led to drugs approved by the FDA, which, together with the 
prevention promoted by CDC, have helped cut deaths from heart 
disease in this country by half.
    Now we must do the same for other chronic and preventable 
conditions, and I want to assure the Congress and the American 
people that as we make determinations about what is safe and 
what is not, what is effective and what is not, we will be 
guided by evidence and effectiveness, not by ideology.
    Finally, let me say that the department will remain 
dedicated to performing all of its vital services, ensuring our 
medical systems are prepared to respond to natural disasters, 
strengthening our public health system, working to improve the 
healthy development of our children through Head Start, 
confronting the challenge of long-term care for the elderly, 
working with States on child support enforcement, and providing 
assistance to people with disabilities.
    Especially in these difficult economic times, the human 
services function of Health and Human Services will continue to 
be a lifeline for many Americans. Let me close where I began, 
with the need to reform our system.
    When healthcare reform collapsed in 1994, I remember all 
the criticism people had after the fact. They said that it took 
too long. They said the process was too opaque. They said the 
plan was too hard to understand, and they said the changes felt 
too dramatic.
    These are good arguments for undertaking reform in a way 
that is aggressive, open, and responsive to American concerns, 
but they are not good arguments for ignoring the problem.
    One of my favorite quotes is from Nelson Mandela. Referring 
to an end to apartheid, he once said, ``Some things seem 
impossible until they are done.'' He could have been talking 
about healthcare reform because, for generations now, it has 
seemed an impossible goal.
    This time, the cost of failure is simply too high. This 
time, working together, Democrats and Republicans can show it 
no longer has to be impossible. This time, it can be done.
    Thank you, Mr. Chairman and members of the committee. I 
would be happy to take your questions.
    [The prepared statement of Senator Daschle follows:]
                 Prepared Statement of Hon. Tom Daschle
    Chairman Kennedy, Senator Enzi, members of the committee, thank you 
for inviting me here today to discuss my nomination to be Secretary of 
Health and Human Services.
    I'm grateful to President-elect Obama for putting his trust in me. 
I look forward to returning to public service at such a pivotal moment 
in American history.
    The Department of Health and Human Services touches the lives of 
all Americans in crucial and fundamental ways. It is called upon to 
protect our citizens as well as offer them assistance in fulfilling 
essential tasks for their well-being. It is called upon to ensure the 
safety of food and the effectiveness of drugs a mother gives her child; 
to help find the cure to the disease afflicting a parent and to educate 
a community on preventing disease; to help the struggling family afford 
child care so parents can work; to ensure children are receiving the 
social and developmental care they need as they enter school and 
prepare to learn; to help the family struggling with caring for an 
aging parent; and of course, to help our seniors and most vulnerable 
families by providing health care, which many would otherwise go 
without.
    This Department also will be central to tackling one of the 
greatest challenges of our time: reforming the U.S. health care system. 
The flaws in our health system are pervasive and corrosive. They 
threaten our health and economic security that is why the President-
elect has crafted the new White House Office of Health Reform and I am 
honored to be chosen to serve in this role as well. If confirmed, I 
will use these dual roles to marshal the talent and energy necessary to 
at last succeed in making health care affordable and accessible for all 
Americans.
    In short, the mission of HHS is to assist Americans by performing 
some of the most fundamental responsibilities of our government. In 
this time of great economic challenge, that mission is more important 
than ever.
                             health reform
    As I know it is with many of you, health care is personal to me.
    I ran for Congress 30 years ago to help places like rural South 
Dakota, where people sometimes went without proper health care because 
the nearest doctor's office was too far away.
    When I came to the Senate, I had the privilege of serving with many 
of you and working together on significant health care legislation--
covering millions of children through the Children's Health Insurance 
Program, improving the ability of workers to keep their health 
insurance if they lost or changed a job, and ensuring, that advances in 
genetics do not lead to health and employment discrimination.
    When I left the Senate, I was able to travel around the country 
talking to businesses, community groups, and people I met about what 
was broken in our health care system. I wrote a book called Critical 
about how I thought we could fix it.
    Ensuring all Americans have health care is integral to the mission 
of HHS and the well-being of our families--but to achieve this goal, we 
will have to work together to tackle tough challenges.
    While our investments in research and pioneering work by our 
scientists lead innovation, too often, patients don't actually get our 
best.
    In 1994, we had 37 million uninsured. Today, we have nearly 46 
million. In 1987, $1 out of $15 went toward health care for the average 
family. Today, it's $1 out of $6. Even though the United States spends 
more on health care than any other country, we rank low on life 
expectancy and infant mortality.
    President-elect Obama recognizes that many of you have been working 
for many years on these issues, and that any effort at reform will 
require close collaboration with Congress.
    He also realizes that change cannot be dictated from the White 
House and Washington out--but must come from the grassroots of this 
country and involve as many Americans as possible in the process of 
reform. In addition, to being a collaborative process, it also needs to 
be an open, transparent process where people know their voices are 
being heard.
    We have already begun to listen. During the Transition, we reached 
millions of Americans via our Web site, Change.gov, to get their input 
on how best to change our health care system. Tens of thousands of 
Americans shared their greatest concerns about health reform, and 
thousands more opened up their homes to host Health Care Community 
Discussions.
    We are currently compiling their reports to share, but one thing 
was crystal clear: America cannot afford more of the same when it comes 
to health care in this country. On this, I think we all can agree.
    It is unacceptable that in a nation of approximately 300 million 
people, nearly one in six Americans don't have health insurance. As we 
face a harsh and deep recession, the problem of the uninsured is likely 
to grow.
    The number of uninsured only describes part of the problem. Even 
Americans who do have health insurance don't always get the care they 
need, especially high-value preventative care. In some cases, this is 
due to a shortage of providers--especially primary care providers in 
rural areas that we must work to address.
    In other cases, it is simply because our health care system is not 
oriented toward prevention, and therefore, fails to incentivize the 
screenings and lifestyle changes that can do so much to improve health. 
Any health care reform plan must make sure every American has 
preventative care that prevents disease and disability. Coverage after 
you get sick should be a second line of defense. Today, it's often the 
first line of defense.
    In addition to being sound medicine, this is sound fiscal policy. 
Studies have shown that for every $1 spent on prevention we could net a 
return of $5.60 in health care costs--totaling upwards of $16 billion 
annually within 5 years.
    But it's not enough to give every American care. It needs to be 
high-quality care.
    By some measures, nearly one third of the care Americans receive is 
at best inadequate, and at worst harmful. While we have pockets of 
excellent care, too often recommended care is not provided.
    This quality gap contributes to racial and ethnic disparities in 
outcomes. On the Pine Ridge reservation in South Dakota, half the 
people over 40 have diabetes, and the life expectancy is just 47 years, 
or what life expectancy was for the rest of the country . . . in 1900. 
This, too, is unacceptable.
    We need to make sure every American gets high-quality care. If you 
see fit to support my nomination to be Secretary of Health and Human 
Services, I'll make sure this goal includes the Indian Health Service. 
I will also make sure the health disparities affecting all other 
minority and underserved populations are acknowledged and addressed.
    Even if every American had good insurance and great care, we have 
an overwhelming problem related to health costs. Over the past 9 years, 
health insurance premiums rose three times faster than inflation.
    The fact that health care premiums have doubled since 2000 leaves 
some families to make the awful choice between health insurance and 
rent, or heat, or food. These cost increases are as unsustainable for 
our national budget as they are for families' budgets. By 2025, the 
Congressional Budget Office projects that health care will account for 
25 percent of our GDP. By comparison, the entire Federal budget today 
is about 20 percent of GDP.
    Any health care reform plan must achieve the three goals of 
increasing access and quality, while containing cost. Helping to 
develop a successful plan is only a piece of what the next Secretary of 
Health and Human Services must do. Here, I highlight a few of the 
agencies and their challenges and opportunities.
               centers for medicare and medicaid services
    Medicare, Medicaid, and the State Children's Health Insurance 
Programs are pillars of health care coverage in our country. As the 
organization under which they each operate, the Center for Medicare and 
Medicaid Services will have a vital role to play in promoting health 
care reform and its goals of affordability, accessibility, and quality. 
CMS should ensure that all those eligible for Medicare, Medicaid, and 
SCHIP are enrolled and have access to high-quality, cost-efficient 
health care. It should improve its protections for Americans with the 
highest costs and lowest incomes. HHS has a historic role in serving 
underserved communities as well. As we embark on the mission of 
expanding coverage to all Americans, we must maintain that commitment.
    CMS can also drive higher quality and greater efficiency in the 
delivery system, enhancing value for beneficiaries and taxpayers and 
becoming a catalyst for health reform. CMS can be a gateway to 
reforming the way providers are paid to better align incentives with 
the provision of high-quality care and make it more affordable. For 
example, CMS can support disease management, ``medical homes,'' and 
other approaches to improve care and reduce costs for patients with 
chronic conditions. In addition, by using its demonstration authority, 
CMS can identify the cutting-edge practices that will become the 
bedrock for a high-performing health system.
    At the same time, CMS must focus on prevention and primary care, 
steering its resources toward wellness rather than sickness. To do so, 
it will need to work side-by-side with the Public Health Service and 
the human services agencies at HHS.
               centers for disease control and prevention
    The Centers for Disease Control and Prevention can contribute to a 
21st-century health system by making prevention more than just a part 
of its name. I believe that moving our system toward health care and 
away from sick care is critical to solving our long-term health 
challenges. The CDC is critical to that goal.
    Too often, too many Americans go without high-value preventive 
services, such as cancer screening and immunizations to protect against 
flu or pneumonia. Similarly, community-based prevention efforts, which 
have helped to drive down rates of smoking and lead poisoning, for 
example, are underutilized despite their effectiveness. The Nation also 
faces epidemics of obesity and chronic diseases as well as new threats 
of pandemic flu and bioterrorism. Despite all of this, fewer than 4 
cents of every health care dollar gets spent on prevention and public 
health. This needs to change.
    At the core of CDC's mission is collaborating to create the 
expertise, information, and tools that people and communities need to 
protect their health through health promotion and prevention of 
disease. CDC's efforts to reduce unhealthful behaviors through public 
awareness campaigns have paid real dividends. Today heart disease rates 
have declined by half, in no small measure because of the role of 
community-based prevention. If confirmed, I will work with the Director 
of the CDC to promote these proven strategies for success.
    I will work to revitalize CDC and strengthen its ability to detect 
and investigate health problems; conduct research to enhance 
prevention; develop and advocate sound public health policies; 
implement prevention strategies; promote health behaviors; and foster 
safe and healthful environments. We should provide greater support to 
the public health and primary care health workforce.
    CDC can focus on ensuring effective coordination between public and 
private resources at the national, State, and community levels to 
promote wellness throughout the lifespan, and ensure healthy 
communities. We can reduce the impact that diseases over the lifespan 
(such as childhood diseases, chronic diseases, and the aging 
population) have on public health, the health care system, and our 
economy. I believe CDC can be a leading agency in promoting the goal of 
prevention in our health care system.
                      food and drug administration
    As Americans focus more on prevention through healthier living, HHS 
must live up to its responsibility to protect the American people 
through its regulation of food and drugs. Ensuring the food we eat and 
the medications we take are safe is a core protection that the American 
people deserve and a core responsibility of government.
    The FDA is responsible for the safety of thousands of items 
Americans depend upon from the toothpaste we use in the morning to the 
fruits and vegetables we eat all day from the medications we take for 
the occasional headache to the extraordinary drugs, vaccines, and 
medical devices that save our lives. Unfortunately, there is growing 
concern that the FDA may have lost the confidence of the public and 
Congress--much to our detriment.
    When Americans are nervous about eating spinach or tomatoes or 
cantaloupes, that's not good for our health and it is terrible for our 
farmers. When nearly two-thirds of Americans do not trust the FDA's 
ability to ensure the safety and effectiveness of pharmaceuticals, the 
result is Americans may hesitate to take important medications that 
protect their health. This is unacceptable.
    As Secretary, I will work to ensure that trust in FDA is restored 
as the leading science-based regulatory agency in the world. I will 
support strengthening the FDA to meet the pressing scientific and 
global challenges of the 21st century. I will send a clear message from 
the top that the President and I expect key decisions at the FDA to be 
made on the basis of science--period.
    Today, there is a broad understanding that the FDA's public health 
mission is as critical as ever. Consumers want pure and healthy foods. 
Patients understand that their lives depend on speedy access to safe 
and effective medical products. Industries need the FDA's seal of 
approval to inspire confidence. There are also thousands of talented 
and committed professionals at the agency ready to serve. We can work 
together to restore the credibility of FDA and advance the health of 
the American people. The committee led the way through its bipartisan 
work last year in reauthorizing the user fee programs and strengthening 
safety.
                     national institutes of health
    Equally critical to protecting people by regulating drugs is 
discovering new drugs and treatments that can prevent, treat, and cure 
disease. The tremendous discoveries funded by the National Institutes 
of Health have often enabled us to live longer, better, more healthful 
lives. These are exciting times at NIH. We are on the cusp of numerous 
scientific discoveries. What we are learning from the human genome 
project is truly breathtaking.
    NIH is the steward of medical and behavioral research for the 
Nation. Its mission is science in pursuit of fundamental knowledge 
about the nature and behavior of living systems, and the application of 
that knowledge to extend healthy life and reduce the burdens of illness 
and disability. It is well-documented that investment at NIH pays real 
dividends, not only for the health of our citizens but for the strength 
of our economy. NIH is a unique and prominent agency, the major source 
of research intended to protect the Nation's health, stimulate the 
economy with high-tech job creation across the country, make 
discoveries that fuel the biotech and pharmaceutical industries, and 
train biomedical scientists for the future.
    However, NIH has been flat-funded in recent years, which has 
produced a 17 percent loss of ``buying power'' since 2003. There has 
been a sharp fall in the success rates for grant applicants, now as low 
as 10 percent for many NIH Institutes. Alternative sources of research 
support from industry, universities, and philanthropy are also under 
severe stress because of the current economic downturn. It has also 
suffered from some instances of people putting politics before science.
    America has been an innovation leader, and part of its edge in the 
areas of biotech is attributed to NIH. Countries around the world are 
trying to cut into that edge. I will work to strengthen NIH, with 
leadership that focuses on the dual objectives of addressing the health 
care challenges of our people and maintaining America's economic edge 
through innovation.
  administration on aging and administration for children and families
    As we address these fundamental science questions, we cannot lose 
sight of the struggles families are facing to make ends meet. A growing 
challenge for many families is long-term care. The group most likely to 
need long-term care, those 85 and older, will increase from 5 million 
in 2006 to 21 million by 2050, creating a generation of Americans who 
are caring for both their parents and their children. The average out-
of-pocket costs facing family caregivers are $5,500 per year. 
Addressing the long-term care needs of our rapidly aging population 
will not be a simple undertaking, but it is doable.
    The Administration on Aging plays a lead role in promoting home- 
and community-based long-term care, including initiatives related to 
State systems of care, targeting services to those at risk for 
institutional placement, and much, much more. The growing challenge of 
long-term care needs calls upon all of us to strengthen the 
institutions in our communities that support family caregivers.
    The Administration for Children and Families will also play a role 
in improving the health and economic security of Americans. As we face 
a recession, its impact on the most vulnerable amongst us--our children 
and low-income families--will be acute. I am reminded that it was a 
very difficult New Year for too many of our fellow Americans. That is 
why as the country moves through this recession, I am committed to 
ensuring ACF is working arm in arm with States and localities to 
address the needs of our families. It can help with child care, foster 
care, and supporting those struggling to simply pay the bills for their 
energy costs through the LIHEAP program.
    In addition, many of the core services provided at ACF offer direct 
economic relief to struggling families and communities. ACF helps low-
income workers enter and move up in the job market, promotes fatherhood 
and strengthens child support enforcement, strengthens communities, and 
assists in reducing poverty.
    HHS plays a vital role in early learning and development through 
the child care block grant and Head Start as well as Early Head Start. 
We must recognize that in these tough economic times, those programs 
will see an increase in demand as well. We know how important 
investments are in this area; some studies show the way dollar invested 
in high quality care at these ages yields $7 dollars in reduced 
government spending down the road. Ensuring our children's proper 
emotional, social and cognitive development is one of the greatest 
responsibilities of the Department, and I look forward to strengthening 
the important initiatives that are critical to our future as a nation.
                               conclusion
    The challenges facing our country and the priorities of the 
Department are great--beginning with the need to reform the system.
    When health care reform collapsed in 1994, I remember all the 
criticisms people had after the fact. They said it took too long, they 
said the process was too opaque, they said the plan was too hard to 
understand, and they said the changes felt too dramatic.
    These are good arguments for undertaking reform in a way that is 
aggressive, open, and responsive to Americans' concerns. They are not 
good arguments for ignoring the problem.
    One of my favorite quotes is from Nelson Mandela. Referring to 
apartheid, he once said, ``Some things seem impossible, until they are 
done.'' He could have been talking about health reform because, for 
generations now, it has seemed an impossible goal. This time the cost 
of failure is simply too high. This time, working together, Democrats 
and Republicans, it no longer has to be impossible. This time, it can 
be done.

    The Chairman. Well, thank you very much, Senator Daschle, 
for really a superb statement and review of the central 
challenges that we face as a country.
    I will ask just a few questions, and then we will move on, 
going back and forth on our committee.
    First of all, you have taken some time recently to do a 
listening session all across the country about what the needs 
are in this country on healthcare. I thought you might just 
review what you have found during the past several months and 
weeks that you have been doing these hearings across the 
country.
    Can you tell us a little bit of what you have seen, what 
you have found? Any stories or interesting comments that you 
might want to make on that?
    Senator Daschle. Well, Mr. Chairman, it was just a 
wonderful opportunity to hear directly from the people in all 
parts of the country, all 50 States. Over 8,500 people offered 
to host these community discussions in their homes. We had over 
4,000 people who reported from those discussions.
    I attended a couple of them myself, one in Durbin, IN, in a 
firehouse. I can recall what the fire chief said as we asked 
him how it was that he could accommodate all of the concerns 
that he had just outlined with regard to providing meaningful 
healthcare in a rural community like Durbin, IN. The fire chief 
started by simply saying, ``You know, we just kind of concluded 
that we are all in this together and that we have to figure out 
a way to address these problems together.''
    I couldn't think of a better way to describe the situation 
as we look at it from the perspective of our country itself. We 
are all in this together, and somehow we have to find a way to 
solve this challenge together.
    In their case, they have a volunteer fire department and a 
volunteer ambulance, and they had a lot of trouble trying to 
sustain their ambulance services. Because they felt that they 
were all in this together, everybody in the community helps 
out.
    In talking to older people in particular, they expressed 
the concern about the costs of care. In many parts of the 
country, they talked to us about the availability of care. A 
lot of people expressed the hope that we can put far more 
emphasis on prevention.
    I think the uncertainty and the concern that people have, 
the anxiety they feel about being one illness away from 
bankruptcy came home over and over again.
    This conversation was a very helpful and a very productive 
one. They had a lot of good ideas about the ways that we could 
go forward and a lot of hope that perhaps this time we can get 
it right and that, working together, we can begin to address 
their anxiety, solve this problem, and recognize that when it 
comes to healthcare, we really are all in it together.
    The Chairman. I'll ask the Clerk to watch the time very 
carefully. Could you talk a minute or two just about the 
urgency that you have seen in this whole battle in trying to 
bring about some reform of the healthcare system?
    What is your sense about the urgency of this? Could you 
speak to that for a minute or two?
    Senator Daschle. Well, Mr. Chairman, I have concluded, and 
I have had conversations with all of you about this. I think 
that the cost of the status quo, the cost of doing nothing may 
be the most expensive option of all.
    We have serious cost problems now, but every expert says 
that if we fail to address the issue of costs, that the 
situation will double just in the next 10 years alone.
    The people at General Motors once told us they actually 
spend more on healthcare today than they do on steel. The folks 
at Starbucks told us that they spend more on healthcare than 
they do on coffee, and that the American family spends more on 
healthcare than they do on virtually any other thing but rent.
    From a cost point of view alone, we know this situation 
will be dramatically exacerbated if we do nothing. The same 
could be said for access. We have huge problems with regard to 
the number of uninsured, but that is really the tip of the 
iceberg.
    We have a number of people who are so underinsured that 
today we are told, statistically, you have about a 50-50 
chance, if you are insured, of getting the care that you need--
50-50. That is only going to get worse if we continue to fail 
to address this problem adequately.
    Finally, the issue of quality continues to be a very 
pervasive and corrosive one. It troubles me that while we spend 
more than any other country, according to just about every 
evaluation that exists today, we come in somewhere in the 30s. 
The most recent ranking in the World Health Organization was 
37th in overall outcomes--37th--31st in life expectancy and 
29th in infant mortality, 24th in overall women's health.
    We don't do very well. We have got to figure a way to 
improve quality. I know that a lot of you have given a lot of 
thought to that, and I hope we can work together to find ways 
to ensure that quality can be something every American can 
count on.
    The Chairman. Thank you very much.
    Now for Senator Enzi.
    Senator Enzi. Thank you, Mr. Chairman, and I will try and 
follow your lead in staying within the time limit. That was 
very impressive.
    I will start off with a question for Senator Daschle that I 
hope is just a one-word answer. One reason we pass a 
considerable amount of legislation through this committee by 
unanimous consent is because of a good working relationship 
between the majority and the minority, both the Senators and 
the staff.
    If confirmed, would you pledge to cooperate in this type of 
a working relationship with all Senators on the committee, 
Democrat or Republican, and by promptly answering or responding 
to any written or phone inquiries, sharing information as soon 
as it becomes available, and directing your staff to do the 
same?
    Senator Daschle. Yes.
    Senator Enzi. Thank you.
    Senator Daschle. If I could just elaborate, I wanted to 
give you a one-word answer with no qualifications, but I just--
yes, for emphasis. I really want to work in a collaborative 
way.
    It is the only way are we going to get this done, and I 
want to be as responsive as I expected people to be when I 
asked those questions.
    Senator Enzi. Thank you.
    Another reason that we are able to get a lot of things done 
in this committee is that we do follow the legislative process, 
and I know you are very familiar with that.
    A part of the process, though, has been--and one you would 
have a unique appreciation for is the use of the budget 
reconciliation, and that sometimes undermines bipartisan 
support for legislation. When we are trying to create a 
healthcare policy, you have stated before that you are not 
looking for a 51-vote solution but, rather, a 70-, 80-, or a 
90-vote solution. I hope you believe that is the correct 
approach to enact healthcare reform.
    In the interest of building bipartisan support, will you 
discourage members from using the budget reconciliation process 
and, hopefully, even the stimulus package, which will eliminate 
the ability to really get into the issues and make sure that 
the unintended consequences are covered and that sort of thing?
    Senator Daschle. Well, I can give you a one-word answer on 
that, too, and that is yes, Senator Enzi.
    Our goal, our hope, and our desire, our determination is to 
use, as you have referred to it and as is properly referred, 
the regular order. We think these committees have tremendous 
talent.
    You have a physician and you have people that have worked 
these issues, as many of you have, for many, many years. We 
need that input. We need that involvement and that engagement. 
I am determined to work with each of you and use the regular 
order to produce the best product we can.
    Senator Enzi. Thank you.
    I am going to shift gears a little bit and talk about 
tobacco because the FDA does approve cures, not poisons. 
Pending legislation from the last session would give the FDA 
regulatory authority over tobacco, a product that has no health 
benefits, but significant risks. I am concerned about a 
regulatory regime that would lend legitimacy to the tobacco 
industry.
    Do you think that it sends a poor public health message to 
have an implied FDA seal of approval on an inherently unsafe 
product?
    Senator Daschle. Well, Senator Enzi, I believe that it is 
important for us to discourage tobacco use in every way we can. 
I believe that it is important for us to continue the 
extraordinary educational effort that has been underway now for 
decades.
    I have had many conversations with people in the Department 
of Health and Human Services over my time in public life and 
have supported efforts over the years to discourage tobacco use 
and to find ways with which to especially discourage the use of 
tobacco among younger smokers. I want to continue to find ways 
with which to do that.
    I am inclined to believe that FDA can play a very important 
role in that regard, but I will promise you that I am going to 
look at all of the options available to us as to what may be 
the most efficient, the most appropriate and prudent way with 
which to address the issue.
    I in no way would endorse, in any case, allowing the FDA to 
give its seal of approval. I think the FDA should, if it did 
anything, should regulate it in a way to provide the kind of 
discouraged efforts nationally and within the Federal 
Government that we have tried to build upon in public policy. I 
would certainly want to look and work with you to find the most 
appropriate way with which that could be done.
    Senator Enzi. Thank you.
    I think within the 80 percent rule there are some other 
options that we can do that will get the job done. I will yield 
the balance of my time.
    The Chairman. Thank you very much.
    Senator Dodd.

                              Senator Dodd

    Senator Dodd. Thank you very much, Mr. Chairman.
    The Chairman. I understand that Senator Dole and Senator 
Johnson have other engagements. We want to thank you very much 
for your presence.
    Senator Dole. I only have one client. I don't want him to 
get away.
    [Laughter.]
    Senator Dodd. Thank you, Senator Dole.
    By the way, I was going to mention, Bob, before you leave, 
that one of the questions I was going to raise with Tom is 
going back on the early childhood issues. I was thinking here, 
reminding myself of a moment where you, George Mitchell and 
Senator Kennedy were in a room where the Childcare Development 
Block Grant never would have happened but for Bob Dole or 
Senator Kennedy.
    Thank you for that as well, Bob Dole. How about a round of 
applause for Bob Dole?
    [Applause.]
    Well, Mr. Chairman, let me just also join with our nominee 
and Bob Dole in saying what a pleasure it is to see you back 
here with us in the Chair. This battle in front of us, which 
our nominee has very, very aptly described, is going to require 
remarkable leadership, and there has never been a more 
remarkable leader than Ted Kennedy. We are thrilled to have you 
here with us and going through these issues.
    I have an opening statement, as I am sure all of our other 
colleagues do. I would ask consent that that be included in the 
record.
    Tom, welcome. You have described the situation well. We 
have a healthcare system that is broken.
    Senator Lamar Alexander and I had some hearings last year 
on children. I have had a lot of hearings over the last 26 
years in this committee dealing with children's issues. One 
statistic jumped out at us, came out of a study actually done 
out of Tennessee in a children's hospital.
    We talk about economic conditions in the country and how we 
are worried that our children or grandchildren may grow up in a 
country that offers less opportunity economically for them. I 
think we are all aware of those statistics.
    What was stunning in Senator Alexander's report to me was 
that we may be looking at the first generation of Americans who 
grow up less healthy than the previous generation. That has 
never occurred in our Nation's history before. They will lead 
potentially less healthy lives, shorter lives with many more 
problems, and you have described some of them in your opening 
comments.
    There are a lot of issues to grapple with, but I would like 
to focus quickly, if I could, on these early childhood issues 
because it is part of the jurisdiction as well of the Health 
and Human Services area--Head Start, Early Head Start, the 
Childcare Development Block Grant programs, and the like.
    I noted that President-elect Obama has pledged some $10 
billion in new spending on early childhood education through a 
Zero to Five Plan. I am excited about that, and I commend him 
for that commitment of support for parents and young children 
administered through early learning challenge grants.
    Federal early learning efforts have historically been led 
by the Department of Health and Human Services. It is not clear 
where this new program may operate. I just wonder if you might 
elaborate--to the extent that you can, here this morning--where 
you think that is apt to go and how that will be managed?
    Will it be still, as I hope it will be, under the 
jurisdiction of Health and Human Services? Do you have any 
idea? Maybe it is--if that is not an unfair question for you at 
this point?
    Senator Daschle. Well, Senator Dodd, I think you have said 
it so well. I remember a highway sign outside of Rapid City, 
SD, many, many years ago, and all it said was it is so much 
better to build a child than to repair an adult. I have always 
remembered that.
    It is always better to build a child than to repair an 
adult. That is what you have dedicated so much of your public 
life to doing.
    I have had many conversations with the President-elect 
about this, and he feels as strongly as you do about the 
importance of that priority. Organizationally, of course, we 
are going to be looking at all of this in a very careful and 
thoughtful way, and we would certainly appreciate the input of 
every member of this committee, especially you, with regard to 
how we do it right.
    We want to empower these agencies to have the ability to 
address these challenges. We are not doing as good a job as we 
should. We don't have the resources. We don't have the 
personnel, and I don't think we have the priority that it 
deserves.
    I believe in the long-term, as you so correctly state, with 
regard to healthcare that one of the biggest challenges we have 
is obesity in this country, and one of the biggest 
opportunities we have to address obesity is with our children. 
What a commentary it would be for us to acknowledge and then to 
accept that children would have a lower life expectancy than we 
would.
    Currently, that is what we are told, that children have a 
lower life expectancy than we have, in part, because of 
obesity. Well, I think we have got to address that, and I think 
the best way to address it is to ensure that we have the 
infrastructure in place in the Department of Health and Human 
Services to work with the States and to work with communities 
and to make sure that we can make it the priority that it so 
rightfully deserves.
    Senator Dodd. Well, I thank you for that, and in fact, 
Senator Harkin has already had a good hearing in prevention. We 
have spent a lot of time talking about obesity. In fact, Jeff 
Bingaman, myself, Senator Kennedy obviously, and Senator Harkin 
are doing a lot of work on the obesity issue, and I was 
delighted to hear your comment that you anticipated a question.
    Your statement obviously answers the question about the 
importance of this and that we give it that kind of emphasis. I 
was stunned to hear your statistics about the diabetes level on 
the Indian reservations--50 percent of the adult population. Of 
course, obesity and the correlation is important.
    If I may, as well on the FDA issue--and you and I had a 
good conversation the other day, and there are a number of 
these critical posts, CDC obviously and FDA--of getting someone 
in charge there right away. One out of every four products 
Americans consume is regulated by the Food and Drug 
Administration. Twenty-five percent of everything we ingest in 
our bodies is regulated by them.
    Obviously, having someone in place there that can give us 
the kind of direction that you have mentioned in your opening 
statement is critically important. In that regard, just a quick 
question, if I could, to encourage you and ask for your comment 
on it to promote this work dealing with the National Institute 
of Child Health and Human Development at NIH and FDA, who are 
doing the best they can with limited resources, I might point 
out as well, which I know you are aware of.
    I would strongly encourage us to promote this work and 
coordinate, prioritize and expand the work being done by these 
agencies and others with respect to pediatric therapeutics. I 
would also be curious of any comments you might have on 
thoughts regarding strengthening FDA's efforts to protect the 
unique needs of children with these orphan diseases.
    Again, it is a complicated area. We have spent a lot of 
time in this committee over the years dealing with those issues 
of encouraging development by the pharmaceutical industry for 
medicines and strengthening efforts, including even in medical 
devices for children.
    I don't know if you have any thoughts or comments you would 
like to share with us on that point?
    Senator Daschle. Well, I think you are absolutely right, 
and I have had the opportunity to talk with others on the 
committee who share your concern about this. The first part of 
your question is, can we move expeditiously? I can assure you 
that we are moving very expeditiously.
    We hope to build our team of leadership within HHS within 
the next few weeks. We have been doing aggressive interviewing 
and reviewing and soliciting good ideas, and we would certainly 
be open to your suggestions about leadership in each one of 
these important departments.
    Second, I would say that it is very important. Senator Burr 
and I had this conversation the other day about breaking down 
stovepipes so that the interrelationship between these agencies 
can do a better job of coordinating the effort.
    FDA has an important role. But with regard to much of the 
research, so does NIH, and with regard to public health, so 
does CDC. What we have to do is make sure that those stovepipes 
that prevent a kind of cooperative effort and a kind of 
integration to go forward have to be torn down.
    We are going to make a real effort to coordinate, to 
integrate, and to provide the kind of mission-driven approach 
to this that will accommodate the goals that you so 
articulately outlined. I think you put your finger on a very 
important one, and we are going to be working with you to 
accomplish it.
    Senator Dodd. Well, I thank you very much.
    This is a challenging time, and I want to commend the 
President. He couldn't have chosen a better person who can take 
challenges and handle them not only efficiently and well, but 
with great courage and leadership. I can't wait to work with 
you over the coming several years to get this issue back on 
track again.
    So congratulations to you.
    Thanks, Mr. Chairman.
    Senator Daschle. Thank you.
    [The prepared statement of Senator Dodd follows:]

                   Prepared Statement of Senator Dodd

    Thank you Chairman Kennedy. I want to welcome and 
congratulate a former colleague of mine and of many of the 
members of this committee, Senator Tom Daschle, on his 
nomination to be Secretary of the Department of Health and 
Human Services (HHS).
    Having served on this committee for 26 years, I can't 
recall another time when the challenges facing the Secretary of 
HHS were so complex. We have a health care system that is 
broken--impacting our families, our businesses and our 
competitiveness as a nation--and a Department of HHS and health 
agencies in desperate need of leadership. As important, is the 
critical need to restore the Department to one whose decisions 
are based on the best available science, not the political 
ideology of the moment.
    Given these challenges, I can think of no better leader to 
tackle these important challenges than you, Senator Daschle. 
The knowledge, temperament, passion and expertise you possess 
will be instrumental in achieving comprehensive health care 
reform--reform that at long last makes health care accessible 
and affordable for all Americans.
    I also want to take a moment here to recognize how 
important the leadership of our Chairman, Senator Kennedy, will 
be in achieving comprehensive health care reform. He has made 
this the cause of his career and his life. His name is 
synonymous with national health care reform. I continue to be 
proud to serve with him and as we embark on this effort, I can 
think of no one I'd rather have at the helm of this endeavor.
    The case for reform of our health care system has never 
been stronger. Many say Americans have the best health care in 
the world and for many Americans that may be true. But how 
effective can that system be if it is unaffordable and 
inaccessible to millions of Americans? In my State, health care 
premiums have shot up 42 percent in the last 8 years--in the 
last 2 years, nearly 1 in 10 of our people have had no health 
insurance at all.
    And how can we have a world-class health care system if 
high-quality care and value are inadequate in many parts of the 
country despite $2 trillion in annual health care spending?
    At the same time, our health care system is failing 
millions of our Nation's children and adolescents. The United 
States is a leader among industrialized nations in infant 
mortality, affecting African-American babies at more than two 
times the rate as non-
Hispanic white babies. That is unacceptable.
    Our system is creating a generation of children who may 
well be the first generation of American children who will live 
shorter, less healthy lives than their parents. That, too, is 
unacceptable.
    This is happening, in part, because our system is driven 
not by the prevention of illness and disability but the 
treatment of illness and disability. It's completely 
backwards--and it has to change. And with your leadership and 
the work of this committee, I believe it can and will change.
    Over the past year, the full HELP Committee under Chairman 
Kennedy and the Children and Families Subcommittee, which I 
chair, have held several hearings examining such public health 
issues as childhood obesity, disease prevention and health 
promotion, and the alarming rise of food allergies in children. 
The work done by this committee on those issues and many others 
such as health information technology and health insurance 
market reforms will be essential to the overall reform effort.
    Senator Daschle, I know you recognize that no reform 
package can be complete without making the necessary 
improvements to our Nation's public health and prevention 
system and the health care workforce underpinning that system.
    While health care reform is a top priority for me and for 
this entire committee, I also want to address another vitally 
important issue and a responsibility of the Department--early 
childhood education and development. This is an issue that has 
long been near and dear to my heart. I am encouraged by the 
commitment President-elect Obama has made to early childhood 
education, and I look forward to working on new proposals as 
well as strengthening current programs like Head Start and 
CCDBG to benefit our children and their families. An investment 
in our youngest Americans pays off in their readiness for 
school, their health, job creation now and in the future, and 
the need for fewer social services later in a child's life.
    Given the challenges facing this huge--oftentimes 
disparate--Department, it is my hope that your team will be in 
place as quickly as possible. I encourage the swift selection 
of leaders at the FDA, NIH, CDC, and HRSA where action on 
numerous statutes this committee has produced in recent years 
await action--everything from newborn screening to access and 
availability of pediatric therapeutics to drug safety. And I 
look forward to working with Chairman Kennedy to help move 
these nominations as expeditiously as we can.
    I believe you will make an outstanding HHS Secretary, 
Senator Daschle and have no doubt you will serve our country 
and President-elect Obama well in this role as you have in 
every other. And I look forward to working with you, Chairman 
Kennedy, and my colleagues on the committee to bring 
meaningful, lasting change to our Nation's health care system 
in the months and years to come.
    The Chairman. Senator Burr.

                              Senator Burr

    Senator Burr. Mr. Chairman, welcome home. Because I think 
this is home for you on this committee, and we are glad to see 
you.
    Senator Daschle, welcome and thank you for your willingness 
to once again serve in a capacity when asked.
    Let me talk about FDA, if I can, for a minute. For years, 
the FDA has been the gold standard of the approval process for 
drugs, biologics, devices, and I think it is recognized that 
way around the world. The FDA is struggling today due to lack 
of funding, low morale, and an increasingly expanding mission.
    I recently heard of a company that had pulled a decision to 
have their EU-approved diabetes drug approved through the FDA 
because once the FDA designed the clinical trial process they 
would go through, they realized that it was more expensive than 
the value of the U.S. market for what was a revolutionary drug 
for diabetes. That alarms me because the FDA can function and 
the American people can lose.
    Share with me, if you will, how you think we overcome this 
in the future because I think we both agree that the innovation 
of drugs and biologics and devices are part of the key to our 
ability to control healthcare costs in the future, but also to 
provide the quality that I think we all want to.
    Senator Daschle. Well, you ask such a very, very good 
question, Senator Burr. I think I would say that there are four 
components that will allow us the opportunity to do this right.
    The first component is one that you all know extremely well 
in that you have to start with good public policy. We have to 
know what the policy is going to be and the degree of clarity 
with regard to what that policy is, is critical.
    The second is you have to have the resources, and you 
alluded to the fact that we have had struggles with resources 
in FDA and elsewhere. I think we have to address the resource 
question, and we would certainly want to work with you with 
regard to resources.
    The third is leadership. I think we have to show real 
leadership with regard to priorities and with regard to the 
kind of motivation of the workforce to do all we can to 
maximize our opportunities once we have set the policy and 
found the resources. We need the leadership to make sure this 
is going to work right, and I hope we can provide good 
leadership.
    Partly, it goes to Senator Dodd's question of who it is we 
are going to find to head up FDA. All through the Department of 
Health and Human Services, we have to have good leadership.
    Then, finally, it seems to me, we have to be able to 
coordinate better. I worry that there is not enough 
coordination. I worry that the NIH doesn't talk to the FDA, 
doesn't talk to the CDC, doesn't talk to CMS as much as they 
should.
    I think we can--if we are sensitive to that and if we know 
that that problem exists, I think we have got to find ways to 
tear down the stovepipes that you and I talked about the other 
day. It seems to me if we did that, if we had those four 
components in place, that we could really make a difference 
there, and I hope to work with you to make that happen.
    Senator Burr. Well, I thank you for that.
    Senator, the Ryan White Care Act is up for reauthorization. 
I am curious. Do you agree with me that the funding should 
follow those that are infected with HIV?
    Senator Daschle. Well, I agree with you that the Ryan White 
Act is--first of all, I commend the people on this committee on 
a bipartisan basis for showing the support and for the effort 
that they have made over the years.
    While I think there are differences with regard to how the 
overall funding ought to be calculated, I generally believe 
that that direction in funding is appropriate and ought to be 
respected.
    Senator Burr. I thank you for that.
    Senator, I don't want to put you on the spot, but you 
mentioned South Dakota and the rural nature. North Carolina is 
very much the same, and I think the rural States are unique and 
require certain additions to our thought process for the same 
level of care to be delivered or the same level of coverage to 
be delivered.
    Medicare Advantage was created to try to provide options in 
rural markets, or the way it was designed was with the rural 
markets in mind. Now, the President-elect has proposed changes 
to Medicare Advantage, and I would only ask you if you have any 
comments relative to how, if you structurally changed Medicare 
Advantage, it would affect South Dakotans' ability to have 
choices for coverage, specifically those seniors under 
Medicare?
    Senator Daschle. Well, Senator Burr, as you know, in most 
rural areas we have huge problems relating to access in 
particular. We have a wonderful infrastructure in place that 
has come about in part because of the support of this committee 
in community health centers. I have had the chance to talk with 
some of you about the role of community health centers in rural 
America in particular, and I can't tell you how strongly I feel 
about their import.
    We have a real problem, of course, with the IHS and the 
lack of adequate funding for facilities on Indian reservations. 
We have a serious problem there with regard to access that has 
to be addressed, both access and quality in part because of 
resources.
    I do think that as we look at Medicare Advantage, it has 
provided some support for people in rural areas, and to the 
extent that it has, it has been welcome. I think it has become 
a much more expensive option, unfortunately--13 percent more 
expensive. I think we have to look at whether or not we are 
getting our money's worth. The President-elect has said that he 
thinks it is important for us to look at the inefficiencies and 
the problems associated with spending in Medicare Advantage and 
address them.
    It is law. Part C is part of the Medicare program. I would 
hope that we could look at Medicare Advantage and Medicare and 
Medicaid in the larger context of health reform and find ways 
with which all of these problems can be made to work better. I 
look forward to working with you on that goal in particular.
    Senator Burr. Thank you.
    Thank you, Mr. Chairman.
    [The prepared statement of Senator Burr follows:]

                   Prepared Statement of Senator Burr

    Thank you, Mr. Chairman. It is a pleasure to be here today 
for the HELP Committee's first hearing on President-elect 
Obama's Cabinet choices. I think after 4 years in the Senate 
someone still needs to explain to me why the Finance Committee 
gets the official nomination hearing for HHS Secretary, but I 
am pleased that the Health Committee at least has a chance to 
talk to the designee about the critical health care issues and 
challenges facing our Nation. Perhaps, Mr. Chairman, we can 
hold a hearing next week on tax reform.
    Senator Daschle, thank you for being here. Although our 
times in the Senate did not overlap, I am aware of the work you 
did as Majority Leader and the thinking you have done on health 
care reform since leaving the Senate. It is a pleasure to have 
you before this committee to talk about your responsibilities 
if you become the next HHS Secretary.
    As you are aware from your tenure as the Senate Majority 
Leader, the issues you will be responsible for at the 
Department of Health and Human Services are broad and complex. 
Our Nation's health care system is at a critical point and 
decisions by HHS will determine the wellness of Americans in 
the coming century.
    As I said earlier, you have clearly done a lot of thinking 
about health care reform in the past several years. I think we 
can agree that wellness and prevention need to be a key part of 
any health care reform effort, and our goal should be to ensure 
affordable, high-quality health care coverage for all 
Americans. I am concerned about several aspects of the health 
care plan outlined in your book, including the Federal Health 
Board, but I am more concerned about the attention that needs 
to be devoted to overseeing HHS.
    As you know, HHS includes CMS, FDA, NIH, CDC, SAMHSA, HRSA, 
and many other important agencies and offices. Those agencies 
and offices are key parts of this country's health care system, 
and I am very concerned about what will happen if they are not 
given needed focus and attention.
    The FDA alone faces challenges in all of its areas of 
jurisdiction, including issues surrounding food safety, drug 
safety, biosimilars, and device safety. Senators Durbin, Gregg, 
and I will be re-introducing our food safety bill early this 
year, and I hope you can support us in this bipartisan effort.
    CMS is managing Medicare, Medicaid and SCHIP--programs that 
face massive fiscal issues and are critical to our seniors and 
the most vulnerable of our society. CMS's Medicare decisions 
set the standard for health insurance decisions throughout the 
United States. Leaders must ensure those are sound medical 
decisions and not just based on cost.
    The Office of the Assistant Secretary for Preparedness and 
Response (ASPR) and the Biomedical Advanced Research and 
Development Authority (BARDA) are currently implementing 
legislation that Senator Kennedy and I worked on to help make 
sure our country is prepared to respond to an act of 
bioterrorism or other public health emergencies. The CDC is 
trying to combat childhood obesity, global infectious diseases, 
injuries, and many other public health threats on a shrinking 
budget.
    While I welcome your thoughts on health care reform, during 
this hearing I hope we will hear from you about your plans for 
the agencies and offices under HHS. Our country needs a 
Secretary of HHS who will be focused on every part of his job 
responsibilities. Senator Daschle, I look forward to asking you 
some questions and working with you in the future.
    The Chairman. Senator Harkin.

                             Senator Harkin

    Senator Harkin. Thank you very much, Mr. Chairman.
    Again, it is great to see you back as our Chair. It is 
great to have you back, Ted.
    To our colleague, Tom Daschle, again my congratulations. It 
is going to be a lot of hard work, but there are some really 
great things I think that we can accomplish.
    First of all, let me just thank you so much for your 
testimony, which I read last night, and the many times that you 
referred to prevention and the fact that we need to make it a 
central part of health reform. You also mention that in your 
book more than once. You mentioned it in your verbal testimony 
today.
    Senator Mikulski just asked me what I meant about 
prevention, and I would like to interchange prevention and 
wellness. It is not just preventing illness. It is enabling 
people to stay well.
    As Dr. Andrew Weil once said, ``the body really wants to be 
healthy.'' We are engineered over the millennia that our DNA 
wants us to be healthy. That is the normal state of being of 
the body. Yet we interfere with that too many times by what we 
eat and what we smoke and what we drink, and we don't exercise 
and all other kinds of things.
    How do we build the system to change it so that we really 
promote wellness and incentivize it? All the incentives now in 
our system, as you know, Tom, is on patching, fixing, and 
mending, as you have so eloquently said both here today and in 
your book.
    In this area of prevention, much of it is not what we think 
of as being under the health umbrella. I think school-based 
programs, what our kids eat in school--we have the child 
nutrition bill up again this year--workplace wellness, 
community-based wellness programs.
    Also one other part, and that is mental health. Again, you 
focused on that also. Many times we have found that many of our 
physical ailments have their genesis in stress, depression, 
other forms of mental illnesses.
    I guess my question is, in thinking of all this, how are 
you kind of focusing on integrating all this? I mean, you are 
going to be the head of healthcare reform, but a lot of this is 
not just under that healthcare umbrella. It goes out into 
transportation. It goes into schools and workplaces and tax 
policies and things like that.
    If you could, just give me some idea of how you see this--
you are head of this, coordinating and pulling all this 
together so it is not just in Health and Human Services. It is 
in, as I say, Department of Transportation, Department of 
Education, Department of Agriculture. All of these different 
things impact us on whether we are going to be healthy or not. 
Just some idea of how you would pull all of this together.
    Senator Daschle. Well, Senator Harkin, you have said it 
very, very well. I think we need to change the paradigm in this 
country on health. It starts with that big picture belief that 
the paradigm needs to be changed from illness to wellness.
    If we understand the shift in paradigm and the recognition 
that it is no longer an illness-driven system, it is a 
wellness-driven system, it starts to open up the series of 
considerations that you suggest have to be made that fall way 
outside the purview of Health and Human Services.
    I look at healthcare as a pyramid in every country, where 
at the base of the pyramid you have primary care, and you work 
your way up until you get more and more sophisticated, until at 
the very top you have heart transplants and MRIs.
    Every country starts at the base of the pyramid with 
primary care, and they work their way up until the money runs 
out. We start at the top of the pyramid, and we work our way 
down until the money runs out. And the money runs out. So few 
people get good primary care and wellness.
    We have to change the pyramid. We have to start at the 
base. And if we are going to do that, it has to be pervasive. 
It has to be part of the goal of the Department of Education, 
the Department of Defense. It has to be the goal of the 
Department of Commerce. It has to be the goal, in other words, 
of everyone so that we can market the idea of wellness.
    Partly, it is the marketing. We have got to be--you know, 
wellness has to be cool, and prevention has to be a hot thing. 
We have got to make prevention hot and wellness cool.
    It is really important for us to build that perception of 
prevention and wellness in a way that actually is part of all 
aspects of our lives--our workplace, our school, our 
buildings--and find ways of which to make wellness easier.
    Much of it has to do with nutrition. As chairman of the 
Agriculture Committee, no one has spent more time on nutrition 
than you have. It has got to be nutrition.
    We aren't going to address obesity and prevention and 
wellness unless we make better school lunches, and unless we 
take the junk food out of schools, and unless we put physical 
exercise back into the school curriculum. Those kinds of things 
could go a long way to helping us create this new wellness 
paradigm that we need so badly.
    Senator Harkin. Wow. Keep giving that speech, will you, 
Tom? Thank you very much.
    Thank you, Mr. Chairman.
    The Chairman. Senator, thank you.
    Senator Coburn.

                             Senator Coburn

    Senator Coburn. Thank you. As with others, welcome back. It 
is good to see you looking so well. I can't wait till that 
thundering voice comes after me on the Senate floor. I will 
appreciate you being there.
    Senator Daschle, thank you. I very much enjoyed our 
conversation yesterday. Appreciate it.
    One of the laws that President-elect Obama passed was the 
accountability and transparency law. It is a law, and it is a 
mandatory requirement. We have a lot of those that agencies 
don't comply with, like improper payments, etc.
    In my discussions with him, he is very insistent, and I 
just wanted to get a commitment out of you for the agencies 
that work under you, that you will be in compliance to make 
sure that every agency under your authority will, in fact, 
submit monthly the data so the American people can see where we 
are spending our money and what we are doing, both down to the 
subcontractee and the subgrantee.
    Senator Daschle. Senator Coburn, I couldn't agree more with 
you. I have had conversations with the President-elect about 
it. I know that is important to him, as it is to you, and I 
will do all I can.
    And I need your help. If I am not doing it, I need you to 
let me know how I can do better.
    Senator Coburn. I will remind you.
    Senator Daschle. Good.
    [Laughter.]
    Senator Coburn. You and I had this discussion yesterday. 
One of the reasons prevention doesn't happen in this country is 
because we don't pay for it. As a matter of fact, in Medicare 
and Medicaid, we refuse to pay for it. We refuse to pay for 
prevention.
    Our last Medicare trustee report showed just on Medicare 
alone the infinity cost, unfunded liability, was $85 trillion. 
The only way we are going to bring that number down is through 
prevention, preventing chronic disease instead of just 
retreating it. Your pyramid is a very good explanation of where 
we stand on that.
    I would submit for your perusal, an editorial today in the 
Wall Street Journal about Medicaid, because I know we are going 
to be talking in the stimulus package about putting Medicaid 
dollars in it. It was written by a former member of the HHS 
team, Scott Gottlieb, talking about the quality that is 
available on Medicaid, and I would love to see your comments on 
it because I think there are some significant things.
    Senator Daschle. Sure.
    Senator Coburn. In the time left, I just want to join with 
my colleague, Senator Burr from North Carolina. We are both 
highly interested in Ryan White. Last year, we made significant 
changes to where the money is following the epidemic, where 
African-American women, who have been discriminated against by 
formulas, it is vastly important that those dollars go where 
the disease is, if we are ever to get a true handle on it. I 
was glad to hear your response.
    I know that is controversial because of some of the 
programs. If we are not going to follow the epidemic, then we 
are going to have another problem later on that is going to get 
further out of our control.
    One of the other commitments that President-elect Obama 
made in his campaign--and he and I have talked about it--is a 
top-down review in every agency across the Federal Government 
about what is effective, what has metrics on it, what doesn't, 
how do we measure it, and how do we get rid of the wasteful and 
duplicate programs.
    I guess my question is, No. 1, are you committed to do 
that? No. 2, when do you expect to have that finished? Because 
in HHS, there is a ton of inefficiency. We all know that. That 
is not talking about the workers. The workers there are great. 
We designed the programs, and we have created the inefficiency.
    When would you expect to have that completed? And would you 
give us a copy of that so that we can see it as well? Because 
unless we can legislate on it, we are not going to be able to 
make any impacts for you.
    Senator Daschle. Well, Senator Coburn, I believe that a 
top-down review is essential. I would start with that. I think 
it is very, very important for us to understand what the 
problems are before we try to make the system better.
    I also think that if all of us want to encourage the use of 
best practices and good comparative research, we ought to start 
with the institutions themselves and try to apply best 
practices approaches and management decisions with regard to 
each one of the departments within HHS. I will be very vigorous 
with regard to the top-down review and, frankly, would want to 
do it as expeditiously as possible.
    I am not familiar with the length of time matters like this 
would normally take, but I will keep you apprised of our 
progress and, by all means, would be more than happy to share 
it with you and members of the committee. I think you should 
have it because I think, most likely, if there are issues that 
are going to have to be addressed, many of them may be issues 
that involve statute.
    We would love to work with you on that, but I will 
certainly keep you apprised of our progress as we go forward.
    Senator Coburn. Mr. Chairman, are we going to have a second 
round?
    The Chairman. Yes.
    Senator Coburn. OK, thank you. I yield back.
    The Chairman. Thank you very much.
    Senator Mikulski.

                            Senator Mikulski

    Senator Mikulski. Senator Kennedy, we truly are so glad to 
see you back with that robust voice and the verve and the 
vigor. I just want to let you know that Senator Enzi was so 
kind in his comments about the Higher Ed Act.
    The Chairman. Yes.
    Senator Mikulski. I want you to know, Senator Enzi really 
helped me be able to work on a bipartisan basis to be able to 
do that, and Senator Burr was particularly helpful with the 
minority historically black colleges. We really did work very, 
very well together, and I want to thank all of our colleagues 
for doing that.
    Senator Daschle, it is really with great enthusiasm that we 
see you. I remember that we once talked about a colleague who 
had a bit of a swagger, and you said he was all hat and no 
cattle. When I looked at the 67,000 Federal employees you have, 
you have a lot of cattle. Now we have got to get you a hat, as 
Secretary of HHS.
    I think all of our colleagues know that you bring great 
intellect and grasp of public policy, a real commitment to the 
issues. In working with you as our Democratic leader, I think 
one of the signatures of your style is collegiality and 
consultation, and I know that that is going to be a hallmark of 
how you will work. I believe that is how we will be able to 
deliver for the American people.
    Let me go right to my questions and talk about those 67,000 
employees, many of whom reside in the State of Maryland. They 
work at agencies like NIH, 13,000--from firefighters to protect 
the public safety of our employees and their research to the 
Nobel Prize winners would be there; to FDA, over 4,000 people; 
to CMS, which is there. I can tell you right now they want to 
work, and they want to work for change.
    What they are so frustrated about is the type of leadership 
that they have not gotten, and that goes to a question that I 
have for you. I see the direction as three Rs--one to 
reinvigorate our civil service, to reform the way we do 
business, and for them to have the resources they need to do 
the job.
    Let us go to FDA, which we feel, many of us, was one of the 
most politicized agencies in the Federal Government. Senator 
Murray and I worked on many women's health issues. We had 
things like Dr. Susan Wood being pushed out.
    We had the Office of Women's Health that I helped create 
with Senator Olympia Snowe, where we had to fight to not only 
keep it, but when we cut it, they put a guy who was a 
veterinarian in charge of it. We had one battle after another, 
from micro to macro, in the safety of our drugs.
    When you look at these agencies, and often we blame the so-
called bureaucrats, but I think we have to look at the 
political leadership that was there and the kind of leadership 
that they can now expect. How do you see reinvigorating and 
reforming these science-based agencies?
    Senator Daschle. Senator Mikulski, I have had some real 
good conversations with people within the department and with 
others in regard to that very problem.
    The first and most important thing is something I said in 
my statement, which is that I want to re-instate a science-
driven environment. I want to take ideology and politics as 
much as humanly possible out of the process and leave the 
scientists to do their job.
    I think it is very important for us to allow scientists to 
be scientists and to give them the resources to do it right. 
And so, it starts with that. It starts with the importance of 
giving them the autonomy they need, without fear of conflict at 
some point with others along the decisionmaking process 
regarding factors having nothing to do with science.
    It starts by empowering our scientists to do the great work 
that we know they can do.
    Senator Mikulski. Now let us go to drug safety and drug 
efficacy. One is the safety issue, and my question is, have you 
had a chance to develop a framework on whether you want an 
independent board to ensure, how we assure safety? Then it goes 
to efficacy.
    Now, one of the things in FDA approval, is the drug 
effective now? One of the questions is: Is the drug that is 
being proposed more effective than what might be cheaper and 
already available on the market? Have you had the chance to 
look at that, or will you wait for your new FDA commissioner to 
advise you on this?
    Senator Daschle. Well, we have begun to look at it, but I 
do believe that this decisionmaking process has to be very 
thoughtful, has to be very collaborative, and certainly should 
involve our leadership within FDA in particular, but also 
members of this body, this panel, in particular, as well.
    It is important that we come to grips with it and to put an 
infrastructure in place. I would certainly love your input and 
your guidance as we do that. I want to wait until we have the 
leadership in place before we make any final decisions.
    Senator Mikulski. Well, I am sure that the transition team 
is moving on it.
    I would like to go to prevention and quality. I chair a 
working group on quality. The reason I asked about prevention, 
it is the most often-used phrase and the least understood.
    One, usually prevention means more testing, and we support 
that. You were a leader in helping us get mammograms for women 
in your role here, and we appreciate that. The other issue is 
also what doctors will say is diet and exercise. Then where 
does that happen, and how does that happen, and how do we 
ensure compliance?
    My definition of prevention, particularly in the management 
of chronic disease, is if you have it, it doesn't get worse. 
Let us take diabetes, you go from insulin-resistant to perhaps 
being insulin-dependent, but you want to avoid the micro-
vascular consequences--eye deterioration, vascular 
deterioration, kidney deterioration. That comes from good 
medicine, good medical practice, and diet and exercise.
    Most doctors will give you a sheet of paper that says here 
is the diet, and you need to do more exercise. Then people are 
on their own. I wonder, No. 1, how do you see in health 
insurance reform, if we are going to have medical homes, we 
will move toward compliance and also move to a broader 
definition?
    For example, for we who work with seniors, much has been 
said about, ``gee, we have the whole Older Americans Act.'' We 
have senior centers in every community, which could be tools 
particularly for a particular population to prevent the further 
escalation of their chronic condition.
    I wonder if that is what you mean by breaking down the 
stovepipes? Then also this whole idea, if we get health 
insurance reform, how are we going to have compliance with 
medical recommendations?
    Senator Daschle. Well, there is----
    Senator Mikulski. Maybe that is a whole other hearing.
    Senator Daschle. I do think that it is subject to a lot 
more discussion than we probably have time for this morning, 
but I think you put your finger on two very important factors 
here.
    One is defining our issues as clearly as we can. And before 
we can ever get to the solutions of healthcare, we have to make 
sure that we are all on the same page with regard to the 
problems of healthcare. I would hope that we could be of like 
mind with regard to at least the ideas that many of us have 
already begun to share on those problems.
    We have cost problems. We have access problems. But as you 
rightfully point out in your question, we certainly have 
quality problems. If those are the categories of problems--
cost, access, and quality--how is it that we can build a high-
value, high-performance system?
    Well, it seems to me the only way to do it is to improve 
access, improve quality, and reduce cost. But, how do we do 
that? That gets to your question, the second part of your 
question.
    That takes a framework, and I think we should talk a lot 
more about how we ought to ensure a proper framework. I have 
very strong ideas about it, but I also know that this has to be 
collaborative. I think there has to be a realization that 
unless we have a framework, we can talk about policy, but 
ultimately, the implementation of that policy will never come 
to fruition.
    We have to have a better integration, more efficiency, far 
more transparency. The only way that is going to come is if we 
can put a framework in place to ensure that the system is 
administered a whole lot better than it is today.
    Now it is administered in small pieces all over with very 
little integration. Senator Coburn and I talked last night 
about interoperability, and that is just one example. We don't 
have an interoperable system yet.
    You can argue about how long it will take to get there, but 
it just seems to me it ought to be an embarrassment for this 
country, in this day and age, that we still don't have an 
operable system when it comes to health information technology.
    And that goes to your point. We need to find a way to make 
that happen, and I want to work with you to ensure that we make 
that as high a priority as it deserves to be.
    Senator Mikulski. Thank you, Mr. Chairman.
    The Chairman. Thank you very much.
    We have historically followed the leadership role on this 
committee, and just so that we let our colleagues know, which 
would, on our side, have Senator Murkowski next and then 
Senator Hatch in that order. We will follow that order on this 
committee as well.

                           Senator Murkowski

    Senator Murkowski. I had to consult with my colleague here. 
I appreciate that, Mr. Chairman.
    Senator Daschle, welcome. I appreciate the time that you 
gave me the other evening as we discussed issues as they relate 
to healthcare and the most vulnerable in our society.
    We talked about the situations with American Indians, 
Alaska natives, and their healthcare status. So, again, I 
appreciate your time. I appreciate your willingness to serve in 
this capacity.
    One of the issues that comes to me as I go back home to 
Alaskans is the issue of access. Both of us coming from rural 
States, where we don't have the number of healthcare providers 
that we would like to have for our constituents, we share the 
same concerns.
    What we are seeing in my State of Alaska with Medicare-
eligible individuals and their ability to see a doctor in the 
largest city in the State of Alaska--to know that there were no 
doctors that were willing to take on new Medicare patients; and 
all of a sudden, it became not just somebody else's problem, 
but it was a problem for people everywhere throughout the 
State.
    We have been working to deal with that in just little bits 
and pieces, but nothing that is really making a difference. I 
have constituents who are coming to me and saying, ``Lisa, we 
would rather forego the Medicare benefits that we have paid 
into for years and instead purchase private coverage just so 
that I can get in to see a doctor. I just need to be able to 
see a doctor.''
    What are we going to do about a Medicare system that is 
failing our seniors in many areas when they can't get in to see 
anyone? What is it that we can do?
    I know that there are some suggestions out there that would 
broaden the scope of the Medicare coverage, including 
individuals between 55 and 64. Do you believe that Medicare is 
sustainable enough to bring more enrollees into the program?
    Speak to me a little bit about Medicare and specifically 
what it means to those of us in rural States, where we have 
such an incredible shortage of providers.
    Senator Daschle. Well, Senator Murkowski, you have spoken 
with a real passion about it, and I can understand that passion 
because anybody from the West can identify completely with your 
very apt description of our circumstances.
    I think access is a function of many different factors, and 
obviously, as you rightfully suggest, Medicare is a big part of 
and a very pervasive part of this situation. We almost 
understate the problem of access if all we do is limit it to 
the number of uninsured because we have a real access problem 
when it comes to mental health in this country. There are so 
few mental health providers in South Dakota.
    Mental health is oftentimes overlooked in so many ways, in 
part because it has not been given the priority it deserves. 
Thanks to extraordinary efforts by the Chairman and members of 
this committee, we are beginning to build the kind of parity 
with regard to mental health that is so critical. Access to 
mental healthcare in rural areas is almost nonexistent in some 
cases.
    Access to dental care is a real problem. It is a function 
of Medicare in part. I think it is a far more universal 
challenge. I think there are four things that I would suggest 
we consider to begin to start addressing this issue.
    One is to encourage in as many ways as possible more 
primary care providers. I would like to go back to the National 
Health Service Corps to see what we can do to encourage larger 
numbers of National Health Service Corps providers.
    Senator Murkowski. We can start by funding that.
    Senator Daschle. Funding.
    Senator Murkowski. Yes.
    Senator Daschle. Funding is a good way to start. The 
resources in that regard would be very helpful. Encouraging 
students, as we change this paradigm from illness to wellness 
and encouraging students to come back into primary care and to 
be willing to be the kind of family practitioners that ought to 
be the anchor, the basis upon which our healthcare system is 
built is a second thing.
    I think we ought to use our alternative providers--and I 
don't really like that term--such as the nurses, the nurse 
practitioners, and the physician's assistants, far more 
effectively. Pharmacists can play a far more important role 
than they do. That, to me, is a very important part.
    As we talked, I think we can do a lot more with HIT, 
especially in rural areas. We need to encourage better 
broadband access and far more utilization of services provided 
through HIT. All through this, Medicare could be the 
beneficiary of that effort, and I hope we can make that happen.
    Senator Murkowski. Thank you, Mr. Chairman. I have pages 
and hours more questions, but I will defer until the next 
round.
    The Chairman. Senator Murray.

                             Senator Murray

    Senator Murray. Thank you, Mr. Chairman. It is wonderful to 
see you back as well.
    The Chairman. Thank you.
    Senator Murray. I am delighted that you are going to be 
leading us as we head into a very important healthcare 
discussion and, hopefully, move legislation this year. It is 
great to see you here.
    The Chairman. Thank you very much.
    Senator Murray. Senator Daschle, welcome. I am delighted 
that you are taking on this agency. Congratulations on your 
nomination.
    I look forward to working with you. Your passion has been 
shown to this committee. We know that these are the issues that 
really drive you, personally, and have for many years. I am 
delighted you are going to be at the helm as we take on some 
incredible challenges over the coming years on healthcare and 
all of the other issues that you will be facing.
    You have heard a lot of people talk to you about access. 
You talked about it in your opening statement. You talked about 
the lack of providers, particularly primary care physicians. I 
have been holding a number of hearings in my State to talk 
about the lack of healthcare providers that are out there, and 
there is a direct correlation with cost.
    If there isn't a doctor to go to or nurses available, it 
drives up the cost of healthcare. It isn't just doctors. It is 
nurses and a vast array of other healthcare providers. When I 
go back to young people in high school who are going to 
hopefully go into these professions, very few of them know 
about these professions or have begun to prepare in a way to go 
into those fields.
    I wanted to ask you, as we look at healthcare reform in 
whatever form it comes to us, is there a way to incorporate 
bringing more people into healthcare professions, showing them 
the paths that they need to get into them, and ensure that we 
focus on making sure we have enough providers in the vast array 
of healthcare that is out there?
    Senator Daschle. Well, Senator Murray, I think you ask a 
very, very important question. I think it starts with sort of a 
realization that our system works through incentives.
    Right now, there is a great deal of incentive to become a 
subspecialist. The reimbursement system as an incentive is one 
that clearly incentivizes subspecialties. I would like to see 
the day when we incentivize in the same way our primary care 
providers, our nurses. I would like to see incentivization of a 
wellness system all the way through, from providers through 
institutions to our clinics.
    I think that, in part, is how this is going to happen, is 
the incentivization that will have to occur. There is no better 
opportunity for us to do it than with health reform.
    But it can't just be that. I think we also have to 
encourage that the providers themselves be incentivized. That 
seems to me to suggest that we put more emphasis on 
scholarships for primary care providers, more emphasis on 
forgiveness of college costs for primary care providers, 
finding ways to say, ``Look, if you take this route, we are 
going to be with you. We are going to be a partner with you. We 
are going to try to find ways to ensure that you have the 
financial wherewithal to become that front-line physician or 
that front-line provider that we need.''
    We need to send that message. And it seems to me payment 
reform and tuition assistance are two powerful tools to do it 
and to incentivize in a way that could make this system begin 
to turn around.
    Senator Murray. Well, I really look forward to working with 
you on that. I obviously heard a lot about primary care 
physicians, but it was everything from therapists to somebody 
to read the mammogram.
    Senator Daschle. Exactly.
    Senator Murray. We have got to incentivize those and create 
this. We are looking to create jobs. We have got to focus on 
that, and I think you have outlined some great ways to do that. 
I look forward to being a partner with that.
    One of the other issues that affects costs--and I know 
Senator Murkowski shares this view--is the way we reimburse 
physicians today under Medicare. The sustainable growth rate is 
an outdated system that basically incentivizes people using 
patient utilization rather than looking at healthy outcomes for 
reimbursement.
    This is an issue I know you and I have talked about when 
you were leader. I am frustrated with it because it was 
impacting a lot of physicians in my State who are no longer 
seeing Medicare patients because of the reimbursement. We need 
to make this system more fair, to focus on healthy outcomes. Is 
this something that you are going to be focusing on as well?
    Senator Daschle. Well, I couldn't feel more strongly that 
the SGR system just isn't working right. We are in the middle 
of it right now, as you know. We have to come up with some sort 
of an answer to the expiration of the current authorization 
this year.
    I can recall being in your shoes on countless occasions and 
saying I don't really have a clue what the SGR should be. I am 
going to listen to the experts. I am certainly going to pay 
attention to my staff. But, at the end of the day, I don't know 
that it makes a whole lot of sense for you to be put in that 
position over and over and over again.
    It is as hot a political position as you are ever going to 
get. Even after you get beyond the politics and the pressures, 
you still have to worry, do I have the wherewithal to make 
these decisions on a routine basis?
    We need to come up with a better system administration, and 
I am hopeful that we can do that as we look at health reform.
    Senator Murray. I hope we look at it not as reimbursing 
based on utilization, but rather based on healthy outcomes.
    Senator Daschle. Absolutely. Healthy outcomes, and I don't 
think we ought to base it on a procedure-by-procedure approach. 
I think it ought to be episodic. I would like to see us look at 
sort of the larger issue and encourage, as you say, better 
outcomes.
    I am not one who supports the so-called performance-based 
approach. I do believe that there are episodic ways with which 
to look at reimbursement that give us a lot more latitude to 
incent again, if I can use that term, better outcomes and lower 
cost and far less hassle for providers.
    Senator Murray. Very good. My time is up. Thank you very 
much. I look forward to working with you.
    Senator Daschle. Thank you.
    The Chairman. Senator Hatch.

                             Senator Hatch

    Senator Hatch. Well, thank you, Mr. Chairman. Glad to see 
you there. I look forward to working with you in the coming 
months and years.
    Senator Daschle, it is great to have you back. Nice to have 
you here. I am particularly appreciative of Linda for allowing 
you to do this gut-busting job. Because it is going to be a 
tough job, but it is really important, and I think you can do 
it well. And I intend to support you.
    There are a lot of areas where I think there is consensus, 
for instance, your ideas on nationwide health information 
technology infrastructure and giving every American an 
electronic health record. Your emphasis on preventive care, I 
think that is important. Of course, the national problem of 
childhood obesity and adult obesity as well as increased access 
to healthcare for rural areas, certainly underserved areas, 
mainly through community health centers.
    This committee is a very strong committee with regard to 
implementing and helping community health centers, because I 
think they do a terrific job at a reasonable cost compared to 
so many other things.
    Of course, you have indicated a desire to try and resolve 
some of the medical liability problems as well because we know 
that is driving an awful lot of the costs. Anybody who has ever 
worked in that area, and I have, understands that. These are 
all very, very important things.
    If I could just mention a couple of things. Members of this 
committee have become increasingly concerned about the issue of 
antimicrobial resistance. A number of bills were introduced 
during the 110th Congress, including a bill by Senator Brown 
and myself entitled Strategies to Address Antimicrobial 
Resistance, or what we call the STAR Act.
    Now I am interested in hearing your thoughts about this 
basic topic because in the STAR Act, Senator Brown and I have 
suggested a rather holistic approach to the problem of 
antibiotic resistance and we would establish a network of 
experts across the country to conduct regional monitoring of 
resistant organisms as they occur, sort of like a snapshot to 
pick up on problems early.
    Would you agree that it is important that we augment CDC's 
current surveillance system with some sort of expert system as 
well?
    Senator Daschle. Well, Senator Hatch, I, first of all, want 
to commend you and Senator Brown for your outstanding work 
here. This is not an area for which there is a great deal of 
history and prior attention. The fact that you have dedicated 
your time and effort to ensuring that we begin to put a policy 
in place is one that is recognized and appreciated.
    I share your view that this is something that really does 
deserve a framework, a national framework, within which we can 
begin to put the kind of attention and priority that it 
deserves.
    I don't have any particular definitive solution today. I 
really would be very interested in working with you and 
accommodating your larger goals in accomplishing this in the 
not-too-distant future.
    There is a tremendous need for greater thought, greater 
work, greater research. I would like to work in partnership 
with you to make that happen.
    Senator Hatch. Well, thank you. In 1984, Congress passed 
the Drug Price Competition and Patent Term Restoration Act. I 
know a little bit about that, by the way.
    I have maintained my strong support of the generic drug 
industry over the years because it helped to create--I think at 
that time, we were lucky to have 18 percent of the industry in 
the form of generic drugs. Today, it is two thirds. It has 
helped bring down costs on an average of $10 billion a year 
every year since 1984, and more today.
    Let me just say this, since two thirds of today's 
prescriptions--at least that is the estimate--are generic, I 
think this is a good measure indicating that the law has 
abundant benefits for American consumers. The law guarantees 
patients that these drug copies are safe and effective. It 
guarantees generic manufacturers that their applications will 
be reviewed within 180 days. It guarantees innovators that 
scientific experts determine the products are bioequivalent.
    Unfortunately, questions have been raised about whether 
each of these is true. This is something I think you have got 
to get into. A big part of the problem seems to be that the 
Office of Generic Drugs has become the poor stepsister to the 
Office of New Drugs, which receives a guaranteed funding stream 
through user fees and appropriations.
    Now, as a result, the Office of Generic Drugs has suffered 
from inadequate findings, an erosion of their scientific base, 
and declining morale due to funding constraints as well as 
disruptions caused by the now-stalled move to White Oak, which 
is very important to me as well.
    By the agency's own admission last year,

          ``It is still difficult to keep pace both with 
        incoming applications and with other matters requiring 
        OGD resources, such as citizen petitions, lawsuits 
        challenging the approval of generic drugs, and 
        providing a guidance to the industry.''

    I am concerned that we may have a system here that is 
broken. I would like you to really take some time, when you get 
there, to look that over and see what you can do because this 
is a really, really important area of healthcare that I think 
you will take a great deal of joy in helping to maintain and 
make even better.
    My time is up. I appreciate you allowing me this little 
extra time, Mr. Chairman.
    I intend to support you. I think you will make a great 
Secretary of Health and Human Services. I intend to support you 
after you are there as well. So just stay close, and I hope 
that I can be of help to you.
    Senator Daschle. Well, thank you very much, Senator Hatch.
    If I could just respond because I think your point about 
generic drugs is so important. As we look to ways with which to 
bring down costs, I am absolutely convinced that a big part of 
that effort, if it is going to be done successfully, will be 
determined by the degree to which generic drugs are allowed to 
play the role that it can.
    The Office of Generic Drugs needs to be supported and 
financed, needs to be given the kind of priority and 
empowerment that it deserves. I would really like to work very 
closely with you to ensure that a mutual goal that we would 
have with regard to generic drugs is realized.
    Thank you for your support and especially for your 
leadership on that issue.
    Senator Hatch. Thank you so much.
    The Chairman. Very good. Thank you very much.
    Senator Reed.

                              Senator Reed

    Senator Reed. Well, thank you, Mr. Chairman, and it is 
great to see you there.
    With your chairmanship and the leader's Cabinet position, 
we are on the road to healthcare reform, I believe. It is a 
long road, but this is encouraging.
    First, let me say that the President has made a very wise 
choice, and I personally again want to thank you for your help 
and friendship, when I was particularly a new member here in 
this body.
    I was very encouraged when you spoke to Senator Murray 
about the emphasis on primary care and the training of primary 
care physicians. One of the components of healthcare reform has 
to be to significantly increase our base of primary care 
physicians and nurses, etc.
    Title VII, as you are aware, of the Public Health Service 
Act provides for resources to help do this, but it is just 
chronically underfunded. As you grapple with healthcare reform, 
you are also grappling with the budget, so good luck on both 
matters. If you could pay particular attention to title VII, I 
would be very appreciative.
    In a similar vein, section 317 of the CDC's program on 
immunization is so important. It has been estimated that we 
need to provide about $1.1 billion to cover all the recommended 
vaccines to eligible children and adults. Frankly, we provide 
less than half of that. That, I think, is another priority.
    The estimates are staggering in terms of the savings. For 
every dollar we spend vaccinating children, we collectively 
save $16.50. It is one of those--in fact, it is one of the 
great triumphs of public health over the last hundred years--
vaccination.
    If you would like to comment, I would appreciate it.
    Senator.
    Senator Daschle. Well, I think this is the first time 
immunization has come up in the hearing, and I applaud you, 
Senator Reed, for raising it.
    Immunization is probably as sound an investment as we can 
make in good health. I can't imagine that we could do any 
better than ensure that every child is immunized and that we 
understand the importance of broad-based immunization and the 
tremendous good health that can come from it.
    I think at various times in the past, while we have 
certainly been supportive rhetorically, we haven't been 
supportive through resources. I think it is critical, as you 
note, that we put the resources where they belong, in the best 
investments in health, and certainly immunization is one of 
them.
    Senator Reed. Well, thank you, Senator.
    You, in response to Senator Kennedy, talked about your 
listening tour across the country. And here, often it comes 
down to 317 and $1.1 billion also being needed for Programs X, 
Y and Z. But for people across the country, it is much more 
personal.
    I wonder if you have an anecdote you would like to share 
which for you encapsulates the situation in the country and the 
most impressive comment that you heard out there on the trail?
    Senator Daschle. Well, I heard just extraordinary stories 
about people who understood the economic circumstances that 
they had were so directly related to the health circumstances 
they were facing. The stories of personal bankruptcy are the 
ones that come back to me so frequently. The stories of people 
who were hard-working people, hard-working and cared so deeply 
for their country and their families, who are virtually thrown 
out on the street because they couldn't cope with the 
extraordinary expense of staying well.
    And I must say, as a society, as a country, how in the 
world can we allow, in the year 2009, for us to say, that is 
just the way life is? How can we possibly say to those people 
that there is not a better way?
    It seems to me it is those extraordinary, gripping stories 
of personal collapse as a result of the fact that we have not 
come up with a healthcare system that allows people to get sick 
in many cases without total economic destruction. They are the 
ones that have had such an incredible impact on me, and they 
will be the ones I will remember as we go through this year.
    Senator Reed. Again, thank you, Mr. Leader, and I look 
forward to your leadership in the Department of Health and 
Human Services. Thank you.
    Senator Daschle. Thank you very much, Senator Reed.
    The Chairman. Thank you, Jack Reed. I don't think I have 
heard an explanation as clear and as passionate as we heard 
from Jack Reed on the general need, the overall need about 
healthcare reform.
    I thank him very much for his statement. Tom Daschle's 
response on it was, I thought, enormously moving and really 
very helpful to our committee.
    Senator Sanders.

                            Senator Sanders

    Senator Sanders. Thank you, Senator Kennedy, and welcome 
back. We need your leadership at this moment.
    Tom, it is great to see you here. I look forward to working 
with you when you are the Secretary.
    When you go last in a long line of questions, it is hard to 
come up with anything brilliant or new, but I will try.
    [Laughter.]
    Last year, legislation was introduced which had 12 co-
sponsors, including Senator Kennedy, Senator Harkin, Senator 
Clinton, and I suspect many others--Senator Mikulski--which 
essentially would deal with an issue you heard a lot about 
today. That is, take a program that Senator Kennedy developed 
some 40 years ago, which has widespread bipartisan support. You 
heard Senator Hatch talk about it, Senator Byrd talk about it, 
President Clinton. President Bush has been very supportive. 
That is the Federally Qualified Health Center Program.
    What that legislation would do--also supported by Barack 
Obama, who used to sit right here, first co-sponsor. It would 
go from $2 billion a year that we are currently spending--1,100 
community health centers to 4,400 community health centers, 
essentially providing quality healthcare, dental care, low-cost 
prescription drugs, mental health counseling to every American 
in an underserved area.
    You go from $2 billion to $8 billion, you expand the 
National Health Service Corps, and you know what happens? You 
save money. All of the studies indicate that by allowing people 
to come to a doctor rather than going to the emergency room or 
going to the hospital, you save money.
    Here is my question. Will you be supportive of the concept 
of significantly expanding the community health centers with 
bipartisan support so that every American has access to a 
doctor or a dentist?
    Senator Daschle. Well, Senator Sanders, you speak so 
passionately about this, and I share your passion, if not your 
eloquence. I strongly support the goal and will work very, very 
closely with you to see how closely we can come.
    I would like to see if we could even surpass that goal. I 
am with you and would be very, very excited about the prospect 
of a partnership that would allow us to accomplish it while I 
am there.
    Senator Sanders. Would you agree that spending that amount 
of money so that we quadruple the number of community health 
centers would actually save Medicare money, Medicaid money, and 
our healthcare system money?
    Senator Daschle. No question. No question.
    Senator Sanders. OK. Can we count on your support to move 
us in that direction?
    Senator Daschle. Absolutely.
    Senator Sanders. We are trying to get some money in the 
stimulus package to help community health centers. Is that 
something you can be supportive of?
    Senator Daschle. I can't speak to the stimulus package 
because it isn't completed yet, but I am certainly supportive 
of putting it in every economic vehicle we have.
    I think there is economic stimulus to be had there. While I 
will be enthusiastically supportive of the package, whether it 
is in stimulus or something else, the sooner we can get it 
done, the better.
    Senator Sanders. All right. I was glad to hear you mention 
the crisis in dental care as well because sometimes when we 
talk about healthcare we forget the reality that millions and 
millions of Americans, especially rural areas, can't find a 
dentist.
    Let me bring back the issue--I think Jack Reed raised it as 
well, and others--the need to substantially increase funding 
for the National Health Service Corps so that we can get 
dentists and doctors into medically underserved areas. Is that 
something you would be supportive of?
    Senator Daschle. Strongly. I think Senator Murkowski and I 
talked a little bit about that as well. But you are absolutely 
right, we have been the beneficiaries in South Dakota of the 
National Health Service Corps on the reservations in 
particular, but also off the reservations. I think it is a 
tremendous investment.
    We need to provide the kind of funding and to encourage the 
participation in National Health Service Corps that we have 
seen at times in the past. I would love to work with you to 
make that happen.
    Senator Sanders. Thank you.
    And you mentioned dental care. We will work aggressively to 
increase the number of dentists in this country. We probably 
need more dental schools, but we have a graying of the dental 
profession. We need to encourage more young people to get in 
there. Is that something you would be willing to work on?
    Senator Daschle. Absolutely. We need to do that. We need 
that in particular in rural areas. We are having a real hard 
time with dentists, as we are, as I said earlier, with mental 
healthcare providers in rural areas. But, that has to be a 
priority.
    Senator Sanders. Let me quickly change gear, move out of 
healthcare to a crisis that we don't talk about enough here. 
That is we have 18 percent of our children living in poverty, 
which, as you may know, is the highest rate of childhood 
poverty in the industrialized world.
    At the same time, we have more people in jail than any 
other country in the world, including China. We spend $50,000 a 
year to put people in jail, and yet millions of working 
families do not have access to quality childcare or pre-school 
education.
    Would you make the needs of our kids and significantly 
improving the disastrous childcare situation in America one of 
your priorities?
    Senator Daschle. Absolutely. As I said earlier to another 
question, I believe in that slogan that it is so much easier to 
build a child than to repair an adult. I think we ought to get 
about building children, building the next leadership in this 
country. I would love to work with you to make that happen.
    Senator Sanders. OK. Thank you very much.
    Mr. Chairman, thank you.

                 Prepared Statement of Senator Sanders

    Welcome, Mr. Daschle and thank you for appearing before the 
committee. Your portfolio will be one of the largest in 
government. Because of that, I'll just concentrate on a couple 
of the issues that I believe deserve priority.
    I was very pleased to hear that, in addition to your duties 
as Secretary, you will also be overseeing the Obama 
administration's health care reform effort. It remains 
unconscionable that Americans, let alone in the developed 
world, lack universal health care as a right of citizenship. 
Health insurance coverage for all must be one of our first 
priorities. In meeting with you and preparing for this hearing, 
I have been very impressed with your understanding that, in 
order to have true health care reform, coverage alone will be 
insufficient unless it is also matched by assurances of access 
to health care.
    I know that you share one of my major interests in this 
regard. During your years in the Senate and in your writings, 
you have been a strong advocate for the expansion of community 
health centers. As you know, we've made progress in the past 8 
years in expanding health centers to cover over 18 million 
Americans with comprehensive primary health care in our 
underserved areas. But, this is still less than one-third of 
the 60 million Americans who lack access to basic health care, 
and most of whom live in rural areas. For the life of me, I 
can't understand why in the past 40 years we have not expanded 
this program to every underserved community in America. Health 
centers are a proven cost-effective program. I don't need to 
tell you that community health centers actually save many times 
more than they cost by reducing unnecessary emergency room use 
and inappropriate hospital care. But even more, they do it in a 
high quality way and they involve their patients in governing 
their operations.
    I believe that, as an essential part of health reform, we 
must complete the circle and make a commitment to provide 
enough funding over the next 5 years to support health centers 
in every underserved community in America. Last August, I 
introduced a bill to do just that. In fact, it was one of the 
very last bills that President-elect Obama cosponsored in the 
Senate.
    We have a real crisis in primary care in this country. In 
addition to underserved communities, we have a serious shortage 
of primary care doctors, dentists, and nurses. Yet, proven 
solutions to the problems of access and shortages of health 
professionals exist. We have four times as many doctors and 
dentists willing to go into primary care and sign up with the 
National Health Service Corps than current funding allows. We 
have 50,000 qualified applicants to nursing schools who are not 
admitted each year due to a lack of faculty. We have over 400 
communities ready to open health centers within 90 days, but 
they were not able to be funded this year.
    Amazingly, by increasing funding for the community health 
center program and the National Health Service Corps from the 
current total of just over $2 billion to less than $9.5 billion 
over the next 5 years, we would be able to provide 60 million 
Americans with medical, dental, and mental health care as well 
as low-cost drugs at community health centers and create over 
24,000 primary care doctors and dentists. In addition, 
provisions in the Higher Education Act would give a capitation 
payment of $3,000 for each new student admitted to nursing 
school. This would allow us to educate 10,000 more nurses.
    Let me also say a word about another priority we must 
address. I am deeply concerned about early childhood education 
and child care in this country. It's a national disgrace that 
18 percent of children live in poverty and that working 
families have an incredibly difficult time finding quality and 
affordable child care. I think it's smarter to invest when 
they're young--through programs like Head Start--rather than 
spending $50,000 a year to keep a kid who fell off track in 
jail.
    Again, just as in health care, there are cost-effective 
solutions that I would urge you to consider as Secretary. I 
have been impressed with parent-child centers, which provide 
early child care in conjunction with education for their 
parents, in a number of States. Based on models existent in 
Vermont, Parent-Child Centers have far higher success rates in 
ending the cycles of poverty, child abuse, and alcoholism, than 
most other initiatives. &
    Let me say that I am looking forward to finally addressing 
long-ignored problems and working with the Obama administration 
on them. Mr. Chairman that concludes my remarks. I will have a 
few questions for Mr. Daschle at the appropriate time. Thank 
you.
    The Chairman. Thank all of you very much.
    I would like, if there are other members who would like to 
ask a question, we would welcome their participation now.
    Senator Enzi. Well, Mr. Chairman, there are a lot of 
additional questions. My side has asked if it would be possible 
to submit them and get a prompt response before the committee 
makes its decision?
    The Chairman. Sure. We will submit them and make them a 
part of the record.\2\
---------------------------------------------------------------------------
    \2\ Mr. Daschle withdrew from the nomination before responding to 
committee questions.
---------------------------------------------------------------------------
    Senator Enzi. We do appreciate the answers that we have 
gotten today and look forward to the same cooperative spirit 
and look forward to a quick confirmation so that we can get 
Senator Daschle in place doing the job that we need done.
    The Chairman. Thank you.
    Senator Enzi, if you would just withhold, we are going to 
hear from a few of our colleagues here who had asked for a few 
more minutes to be able to complete their thoughts.
    Senator Dodd. Well, Mr. Chairman, I don't have any 
additional questions. There are a lot more questions, 
obviously, but I think, as Tom pointed out, we could literally 
have hearings on almost every question that has been raised 
this morning. They are all deeply significant and important, 
the magnitude of the problem.
    It also speaks in a way as to how we have to think about 
reorganizing ourselves up here, something we are not likely to 
do in the short term. There are so many areas of overlapping 
jurisdiction and dealing with the stovepipe analysis, as you 
brought up--I think you talked about, Senator Burr--talking 
about our ability to get our arms around all of this, given the 
bifurcated structure we deal with up here makes it very 
difficult.
    It is not a problem, obviously, you are going to be able to 
address. There was a time maybe we might have, a different role 
you played.
    I just want to make two points that I thought were very 
important that you raised today. There were a lot of things you 
said that were tremendously helpful in giving us a sense of 
your appreciation of the problem.
    One is the de-politicalization, in a sense, of science. 
That will go a long way, in my view, of building, rebuilding 
public trust in our agencies. I think that that was a major 
factor in a loss of confidence among many people in our 
agencies dealing with this very important issue that affects so 
many millions of our fellow citizens.
    I think it will go a long way toward creating that 
environment here that will allow us to get a job done, as you 
point out, in a bipartisan fashion, which has been a hallmark 
of this committee under Senator Kennedy's leadership, I might 
point out, over the years.
    The reason we have been successful with legislative efforts 
is because we have had a chairman that has always reached 
across that aisle to build relationships, as Senator Enzi 
pointed out, on areas of common interest where we could develop 
common agendas. I thank you for that.
    And second, the mental health issues--and again, Senator 
Kennedy, Senator Domenici, Paul Wellstone, who valiantly 
fought, as did Pete Domenici and, of course, Senator Kennedy, 
for years on mental health issues. It might have got lost in 
all of the economic debates in the fall. In fact, the very day 
that we passed the Economic Stabilization Act, mental health 
parity was actually a part of that bill.
    I suspect that under different circumstances, that would 
have been the banner headline. But because it was the economic 
issues, it got lost a bit. But it was a major step forward for 
our country--huge step forward.
    Your commitments to working on that expanding affects so 
many other aspects of what we talked about here today. This is 
not just another area of healthcare. It is one that absolutely 
reaches into every other issue that has been raised.
    I am particularly pleased, Tom, about your commitment to 
this, to that issue, that we not just let this lie there now as 
an accomplishment of a Congress, but now becomes part of that 
seamless effort of ours to provide that universal care for our 
fellow citizens.
    I am very excited about your nomination, and I am hopeful 
as well, as Senator Enzi pointed out, we can deal with this 
quickly, get you on the job, and roll up our sleeves and go to 
work on this most critical issue. Congratulations.
    Senator Daschle. Thank you very much, Chris.
    The Chairman. Senator Harkin.
    Senator Harkin. Thank you very much again, Mr. Chairman.
    Again, this has been a great hearing and the kind of 
attitude, the philosophy you are bringing to this job is just 
refreshing.
    There were just two other areas I just wanted to cover with 
you very briefly, Tom. I would be remiss if I left this room 
and didn't bring up with you the area concerning people with 
disabilities in our healthcare system.
    Too often they fall through the cracks. Too often they go 
and doctors don't really know how to treat them. There is not 
that much instruction in our medical schools on how to treat 
people with disabilities. Dentists don't know how to do this. 
We really need to focus a lot in that area.
    Second, in your book, you wrote that Medicaid ``is 
fundamentally geared toward institutional care, even though 
most elderly people prefer to receive care at home or in more 
personalized community settings.'' I would expand that to say 
also people with disabilities, with significant disabilities.
    Right now, Medicaid has to pay for institutional care for a 
person with a disability. If they want to live at home or in a 
community-based setting, Medicaid doesn't have to pay for that. 
In between that, we had the Olmstead decision in which the U.S. 
Supreme Court said emphatically that it is a constitutional 
right of a person with a disability to have the least 
restrictive environment.
    I guess my question is can I count on you to support that 
what we now call the Community Choice Act? It used to be called 
MiCASSA. I won't get into that. By the way, I will mention that 
the first person to introduce this in the House of 
Representatives was Newt Gingrich, by the way, back in the 
1990s. We have been trying for years to get this done.
    In other words, to provide that a person with a disability 
can use that money, that Medicaid money for their own choice 
where they want to live, their own home, their own community-
based setting. I would hope that we could ask for your help and 
your support in that effort.
    Senator Daschle. Well, Senator Harkin, you have been the 
leader and you have been the incredible voice of reason and 
passion when it comes to disabilities and the disability 
community. I have learned a lot in listening to you for many, 
many years.
    I think that providing as high a quality of life as we can 
guarantee is a critical goal for us as we look at health reform 
and as it pertains especially to the disability community. 
Providing them with choice is a part of that quality of life.
    I will work with you to see that we get that done and move 
in that direction, recognizing the importance. The long-term 
care today is as much a function of serving the disabled as it 
is serving the elderly.
    Senator Harkin. That is right.
    Senator Daschle. It ought to be the choice of the 
disability community as to where they would like to get their 
care and to live their lives. You have voiced that concern and 
that vision, and I would like to work with you to make sure 
that it is realized.
    Senator Harkin. I appreciate that, Tom, very much.
    And last, I walked into a clinic in Carroll, IA, and I 
think I saw the future. It is a small clinic in a small town. 
And when you walk in the door, it is all electronic 
recordkeeping. Under one roof, they have M.D., D.O.s, 
chiropractors, acupuncturists, massage therapists, 
psychologists. There may be a few others.
    Senator Dodd. Dentists? I have been to that place.
    Senator Harkin. Oh, yes, they have dentists. There isn't a 
place you haven't been.
    [Laughter.]
    Senator Dodd. A lot of good it did me, though.
    Senator Harkin. This leads to the whole area of integrative 
medicine. There are people out there like Dr. Dean Ornish and 
Dr. Andrew Weil and Dr. Mark Hyman. These are all M.D.s, but 
they have all been promoters of bringing together integrative 
medicine and all the different types of things, and a lot of 
these do lend itself to prevention and wellness.
    I hope that you will look for some way to set up a team or 
a process or something in your office of healthcare reform that 
will bring these very knowledgeable practitioners in. I just 
mentioned those three because--there are a lot of others out 
there, too. But to set up some kind of a process where we can 
look at integrative medicine also in healthcare reform.
    Senator Daschle. Well, you have mentioned some of the 
finest voices in health that I know. I respect them a great 
deal, as you do. I have long advocated this notion of a medical 
home. And I think integrated care is all about providing 
efficient care and improved quality at lower cost, and that is 
what you probably saw in that particular facility.
    We ought to take that model and models like it and make 
sure that that is the standard by which we judge how well we 
are integrating and how well we are improving the quality in 
this high-performance system in the future. It is fun to see 
those. I have been in a few myself.
    You can see what can be done and what can happen if this 
integration is made as effectively as they apparently have. I 
would love to work with you on it.
    Senator Harkin. Thank you very much, Tom. I look forward to 
working with you.
    Senator Daschle. Thank you, Tom.
    The Chairman. Senator Sanders.
    Senator Sanders. Thank you, Senator Kennedy.
    Senator Daschle, one of the issues that I hear a lot of 
concern about in Vermont and, I expect, all over the country is 
Medicare Part D. (A), it is extraordinarily confusing. I mean, 
literally, I have heard from people who have Ph.D.s that don't 
quite know how to find the insurance policy that they need.
    Will you work with some of us in several areas, No. 1, to 
do away with the donut hole, which is very costly now, for many 
seniors who go over the cliff and then have to pay 100 percent 
out of their own pocket? And (B), will you help us save money 
by allowing Medicare to begin negotiating with the drug 
companies rather than paying far higher prices, say, than the 
Veterans Administration?
    Senator Daschle. Well, the answer is yes. I would like very 
much to be able to address the donut hole. It is one of the 
bigger financial challenges that we face with regard to the 
program. It is a very expensive fix, and we will have to work 
together to see how we can find solutions to that.
    I also think that the more we can continue to find 
innovative ways with which to bring down the cost of drugs--and 
I think that as we look at those innovative ways, giving the 
Secretary the negotiating authority is one of those ways that 
ought to be evaluated and looked at. I think that there is a 
great deal to be said for that. I have supported it in the 
past, and I would support it in the future.
    Senator Sanders. On a related issue, a number of years ago, 
I took a number of my constituents--we live on the Canadian 
border--over the Canadian border to purchase medicine in 
Montreal. Many of the people were women who were dealing with 
breast cancer, and they bought a drug called Tamoxifen for a 
fraction of the price they were paying in the United States.
    And many of us for years have been trying to grapple with 
the issue of why Americans are forced to pay by far the highest 
prices in the world for the same exact prescription drugs. And 
one of the solutions that some of us have come up with is the 
idea of prescription drug re-importation.
    Will you work with those of us who think that, in fact, 
Americans should be able to purchase safe, FDA-approved 
medicine from other countries where the prices are 
substantially lower than they are in the United States?
    Senator Daschle. Well, you put your finger on, I think, the 
most important aspect of this effort, which is to ensure the 
confidence and safety of the drugs wherever they may come from. 
Many of our drugs today are manufactured abroad and imported as 
domestic product even though they are manufactured abroad.
    Some consistent policy with regard to the manufacture and 
the sale of all of our drugs, I think, is in order. I would 
love to work with this committee and certainly with you, 
Senator Sanders, to make sure that we come up with the best 
policy to do just that.
    Senator Sanders. OK. Senator Daschle, thank you very much.
    Senator Daschle. Thank you.
    The Chairman. Let me just have a final word about a couple 
of areas that we haven't really given much attention to.
    One is the NIH, the importance of the NIH and the 
difference that it is making today in the whole area of 
progress in terms of all the forms of healthcare. It is doing 
just an extraordinary job.
    We mentioned the mental health. As you know, we passed 
recently the Mental Health Parity Act, which is extraordinarily 
important for people across this country. It has been 
referenced during the course of the morning, but I just want to 
underline that for you.
    We also didn't talk about FDA, and that is just enormously 
important. We, in the Congress, have not given it attention or 
focus. This is an enormously important agency that has been 
left out in terms of recognition and in terms of--there were 
some references here during the course of the hearing, but just 
the importance of that.
    And finally, the importance of genetic discrimination. We 
passed legislation recently on that. The hearings that we had 
prior to the acceptance of that legislation reminded us all 
about the importance of that.
    I won't take up time in going through those areas, but 
maybe you would submit a comment on those.
    From this morning, you can see the enormous interest of the 
members of this committee on all of these items, that we have 
on healthcare. We know we have a division between our 
committees, and we want to work with all of our colleagues to 
make sure we accommodate those interests. But you do get a 
sense about the depth and breadth of the concerns that the 
members of this committee have and the great desire to work 
with you.
    This has been an extraordinary hearing this morning. You 
must take away a sense of satisfaction that the desire of the 
members of this committee to work closely with you and also a 
recognition of the enormous contribution that you have already 
made in this healthcare area and how all of us on this 
committee--and I know I, in this instance, speak for Senator 
Enzi--how all of us want to work very closely.
    And in conclusion, I want to thank Senator Enzi again for 
all of his courtesies for us on this committee and the desire 
to look forward to working with him as well as all the members 
of our committee in the days ahead.
    If there is no further business, we will stand in recess.
    [Additional material follows.]

                          ADDITIONAL MATERIAL

                  Prepared Statement of Senator Inouye

    I would like to compliment President-elect Obama on making 
an excellent choice in naming you as the Secretary-designate of 
the Department of Health and Human Services. I look forward to 
working with you and supporting your efforts to lead the 
Department and to find common ground on health care reform, an 
issue that is long overdue for resolution.
    As you begin to consider candidates for NIH Director and as 
you consider unfinished business at the various agencies within 
the Department, I wanted to bring to your attention an 
unresolved issue at NIH that has been pending for a decade. 
Several members including myself, and Senator Harkin and 
Senator Specter, the Chairman and Ranking Member of the Labor-
Health and Human Services Appropriations Subcommittee have 
urged NIH with committee report language and floor colloquies 
to provide dedicated scientific leadership in the appropriate 
NIH grant-making institute for basic behavioral research. 
Similar requests have been made in the House. NIH has chosen to 
stonewall these requests for a decade. The time has come to 
resolve this issue and I ask for your assistance.
    As you know, many leading health conditions--such as heart 
disease; stroke; lung disease and certain cancers; obesity; 
AIDS; suicide; teen pregnancy; drug abuse and addiction; 
depression and other mental illnesses; neurological disorders; 
alcoholism; violence; injuries and accidents--originate in 
behavior and can be prevented or controlled through behavior. 
Effective behavioral interventions typically originate as a 
result of basic behavioral research--an area NIH reports it 
spends $1.2 billion annually. In spite of the importance of 
this research arena NIH has refused to establish dedicated 
scientific leadership in the form of an office or center to 
provide the needed NIH-wide leadership.
    I look forward to working with you to resolve this matter 
quickly in the early days of the 111th Congress. Can we look to 
you for help to resolve this matter?
                                ------                                

                [The New York Times, December 26, 2008]

                Expansion of Clinics Shapes Bush Legacy

                            (By Kevin Sack)

    Nashville.--Although the number of uninsured and the cost of 
coverage have ballooned under his watch, President Bush leaves office 
with a health care legacy in bricks and mortar: he has doubled Federal 
financing for community health centers, enabling the creation or 
expansion of 1,297 clinics in medically underserved areas.
    For those in poor urban neighborhoods and isolated rural areas, 
including Indian reservations, the clinics are often the only 
dependable providers of basic services like prenatal care, childhood 
immunizations, asthma treatments, cancer screenings and tests for 
sexually transmitted diseases.
    As a crucial component of the health safety net, they are lauded as 
a cost-effective alternative to hospital emergency rooms, where the 
uninsured and underinsured often seek care.
    Despite the clinics' unprecedented growth, wide swaths of the 
country remain without access to affordable primary care. The recession 
has only magnified the need as hundreds of thousands of Americans have 
lost their employer-sponsored health insurance along with their jobs.
    In response, Democrats on Capitol Hill are proposing even more 
significant increases, making the centers a likely feature of any 
health care deal struck by Congress and the Obama administration.
    In Nashville, United Neighborhood Health Services, a 32-year-old 
community health center, has seen its Federal financing rise to $4.2 
million, from $1.8 million in 2001. That has allowed the organization 
to add eight clinics to its base of six, and to increase its pool of 
patients to nearly 25,000 from 10,000.
    Still, says Mary Bufwack, the center's chief executive, the clinics 
satisfy only a third of the demand in Nashville's pockets of urban 
poverty and immigrant need.
    One of the group's recent grants helped open the Southside Family 
Clinic, which moved last year from a pair of public housing apartments 
to a gleaming new building on a once derelict corner.
    As she completed a breathing treatment one recent afternoon, Willie 
Mai Ridley, a 68-year-old beautician, said she would have sought care 
for her bronchitis in a hospital emergency room were it not for the new 
clinic. Instead, she took a short drive, waited 15 minutes without an 
appointment and left without paying a dime; the clinic would bill her 
later for her Medicare co-payment of $18.88.
    Ms. Ridley said she appreciated both the dignity and the 
affordability of her care. ``This place is really very, very important 
to me,'' she said, ``because you can go and feel like you're being 
treated like a person and get the same medical care you would get 
somewhere else and have to pay $200 to $300.''
    As governor of Texas, Mr. Bush came to admire the missionary zeal 
and cost-efficiency of the not-for-profit community health centers, 
which qualify for Federal operating grants by being located in 
designated underserved areas and treating patients regardless of their 
ability to pay. He pledged support for the program while campaigning 
for President in 2000 on a platform of ``compassionate conservatism.''
    In Mr. Bush's first year in office, he proposed to open or expand 
1,200 clinics over 5 years (mission accomplished) and to double the 
number of patients served (the increase has ended up closer to 60 
percent). With the health centers now serving more than 16 million 
patients at 7,354 sites, the expansion has been the largest since the 
program's origins in President Lyndon B. Johnson's war on poverty, 
Federal officials said.
    ``They're an integral part of a health care system because they 
provide care for the low-income, for the newly arrived, and they take 
the pressure off of our hospital emergency rooms,'' Mr. Bush said last 
year while touring a clinic in Omaha.
    With Federal encouragement, the centers have made a major push this 
decade to expand dental and mental health services, open on-site 
pharmacies, extend hours to nights and weekends and accommodate recent 
immigrants--legal and otherwise--by employing bilingual staff. More 
than a third of patients are now Hispanic, according to the National 
Association of Community Health Centers.
    The centers now serve one of every three people who live in poverty 
and one of every eight without insurance. But a study released in 
August by the Government Accountability Office found that 43 percent of 
the country's medically underserved areas lack a health center site. 
The National Association of Community Health Centers and the American 
Academy of Family Physicians estimated last year that 56 million people 
were ``medically disenfranchised'' because they lived in areas with 
inadequate primary care.
    President-elect Barack Obama has said little about how the centers 
may fit into his plans to remake American health care. But he was a 
sponsor of a Senate bill in August that would quadruple Federal 
spending on the program--to $8 billion from $2.1 billion--and increase 
incentives for medical students to choose primary care. His wife, 
Michelle, worked closely with health centers in Chicago as vice 
president for community and external relations at the University of 
Chicago Medical Center.
    And Mr. Obama's choice to become secretary of health and human 
services, former Senator Tom Daschle of South Dakota, argues in his 
recent book on health care that financing should be increased, 
describing the health centers as ``a godsend.''
    The Federal program, which was first championed in Congress by 
Senator Edward M. Kennedy, Democrat of Massachusetts, has earned 
considerable bipartisan support. Leading advocates, like Senator Bernie 
Sanders, independent of Vermont, and Representative James E. Clyburn, 
Democrat of South Carolina, the House majority whip, argue that any 
success Mr. Obama has in reducing the number of uninsured will be 
meaningless if the newly insured cannot find medical homes. In 
Massachusetts, health centers have seen increased demand since the 
State began mandating health coverage 2 years ago.
    At $8 billion, the Senate measure may be considered a relative 
bargain compared with the more than $100 billion needed for Mr. Obama's 
proposal to subsidize coverage for the uninsured. If his plan runs into 
fiscal obstacles, a vast expansion of community health centers may 
again serve as a stop-gap while universal coverage waits for flusher 
times.
    Recent job losses, meanwhile, are stoking demand for the clinics' 
services, often from first-time users. The United Neighborhood Health 
Services clinics in Nashville have seen a 35 percent increase in 
patients this year, with much of the growth from the newly jobless.
    ``I'm seeing a lot of professionals that no longer have their 
insurance or they're laid off from their jobs,'' said Dr. Marshelya D. 
Wilson, a physician at the center's Cayce clinic. ``So they come here 
and get their health care.''
    Studies have generally shown that the health centers--which must be 
governed by patient-dominated boards--are effective at reducing racial 
and ethnic disparities in medical treatment and save substantial sums 
by keeping patients out of hospitals. Their trade association estimates 
that they save the health care system $17.6 billion a year, and that an 
equivalent amount could be saved if avoidable emergency room visits 
were diverted to clinics. Some centers, including here in Nashville, 
have brokered agreements with hospitals to do exactly that.
    Many centers are finding that Federal support is not keeping pace 
with the growing cost of treating the uninsured. Government grants now 
account for 19 percent of community health center revenues, compared 
with 22 percent in 2001, according to the Health Resources and Services 
Administration, which oversees the program. The largest revenue sources 
are public insurance plans like Medicaid, Medicare and the State 
Children's Health Insurance Program, making the centers vulnerable to 
government belt-tightening.
    The centers are known for their efficiency. Though United 
Neighborhood Health Services has more than doubled in size this decade, 
Ms. Bufwack, its chief executive, manages to run five neighborhood 
clinics, five school clinics, a homeless clinic, two mobile clinics and 
a rural clinic, with 24,391 patients, on a budget of $8.1 million. 
Starting pay for her doctors is $120,000. Patients are charged on an 
income-based sliding scale, and the uninsured are expected to pay at 
least $20 for an office visit. One clinic is housed in a double-wide 
trailer.
    Because of a nationwide shortage of primary care physicians, the 
clinics rely on Federal programs like the National Health Service Corps 
that entice medical students with grants and loan write-offs in 
exchange for agreements to practice as generalists in underserved 
areas. Of the 16 doctors working for United Neighborhood, seven are 
current or former participants.
    Dr. LaTonya D. Knott, 37, who treated Ms. Ridley for her 
bronchitis, is among them. Born to a 15-year-old mother in south 
Nashville, she herself had been a regular childhood patient at one of 
the center's clinics. After graduating as her high school's 
valedictorian, she went to college on scholarships and then to medical 
school on government grants, with an obligation to serve for 2 years.
    She said she now felt a responsibility to be a role model. ``I do a 
whole lot of social work,'' she said, noting that it was not uncommon 
for children to drop by the clinic for help with homework, or for a 
peanut butter sandwich. ``It's not just that we provide the medical 
care. I'm trying to provide you with a future.''
    Despite such commitment, national staffing shortages have 
reinforced concerns about the quality of care at health centers, 
notably the management of chronic diseases. This year, the government 
started collecting data at the centers on performance measures like 
cervical cancer screening and diabetes control.
    ``The question is not just, `Are you going to have more community 
health centers?' '' said Dr. H. Jack Geiger, founder of the health 
centers movement and a professor emeritus at the City University of New 
York. ``It's, `Are you going to have adequate services?' ''
    A deeper frustration for health centers concerns their difficulty 
in securing follow-up appointments with specialists for patients who 
are uninsured or have Medicaid. All too often, said Ms. Bufwack, 
medical care ends at the clinic door, reinforcing the need to expand 
both primary care and health insurance coverage.
    ``That's when our doctors feel they're practicing third world 
medicine,'' she said. ``You will die if you have cancer or a heart 
condition or bad asthma or horrible diabetes. If you need a specialist 
and specialty tests and specialty meds and specialty surgery, those 
things are totally out of your reach.''

    [Whereupon, at 12:11 p.m., the hearing was adjourned.]

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