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[Senate Hearing 108-152]
[From the U.S. Government Publishing Office]

                                                        S. Hrg. 108-152
 
                 HEALTH CARE ACCESS AND AFFORDABILITY--
      EFFECTS ON FAMILIES, COMMUNITIES, AND HEALTH CARE PROVIDERS

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

                                HEARING

                                before a

                          SUBCOMMITTEE OF THE

            COMMITTEE ON APPROPRIATIONS UNITED STATES SENATE

                      ONE HUNDRED EIGHTH CONGRESS

                             FIRST SESSION

                               __________

                            SPECIAL HEARING

                     APRIL 30, 2003--WASHINGTON, DC

                               __________

         Printed for the use of the Committee on Appropriations

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

                                 ______

                    U.S. GOVERNMENT PRINTING OFFICE
                            WASHINGTON : 2003
89-042 PDF

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                      COMMITTEE ON APPROPRIATIONS

                     TED STEVENS, Alaska, Chairman
THAD COCHRAN, Mississippi            ROBERT C. BYRD, West Virginia
ARLEN SPECTER, Pennsylvania          DANIEL K. INOUYE, Hawaii
PETE V. DOMENICI, New Mexico         ERNEST F. HOLLINGS, South Carolina
CHRISTOPHER S. BOND, Missouri        PATRICK J. LEAHY, Vermont
MITCH McCONNELL, Kentucky            TOM HARKIN, Iowa
CONRAD BURNS, Montana                BARBARA A. MIKULSKI, Maryland
RICHARD C. SHELBY, Alabama           HARRY REID, Nevada
JUDD GREGG, New Hampshire            HERB KOHL, Wisconsin
ROBERT F. BENNETT, Utah              PATTY MURRAY, Washington
BEN NIGHTHORSE CAMPBELL, Colorado    BYRON L. DORGAN, North Dakota
LARRY CRAIG, Idaho                   DIANNE FEINSTEIN, California
KAY BAILEY HUTCHISON, Texas          RICHARD J. DURBIN, Illinois
MIKE DeWINE, Ohio                    TIM JOHNSON, South Dakota
SAM BROWNBACK, Kansas                MARY L. LANDRIEU, Louisiana
                    James W. Morhard, Staff Director
                 Lisa Sutherland, Deputy Staff Director
              Terrence E. Sauvain, Minority Staff Director
                                 ------                                

 Subcommittee on Departments of Labor, Health and Human Services, and 
                    Education, and Related Agencies

                 ARLEN SPECTER, Pennsylvania, Chairman
THAD COCHRAN, Mississippi            TOM HARKIN, Iowa
JUDD GREGG, New Hampshire            ERNEST F. HOLLINGS, South Carolina
LARRY CRAIG, Idaho                   DANIEL K. INOUYE, Hawaii
KAY BAILEY HUTCHISON, Texas          HARRY REID, Nevada
TED STEVENS, Alaska                  HERB KOHL, Wisconsin
MIKE DeWINE, Ohio                    PATTY MURRAY, Washington
RICHARD C. SHELBY, Alabama           MARY L. LANDRIEU, Louisiana
                           Professional Staff
                            Bettilou Taylor
                              Jim Sourwine
                              Mark Laisch
                         Sudip Shrikant Parikh
                             Candice Rogers
                        Ellen Murray (Minority)
                         Erik Fatemi (Minority)
                      Adrienne Hallett (Minority)

                         Administrative Support
                             Carole Geagley

                            C O N T E N T S

                              ----------                              
                                                                   Page

Opening statement of Senator Tom Harkin..........................     1
Statement of Risa Lavizzo-Mourey, M.D., M.B.A., president and 
  chief executive officer, The Robert Wood Johnson Foundation....     3
    Prepared statement...........................................     6
Statement of Arthur L. Kellermann, M.D., M.P.H., School of 
  Medicine, Emory University, member, Institute of Medicine......     8
    Prepared statement...........................................    10
Statement of Carolyn F. Scanlan, president and chief executive 
  officer, Hospital and Healthsystem Association of Pennsylvania.    12
    Prepared statement...........................................    14
Statement of Lanett Kane, R.N., People's Clinic, Cedar Falls, IA.    18
    Prepared statement...........................................    19
Statement of Chris Petersen, farmer, Clear Lake, IA..............    21
    Prepared statement...........................................    23
Opening statement of Senator Arlen Specter.......................    28

     HEALTH CARE ACCESS AND AFFORDABIL- ITY--EFFECTS ON FAMILIES, 
                 COMMUNITIES, AND HEALTH CARE PROVIDERS

                              ----------                              

                       WEDNESDAY, APRIL 30, 2003

                           U.S. Senate,    
    Subcommittee on Labor, Health and Human
     Services, and Education, and Related Agencies,
                               Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 9:33 a.m., in room SD-124, Dirksen 
Senate Office Building, Hon. Arlen Specter (chairman) 
presiding.
    Present: Senators Specter and Harkin.

                opening statement of senator tom harkin

    Senator Harkin. The Senate Labor, Health and Human 
Services, Education Subcommittee on Appropriations will now 
come to order. Senator Specter should be joining us shortly. He 
is on a train getting here right now and I guess has been 
delayed a little bit. I am sorry. I better turn on my mike 
here.
    Again, I want to thank Senator Specter, our chairman, for 
having this series of hearings. I think this is the first of 
three hearings we are having on the issue of health care 
accessibility and affordability.
    This subcommittee has a lot of responsibility in this area. 
And we want to get as much information as possible to make sure 
that we are able to address this issue forthrightly and to help 
get information for our fellow Senators and members of the 
Congress as to the dimensions of the health care problem in 
America as it deals with accessibility and affordability. So I 
just appreciate Senator Specter's having this series of 
hearings.
    I want to thank all of you for joining us today on this 
issue. It is the top issue in America. Even a recent poll, even 
with the war and the aftermath of the war, a recent poll showed 
that this is still the top concern of most Americans.
    I have recently held some roundtable discussions in Iowa on 
this issue, traveling around the State, and some of the stories 
you hear just break your heart when you get real people in to 
talk about it.
    I had a farmer who was going through bankruptcy. He has 
lupus, his insurance costs rose to $13,000 a year. He does not 
know what he is going to do. We have another farmer here today, 
Mr. Petersen, who is going to speak about his situation, the 
plight of a lot of farmers without health coverage.
    I had a 55-year-old man who became ill, lost his job, and 
could not afford COBRA. And now all they are doing is he and 
his wife are just sort of trying to wait until he can get on 
Medicare.
    We have--and it is not just individuals per se that are 
being affected. Businesses, especially small businesses, I 
cannot tell you how many small businesses I had come to my 
meetings and, you know, these are small businesses. I remember 
one had--employed like 55 people, if I am not mistaken. And 
like 10 years ago, they had a health care plan that covered 
their workers and their families.
    Then the cost got so high, they had to drop the families. 
And then it kept getting higher and higher, until where they 
had to have higher and higher deductibles and co-payments to 
where it is almost not much of a benefit any longer at all.
    As this guy said to me, he said, you know, he said, ``These 
people who work for me, these 55 people who work for me,'' he 
said, ``these are not just people that work for me. They are my 
neighbors. They are my friends. We go to the same church. Our 
kids go to the same schools. And it is--you know, it is,'' he 
said, ``and it is''--he said, ``I am not--finally, I cannot 
even give them health care coverage any longer.''
    We have got school districts--when I was in Ottumwa, I 
remember, I had a couple of school districts came forward. One 
small school district in Southeastern Iowa, their health costs 
had gone up 62 percent in a year, 62 percent. And then there 
were other school districts who were 50 percent, 48 percent. I 
mean really huge increases. And as the superintendent of the 
school said, you know, ``When these costs go up like this, we 
can do a couple of things. One, we can cut coverage or we can 
cut salaries, because most of the money in a school district 
goes for salaries for school teachers.'' He said, ``Now if we 
cut coverage, we lose teachers, because they will say, `Well, 
we can go some place else. We can go outside the State or we 
will go somewhere else, maybe get a better deal.' If we cut 
salaries, the same thing happens.'' So he said, ``Because of 
rising health care costs,'' he said, ``we are losing our hard-
working teachers.''
    So anyway, these are the things I am picking up all over 
the State, and I--one other figure, right now, if I am not 
mistaken, and some of you may correct me, I believe health care 
costs are now somewhere in the neighborhood of about 15, 16 
percent of GDP right now, somewhere in that neighborhood. Our 
GDP is going up at about 2 percent a year, forecast over the 
next several years. Health care costs are projected to go up 
about 9 percent, 8 to 9 percent a year. At the end of this, 
these next 9 years, by the end of this decade that we are in 
now, health care costs could consume somewhere over 25 to 27 
percent of GDP, by the end of this decade.
    That is not even taking into account the baby boomers and 
Medicare and everything else that is coming down the pike. So 
we really have a crisis on our hands. And we have to be about 
the business of addressing this, and how we are going to solve 
this health care accessibility and affordability.
    Last point, as was brought out to me time and time again 
that most people in America do get health care, even if they do 
not have insurance, even if they are not covered, they do get 
health care, but they get it when they are the sickest and when 
they walk in the emergency room, that is. And that is the most 
expensive health care you can provide. Whereas, if they could 
get to people earlier with preventative care and supportive 
care, it would not cost so much.
    So that keeps coming home time and time again, that that 
really is sort of the last resort of those who do not have 
insurance, and that is to show up at the emergency room if they 
have one close by.
    So with that, again, I thank you all for being here.
STATEMENT OF RISA LAVIZZO-MOUREY, M.D., M.B.A., 
            PRESIDENT AND CHIEF EXECUTIVE OFFICER, THE 
            ROBERT WOOD JOHNSON FOUNDATION
    Senator Harkin. We have a distinguished list of witnesses 
today. We have Dr. Risa Lavizzo-Mourey----
    Dr. Lavizzo-Mourey. Exactly right.
    Senator Harkin [continuing]. Who became The Robert Wood 
Johnson Foundation president and CEO in January of 2003. Prior 
to her current position, she was a member of The White House 
Task Force on Health Care Reform, also served as a consultant 
to The White House in health policy issues. Dr. Lavizzo-Mourey 
earned an M.D. degree from Harvard Medical School and an MBA 
from the University of Pennsylvania.
    We will start with you, then I will then go to Dr. 
Kellermann, and Ms. Scanlan--you made it all right.
    Ms. Scanlan. Thank you.
    Senator Harkin. I heard you were stuck on the Parkway. 
Thank you so much for being here.
    Then we will go to Ms. Kane, and then last with Mr. 
Petersen.
    So, Dr. Mourey, we will start with you, and then after your 
testimony, I will then introduce Dr. Kellermann, and then on 
down the list.
    Dr. Lavizzo-Mourey. Very good.
    Senator Harkin. So welcome to the panel. And all your 
statements will be made a part of the record in their entirety. 
And please if you could sum up in 5 or 7 minutes or something 
like that, I would appreciate it.
    Dr. Lavizzo-Mourey. Very good. Thank you, Senator. And I 
thank all of the members of the subcommittee for this 
invitation.
    As you have heard, my name is Dr. Risa Lavizzo-Mourey. I am 
the president of The Robert Wood Johnson Foundation, who has a 
mission to improve the health and health care of the American 
people.
    For those of us fortunate enough to have health insurance, 
we know what to do if we become ill or develop symptoms of an 
illness; we simply call the doctor. But for those who do not 
have health insurance, it is more difficult.
    As a physician, I have grappled with this issue and watched 
people choosing between health care and paying their bills. I 
still recall a mother facing a situation when I was a young 
physician, when a young mother brought her 18-month-old boy 
into the emergency room. He had a high fever, and she was 
understandably very concerned. It did not take very long to 
figure out that he had a pneumonia and needed treatment in the 
hospital, intravenous antibiotics.
    When I went in to talk to her and tell her that it was a 
treatable illness, I suspected that she was going to be 
relieved, but instead, she wept. And through her tears, she 
told me that she was uninsured, they had already had one 
hospitalization, and the family simply could not face more 
debts.
    To avoid hospitalization, she said that she and her husband 
would do anything. They would take off from work. They would 
treat the child at home. Yes, they were a working family. They 
had to choose between health care for their child and paying 
their bills. I struggled with what to do, and ultimately our 
team decided we could safely send him home on oral antibiotics. 
Thankfully, that little boy recovered.
    But 20 years later, millions of uninsured families are 
still facing barriers to health care, crippling debt, and even 
personal bankruptcy.
    Who are these people? Most of them are working families, 
fully 8 out of 10 are working families. Most of the uninsured 
are either not offered coverage or the premiums that they have 
to face through their jobs are simply beyond their budget.
    Now, unfortunately, going without insurance, even for a 
short time, is risky. It leads to delaying health care and 
avoiding treatment that can alleviate serious illnesses.
    In a sobering report by the respected Institute of 
Medicine, an estimated 18,000 Americans die each year because 
they lack health insurance. This report is from one of our most 
trusted research institutions and should remind us that this 
problem is truly a matter of life and death for far too many.
    We all agree that this situation is unacceptable. The 
question we now face is how to forge a constructive and non-
partisan national discussion that is based on reliable, 
objective information. The Robert Wood Johnson Foundation is 
fully committed to helping our Nation do both, and I am here to 
tell you what we have done to date, and what we plan to do, and 
hope that we can help in any way in the future.
    Over the past three decades, The Robert Wood Johnson 
Foundation has made access to health care a top priority. The 
foundation has addressed this complex problem in numerous ways.
    First and foremost, it has done so by supporting 
fundamental research into the economic underpinnings of the 
problem and the health and economic consequences of being 
uninsured in our society.
    The Foundation has lent a hand to practical efforts as 
well. We have helped the private sector and the States develop 
new private and public options for coverage through our State 
Coverage Initiatives program, and we have supported efforts of 
volunteer doctors and clinics through Volunteers In Health, and 
we have worked to enroll Americans in Medicaid and SCHIP, and 
to make these programs more efficient and family-friendly 
through our Covering Kids and Families Program.
    Currently, the Foundation is leading the way on several 
fronts. We are trying to raise awareness about the plight of 
the 41 million Americans who are uninsured through 
constructive, nonpartisan national debate on this issue. We are 
also supporting the development of reliable, non-partisan 
information about problems and solutions.
    Let me tell you just a bit more about each. To raise 
awareness and encourage a non-partisan discussion, we developed 
and led Cover the Uninsured Week just a little while ago--and I 
want to thank Senator Harkin and Senator Specter for their 
participation in those activities. As some of you may know, it 
was co-chaired by former Presidents Gerald Ford and Jimmy 
Carter, and the Foundation was able to forge a unique 
partnership between business and labor, consumer groups and 
health care groups, and ideologically diverse partners such as 
the Chamber of Commerce, the AFL-CIO, the American Medical 
Association, The American--Health Insurance of America 
Association, and AARP, as well as Families USA.
    These groups and 160 national organizations and 700 local 
organizations, including every major religious denomination, 
and 200 elected officials participated in over 875 events in 
all 50 States and the District of Columbia. A total of 20 U.S. 
Senators, including as I said, Senator Specter and Senator 
Harkin participated, 43 Members of the House participated in 
the week's activities.
    I think that this demonstrated that Americans want this 
problem solved. The meetings were non-partisan in nature and 
set the right tone for future discussions designed to meet the 
interests of our Nation.
    Raising awareness and supporting a constructive, national 
discussion is necessary----
    Senator Harkin. If you could kind of wrap up----
    Dr. Lavizzo-Mourey [continuing]. Surely----
    Senator Harkin [continuing]. Because the light----
    Dr. Lavizzo-Mourey [continuing]. But not sufficient. Yes, 
sir.
    In addition, we support numerous other research activities 
that I will just highlight briefly. Covering America is a 
project that the Economic and Social Research Institute is 
working on. It is a philosophically diverse group of health 
care scholars and the important thing to note about this work 
is that it will propose an analysis of solutions ranging from 
Federal tax income credits to Medicaid and SCHIP, to Medicare 
buy-ins, and there will be cost and coverage implications and 
analyses that associate--are associated with them. They will be 
available later on this year, actually in the summer. And we 
would hope that they could be helpful to members of the 
committee.

                           prepared statement

    Let me just say that everyone at The Robert Wood Johnson 
Foundation is committed to helping this committee and any other 
of our policymakers who would like our help. We invite your 
questions about future research we might do, so that with you 
we can make sure that the young family I talked about 20 years 
ago does not have to face this kind of tragedy in the future.
    Thank you, Senator.
    [The statement follows:]
               Prepared Statement of Risa Lavizzo-Mourey
    Mr. Chairman and members of the subcommittee, good morning. My name 
is Dr. Risa Lavizzo-Mourey. I am the president and chief executive 
officer of The Robert Wood Johnson Foundation in Princeton, NJ, the 
mission of which is to improve the health and health care of all 
Americans. Thank you for inviting me to testify this morning.
    Those of us fortunate enough to have health insurance know what to 
do if our child becomes ill or we develop symptoms of an illness: We 
call the doctor.
    But for more than 41 million uninsured Americans, the choice is not 
so easy. It can mean choosing between the health of your child and 
paying your other bills.
    It can mean getting lifesaving early diagnosis and treatment, or 
postponing care until it is too late.
    As a physician, I have watched people grapple with these terrible 
choices too often. I still recall a mother facing such a cruel choice 
some 20 years ago when I was a young physician, just out of medical 
school, working in an emergency room in rural Massachusetts.
    The young woman brought in her baby boy who was about 18 months 
old, as I recall. He had a high fever. He was breathing rapidly. The 
young mother was understandably anxious and concerned. I ordered an x-
ray, examined the child, and determined that he had pneumonia. I 
informed the mother, expecting her to be relieved. It was treatable, 
and he would be fine. We just needed to admit him, get him on some I.V. 
antibiotics, and watch him.
    Instead, she wept.
    She explained to me that her boy had already had one hospital 
admission and the family still faced debt from that stay.
    She didn't know how they could handle another big hospital bill. 
Couldn't she take him home?, she asked.
    She and her husband would do everything they could. They would take 
time off work. They would watch him around the clock.
    Wanting to do the right thing, to live up to my physician's oath to 
first do no harm, I struggled with what to do. I prescribed oral 
antibiotics and talked to her at length about how to care for her young 
child and monitor him at home.
    Thankfully, that little boy recovered.
    But 20 years later:
  --Children are still going without the care they need because their 
        parents cannot afford the costs.
  --We still have millions of Americans of all ages who live sicker and 
        die younger because they lack health insurance.
  --Families are still going into crippling debt or personal bankruptcy 
        to get the medical care they need.
    Who are these people?
    Most of the uninsured today are in working families--fully 8 out of 
10 of them.
    Most of the uninsured either are not offered coverage through their 
jobs or face premiums and co-pays that are simply beyond their budget.
    Unfortunately, going without insurance, even for a short time, is 
very risky; including the deadly results of delaying medical care for 
serious, life-threatening problems.
    In a sobering report, the respected Institute of Medicine estimated 
last year that 18,000 Americans die each year because they lack health 
insurance. This report from one of our most trusted research institutes 
should remind all of us that this problem is a matter of life and death 
for too many.
    We all agree that this situation is unacceptable. The question we 
face is how to forge a constructive and non-partisan national 
discussion based on reliable, objective information. The Robert Wood 
Johnson Foundation is fully committed to helping our nation do both, 
and I am hear to tell you about what we have done to date, and what we 
plan to do, until this problem is solved.
    Over the past three decades, The Robert Wood Johnson Foundation has 
made access to health care its top priority. The Foundation has 
addressed this complex problem in numerous ways.
    First and foremost, it has done so by supporting fundamental 
research into the economic underpinnings of the problem and the health 
and economic consequences for the uninsured and society.
    The Foundation has also lent a hand to practical efforts. We have 
helped the private sector and the states develop new private and public 
options for coverage through the State Coverage Initiatives program, 
supported the efforts of volunteer doctors and clinics through 
Volunteers In Health, and worked to enroll Americans in Medicaid and 
the State Children's Health Insurance Program (SCHIP) to make these 
programs more efficient and family-friendly through our Covering Kids 
and Families program.
    Currently, the Foundation is leading the way on several fronts. We 
are raising awareness about the plight of more than 41 million 
uninsured Americans and encouraging constructive, nonpartisan national 
discussion about the issue. We are also supporting the development of 
reliable, non-partisan information about the problem and proposed 
solutions.
    Please let me tell you more about each.
    To raise awareness and encourage a non-partisan and constructive 
national discussion, we developed and led Cover the Uninsured Week, a 
week long series of events in March 2003, co-chaired by former 
presidents Gerald Ford and Jimmy Carter. The Foundation forged a unique 
partnership of business and labor, consumer and health care groups, 
ideologically diverse partners such as the U.S. Chamber of Commerce and 
the AFL-CIO, The American Medical Association, The Health Insurance 
Association of America, AARP and Families USA. These groups and 160 
national and 700 local organizations, including every major religious 
denomination, plus almost 200 elected officials participated in more 
than 875 community events in all 50 states and the District of 
Columbia. A total of 20 United States Senators, including two members 
of this committee, Senators Specter and Harkin, and 43 members of the 
House participated in the Week's activities. The Week demonstrated that 
Americans want this problem solved. The meetings were non-partisan in 
nature and set the right tone for future discussions designed to serve 
the best interests of our Nation.
    The results of Cover the Uninsured Week speak for themselves. 
Preliminary reports indicate that the Week generated significant 
coverage on the plight of the uninsured, making it a truly 
unprecedented effort to raise awareness about the uninsured. The Week 
also brought together Americans of all points of view to begin a 
constructive, national discussion about possible solutions that might 
attract widespread support in American society.
    While the plight of the uninsured demands new approaches, there are 
things we can do now to help alleviate the problem. As you know, many 
uninsured children are eligible for low-cost or free health care 
coverage through the SCHIP or Medicaid, but their parents are unaware 
that their children are eligible. Since 1997, the Foundation has been 
working through its Covering Kids and Covering Kids and Families 
initiatives to address this problem. These programs have been active in 
all 50 states and the District of Columbia. State and Foundation-funded 
local coalitions have worked with almost every governor and state 
Medicaid agency to remove administrative and other barriers to 
enrolling children and adults in SCHIP and Medicaid. In all, we have 
committed more than $150 million to these efforts.
    In August 2003, we will launch our fourth annual Covering Kids and 
Families ``Back to School'' campaign that uses paid and free 
advertising to let families know that they may be eligible for low-cost 
and free health coverage through SCHIP and Medicaid. Since 1997, the 
campaign has generated more than half a million calls to state and 
federal toll-free information lines, including the federal government's 
1-877-KIDS-NOW number. Through this campaign, more than 4,000 
organizations nationwide have been actively engaged in finding, 
enrolling and retaining eligible children in Medicaid and SCHIP.
    Helping public programs work better, raising awareness about the 
problem and supporting a constructive national discussion are necessary 
but not sufficient steps for solving the problem of the uninsured. 
Another key element is reliable, non-partisan research about the 
problem and solutions. With our funds we are supporting the following 
research and education projects, among many others:
    The Institute of Medicine's six-part study on the consequences of 
being uninsured. The fifth report will be released this June, and I 
urge you to read it and all of the IOM reports on this issue.
    Covering America, a project of The Economic and Social Research 
Institute. Through this project, a widely respected and philosophically 
diverse group of health care scholars and analysts has developed a set 
of proposals that, if enacted, might help provide coverage for all 
Americans. The first round of the project produced ten proposals, which 
include new approaches using federal income tax credits, Medicaid and 
SCHIP expansions, Medicare buy-ins, and organized insurance purchasing. 
We have commissioned the Lewin Group to produce estimates of the costs 
of those proposals and their expected impact on coverage. These 
estimates will be coming out this summer, and we would welcome the 
opportunity to share them with you. We believe that these wide-ranging 
ideas, and estimates of their potential effects, will help lawmakers as 
they grapple with ways to expand health insurance coverage.
    If you or your staff, have any questions that you would like to 
have the Foundation consider for future research that might serve to 
advance our understanding of the problem or of proposed solutions, 
please do not hesitate to let me know now during your questions today 
or any time in the future.
    Last but not least, allow me to mention The Alliance For Health 
Reform, Co-Chaired by Senators Frist and Rockefeller and the National 
Health Policy Forum, headed up by Judy Miller Jones. Both projects 
provide your staff and others with objective information, well-rounded 
discussions and issue briefs on the issue of the uninsured as well as 
other urgent health policy matters.
    We fund these and many other projects, because we believe that good 
solutions will flow from good information and that such information 
must be considered separate and apart from partisan concerns.
    That's a tall order, but as president of The Robert Wood Johnson 
Foundation, I believe that is what our nation needs. This is most 
pressing for the uninsured families like the one I helped some two 
decades ago as a young physician.
    I appreciate your invitation to participate in this hearing and 
look forward to your questions and comments.

    Senator Harkin. Thank you very much, Doctor.
    I will just tell the witnesses, these lights are set for 5 
minutes.
    They are set for 5 minutes, but if you go over a couple of 
minutes, that is fine.
STATEMENT OF ARTHUR L. KELLERMANN, M.D., M.P.H., SCHOOL 
            OF MEDICINE, EMORY UNIVERSITY, MEMBER, 
            INSTITUTE OF MEDICINE
    Senator Harkin. Next we have Dr. Kellermann, professor and 
director of the Center for Injury Control, Rollins School of 
Public Health at Emory University. In 1999, Dr. Kellermann was 
elected as a member of the Institute of Medicine. He received 
his M.D. from Emory University School of Medicine and his MPH 
from the University of Washington.
    Dr. Kellermann, welcome and please proceed.
    Dr. Kellermann. Good morning, Senator Harkin, members of 
the subcommittee. I am Arthur Kellermann. I am a practicing 
emergency physician and Chair of the Department of Emergency 
Medicine at the Emory School of Medicine in Atlanta.
    I also co-chair the Institute of Medicine's Committee on 
the Consequences of Uninsurance. Over the past 2 years, our 
committee has systematically studied the consequences that lack 
of health insurance posed for individuals, families, entire 
communities, and the country.
    The committee's work is supported by The Robert Wood 
Johnson Foundation. To date, we have issued four of six planned 
reports. Our fourth report, entitled ``A Shared Destiny: 
Community Effects of Uninsurance,'' was released last month.
    In these reports, our committee reached the following 
conclusions: First, people are not uninsured by choice. Most 
are uninsured because health insurance is not offered by their 
employer or coverage is unaffordable.
    Second, health insurance contributes to improved health 
outcomes for children, as well as adults. Conversely, uninsured 
people are more likely to receive too little medical care, to 
receive it too late, and as a result, they tend to be sicker 
and to die sooner.
    Third, when even one member of a family lacks health 
insurance it can jeopardize the health and the financial well-
being of the entire family, including its insured members.
    Fourth and very important, uninsurance can adversely affect 
the financial viability of a community's health care 
institutions and providers. This, in turn, can result in 
reduced access to primary care, to specialty services, and to 
hospital care, particularly emergency medical services and 
trauma care.
    Uninsurance influences access to health care across the 
entire community, because the deliver of care to the insured 
and the uninsured is intertwined. Historically, hospitals and 
health care providers use surplus revenue from insured patients 
to subsidize the cost of providing uncompensated medical care 
to the uninsured.
    However, over the past 25 years, public policies and 
enhanced market competition have eroded these margins. The 
effects of this erosion have been felt most strongly in inner 
city neighborhoods and in rural areas with sizeable uninsured 
populations. It has also been felt in parts of the health care 
system, such as public hospitals and academic medical centers 
that serve many uninsured people.
    Through taxes, we all pay for the care of uninsured 
persons, either through local delivery of services or public 
insurance programs, such as Medicaid.
    Public funding accounts for up to 85 percent of the 
estimated $34 billion to $38 billion in uncompensated care 
costs that were incurred by uninsured patients in 2001. 
However, responsibility for financing and delivering care to 
the uninsured is badly fragmented. There is no guarantee that 
health care providers who treat uninsured patients will be 
reimbursed.
    Currently the only health care to which Americans have an 
explicit, legal right is care in the emergency department. The 
Federal Emergency Medical Treatment and Labor Act, EMTALA, 
requires hospital emergency departments to care for everyone in 
need, without regard for their ability to pay. However, no 
Federal funds are allocated to compensate hospitals or doctors 
for the cost of EMTALA mandated services.
    Unfortunately emergency department crowding, a nationwide 
problem worsened by rising uninsurance rates now threatens 
everyone's access to lifesaving emergency care, insured and 
uninsured alike.
    At the community level, local taxpayers bear much of the 
cost of caring for uninsured persons. Federal and State 
institute programs, like Medicaid, alleviate but do not 
eliminate the financial demands that uninsurance places on 
communities. The subsequent strain on State and local budgets 
can hurt community economies.
    Because many urban health departments today have been 
forced to divert scare resources from traditional public health 
activities to direct provision of health care services to the 
poor, uninsurance also poses a threat to the detection, 
reporting and treatment of infectious disease outbreaks, 
including emerging infectious diseases such as SARS or a 
potential act of bioterrorism.
    In communities with high rates of uninsurance, the capacity 
of local EMS or ambulance systems and emergency departments to 
handle a mass casualty event, such as a terrorist strike or a 
natural disaster may be compromised. Problems like these put 
everyone at risk.

                           prepared statement

    Our committee believes that there is enough evidence today 
to justify the immediate adoption of policies to address the 
problem of uninsurance in our Nation. It is both mistaken and 
dangerous to assume that uninsurance in the United States harms 
only the uninsured. At the community level, the insured and the 
uninsured have a shared destiny.
    Thank you.
    [The statement follows:]
               Prepared Statement of Arthur L. Kellermann
    Good morning, Mr. Chairman and members of the Subcommittee. My name 
is Arthur Kellermann. I am chair of the Department of Emergency 
Medicine, Emory University School of Medicine and Director of the 
Center for Injury Control, Rollins School of Public Health, Emory 
University. I also serve as Co-Chair of the Committee on the 
Consequences of Uninsurance of the Institute of Medicine. The IOM is 
part of the National Academies, originally chartered as the National 
Academy of Sciences by Congress in 1863 to advise the government on 
matters of science and technology.
    Over the past two years, this Committee has systematically studied 
the consequences that lack of health insurance poses for individuals, 
families, entire communities, and our society. After a brief downturn 
at the end of the 90's, the number of uninsured has resumed growth and 
now stands at over 41 million persons--roughly 16.5 percent of the U.S. 
population under age 65. The committee is supported by The Robert Wood 
Johnson Foundation and to date has issued 4 of its 6 planned reports. 
Our fourth report, entitled A Shared Destiny: Community Effects of 
Uninsurance, was released last month. Two more reports will follow this 
year. The fifth will estimate the economic and social costs resulting 
from uninsurance nationally. Our sixth and final report will present 
principles for assessing the potential impact of various strategies to 
expand coverage.
    With the release of the 4 reports we have produced to date on the 
consequences of uninsurance, our Committee has provided the most 
complete, evidence-based picture of the many adverse effects of 
uninsurance--from the impacts on individuals to the effects on 
families, to the consequences for entire communities. In these reports, 
the committee has reached four main conclusions:
  --First, people are not uninsured by choice. Most are uninsured 
        because insurance is not offered by their employer or coverage 
        is unaffordable.
  --Second, health insurance contributes to improved health outcomes 
        for children and adults. Conversely, uninsured people are more 
        likely to receive too little medical care and to receive it too 
        late, and as a result, they tend to be sicker and to die 
        sooner.
  --Third, when even one member of a family lacks coverage, it can 
        jeopardize the health and financial well-being of the entire 
        family, including insured members.
  --Fourth, uninsurance can adversely affect the financial viability of 
        a community's health care institutions and providers. This can 
        result in reduced access to primary care, specialty services, 
        and hospital care, particularly emergency medical services and 
        trauma care.
    The nation's more than 41 million uninsured persons are not 
isolated individuals. They are members of communities. In our 4th 
report, A Shared Destiny, we conclude that uninsurance has serious 
community wide effects. Based on our findings, we believe that it is 
both mistaken and dangerous to assume that the prevalence of 
uninsurance in the United States harms only those who are uninsured. In 
our report, we cite evidence that the financial strain of treating 
large numbers of people without health insurance can hurt the viability 
of local governments and local health care providers. This can produce 
``spillover effects'' across the community, including reduced access to 
emergency services and trauma care, loss of access to specialists, and 
reduced availability of hospital-based services. These effects can 
compromise access to health care community-wide, and ultimately damage 
a community's economy. In this report, our Committee establishes a 
framework for thinking about how the effects of uninsurance ripple 
throughout communities. We also assess the existing base of evidence 
and propose a research agenda to learn more about community-level 
effects.
    The presence of a large uninsured population can affect an entire 
community's access to health care because the delivery of care to the 
insured and the uninsured is interrelated. This connection is evident 
if we examine the streams of funding that pay for uncompensated care. 
When the proportion of uninsured residents increases, or revenue from 
other sources such as private insurance is reduced, providing 
uncompensated care to uninsured people has a severe financial impact on 
health care institutions and providers.
    Over the past 25 years, public policies to control health care 
costs, including promotion of competitive health care markets, have 
constrained the amounts that insurers pay to providers. This has eroded 
the financial support that allowed providers to subsidize their 
uncompensated care. The effects of this erosion have been felt more 
strongly in communities with large or growing uninsured populations, 
particularly inner city neighborhoods and rural areas as well as parts 
of the health care system that serve large numbers of uninsured people, 
such as public hospitals.
    Responsibility for financing and delivering care to the uninsured 
in the United States is fragmented and ill-defined. As a result, many 
state, county, and municipal facilities serve as providers by default. 
The patchwork of federal, state, and local requirements for provision 
of minimal services typically do not specify the scope of benefits, or 
guarantee that providers will be reimbursed. Public funding for safety-
net care is considerable, accounting for up to 85 percent of the 
estimated $34 billion to $38 billion in uncompensated care costs 
incurred by uninsured patients in 2001. However, there is little 
evidence that the public funds that pay for the bulk of uncompensated 
medical care for uninsured patients are being allocated or targeted 
efficiently.
    In A Shared Destiny, we find that uninsurance had adverse impacts 
on ambulatory care:
  --Individuals in lower-income families, nearly one-third of whom are 
        uninsured, delay seeking care or go without needed care more 
        often in communities with high rates of uninsurance than do 
        their counterparts in communities with fewer uninsured members.
  --Community health centers that serve a large or increasing number of 
        uninsured people report that their capacity to provide primary 
        care to their clients, insured as well as uninsured, is 
        becoming increasingly strained.
    Uninsurance can place a severe financial stress on hospital 
outpatient and inpatient departments, sometimes resulting in fewer 
available services. For example,
  --In contrast to the rest of our health care system, hospital 
        emergency departments or ERs are required by federal law to 
        care for everyone in need, without regard to their ability to 
        pay. Yet in recent years, ERs have become terribly crowded, 
        reducing everyone's access to life-saving care. Uninsurance is 
        not the primary cause of overcrowding in hospital ERs, but 
        rising uninsured rates can worsen emergency room overcrowding 
        and add financial strain on hospitals. Trauma centers are 
        affected as well. Because trauma victims are more likely to be 
        uninsured, hospitals in communities with large numbers of 
        uninsured may decline to open a trauma center, or decide to 
        scale back or close an existing center in response to financial 
        stress.
  --Higher rates of uninsurance in communities are associated with 
        decreased availability of on-call specialists to hospital ERs. 
        Primary care providers also report difficulty in obtaining 
        specialty referrals for patients, particularly those who are 
        members of medically underserved groups.
  --Hospitals in urban areas with higher rates of uninsurance have less 
        total inpatient capacity, offer fewer services for vulnerable 
        populations, such as AIDS patients, and are less likely to 
        offer trauma and burn care. Hospitals in rural counties with 
        higher uninsured rates have lower financial margins and fewer 
        intensive-care beds, offer fewer psychiatric inpatient 
        services, and are less likely to offer high-technology 
        services, such as radiation therapy.
  --When public jurisdictions respond to the financial pressure of 
        uninsurance and other stresses by converting their hospitals to 
        private ownership, the availability of vital but unprofitable 
        services may be adversely affected.
    Local taxpayers bear a heavy economic burden of subsidizing 
uncompensated health care at the community level. Federal public 
insurance programs, such as Medicaid, alleviate but do not eliminate 
the financial demands that uninsurance places on communities. Strains 
on state and local budgets that result from serving uninsured 
populations may hurt the community economically. When local governments 
need additional funds to care for uninsured people, the money must be 
raised somehow. This may require higher local taxes or budget cuts 
elsewhere. If, however, local governments cannot raise new funds for 
health care and instead cut support, providers may be forced to reduce 
their services or leave the area entirely. This can weaken a 
community's economic base and reduce access to health care for 
everyone.
    Uninsurance poses a threat to the control of communicable disease 
by delaying the detection, treatment, and reporting of infectious 
disease outbreaks, which may include emerging infectious agents such as 
SARS and perhaps someday those linked to bioterrorism. Hospital 
emergency departments and health departments play critical roles both 
in infectious disease surveillance and in caring for low-income 
populations, who are more likely to be uninsured. When high rates of 
uninsurance make emergency department crowding worse, the capacity of 
the emergency care system to handle a sudden influx of patients from a 
natural disaster or terrorist strike is compromised. To meet the burden 
of caring for the uninsured, health departments may be forced to shift 
scarce resources from traditional population-based public health 
activities, such as monitoring water quality and restaurant inspections 
to the delivery of personal health services to uninsured persons. This 
can weaken the ability of local health departments to contain outbreaks 
of infectious disease and other public health threats.
    The IOM Committee on the Consequences of Uninsurance believes that 
there is sufficient evidence to justify the immediate adoption of 
policies to address the lack of health insurance in our nation. It is 
both mistaken and dangerous to assume that the prevalence of 
uninsurance in the United States harms only those who are uninsured. 
When analyzing health care at the community level, it is evident that 
the insured and the uninsured have a shared destiny.
    Thank you for inviting me to present the work of the IOM and the 
Committee on the Consequences of Uninsurance. I am happy to answer any 
questions that you may have about our work and to provide the 
Subcommittee with more copies of reports, executive summaries, and CD-
ROMs. More information about the IOM Committee is available at http://
www.iom.edu/uninsured.

    Senator Harkin. Thank you, Dr. Kellermann.
    Would you give me the name of that bill again? You called 
it the Federal Emergency----
    Dr. Kellermann. EMTALA is the nickname. It is the Federal 
Emergency Medical Treatment and Labor Act. It used to be called 
the Emergency Medical Treatment and Active Labor Act. And it is 
the only legal right to health care that most Americans have.
    Senator Harkin. Medical Treatment----
    Dr. Kellermann. EMTALA is the nickname.
    Senator Harkin. EMTALA. I need more--I am going to need 
more information on that.
    Dr. Kellermann. And it is a classic unfunded mandate.
    Senator Harkin. Yes.
    Dr. Lavizzo-Mourey. Non-funded mandate.
    Senator Harkin. Non-funded mandate. Well, I need to know 
more about that. Thank you very much, Dr. Kellermann.
    Dr. Kellermann. You are welcome.
STATEMENT OF CAROLYN F. SCANLAN, PRESIDENT AND CHIEF 
            EXECUTIVE OFFICER, HOSPITAL AND 
            HEALTHSYSTEM ASSOCIATION OF PENNSYLVANIA
    Senator Harkin. Next we will turn to Carolyn Scanlan. Since 
June 1995, Ms. Scanlan has served as the president and CEO of 
the Hospital and HealthSystem Association of Pennsylvania. Ms. 
Scanlan received a degree in psychology from Skidmore College 
and a masters degree in health services administration from 
Russell Sage College.
    Ms. Scanlan, welcome to the committee. As I said--I do not 
know if you were around, but I said earlier that all the 
statements would be made a part of the record, and so please 
proceed as you desire. Thank you.
    Ms. Scanlan. Thank you, Senator, and thank you for 
requesting these hearings. For the hospitals in Pennsylvania, 
the issues of access to care for all is very important, and we 
are glad to be here representing the chairman's State.
    We represent the 272 licensed acute care, rehab, and psych 
hospitals in Pennsylvania. And our mission, along with our 
members' mission is to advance the health of individuals and 
the communities throughout Pennsylvania. We do commend you for 
holding this hearing and appreciate the opportunity for 
expressing our views.
    Hospitals, as we have heard from the prior two witnesses, 
play a key role in the patchwork system that has developed in 
our country for the provision of health care to the low income 
and uninsured individuals. We provide care 24 hours a day, 7 
days a week, to all who need it, and in particular, through our 
emergency departments through EMTALA requirements, which we 
would follow legally, but which we also believe care in the 
emergency room is a moral imperative for hospitals.
    We are proud of what we do in Pennsylvania. In 1 year, 
without any public hospitals--I want to repeat that--there are 
no public hospitals in Pennsylvania, neither at the State 
level, the county level, or the city level. And so the 
voluntary, not for profit system in Pennsylvania absorbs all of 
what we talk about.
    We took care of nearly 2 million people last year. We took 
care of 33 million people in an outpatient setting. We provided 
nearly $1 billion in uncompensated care, $19 billion of care 
that was reimbursed.
    We employ almost 300,000 people in the State, and we are 
one of the major contributions to the economic well-being of 
Pennsylvania. For that, we think we have a mission and a role.
    As we heard from Dr. Lavizzo-Mourey, The Robert Wood 
Johnson Foundation has been particularly involved in this 
issue. In a recent study that they did in preparation for the 
care of the uninsured, we indicated that there are 2.4 million 
Pennsylvanians out of 12 million--that is our overall 
population--under the age of 65 that are--were uninsured during 
the period of a year. That is nearly 10 percent or 20 percent 
of our population. Seventy percent of that group was uninsured 
for a period of 6 months.
    The health and--the uninsured has been a concern for us for 
many years. And we have worked with the State for outreach and 
active enrollment of children in our State's Children's Health 
Insurance program, which has been around for many years prior 
to the federally mandated program.
    Medical assistance, which is another form of being able to 
get uninsured people health care, and a newly established 
program in our State for low-income working adults called Adult 
Basic, which is funded from a portion of Pennsylvania's share 
of the national tobacco settlement funds. But that is not 
enough. And we need to be able to expand this further.
    Doctors, nurses, and hospital executives entered the health 
care field because we care about the quality of health care 
that people receive. We care about the health of the entire 
State. And we see people, children, adults, and seniors who are 
not receiving proper care simply because they cannot afford it. 
And that needs to change.
    Our emergency departments, as Dr. Kellermann has indicated, 
across--as evident across the country are overcrowded. Forty-
five percent of our hospitals are operating in what they 
consider over capacity. And more and more of the hospitals have 
to divert their ambulances to other facilities because they 
lack the staff and space to care for those additional patients.
    Our emergency departments do not have the capacity to take 
on the even greater burden of the growing uninsured. And even 
more importantly, as we all already heard, we know all too 
well, that this setting is not the most appropriate or cost 
effective treatment for chronic diseases such as hypertension, 
asthma and chronic disease, and certainly does not allow for 
ongoing continuity of care around prevention and primary care.
    In my statement, I have a list of six items, which we 
believe would help to incrementally work off of existing 
programs that are in place, both for children, for Medicaid 
adults, tax policies, as well as others. But in the end, we are 
all going to have to approach and look at the overall programs 
and make some fundamental changes on how we view care for the 
uninsured.

                           prepared statement

    The partnership between Federal and State government, and 
health care providers is essential in order to make sure that 
in the Commonwealth of Pennsylvania, as well as across this 
Nation, the care and the health of all of our citizens is 
appropriate, acceptable, and leads to quality lives.
    Thank you.
    [The statement follows:]
                Prepared Statement of Carolyn F. Scanlan
    Mr. Chairman and members of the Subcommittee, my name is Carolyn F. 
Scanlan, and I am president and chief executive officer of The Hospital 
& Healthsystem Association of Pennsylvania (HAP). HAP is located in 
Harrisburg and has more than 250 member hospitals, health systems, and 
other health related organizations serving patients across 
Pennsylvania. The mission of HAP is to advance the health of 
individuals and communities and to advocate for and provide services to 
members who are accountable to the patients and communities they serve. 
Mr. Chairman we commend you for holding this hearing and appreciate the 
opportunity to present our views on health care access and 
affordability.
    Hospitals play a key role in the patchwork system that has 
developed in our country for the provision of health care to low income 
and uninsured individuals. Our over 250 member hospitals provide 24 
hour per day, seven days per week, access to health care to all without 
regard to ability to pay. Pennsylvania hospitals and health systems 
provide over $980 million in uncompensated care annually. We believe 
that a healthy hospital and health care system is vital to the ability 
of both urban and rural communities alike to care for their most 
vulnerable citizens.
    A recent report by The Robert Wood Johnson Foundation Hospitals 
estimates that approximately 2.4 million Pennsylvania residents under 
age 65--almost one out of four--were uninsured at sometime in 2001-
2002. About 70 percent of this group was uninsured for a period of over 
six months.
    The plight of the uninsured is something hospitals are acutely 
aware of and concerned about. The health care of the uninsured has been 
a concern for us for many years. We have worked with the state to 
outreach and actively enroll children into our state's Children's 
Health Insurance Program (CHIP), Medical Assistance, and the newly 
established program for low-income, working adults, adultBasic. But 
these are not enough to stem the tide. One solution for the continuing 
problem of the uninsured is to expand insurance coverage. It is 
something that is the right thing to do to help people in our 
community.
    Doctors, nurses and hospital executives entered the health care 
field because we care about the quality of health care people receive. 
Everyday we see people--children, adults and our seniors--who are not 
receiving proper care simply because they cannot afford it. And that 
needs to change.
    But we're also concerned about addressing the problem of the 
uninsured because we recognize the impact the cost of treating the 
uninsured has on our ability to provide the best possible care. While 
Pennsylvania is home to over 250 hospitals, there are no public 
hospitals in Pennsylvania, which makes us very different from the other 
larger states. With uncompensated care costs growing, it directly 
affects our ability to provide the best care possible. This represents, 
on average, over 4.8 percent of hospital's net patient revenue, but it 
can range as high as 20 percent. How many fiscally responsible entities 
can continue to do business when almost 5 percent of their business is 
unpaid, and in some cases 15-20 percent? The reality is they cannot and 
in Pennsylvania we continue to see service elimination, closure of 
hospitals, and significant stresses on those that remain.
    Hospitals provide care 24 hours-a-day, seven days-a-week to our 
communities--when health care needs arise, when disaster strikes a 
community, when an uninsured child needs care, when others have closed 
for the night, when there's no place else to turn. Many times those 
without health insurance see the emergency room of their local hospital 
as the only place to go to for care.
    Our emergency departments are already overcrowded. 45 percent of 
hospitals in the mid-Atlantic region of our country say their emergency 
departments are operating ``over'' capacity. More and more, hospitals 
are forced to divert ambulances to other facilities because they lack 
the staff and space to care for additional patients. Our emergency 
departments cannot take on a greater burden of treating the uninsured. 
Even more important, as we know all too well, this setting does not 
allow for the most appropriate or cost effective treatment of chronic 
diseases such as hypertension, asthma and other chronic illnesses, and 
it does not allow for ongoing preventive or primary care.
    Collectively, we have crafted national and state partnerships in 
regard to Medicaid, children insurance programs, and other programs to 
expand access to health care. However, there are still large numbers of 
Americans and Pennsylvanians who are uninsured. And, as you, at the 
federal level, and Pennsylvania state government address this year's 
government budgets, these expanded programs and the providers who 
deliver the health care programs are in jeopardy. Therefore HAP, in 
conjunction with its national partner the American Hospital 
Association, supports legislation that:
  --Expands coverage to parents of children enrolled in SCHIP and 
        Medicaid; simplifies the enrollment process, and expands 
        coverage to children through the age of 20.
  --Expands Medicaid and SCHIP allowing states to include legal 
        immigrant children and pregnant women. And allow states to 
        expand Medicaid to include single, childless adults.
  --Establish payment accountability mechanisms that ensure adequate 
        Medicaid payments for hospitals.
  --Creates refundable tax credits to make health care coverage more 
        affordable for low-income individuals and their families.
  --Establishes a tax credit for employers that make additional health 
        insurance premium contributions on behalf of their low-income 
        employees.
  --Extends the period for which COBRA is available and provides a 
        refundable tax credit for individuals and families to help 
        offset the cost of coverage.
    It is critically important that both the federal and state 
governments fund the existing programs, including Medicaid, 
appropriately in order to continue meeting the health care needs of our 
most vulnerable people. Nationally, nearly 45 million poor, disabled 
and elderly people rely on Medicaid for their care. The Pennsylvania 
Medicaid program last year met the health care needs of approximately 
1.7 million disadvantaged Pennsylvanians, many of them children and our 
senior citizens. Over its nearly 40-year history, Medicaid truly has 
become the nation's health care safety net.
    The importance of this role has never been more critical than 
today. The current economy has forced many Americans out of work, 
pushing them and their families into the ranks of the uninsured. 
Medicaid has historically served as a buffer to the perils of an 
uncertain economy by providing access to health services for those who 
cannot afford it. In hard economic times, the numbers of those eligible 
for Medicaid typically increase. Pennsylvania currently faces a budget 
shortfall that could be as high as $2 billion, and projections are 
pushing that figure even higher next year. Our state's Medicaid program 
is struggling to make ends meet and will be enacting ``draconian'' 
payment cuts to hospitals and other providers as a means of assuring 
recipients continued eligibility. This will be devastating to our 
hospitals.
    It is imperative that any federal action to address the current 
crisis, and any federal efforts to change the current structure of the 
Medicaid program, must not put further financial pressure on the states 
nor diminish the guarantee of coverage for our most vulnerable 
Americans.
    HAP is concerned about the Administration's proposal, which seeks 
fundamental change to the Medicaid program. The proposal reduces and 
weakens coverage for vulnerable populations. It also appears to 
dismantle the disproportionate share hospital payment (DSH) program. 
DSH is our nation's primary source of support for safety net hospitals 
that serve the most vulnerable Americans--the uninsured, the 
underinsured and Medicaid beneficiaries.
    In Pennsylvania, a 2001 report of a bipartisan committee of our 
state legislature found that in hospitals are paid an average of only 
$.74 for every dollar in services provided to Medicaid recipients, and 
provide nearly $1 billion in uncompensated care annually. Eligible 
Pennsylvania hospitals were only paid $255 million in DSH (state and 
federal) in fiscal year 2002. Eliminating DSH would only further 
exacerbate the financial deterioration of Pennsylvania's hospitals, 70 
percent of which lost money last year on patient care. This underscores 
the importance of the DSH program in maintaining access to health care 
for Pennsylvania's poor. It is the poor, disabled and elderly that 
would be affected.
    HAP believes that the current fiscal and economic crises faced by 
states demands immediate and meaningful federal support. That support 
could be in the form of an increase in the federal Medicaid matching 
percentage or other relief that would allow states to use such funds to 
help support their Medicaid programs, as we all work to improve 
economic conditions. States should not be forced to radically transform 
their programs to receive such fiscal relief, nor should they be 
compelled to reduce future spending to repay the federal support given 
now.
    HAP believes that this nation has an obligation to care for the 
neediest of our society. Federal accountability to a set of meaningful 
benefits for this population must be maintained, whether delivered 
through traditional fee-for-service or through managed care. An 
approach that requires coverage of the mandatory Medicaid population, 
but allows states absolute flexibility in deciding which non-mandatory 
populations and health care services will be covered in the future, 
begins to erode the guarantee to coverage that has long been a 
fundamental feature of the Medicaid program. Optional services, but 
medically necessary services, such as prescription drugs for the poor, 
elderly, and disabled, could be eliminated. Health services to more 
than 12 million children, parents, disabled and elderly people could 
stop if these populations are dropped from Medicaid, thereby swelling 
the ranks of the uninsured, and ultimately stressing the nation's 
already fragile health care system.
    HAP believes that adequate provider payment is critical to ensuring 
that Medicaid beneficiaries have access to needed quality health care 
services. Current Medicaid law has minimal protections that are mostly 
geared to making the payment rate-setting process more public. HAP 
advocates that these current protections be strengthened.
    HAP also believes that federal oversight of state Medicaid programs 
serves as an important tool in protecting access to health care 
services for vulnerable people. The federal government oversight role 
ranges from requiring states to oversee Medicaid managed care plans to 
make certain enrollees have access to quality health care providers, to 
assuring the financial integrity of the program by making certain 
states spend their Medicaid funds on health care. The Administration's 
approach would significantly weaken this oversight role for the federal 
government and virtually eliminate state accountability for the 
management of their programs.
    The Medicaid program has played a vital role in providing access to 
health care services to millions of Americans over its 40-year history. 
It has provided vitally needed services to pregnant women, children, 
poor elderly, the disabled and other medically needy citizens. The 
current fiscal crisis faced by states should not be the impetus for 
dismantling the program and abandoning its mission of serving those in 
our country who need help the most. States need immediate and 
meaningful fiscal relief and any flexibility granted state governments 
should not put at risk the essential mission of the Medicaid program. 
Abandoning people's health care needs will not help turn our economy 
around.
    HAP stands ready to assist the committee as it works to meet the 
challenge of sustaining access to health care for the poor. At the same 
time, to assure the vitality of the health care system in Pennsylvania, 
we need to address the Medicare program along with the challenges of 
treating the uninsured and the underfunding of the Medicaid program.
    Medicare patients represented over 55 percent of Pennsylvania 
hospital's inpatient admissions in 2002. Medicare hospital payment 
increases historically have been less than government-acknowledged 
costs. On average, Pennsylvania hospitals' have only a 4.3 percent 
increase in their Medicare inpatient payments over the past six years, 
while hospitals costs increased by 22 percent nationally over the same 
time period. Each year Pennsylvania hospitals have had to cope with a 
shortfall in Medicare inpatient payments. In 2002, 32.6 percent of 
Pennsylvania hospitals had a negative total Medicare margin. This is 
largely due to the $3.1 billion cuts hospitals experienced in the 
Medicare program with the Balanced Budget Act, even after the partial 
restoration of funding with subsequent legislation. The entire Medicare 
program must be adequately funded, including outpatient services, 
graduate medical education, psychiatric and rehabilitation units and 
skilled nursing.
    In 1998, 28 percent of Pennsylvania hospitals' bottom lines were in 
the red. Medicare and Medicaid cuts have spread the red ink and now 
more than 40 percent of Pennsylvania hospitals have negative bottom 
lines. The statewide average total margin of 2.26 percent is far below 
the 4 percent minimum margin level that most economists consider 
essential to sustain financial viability. Yet Pennsylvania hospitals 
are operating efficiently. A 2001 report to the state's Legislative 
Budget & Finance Committee found Pennsylvania hospitals to be one of 
the most efficient in the nation with costs 6 percent to 7 percent 
lower than expected. Pennsylvania hospitals have eliminated as much 
capacity as possible. The number of set up and staffed beds has 
declined 18 percent since 1995.
    Yet along with reimbursement pressures and aggressive efforts to 
operate efficiently, Pennsylvania hospitals are facing skyrocketing 
costs. Hospitals' incurred costs of providing care increased 44.6 
percent from 1997 to 2001. Labor costs are rising due to continuing 
workforce shortages. Between 1997 and 2001, hospitals labor costs grew 
38.8 percent. Hospitals' costs for pharmaceuticals, supplies, and other 
services increased 24.1 percent from 1997 to 2001. Blood costs 
increased more than 20 percent in the last year and more than 117 
percent since 1997. Spiking energy prices are wreaking havoc with 
hospital operating budgets. Energy costs rose 4.7 percent in March and 
7.4 percent in February. In 2001-2002, Pennsylvania hospitals spent 
more than $8.3 million on emergency preparedness and expect to spend 
$24.6 million this year alone. Hospitals are also anticipating a 
growing capacity crisis as the nation is seeing the 15-year decline in 
hospital inpatient volume indicators leveling out. Therefore, the 
number of acute care beds needed nationally is expected to increase 46 
percent by 2027. Given Pennsylvania's aging population, we expect the 
demand for access to acute care to grow in our state as well.
    It is important to take a moment to specifically address 
Pennsylvania soaring medical liability insurance premiums which have 
forced physicians to leave practice, move or suspend services and 
resulted in overwhelming financial burdens to hospitals. Medical 
liability premiums rose an average of 86 percent over the past 12 
months, and 23 percent of hospitals reported premium increases 
exceeding 200 percent. The federal government--through its funding of 
Medicare, Medicaid and other programs--pays an additional $28 billion 
to $47.5 billion a year for health care due to the costs of medical 
liability coverage and defensive medicine. From 1975 to 2000, medical 
liability premiums rose 505 percent in the nation, Pennsylvania's 
increase was more than 1,400 percent during this time. States with 
limits on non-economic damages in medical liability cases saw premiums 
rise the least: California premiums rose just 167 percent from 1975 to 
2000. Only a few short years ago, there were more than 30 medical 
liability insurers active in the Pennsylvania market. Today there are 
only two major insurance companies left.
    Nearly 7 in 10 Pennsylvanians believe the medical liability crisis 
will likely affect their medical care. Four in 10 Pennsylvania adults 
say they are very concerned they will have trouble finding a doctor 
when they need one due to the rising cost of medical liability 
insurance. A national survey also showed that 78 percent of Americans 
are concerned that access to health care may be compromised because of 
soaring liability premiums. Some 71 percent agree that medical 
liability lawsuits are one of the main factors behind rising health 
care costs.
    The uninsured, reimbursement cuts and underfunding in Medicare and 
Medicaid, and growing cost pressures including medical liability 
premium increases have forced hospitals to reduce services, layoff 
staff, close programs, and forego modernizing equipment and buildings. 
At the same time the need for hospital services is growing and 
Pennsylvania's hospitals are struggling to maintain this level of care 
and service to their communities.
    The foundation of one of our state's most important economic 
assets--our health care system is eroding. The federal government plays 
a critical role in keeping the promise of providing health care to 
America's elderly and poor by adequately funding the Medicare and 
Medicaid programs. Pennsylvania's hospitals cannot continue to be 
reimbursed less than the cost of care and provide care to the 
uninsured. If hospitals are to continue to provide the care patients 
and communities need, then immediate action must be taken.
    Mr. Chairman, I want to thank you for the opportunity to comment on 
this important challenge facing health care today. Health care access 
and affordability affects families and communities throughout the 
Commonwealth as well as other parts of the nation. We appreciate your 
help in trying to ensure that affordable health care is available to 
Pennsylvania families. I would be happy to try to answer any questions 
you or the other members of the Subcommittee may have.

    Senator Harkin. Ms. Scanlan, thank you very much for a very 
strong statement. I will get back to questions later. Very 
good. Thank you.
STATEMENT OF LANETT KANE, R.N., PEOPLE'S CLINIC, CEDAR 
            FALLS, IA
    Senator Harkin. Next we go to Lanett Kane. Ms. Kane is now 
serving as a nurse at the People's Clinic in Cedar Falls, Iowa. 
She has worked at the clinic for over 13 years, serving in a 
variety of positions. And Ms. Kane resides in Cedar Falls, 
Iowa.
    Ms. Kane, welcome to the hearing.
    Ms. Kane. Good morning, and I am honored to be here. Again, 
my name is Lanett Kane. I work at Peoples Community Health 
Clinic in Waterloo, Iowa as a family practice registered nurse.
    I have worked at PCHC for 13 years and, of course, have 
done a variety of duties there. I have been a nurse for a 
little over a year. At PCHC, I work for less money and have no 
opportunity in getting help in repaying roughly $12,000 in 
student loans compared to similar jobs in the community. But I 
decided to stay at PCHC due to the diversity in our patient 
population and our mission statement, which is to serve the 
underserved.
    Working at PCHC has shown me first hand the hardships 
people endure due to the lack of or shortage of insurance. I 
have also seen many successes when people with chronic health 
problems finally have access to health care coverage. Under 
insurance/no insurance is an epidemic problem at my job. I have 
the rare opportunity not only to witness the devastating 
effects on our patients, but I also realize the devastating 
impact poor health care has in our society as a whole.
    PCHC began 27 years ago in the basement of a church with 
one doctor and one nurse. Currently we serve 13,048 patients 
with 53,393 encounters. Of those encounters 39 percent were 
Medicaid, 6 percent were Medicare, 24 percent were third-party 
payer, and 31 percent were self-pay.
    Taking care of a large number of patients who have 
inadequate health care is difficult and costly. Seventeen 
percent of our patients are limited English speaking and 
require translation services.
    We have a full-time position to enroll patients in the 
patient assistant program for medications. For patients with 
chronic medical problems, it takes a team approach to make a 
difference--doctors, nurses, aids, nutritionists, social 
worker, homeless outreach worker, case managers, substance 
abuse counselors, and clinical pharmacists.
    Most of the ancillary services that we provide are not 
reimbursed by third-party payers. The limited education, 
increased social and economic struggles of our patients not 
only affects the productivity of our providers, but also 
affects our ability to recruit and retain providers.
    There are so many stories I could share that I see on a 
daily basis, it is hard to narrow it down to just a few that 
epitomize the crisis that we face at PCHC everyday. One of them 
is a family, both parents work. They bring in $2,800 a month 
before taxes. They pay $220 a month for their health insurance, 
but they have to pay a $500 deductible per person before the 
insurance kicks in. The insurance coverage does not pay for 
preventative care or prescriptions.
    One of the children has an ongoing medical issue which 
requires daily medication which costs $20 to $30 a month. 
Within 2 months this family had three trips to our office, two 
acute visits at $20, a well child visit with immunizations cost 
them $300, and two medications at $40. Mom's statement to me 
while I was giving the immunizations was ``I do not even know 
why we have insurance.''
    Once a child turns 19, they are no longer covered on their 
parent's insurance, or they do not qualify for Title 19, or 
they do not make enough money.
    One of our patients, who had Diabetes Type 1, turned 19 and 
no longer had insurance to cover her medicine. She struggled to 
pay for medicines and rarely was able to check her blood sugars 
on a glucometer in order to adjust her insulin. She attempted 
to work, but lost several jobs because of her health. 
Eventually, once her health dramatically declined, she 
qualified for Medicare/Medicaid. At this point her health 
insurance, our tax dollars, covered 4 years of dialysis, two 
heart surgeries, and numerous hospital stays secondary to 
complications of her diabetes. She died at age 36.
    It is not unusual at our clinic or the ER to see patients 
arrive seriously ill because they delayed getting treatment due 
to lack of medical coverage. I will never forget a 40-year-old 
man who came to the clinic with a severe life threatening 
infection to his leg. The infection started as a small skin 
infection around his ankle. After 5 days of waiting, the 
infection spread up his leg, to the tissue below his skin and 
into his bloodstream. The infection had already begun affecting 
other major organs. He was having a difficult time breathing 
and his blood pressure was very low. He was rushed to the ER 
and air lifted to the University of Iowa Hospital.
    He eventually recovered from this infection but not before 
having two leg surgeries, one of those being an amputation, 10 
days in the ICU on life support, and a total of 6 weeks in the 
hospital. Had this patient been seen in the beginning, it would 
have cost approximately $65.
    Health care is much more expensive for people with no 
insurance. This group of people has nobody negotiating their 
group rates.

                           prepared statement

    Our society loses when someone loses his leg because of 
delayed treatment due to no insurance. Our society loses when 
someone is hospitalized as a direct result of inability to 
afford medicines. Our society loses when an uninsured person 
has major surgery and will need to declare bankruptcy due to 
inability to pay. Our society loses when a person dies at the 
age of 36 due to inadequate health care coverage. We cannot 
afford to lose any more.
    [The statement follows:]
                   Prepared Statement of Lanett Kane
    My name is Lanett Kane and I work at Peoples Community Health 
Clinic in Waterloo, Iowa as a family practice registered nurse.
    I have worked at PCHC for thirteen years. In the course of my time 
there I have been a scheduling clerk clinic aide, medical records clerk 
and lead worker, homeless outreach worker, peri-natal case manager, and 
accounts receivable clerk. I have been a nurse for a little over a 
year. At PCHC, I work for less money and have no opportunity in getting 
help in repaying about $12,000 in student loans compared to similar 
jobs in the community. But I decided to stay there due to the diversity 
in our patient population and its mission statement: to serve the 
underserved.
    Working at PCHC has shown me first hand the hardships people endure 
due to the lack of or shortage of insurance. I have also seen many 
successes when people with chronic health problems finally have access 
to health care coverage. Under insurance/no insurance is an epidemic 
problem and at my job, I have the rare opportunity to not only witness 
the devastating effects on our patients, but I also realize the 
devastating impact poor health care has on our society as a whole.
    PCHC currently serves 13,048 patients with 53,393 encounters. Of 
those encounters 39 percent were Medicaid, 6 percent were Medicare, 24 
percent were third party payer, and 31 percent were self-pay.
    There are so many stories I could share, it is hard to narrow it 
down to a few that epitomize the crisis that we face at PCHC everyday. 
I would like to begin with a family of five that I have treated. Both 
parents work and bring home about $2,800/month before taxes. They pay 
$220/month for health insurance for themselves and their three 
children, but have to pay $500 deductible per person before the 
insurance will kick in. This insurance coverage does not pay for 
preventative care or prescriptions.
    One of the children has an ongoing medical issue which requires 
daily medication which costs the family between $20 and $30/month. 
Within two months this family had three trips to our office: two acute 
visits at $20, a well child visit with immunizations at $300, and two 
medicines at $40. Mom's statement while in the office was, ``I don't 
even know why we have insurance.''
    Once a child turns nineteen they are no longer covered on their 
parent's insurance, or they don't qualify for Title 19, or they don't 
make enough money to afford health insurance. And college age 
adolescents/young adults need to have access to health coverage. We see 
many health concerns in this age group at PCHC. Many cannot afford the 
office visit or the medicine to treat STD's, depression, stomach 
ulcers, obesity, diabetes, beginning symptoms of hypertension, and 
common illnesses. One of our patients, who had Diabetes Type 1, turned 
nineteen and no longer had insurance to cover her medicine. She 
struggled to pay for medicines and rarely was able to check her blood 
sugars on a glucometer in order to adjust her insulin. She attempted to 
work but lost several jobs because of her health. Eventually, once her 
health dramatically declined, she qualified for Medicare/Medicaid. At 
this point her health insurance (our tax dollars) covered four years of 
dialysis, 2 heart surgeries, and numerous hospital stays secondary to 
complications of her diabetes. She died at the age of 36.
    It is not unusual at our clinic or the ER to see patients arrive 
seriously ill because they delayed getting treatment due to lack of 
medical coverage. I will never forget a 40 year-old man who came to the 
clinic with a severe life threatening infection to his leg. The 
infection started as a small skin infection around his ankle. After 
five days of waiting, the infection spread up his leg, to the tissue 
below his skin and into his bloodstream. The infection had already 
begun affecting other major organs. He was having difficult time 
breathing and his blood pressure was extremely low. He was rushed to 
the ER and air lifted to University of Iowa Hospital. He eventually 
recovered from this infection but not before having two leg surgeries, 
one of those being and amputation of the leg, 10 days in the ICU on 
life support, and a total of 6 weeks in the hospital. Had this patient 
been seen at the beginning of his illness, his office visit and 
appropriate medication would have been a combined cost of about $65.
    Recently I treated a 42 year-old female with diabetes Type 2 and 
hypertension. She has a four year college degree and is a teacher at a 
small private school that is unable to offer health coverage to 
employees. Due to lack of insurance she is unable to afford all of her 
medications to control her diabetes and hypertension. Her income is too 
high to qualify for help through pharmaceutical patient assistance 
program. Her chronic illnesses are taking a toll on her body and she 
now is requiring heart surgery. A hospital stay for open heart surgery 
is $30,000. How will she pay for that with an income of $18,500/year? 
She works, teaches our children, pays her taxes, and this is the best 
we have to offer her!
    It's not just the people we treat at PCHC who struggle with rising 
health costs. Like other small businesses, PCHC is feeling the affect 
of trying to offer its employees adequate health care coverage. 
Currently it costs $208/month for family coverage thru PCHC and $82/
month for single coverage. Some of our employees are unable to afford 
the insurance or have a hard time paying the deductible or the co-pay.
    Our society loses when someone loses his leg because of delayed 
treatment due to no insurance. Our society loses when someone is 
hospitalized as a direct result of inability to afford medicines. Our 
society loses when an uninsured person has major surgery and will need 
to declare bankruptcy due to inability to pay. Our society loses when a 
person dies at the age of 36 due to inadequate health care coverage. We 
can't afford to lose any more.

    Senator Harkin. Ms. Kane, thank you very much, a very 
powerful statement. Thank you. Yes, you have seen it.
STATEMENT OF CHRIS PETERSEN, FARMER, CLEAR LAKE, IA
    Senator Harkin. Next we turn to Mr. Chris Petersen. Mr. 
Petersen is a family farmer in rural Iowa. He is the vice 
president of the Iowa Farmer's Union, president of the Prairie 
Land Farmer's Union, and a member of the National Farmers 
Union. Mr. Petersen is a lifelong Iowan and currently resides 
in Clear Lake, Iowa, with his wife and two children.
    Mr. Petersen, welcome.
    Mr. Petersen. Thank you, Senator Harkin. I appreciate this 
opportunity to talk about health care. Again, my name is Chris 
Petersen. I am a family farmer from Clear Lake, Iowa. I am here 
today to share my personal story and the stories of other rural 
farmers in Iowa about the lack of health care available to us.
    Years ago when I started farming, I worked in a factory 
where I received health benefits, but in 1992 I started farming 
full time on my own. I had to find my own health insurance for 
me and my family, so I signed up on a private policy. We stayed 
on that for about 3 years until profits declined from the 
family farm, and with the increasing costs of health insurance 
at that time also, we dropped the insurance.
    In 2001, because of the decline in farm profits, I had to 
file a personal bankruptcy. Since money was tight my family and 
I were forced to go without any health coverage at all from 
1995 till January 2001. My wife, two teenage kids and I were 
uninsured for those 5 years. During that time, if we got sick, 
we could not afford to go to the doctor. We just had to hope 
for the best and put faith in the Lord.
    Since 2001 I have gone to part time farming and taken other 
jobs, and am finally able to again buy health insurance from a 
private insurer. But the price for that insurance has doubled 
since the last time we had insurance. My wife and I are in our 
forties now. And it is a priority that we have access to health 
care that we need. Unfortunately, over the last 2\1/2\ years 
the cost has accelerated to the point we may have to reconsider 
our options.
    As costs have increased, we have done everything possible 
to make sure we could afford the monthly fees for our health 
insurance. We have cut our dental and vision benefits. We have 
cut some of the preventative care, such as out-of-hospital 
blood work, increased our deductible from $1,000 to $3,000. 
Now, we are basically left with insurance for catastrophic 
health emergencies, and even with just that we pay nearly $400 
a month. And the cost of our insurance is still rising, to the 
point at which it is outpacing our ability to pay for it.
    At this point, we might be forced to join the other 
millions of people lacking health insurance in this country 
again. And if we lose our health insurance, how on earth are we 
going to pay for my wife's and I--we are on blood pressure 
medication; I am on Nexium--the very medication that prevents 
us from getting sick in the first place?
    I got another surprise here about 6 weeks ago, I applied 
for some life insurance and through the diagnostic testing, I--
they found out I am borderline diabetic, so I have got that 
facing me now. So that is another good reason to have health 
insurance.
    As a family farmer, I do not have 401(k)s, vacation time, 
or health care benefits. I have had to choose between health 
care and shelter and food in the past, and we are almost at 
that point again. Because I and my wife who also has worked 
full-time throughout our marriage as an assistant director of 
daycare where they have absolutely no benefits, we earned 
enough income not to be eligible for Medicaid. Nevertheless the 
cost of keeping my wife and I covered, I feel, is outrageous.
    My kids are 22 and 19 years old now. I have discouraged 
them from farming, and urged them instead to work in town. They 
have found average-paying jobs that, yes, they offer health 
insurance, got to pay for it, but they do not use it because 
they cannot afford to pay for it. It would cost at least one-
third of their paychecks. These are kids trying to begin life.
    My daughter, she is going to be getting married here in a 
few months. And, you know, there is priorities. You need a 
home. You need food, things like that.
    Both my kids are going without health care because it is 
just too expensive, and, of course, they do not qualify for 
Medicaid.
    There are many other families in Iowa who are even worse 
off. A good friend of mine has struggled with health problems, 
including rheumatoid arthritis and lupus, since 1994. When his 
lupus becomes active in his system, the rheumatologist tries to 
find other medications to bring it back under control and into 
a dormant state again, which is extremely expensive. This 
friend of mine has raised hogs for his entire life, but can no 
longer do so because of his medical condition. He is currently 
applying for disability benefits, but even if he qualifies, he 
will not receive any health care assistance for 2 years.
    Although my friend and his family have health insurance 
through the Farm Bureau, right now, without the co-pays or 
anything, they are paying $1,111.30 a month for health care 
coverage.
    I seen the lights on. I have got other examples here. It is 
just atrocious what is going on out in rural America. I feel we 
were in a vicious cycle, without being able to have access or 
affordable preventative care, family farmers like me and my 
friends wind up being forced to emergency rooms to obtain care, 
which is very expensive. And that is why farm families like my 
own send their spouses and kids to town to get jobs. But in 
Iowa, as in many other places, there are less and less of those 
good-paying jobs that have health care. So it is a vicious 
circle we are creating here.

                           prepared statement

    We need to do something to make health care more affordable 
and accessible. If we do not fix this problem, it is only going 
to get worse. And, you know, if the cost of health care keeps 
accelerating, who and how many Americans will have the ability 
to pay for it?
    Thank you for inviting me to share this.
    [The statement follows:]
                  Prepared Statement of Chris Petersen
    Thank you Senator Harkin: My name is Chris Petersen, and I'm a 
farmer in Clear Lake, Iowa. I'm here today to share my personal story 
and the stories of other rural farmers in Iowa about the lack of health 
care available to us.
    Awhile back I worked in a factory where I received health benefits, 
but in 1992 I started farming full time on my own. I had to find my own 
health insurance for me and my family, so I signed up on a private 
policy. We stayed on that for about three years until profits from 
family farming dropped, and in 2001 I had to file for bankruptcy. Since 
money was tight my family and I were forced to go without any health 
coverage at all from 1995 to January 2001. My wife, two teenage kids 
and I were uninsured for those five years. During that time, if we got 
sick, we couldn't afford to go to the doctor. We just had to hope for 
the best.
    Since 2001 I've gone to part time farming and taken other jobs, and 
am finally able to again buy health insurance from a private insurer. 
But the price for that insurance has doubled since the last time we had 
insurance. My wife and I are in our forties now. It's a priority that 
we have access to the health care we need. Unfortunately, over the last 
two and a half years the cost has accelerated to the point that we may 
have to reconsider our options.
    As costs have increased, we've done everything possible to make 
sure we could afford the monthly fees for our health insurance. We've 
cut our dental and vision benefits, cut some preventative care, such as 
out-of-hospital blood work, and increased our deductible from $1,000 to 
$3,000. Now, we're basically left with insurance for catastrophic 
health emergencies, and even with just that we pay nearly $400 every 
month. And the cost of our insurance is still rising, to the point at 
which it's outpacing our ability to pay for it. At this rate, we might 
be forced to join the other millions of people lacking health 
insurance. And if we lose our health insurance, how on earth are we 
going to pay for my wife's blood pressure medicine or my Nexium--the 
very medication that prevents us from getting sick in the first place?
    As a family farmer, I don't have 401k's, vacation time, or health 
care benefits. I have had to choose between health care and food in the 
past, and I'm almost at that point again. Because I work hard I earn 
enough income not to be eligible for Medicaid, nevertheless the cost of 
keeping my wife and I covered is outrageous.
    My kids are 22 and 19 years old now. I've discouraged them from 
family farming, and urged them to instead work in town. They found jobs 
that offer them health insurance, but they don't use it because it 
would cost at least one-third of their paychecks. My kids are going 
without health care because it's just too expensive, and they do not 
qualify for Medicaid.
    There are many other families in Iowa who are even worse off.
    A good friend of mine has struggled with health problems, including 
rheumatoid arthritis and lupus, since 1994. When his lupus becomes 
active in his system, the rheumatologist tries to find other 
medications to bring it back under control and into a dormant state 
again, which is extremely expensive. This friend of mine has raised 
hogs for his entire life, but can no longer do so because of his 
medical condition. He is currently applying for disability benefits, 
but even if he qualifies, he won't receive any health care assistance 
for another two years.
    Although my friend and his family currently have health insurance 
through the Farm Bureau, they pay $1,111.30 every month for their 
medical premium coverage. But if they tried to change to another group 
plan with a lower premium cost, he would be required to have a separate 
medical plan--and it is highly likely that this insurance company would 
deny coverage for his current or future health problems, because it is 
a preexisting condition. With their deductibles and all the co-pays 
from medical expenses, the out of pocket cost is starting to really 
take a toll on their family monthly budget.
    I have another close friend, who has had Psoratic Arthritis for 15 
years. Her fingers are turning sideways. Her toes are so swollen 
sometimes it's a struggle to put shoes on. To make matters worse, as a 
hairdresser she has to use her fingers constantly and stand on her feet 
all day.
    Four years ago, my friend's husband was run over on the job site of 
a county job. In addition to losing her husband and best friend, she 
also lost her family's main source for income, and her only source for 
medical insurance. She was able to get care through Cobra for three 
years, but every month, the payments have gone up. The first month it 
was $585.00, then two months later it was $600.00, then it was going to 
$700.00 at the beginning of the New Year. Now she has a private 
insurer, and pays $5,600.00 a year. To save money, she quit taking her 
medicines and stopped having blood work taken. She sends her son to 
Canada for her medications, although they are not the right strengths 
and do not help much.
    We're in a vicious cycle. Without being able to have access to 
affordable preventative care, family farmers like me and my friends 
wind up being forced to the emergency room to obtain care, which is far 
more expensive.
    That's why farm families, like my own, send their spouses and kids 
to get town jobs, so they can get health insurance or access to health 
care. But in Iowa, and many other places, there are less of those jobs 
available, especially in rural America.
    We need to do something now to make health care more affordable. If 
we don't do something soon to fix this problem, it is only going to get 
worse for my family, and families like mine all over America.
    Thank you for inviting me to share our stories with you.

    Senator Harkin. Well, Chris, thank you very much. I asked 
you to come because you had been at one of the health care 
forums we had in Iowa and I was very touched by your story and 
the fact that you had so many friends and people you had worked 
with who had similar kinds of situations, because, again, I 
think it is always important as both you and Ms. Kane--well, as 
all of you have--to put a human face on this. I mean, we are 
talking--this is not an abstract theory we are talking about. 
These are real people that are suffering out there.
    So, again, I thank you all for your testimony, for your 
testimony and for your involvement in our effort to try to seek 
some way out of this.
    I want to commend The Robert Wood Johnson foundation for 
Covering the Uninsured Week. We--if other States had the same 
kind of rollout that we did in Iowa, then it must have been--I 
am sure it had an impact across the country, because it was 
quite a rollout in the State of Iowa for that entire week, 
because what it really did is it--there are so many people out 
there that think that, well, this is sort of their fault, that 
they are sort of, well, it is they have a special case.
    Cover the Uninsured Week got a lot of information out that 
``I am not alone. It is not just me. Every--there is a lot of 
people like me out there.'' And perhaps this now can give us 
the kind of spark to move ahead to try to do something on it.
    I would be the first to say that I do not have the answer. 
I cannot sit here and write an answer out as to what it is. But 
I keep coming back to this: You know, we started the human 
genome project with this subcommittee 12, 13 years ago, if I am 
not mistaken, 14 years ago, mapped and sequenced the entire 
human gene, phenomenal.
    Senator Specter and I worked together on that for 13 years. 
We are doing great breakthrough research on all kinds of 
medical conditions in this country. We have got the best 
scientists. We have the best researchers. We have got the 
National Institute of Health with all that it does. We have got 
great hospitals.
    I mean, I have been all over the world. You cannot find 
better hospitals than what we have in this country, health care 
professionals. And yet we cannot figure out how to cover the 
uninsured. I mean, do not tell me that this is some unsolvable 
problem and we have to go on year after year like this. And so 
I hope that somehow we can, through these stories, through your 
involvement, all of your involvement, we can begin to map some 
way out of this.
    Since I mentioned The Robert Wood Johnson Foundation, I 
will start again with Dr. Lavizzo-Mourey: That was quite a 
week. A lot of information got out, a lot in the papers, a lot 
on television. As I said we had a lot of activities in my State 
of Iowa.
    So what is next? I mean, what do we do now? I mean, what is 
The Robert Wood Johnson Foundation looking at as a follow up on 
this? Do you know? Can you inform us of that?
    Dr. Lavizzo-Mourey. Well, Senator, first of all, I think 
that the efforts of people like you, and more particularly the 
people at the community level who got a chance to, as you say, 
talk to one another and hear that they are not only not alone, 
but that they may be able to develop relationships that can 
help solve this problem, was a benefit of that week's 
activities across the country that I just want to underscore.
    Having individuals and groups at the local level continue 
those efforts is something that we certainly support and 
encourage going forward. I think that for us, we need to be a 
resource to people like you who are looking for solutions, so 
we emphasize that there is research that we want to fund to 
answer the questions that policymakers have.
    Moreover, we are looking at whether or not having 
subsequent events like Cover the Uninsured Week next year and 
beyond are ways to continue to bring people together around 
this important issue, so that we raise the awareness and make 
sure that that 56 percent who say that is a priority gets to an 
even higher number as they really understand the consequences 
of being uninsured.
    Senator Harkin. Ms. Scanlan, you said that you do not have 
any public hospitals in Pennsylvania, and I was sort of wincing 
at that, but I guess that is not really unusual. I think there 
are a lot of places without public hospitals.
    Ms. Scanlan. I think Pennsylvania is a little unique. Most 
States do have at some level----
    Senator Harkin. At least one----
    Ms. Scanlan [continuing]. At least one public hospital----
    Senator Harkin [continuing]. Or something.
    Ms. Scanlan [continuing]. In the major city or cities----
    Senator Harkin. Yes, that is true.
    Ms. Scanlan [continuing]. And some State involvement. In 
Pennsylvania, all of that was divested about 15 years ago. 
Pennsylvania is an old mining State, as you probably know, and 
there were a lot of small hospitals that the State ran in those 
mining towns. And those were all converted into non-public 
hospitals.
    The two major cities, in particular Philadelphia, had 
public hospitals--a public hospital in Philadelphia, which was 
converted and enclosed.
    Senator Harkin. You must have a lot of--well, I know 
Pennsylvania has an active community health center organization 
as we do in Iowa. And I know both Senator Specter and I have 
been strong advocates of the community health center system, 
which has been around a long time. And it has been building, 
but a lot of people are not aware of it, and the good they can 
do.
    I do not have at my fingertips how many community health 
centers are in Pennsylvania, but are you aware of them, and are 
you--do you work with them, and how are they serving this 
population of underserved people? Now, because where Ms. Kane 
works--you work at a community health center.
    Ms. Kane. Yes, I do.
    Senator Harkin. That is right. And so she gave a breakdown 
on sort of the percentages of, well, people that were uninsured 
and stuff I cannot remember off the top of my head. But, yes, 
the People's Community Health Clinic in Waterloo--that is a 
community health center, 39 percent were Medicaid, 6 percent 
Medicare, 24 percent third-party payer, and 31 percent no 
coverage. Do you--do you have any idea what--do you work at 
some of these in Pennsylvania? And can you tell me some about 
that?
    Ms. Scanlan. We do. The hospital association actually funds 
an organization called the Institute for Healthy Communities. 
It works with 95 health care partnerships around the State, 
which are comprised of community health centers, hospitals, and 
other community leaders, both religious, lay, in order to reach 
out to the communities to deal with the issues around health 
care status.
    One of the issues that is important to hospitals is to be 
part of those partnerships, and so a great many of our 
hospitals support those partnerships financially. They have 
created free clinics to work along with community health 
centers, which while they bear a burden for the uninsured, 
cannot bear the entire burden, or else they would not be able 
to operate and continue into the future.
    So collectively, I think we have tried to put our arms 
around this. But it is at best a safety net. People generally 
do not seek care until they need it, and if you are uninsured, 
you wait until you drastically need it as Ms. Kane indicated. 
And we want to be able to have all individuals feel that they 
should be getting preventive care and to be seeking it when 
they need it.
    Senator Harkin. That has been my observation of community 
health centers is that they do provide that preventive health 
care of immunization and checkups and physicals, things like 
that. The other thing that occurred to me--and I have been to 
People's Community Health Center there in Waterloo several 
times--is that a lot of people do not know that it is 
available. They just do not know that it is there, and you--I 
just saw a report that claimed we could cover one-third of the 
uninsured if they enroll in the public programs they are 
eligible for.
    Ms. Scanlan. We know in Pennsylvania that we are--that 
there are individuals who would be eligible for Medicaid or the 
Children's Health Insurance program that do not enroll for a 
series of reasons. One they are uninformed, and so when those 
people present themselves in the hospital either through the 
emergency room or through another outpatient clinic, we work 
with them to get them enrolled in the program.
    However, with both of those programs, there is a viewed 
stigma of being on a public program and some individuals are 
not comfortable with that. And so then we work with them to get 
them to free clinics or the community health center or any 
other opportunity where they can get care. Our goal is to make 
sure that every child has a doctor and every family has a 
support system where they can go for health care.
    Senator Harkin. We have got to get more--that is why this 
whole Cover the Uninsured--we have got to get information out 
to people as to the accessibility of some of these places where 
they can go. I have talked to so many people who felt that, 
well, they could not go to a community health center because 
they were not ``poor.'' Well, there is no income guideline. 
Anybody can go to a community health center.
    Ms. Scanlan. We were part of the Cover the Uninsured and 
had major events in Philadelphia, Pittsburgh and in our capital 
of Harrisburg. We got great press coverage. I think we were 
able to draw people in who had not been part of groups together 
before. And so we really thank The Robert Wood Johnson 
Foundation for that, as well as our colleagues at the national 
level.
    But I, like Dr. Lavizzo-Mourey, think we need to do a lot 
more and we do need State and Federal help in this partnership 
as well as funding.
    Dr. Lavizzo-Mourey. Senator, I would just comment that one 
of the things that we tried to do at the beginning of every 
school year is have a back-to-school campaign to highlight for 
parents that going back to school is a good time to think about 
their children's health care and getting them enrolled in some 
of the programs that many of them just do not know they are 
eligible for. And, as you know, if kids are not covered and do 
not get those immunizations and so on, they have adverse 
outcomes. So you are so right that getting the word out is a 
critical part of the solution.
    Senator Harkin. Dr. Kellermann, the IOM, Institute of 
Medicine, issued four reports, did you say, on----
    Dr. Kellermann. Yes, sir. We have issued four. We have a 
fifth report that looks at the economic impact of this problem 
on the American people that will be coming out in the next 
several weeks. And we have a final report in October. So there 
will be six total reports.
    Senator Harkin. The economic one will be out, did you say, 
by June or something like that?
    Dr. Kellermann. June 17 is the planned release date for 
that report.
    Senator Harkin. Okay.
    Dr. Kellermann. I would like to--you mentioned, sir, the 
human genome project, and I think it is important for American 
citizens to remember that that was a magnificent scientific 
achievement, and it has great potential for health in this 
country.
    But the reality for most Americans today is that your 
chances of living a long, healthy and productive life depend a 
lot more on your zip code than on your genetic code. And it is 
the community level impact of this problem that goes beyond the 
41 million Americans today who lack health insurance and affect 
over 200 million Americans with health insurance.
    You and I both know that the States have a tremendous 
fiscal crisis right now. And in contrast to the Federal 
Government, they cannot deficit spend. Many of those States are 
looking at enormous cuts in their Medicaid programs and their 
SCHIP programs.
    If that happens, two immediate consequences will occur. 
One, we will have potentially another 1.5 million Americans 
pushed from Medicaid roles to the uninsured. But, two, and 
very, very importantly, many of the health care providers today 
that care for the uninsured are highly dependent upon Medicaid 
revenues to meet their mission.
    If those health care providers, the doctors, the primary 
care nurse practitioners, the hospitals lose those revenues, 
not only will those providers of care to the uninsured and 
Medicaid beneficiaries be severely impaired, but those 
providers are also providing mission critical services to the 
entire community.
    Grady Hospital in Atlanta is a case in point. It is not 
only the only public hospital for Metro Atlanta, it is the only 
level one trauma center for North Georgia. It is one of the 
only two burn units for the entire State. It is one of the 
State's only neo-natal intensive care units. It is the key 
training hospital for two medical schools. It is the only 
poison control center for the entire State. When providers like 
that get slammed, everybody will suffer. This is an extremely 
dangerous situation.
    Senator Harkin. We are joined by our distinguished 
chairman. And as I said earlier, the chairman, Senator Specter, 
has called these three series of hearings to look at the 
impacts of underinsured and uninsured. This subcommittee has a 
lot of responsibility in this area. Great testimony here from 
Dr. Kellermann, who is on the board with the Institute of 
Medicine, and the reports we were just talking about, they are 
coming out.
    We have Dr. Lavizzo-Mourey who is with The Robert Wood 
Johnson Foundation; Ms. Scanlan, who is from your home State of 
Pennsylvania and talking about the situation. And we had Ms. 
Kane and Mr. Petersen. So they have all had their--have given 
their testimony.
    We have had questions and some dialogue here on the 
Institute of Medicine's coming out with--well, they have had 
four reports. They are coming out with another one in June on 
the economic impact and----
    Dr. Kellermann. The final report is going to look at 
promising strategies for addressing the problem and some of the 
parameters that policymakers may want to consider in looking at 
potential solutions to covering the uninsured.
    Senator Harkin. I know Senator Specter was involved also 
with The Robert Wood Johnson Foundation and Cover the Uninsured 
Week. I know you were unavoidably detained this morning, 
Senator Specter. I do not know if you wanted to come in now, or 
do you want me to finish my questioning or----
    Senator Specter. Well, if I might make a statement or two.
    Senator Harkin. Sure.

               OPENING STATEMENT OF SENATOR ARLEN SPECTER

    Senator Specter [presiding]. I thank you for beginning the 
hearing. There are so many conflicting hearings that it is not 
possible to attend them all. I have just come from a hearing 
with Secretary Ridge on Homeland Security, and we have a 
hearing on the judiciary nominations.
    I discussed this hearing yesterday with Ms. Scanlan when I 
talked to the hospital administrators of Pennsylvania, and I 
thank you, Senator Harkin, for suggesting these series of 
hearings. Senator Harkin, I think, had planned these hearings 
when he was chairman, and it is a precarious position being 
chairman of this subcommittee because it changes from time to 
time.
    Senator Harkin. Go back and forth over----
    Senator Specter. Yes. But when it changes, as both Senator 
Harkin and I have said, it is a seamless exchange of the gavel. 
We do not have any partisanship here at all, and I think this 
subcommittee for the past decade-plus has been a model of 
bipartisan cooperation as we have increased funding in NIH, and 
tackled the really tough problems at CDC, et cetera. And we 
intend to keep it that way.
    Senator Harkin, why don't you finish your round of 
questioning? And then I will have some questions of my own.
    Senator Harkin. I appreciate that. Again, I thank you very 
much, Mr. Chairman, for having these hearings, for your great 
leadership of this subcommittee. And you are right; we have 
been back and forth as chairman and ranking member, going back 
over almost a dozen years, and it has been seamless. And I just 
want you to know that I appreciate all that you do in leader-
ing or leading this subcommittee, making sure that we continue 
to address the health needs of our country. And I--it has just 
been a real privilege and a joy to work with you, Senator 
Specter, over all these years.
    I just--I was sort of just kind of getting to Mr. Petersen. 
Mr. Petersen is a family farmer in Iowa. Ms. Kane is a nurse at 
a community health center in Waterloo that I visited before. 
But Chris was talking about his own situation and his own 
family, and so many people around him.
    Is there--do you think or can you talk about whether there 
is any kind of a difference between those who live in rural 
areas, small towns, small communities, what kind of differences 
that are there, farmers, farm families, small farmers, people 
who live in small communities? What is that situation like in 
terms of insurance coverage? How do you--what is your 
sensibilities on that, Chris? Any differences between that and, 
say, living in Des Moines or Chicago or Omaha, or some place 
like that?
    Mr. Petersen. Yes, economic impact, that is a big thought. 
I agree with the comment down the table here a couple of 
minutes ago that it depends on your zip code what kind of 
health care you get.
    The rural areas, as you know, there is a lot of budget cuts 
going on. The small rural hospitals, not only in Iowa, but 
throughout the Midwest, are taking the hits. They are not 
getting the money. Iowa has got a severe problem with Medicare 
reimbursement, so that really hurts Iowa.
    So we are denied health care access, period. You know, 
whether we can afford it or not, we are not getting the care 
that we need in the rural areas.
    You know, the economic impact of this stuff, a lot of us we 
go get health care because we will figure out how to pay for it 
later because the object is to have a quality of life and live 
a long life. And what happens when this is going on, it not 
only hurts the hospitals and the doctors and the--and everybody 
else, but there is a lot of bankruptcies going on, being filed 
over health care costs. And, you know, I would be very 
interested in knowing the percentage of bankruptcies filed in 
this country because of health care costs.
    Senator Harkin. I have heard from several sources in Iowa 
that that is a high percentage of the bankruptcies, at least in 
Iowa. I cannot speak about any other States, but----
    Mr. Petersen. Yes. I would feel that that is another very 
critical reason to address this issue, because it is affecting 
everybody.
    Senator Harkin. I have to leave. I am going now down to--
Mr. Ridge is there, and I am on that subcommittee also, and I 
have to engage him on a couple of things dealing with homeland 
security. Senator Specter just came from there. So I am going 
to have to leave.
    But, Dr. Kellermann, before I leave, can you hold up the 
copy of that--I did not get to that in my questions, and I 
spoke to you about it before the hearing started.
    Dr. Kellermann. I am happy to loan it to you, if you want 
to share it with Mr. Ridge.
    Senator Harkin. Thank you.
    Dr. Kellermann. But, Senator Specter, this was a cover 
story in U.S. News World Report that came out a couple of years 
ago almost. And the cover story says, ``Crisis in the ER: Turn 
away and huge delays are a surefire recipe for disaster. What 
you can do.''
    Sir, the date of this issue was September 10, 2001. Nothing 
has been done on this issue or this problem since that time. 
You have mentioned homeland security. This is emphatically a 
homeland security issue. And the challenges of uninsurance and 
the financial strain, particularly on our trauma care system, 
is an enormous homeland security issue and one that so far has 
not hit the radar screen as squarely as some of the other 
homeland security issues have.
    Senator Harkin. Thank you. Thank you all for coming great 
distances to be here. Thank you for your testimony. And 
especially to my two friends from Iowa, thank you for--and you, 
Ms. Scanlan, thanks for coming from Pennsylvania. I thank all 
of you for what you are doing.
    I do have to leave, and I thank you, again, Mr. Chairman.
    Senator Specter. Thank you, Senator Harkin.
    You might be interested to know as Senator Harkin departs 
that he serves on six subcommittees of Appropriations, as do I.
    Senator Harkin. Yes.
    Senator Specter. And in two other rooms, there are other 
subcommittee hearings. There is a subcommittee hearing on 
Defense Appropriation where Senator Harkin sits, as do I.
    Senator Harkin. Yes.
    Senator Specter. And then he has other committees. He has 
the Agriculture Subcommittee, and it is an impossible job. And 
the chairs which are vacant here would be filled by Senators 
who are at other hearings too. And it is a sort of testament to 
how many complex problems we have to deal with.
    Senator Harkin. Yes.
    Senator Specter. I have only a few questions to add. I am 
due at another hearing, as I said, with the Judiciary 
Committee.
    But I have discussed, as I commented earlier, with Ms. 
Scanlan--at a meeting yesterday with hospital administrators, I 
noted the presence of Scott Malan, who is the vice president of 
the Pennsylvania hospitals group.
    This is a problem and one of the questions which came up 
yesterday, which is a continuing issue is: How do we cover the 
41 million Americans who are now not covered? What can we do to 
extend coverage short of a single payer system where there 
seems to be a lot of concern that that would involve a 
bureaucracy, which we do not want to undertake?
    Ms. Scanlan, let me begin with you, as a fellow 
Pennsylvanian.
    Ms. Scanlan. We suggest in our testimony, Senator--and 
thank you for holding these hearings, by the way. We all 
acknowledged you before your presence, and so wanted to do it 
in your presence also.
    We suggest in our testimony, Senator, that there are in the 
current manner of programs ways to expand most programs, both 
Medicaid, children's health insurance program, and others, both 
at the Federal and State level, and perhaps on a short-term 
basis dealing with some of the tax issues.
    Unfortunately, those have been tried, and we continue to 
tinker with those. I think they help some, but not all of the 
population, evidenced by the 41 million or 42 million, whatever 
the number has grown to now, of the uninsured.
    It is a difficult problem. I know that we, at the national 
level, have tried to fix it several times, because it is so 
complicated. It is a complicated program to try to create, but 
I would suggest that there are a series of ways including 
looking at the current infrastructure of providers, health care 
plans, community health centers, individual practitioners or 
clinicians that, with appropriate funding, could begin to reach 
out and offer the kind of care to all of those 41 million.
    Senator Specter. When you talk about appropriate funding, 
one of the issues which has concerned me for many years and I 
have introduced legislation on, is the very high cost in the 
last few days, few weeks before death and the really inadequate 
information being distributed to people about living wills and 
about making a decision.
    Nobody should decide for anybody else when the life support 
systems will be turned off. But people can make their own 
judgments on that, and can make a determination. It is a very 
difficult situation for a family to have to decide when to, so 
called, ``pull the plug.'' And there have been suggestions of 
enormous savings there.
    Dr. Kellermann, do you have any idea about the extent of 
the savings that could be obtained if families were to have a 
more informed decision for determining when life supports end?
    Dr. Kellermann. Since I am here today on behalf of the 
Committee on the Consequences of Uninsurance, we are looking at 
economic impacts of the general issue of uninsurance in our 
next report, but I--we have not as a committee specifically 
addressed end-of-life issues, although other reports by the 
Institute of Medicine have. There are substantial costs.
    Senator Specter. Dr. Lavizzo-Mourey, do you have any 
thoughts on that subject?
    Dr. Lavizzo-Mourey. The foundation, as you may know--and by 
the way, let me just say thank you for having these hearings, 
Senator. As a fellow Philadelphian, I do appreciate your 
leadership on this matter.
    The foundation has invested for a long time in trying to, 
not only understand the costs associated with end-of-life care 
but to also address the issues of quality of care and the 
quality of life that the family and the patient experience. We 
know that it is cheaper to provide palliative care than it is 
to provide high tech unnecessary and oftentimes unwanted end-
of-life support. But I do not have at the tip of my fingers a 
dollar amount. We can certainly look at that and get back to 
you and your staff, Senator.
    Senator Specter. That would be helpful. Ms. Kane, do you 
have any thoughts as to how we can cover the 41 million 
Americans who are now not covered?
    Ms. Kane. I think, working in the community health centers, 
I think they are a great place, because we do base it on a 
sliding fee scale according to their income with a set, you 
know, $10, if--for service. I think number one is: We do have 
to get the word out. A lot of people are not aware of community 
health centers.
    I think the--my thought just left my head. Just getting, I 
suppose, getting past that, knowing that people, number one, 
were out there to give them health care, that you do not have 
to have money up front. We are not going to hound you with guns 
at your door, send you letters. We would rather, you know, I 
suppose lose that $65 than have the person lose their leg.
    Senator Specter. Mr. Petersen, you are a family farmer in 
rural Iowa. I heard the reference made to Waterloo, is that 
true?
    Mr. Petersen. Clear Lake.
    Senator Specter. Clearly.
    Mr. Petersen. Yes.
    Senator Specter. Clearly, is that--when you say 
``Clearly,'' is that the name of a town?
    Mr. Petersen. Clear Lake. Pardon me.
    Senator Specter. Oh, is that close to Waterloo?
    Mr. Petersen. No. I am located in North Central Iowa, right 
close to Minnesota.
    Senator Specter. Well, what was the reference to Waterloo?
    Ms. Kane. I am Waterloo.
    Senator Specter. You are from Waterloo?
    Ms. Kane. Yes.
    Senator Specter. Okay. Well, even though you are not from 
Waterloo, Mr. Petersen, I know of another farmer who lived in 
Waterloo who pursued a political career, ran for the House of 
Representatives in the State of Iowa. He told me that when he 
was elected to the House of Representatives, he made more money 
than he did when he was farming. And then he later ran for the 
U.S. House of Representatives and was elected. And then he ran 
for the U.S. Senate and was elected. And now he is chairman of 
the Finance Committee. And that man is?
    Mr. Petersen. I am very good friends with Senator Grassley.
    Senator Specter. You have got it. So in conclusion, Mr. 
Petersen, you ought to consider a political career.

                         CONCLUSION OF HEARING

    Thank you all very much for being here. That concludes our 
hearing.
    [Whereupon, at 10:45 a.m., Wednesday, April 30, the hearing 
was concluded, and the subcommittee was recessed, to reconvene 
subject to the call of the Chair.]

                                   
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