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52–260 PDF 2009

FULL COMMITTEE HEARING ON THE 

CHALLENGES OF THE 2009-H1N1 INFLUENZA 

AND ITS POTENTIAL IMPACT ON SMALL 

BUSINESSES AND HEALTHCARE PROVIDERS 

HEARING 

BEFORE THE

COMMITTEE ON SMALL BUSINESS 

UNITED STATES 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED ELEVENTH CONGRESS 

FIRST SESSION 

HEARING HELD 

SEPTEMBER 9, 2009 

Small Business Committee Document Number 111-044 

Available via the GPO Website: http://www.access.gpo.gov/congress/house 


Congress.#13
HOUSE COMMITTEE ON SMALL BUSINESS 

NYDIA M. VELA ́ ZQUEZ, New York, Chairwoman 

DENNIS MOORE, Kansas 

HEATH SHULER, North Carolina 

KATHY DAHLKEMPER, Pennsylvania 

KURT SCHRADER, Oregon 

ANN KIRKPATRICK, Arizona 

GLENN NYE, Virginia 

MICHAEL MICHAUD, Maine 

MELISSA BEAN, Illinois 

DAN LIPINSKI, Illinois 

JASON ALTMIRE, Pennsylvania 

YVETTE CLARKE, New York 

BRAD ELLSWORTH, Indiana 

JOE SESTAK, Pennsylvania 

BOBBY BRIGHT, Alabama 

PARKER GRIFFITH, Alabama 

DEBORAH HALVORSON, Illinois 

SAM GRAVES, Missouri, Ranking Member 

ROSCOE G. BARTLETT, Maryland 

W. TODD AKIN, Missouri 

STEVE KING, Iowa 

LYNN A. WESTMORELAND, Georgia 

LOUIE GOHMERT, Texas 

MARY FALLIN, Oklahoma 

VERN BUCHANAN, Florida 

BLAINE LUETKEMEYER, Missouri 

AARON SCHOCK, Illinois 

GLENN THOMPSON, Pennsylvania 

MIKE COFFMAN, Colorado 

MICHAEL DAY, Majority Staff Director 

ADAM MINEHARDT, Deputy Staff Director 

TIM SLATTERY, Chief Counsel 

KAREN HAAS, Minority Staff Director 

(II) 

STANDING SUBCOMMITTEES 

Subcommittee on Contracting and Technology 

GLENN NYE, Virginia, Chairman 

YVETTE CLARKE, New York 

BRAD ELLSWORTH, Indiana 

KURT SCHRADER, Oregon 

DEBORAH HALVORSON, Illinois 

MELISSA BEAN, Illinois 

JOE SESTAK, Pennsylvania 

PARKER GRIFFITH, Alabama 

AARON SCHOCK, Illinois, Ranking 

ROSCOE BARTLETT, Maryland 

W. TODD AKIN, Missouri 

MARY FALLIN, Oklahoma 

GLENN THOMPSON, Pennsylvania 

Subcommittee on Finance and Tax 

KURT SCHRADER, Oregon, Chairman 

DENNIS MOORE, Kansas 

ANN KIRKPATRICK, Arizona 

MELISSA BEAN, Illinois 

JOE SESTAK, Pennsylvania 

DEBORAH HALVORSON, Illinois 

GLENN NYE, Virginia 

MICHAEL MICHAUD, Maine 

VERN BUCHANAN, Florida, Ranking 

STEVE KING, Iowa 

W. TODD AKIN, Missouri 

BLAINE LUETKEMEYER, Missouri 

MIKE COFFMAN, Colorado 

Subcommittee on Investigations and Oversight 

JASON ALTMIRE, Pennsylvania, Chairman 

HEATH SHULER, North Carolina 

BRAD ELLSWORTH, Indiana 

PARKER GRIFFITH, Alabama 

MARY FALLIN, Oklahoma, Ranking 

LOUIE GOHMERT, Texas 

(III) 

Subcommittee on Regulations and Healthcare 

KATHY DAHLKEMPER, Pennsylvania, Chairwoman 

DAN LIPINSKI, Illinois 

PARKER GRIFFITH, Alabama 

MELISSA BEAN, Illinois 

JASON ALTMIRE, Pennsylvania 

JOE SESTAK, Pennsylvania 

BOBBY BRIGHT, Alabama 

LYNN WESTMORELAND, Georgia, Ranking 

STEVE KING, Iowa 

VERN BUCHANAN, Florida 

GLENN THOMPSON, Pennsylvania 

MIKE COFFMAN, Colorado 

Subcommittee on Rural Development, Entrepreneurship and Trade 

HEATH SHULER, North Carolina, Chairman 

MICHAEL MICHAUD, Maine 

BOBBY BRIGHT, Alabama 

KATHY DAHLKEMPER, Pennsylvania 

ANN KIRKPATRICK, Arizona 

YVETTE CLARKE, New York 

BLAINE LUETKEMEYER, Missouri, Ranking 

STEVE KING, Iowa 

AARON SCHOCK, Illinois 

GLENN THOMPSON, Pennsylvania 

(IV) 

C O N T E N T S 

OPENING STATEMENTS 

Page 

Vela ́zquez, Hon. Nydia M. ....................................................................................... 1 

Graves, Hon. Sam .................................................................................................... 2 

WITNESSES 

Blank, Ph.D., Hon. Rebecca M., Under Secretary of Commerce for Economic 

Affairs, U.S. Department of Commerce .............................................................. 3 

Schuchat, M.D., USPHS, Rear Admiral Anne, Assistant Surgeon General, 

United States Public Health Service, Director, National Center for Immunization and Respiratory Diseases (NCIRD), Centers For Disease Control 

and Prevention, Department of Health And Human Services ......................... 4 

Mcgaw, Mr. Bridger Acting Assistant Secretary for the Private Sector, Office 

of Policy/Office of Private Sector, Department of Homeland Security ............. 6 

Demangone, Mr. Anthony, Director of Regulatory Compliance, Senior Compliance Counsel, National Association of Federal Credit Unions ......................... 21 

King, Md, Dr. Jim, Chair of Board of Directors, Selmer, Tennessee, American 

Academy Of Family Physicians .......................................................................... 23 

Jackson, Mr. Harold, President and CEO, Buffalo Supply, Inc., Lafayette, 

CO. On Behalf of The U.S. Chamber of Commerce ........................................... 24 

Tayloe, Jr. Md, Dr. David T., President Goldsboro, NC, American Academy 

of Pediatrics .......................................................................................................... 26 

Thatcher, Ms. Mary Kay, Director of Public Policy, American Farm Bureau 

Federation ............................................................................................................. 28 

(V) 

APPENDIX 

Prepared Statements: 

Vela ́zquez, Hon. Nydia M. ....................................................................................... 36 

Graves, Hon. Sam .................................................................................................... 38 

Blank, Ph.D., Hon. Rebecca M., Under Secretary of Commerce for Economic 

Affairs, U.S. Department of Commerce .............................................................. 40 

Schuchat, M.D., USPHS, Rear Admiral Anne, Assistant Surgeon General, 

United States Public Health Service, Director, National Center for Immunization and Respiratory Diseases (NCIRD), Centers For Disease Control 

and Prevention, Department of Health And Human Services ......................... 44 

Mcgaw, Mr. Bridger Acting Assistant Secretary for the Private Sector, Office 

of Policy/Office of Private Sector, Department of Homeland Security ............. 51 

Demangone, Mr. Anthony, Director of Regulatory Compliance, Senior Compliance Counsel, National Association of Federal Credit Unions ......................... 57 

King, Md, Dr. Jim, Chair of Board of Directors, Selmer, Tennessee, American 

Academy Of Family Physicians .......................................................................... 68 

Jackson, Mr. Harold, President and CEO, Buffalo Supply, Inc., Lafayette, 

CO. On Behalf of The U.S. Chamber of Commerce ........................................... 72 

Tayloe, Jr. Md, Dr. David T., President Goldsboro, NC, American Academy 

of Pediatrics .......................................................................................................... 81 

Thatcher, Ms. Mary Kay, Director of Public Policy, American Farm Bureau 

Federation ............................................................................................................. 93 

Statements for the Record: 

American Farm Bureau Federation ....................................................................... 99 

National Pork Producers Council ........................................................................... 101 

American Hotel & Lodging Association ................................................................. 108 

(VI) 

(1) 

FULL COMMITTEE HEARING ON THE 

CHALLENGES OF THE 2009-H1N1 INFLUENZA 

AND ITS POTENTIAL IMPACT ON SMALL 

BUSINESSES AND HEALTHCARE PROVIDERS 

Wednesday, September 9, 2009 

U.S. HOUSE OF REPRESENTATIVES, 

COMMITTEE ON SMALL BUSINESS, 

Washington, DC. 

The Committee met, pursuant to call, at 1:08 p.m., in Room 

2360, Rayburn House Office Building, Hon. Nydia M. Vela ́zquez 

[Chair of the Committee] Presiding. 

Present: Representatives Vela ́zquez, Moore, Dahlkemper, 

Schrader, Ellsworth, Luetkemeyer and Thompson. 

Chairwoman VELA ́ ZQUEZ. I call this hearing of the Committee to 

order. 

Every flu season we encourage Americans to take precautions 

like getting vaccinated and washing their hands. However, this 

year’s flu season is different. Because of H1N1, our Nation can expect a new set of public health issues. For those in the small business community, the 2009 H1N1 flu season will mean new challenges. 

The World Health Organization and the CDC announced the outbreak of H1N1 in March. By July, the number of confirmed cases 

have reached 100,000. While it is too early to tell how fast the 

virus will spread, it is almost certain that a pandemic will mean 

significant economic consequences. The CBO has suggested a fullblown pandemic could draw $700 billion out of our economy at a 

time when we cannot afford any economic setbacks. 

The administration recently released its plan for employers to respond to and prepare for H1N1. This week we expect to see a similar plan that is specifically tailored for small businesses’ needs. Today’s hearing will look at these recommendations and the issues 

facing small firms. 

For small companies this year’s flu season raises many questions. How should small businesses handle leave policy? One of the 

best ways to combat the spread of H1N1 is to encourage employees 

to stay home if they are ill. Clearly, limiting exposure is important 

for fighting the spread of flu; however, sending too many workers 

home can also impede small firms’ operations. 

While most small business owners want to be responsible and 

protect their employees’ health, we also want to ensure that they 

do not needlessly slow down their operations. Big companies usually have enough employees to continue operating even when part 

2 

of their workforce grows ill. That isn’t always the case for small 

businesses. So we cannot assume that solutions that work for big 

firms will work for small ones. 

We also need to think about how disruptions to small businesses 

will impact the flow of commerce. Entrepreneurs rely on other 

firms to provide them materials, but they also supply products to 

other businesses. If H1N1 interrupts the supply chain, there are 

questions about how the overall flow of goods and services will be 

affected. 

We need to examine these problems and think about solutions for 

minimizing this economic ripple effect. Perhaps, most of all, we 

must look at what tools are available to help small businesses as 

we head into flu season and consider whether those tools are sufficient. 

Just as small employers are taking steps to slow the spread of 

H1N1, entrepreneurs will be critical to helping our Nation overcome this pandemic. Some of the most promising research is conducted by small companies. As we race to develop effective vaccines, these companies will be instrumental. Small health-care providers have always been the core of our medical system. Eighty 

percent of doctor office visits take place in a small practice. These 

providers will be vital in distributing vaccinations and treating 

Americans who fall sick. 

Clearly all types of small businesses will be on the front line this 

flu season. As employers, as health-care providers, and as a source 

of medical innovation, entrepreneurs will be an important part of 

how our Nation responds to this public health problem. 

At this stage numerous questions remain unanswered. All of us 

hope that infection rates are moderate, but regardless, the wisest 

course of action is for all of us to be—the most important thing is 

to be prepared. 

Today’s hearing will explore how small businesses can help us 

through this year’s flu season, the challenges they face, and what 

we did do to support their efforts. 

With that, I thank our witnesses for being here and yield to 

Ranking Member Mr. Thompson for an opening statement. 

Mr. THOMPSON. Madam Chairwoman, thank you for calling this 

hearing on a very important issue, the H1N1 influenza virus and 

its effects on small businesses and family farms and health-care 

providers, and thank you to all the witnesses who are testifying 

today. 

The H1N1 flu virus appeared in the United States in late April 

of 2008. Since that time the World Health Organization and the 

Centers for Disease Control have said that there is no evidence 

that H1N1 is spread by the consumption of food. Nevertheless, 

pork consumption is down, and exports of pork and pork products 

have declined, and farmers, owners of the related industries and 

their communities are feeling the negative ripple effects. 

Now, this comes at a time when small companies are already 

struggling in a difficult economy. Small businesses of all kinds 

have been affected by H1N1, and this hearing will provide an opportunity for us to examine the many related issues that center 

around this. 

3 

Madam Chairwoman, I look forward to hearing from our witnesses, and I yield back the balance of my time. 

Chairwoman VELA ́ ZQUEZ. And now I want to welcome the Honorable Rebecca Blank. Ms. Blank is the Under Secretary for Economic Affairs at the U.S. Department of Commerce. She has been 

confirmed by the Senate and was sworn in on June 9. In this position Dr. Blank’s principal responsibilities include economic forecasting, consultation with the private sector, and policy analysis. 

Welcome. 

STATEMENT OF REBECCA M. BLANK 

Ms. BLANK. Madam Chairwoman, Representative Thompson, and 

other members of the Committee, thank you very much for inviting 

me to be here this afternoon. I appreciate the opportunity to appear and discuss the efforts of the Department of Commerce to 

educate businesses, including small businesses, on how to minimize 

the negative economic impacts of the H1N1 virus. 

I commend the Committee’s focus on this topic. We don’t know 

the specific course that the H1N1 flu will follow over the next few 

months, but we do know there are actions that can be taken to 

minimize its impact. The Obama administration has developed preparedness guidance and is working with State and local governments and the private sector to promote awareness of these steps. 

It is predicted that the arrival of the H1N1 flu, in conjunction 

with the regular seasonal flu, will bring more illness. The more severe the flu outbreak, the greater the impact on the economy. We 

don’t know precisely what these impacts will be, but it is likely 

that businesses will be confronted with greater absenteeism as 

their employees or family members become ill, which will in turn 

affect productivity. 

In a more severe outbreak, concern about the flu can lead people 

to avoid public places. This will reduce consumer spending and 

means that some industries, such as travel and tourism, retail 

sales, and service-oriented businesses will experience greater economic impact than others. 

Just recently Secretary Locke participated in several outreach 

calls to CEOs in the retail, travel, tourism, and technology sectors. 

The response to that outreach has been very positive. The Department will remain in contact with the business community on this 

matter through an outreach plan that will provide regular opportunities to share information, promote preparedness, and monitor responses should H1N1 occur this fall. 

Let me emphasize that all businesses, including small business, 

should develop plans in advance to respond flexibly to either the 

current level of severity or a more severe flu outbreak. The coming 

influenza season is likely to prove challenging, especially to small 

businesses, as they can easily be affected by the absence of just a 

few key employees. Small businesses may have fewer resources 

available to cope with unexpected events. That is all the more reason for them to prepare now for how they would handle future 

problems. 

Whatever the magnitude of the flu outbreak, there are steps that 

can and should be taken to mitigate the impact of the upcoming 

4 

flu season on productivity and to better protect workers and their 

families. 

The Interagency Committee Guide has recommended that businesses establish an influenza plan and involve employees in development and review. This may be particularly important for small 

businesses where there is more need for employees to take over responsibilities when other employees become absent. 

Understand the organization’s normal seasonal absenteeism 

rates so that businesses can monitor any unusual increases and 

know if they are being affected. Engage with local health authorities to confirm channels of communication to know if the local outbreak is becoming more severe; share best practices with other 

similar businesses; and implement sick-leave policies that are flexible and consistent with public health guidance so sick employees 

may remain home. 

Unfortunately, it is possible that the flu outbreak in the coming 

season could be worse than what we experienced in early 2009. In 

this case there may be a need to implement plans that would allow 

more workers to telecommute or temporarily limit noncritical activities. 

Businesses should follow updates on the course of the flu to be 

aware of changes in occurrence and severity in their local area. The 

most up-to-date information on this will be available on the 

www.flu.gov Web site. I have been told by my staff to repeat that 

Web site as often as possible. It is the most authoritative source 

of information for people. 

We cannot stop the flu season, but with adequate preparation 

and planning, we can minimize its impact on people, businesses, 

and the economy. 

Thank you for the opportunity to testify on the activities of the 

Department of Commerce. We look forward to continuing our collaboration between the Department and the agencies represented 

here today, as well as other Federal agencies and the business community. I look forward to your questions. 

Chairwoman VELA ́ ZQUEZ. Thank you, Dr. Blank. 

[The statement of Ms. Blank is included in the appendix.] 

Chairwoman VELA ́ ZQUEZ. And now it is my pleasure to welcome 

Rear Admiral Anne Schuchat. She is the Assistant Surgeon General for the United States Public Health Service. She is also the Director of the National Center for Immunization and Respiratory 

Diseases. Dr. Schuchat has played a leadership role in the Health 

and Human Services response to the 2009 H1N1 influenza virus. 

Welcome. 

STATEMENT OF REAR ADMIRAL ANNE SCHUCHAT 

Admiral SCHUCHAT. Good afternoon. Thank you, Chairwoman 

Vela ́zquez and distinguished Committee members. I am Dr. Anne 

Schuchat, the Director of the National Center for Immunization 

and Respiratory Diseases, and delighted to be able to update you 

on the H1N1 situation. 

Increased disease from the 2009 H1N1 virus has already begun 

in the Southeastern States, and we expect in the coming months 

more and more communities around the country to experience increases of influenza, including this new virus. Communities may be 

5 

more severely affected, reflecting wider transmission and potentially greater impact. Seasonal influenza viruses may continue to 

circulate at the same time as the H1N1 virus this fall and winter. 

It is also difficult for us to predict the severity that these outbreaks 

will have, the number of hospitalizations, the deaths that will occur 

due to either the H1N1 virus or seasonal flu. 

Small businesses play a vital role in community functioning during influenza pandemics. They form the critical backbone of supply 

chains for larger businesses and are central to the strength of local 

economies. Many health-care providers are also small businesses, 

and they are critical to caring for patients, to delivering vaccine, 

and to managing and informing influenza decisionmaking in their 

communities, yet small businesses also suffer disproportionately 

during disasters, and they are especially susceptible to the negative 

economic impacts of an influenza pandemic. 

The CDC and Health and Human Services work closely with the 

Department of Homeland Security, the Department of Labor, Department of Commerce, and the Small Business Administration to 

help small businesses address issues they may face during an influenza pandemic. In response to our expected spread of the 2009 

H1N1, CDC has updated our recommendations to assist businesses 

and other employers of all sizes, and, in fact, we are now working 

on updating guidance that will address the small business community in particular. 

The guidance for small businesses will recommend that small 

businesses should plan for and respond to two possible scenarios: 

One where the severity of illness is similar to what we saw in the 

spring and summer, and a second scenario where the severity 

might be worse. 

Even if the severity of this virus doesn’t change, though, small 

businesses should expect that there will be more illness this fall 

and winter, and that this may significantly raise the levels of absenteeism and could have an impact on their business operations. 

That second scenario of greater severity involves more people becoming ill with severe illness, more hospitalizations, and even more 

deaths, an even greater escalation of absenteeism. Businesses need 

to be ready to implement strategies to protect their workforce while 

ensuring continuity of operations. 

During an influenza pandemic, all sick people should stay home 

and away from the workplace. Hand washing and covering your 

cough continues to be important, and routine cleaning of commonly 

touched surfaces is also important. 

Employers of all sizes should consider plans to implement flexible sick-leave policies. CDC recommends that employees with influenza illness stay home until at least 24 hours after their fever is 

gone. Sick employees would be out for about 3 to 5 days in general, 

even if antiviral medications are used. Businesses should also not 

require a doctor’s note for workers who are ill with influenzalike 

illness to validate their illness or to return to work. A doctor’s visit 

might strain the health system and isn’t needed for most people 

with influenzalike illness. 

Businesses should also inform employees that some people are at 

higher risk of complications from influenza. People at higher risk 

should check with their health-care providers if they become ill. 

6 

Early treatment with antiviral medicines is important for people at 

high risk because it can help prevent hospitalizations and death. 

CDC also recommends businesses encourage employees who are 

recommended for the seasonal flu vaccine and for the 2009 H1N1 

vaccines get vaccinated as soon as those vaccines are available in 

their communities. 

Small businesses should consider developing other flexible leave 

policies to allow workers to stay home to care for sick family members or for children if schools dismiss students of child-care programs or if child-care programs close. 

It may be helpful to consider ways to cross-train workers to perform essential functions so the workplace is able to operate even 

when key staff are absent. To maintain critical operations, small 

businesses should be prepared to change business practices as 

needed during an outbreak. Small businesses should prepare to 

identify alternative suppliers, for instance, or prioritize customers, 

or temporarily suspend some operations if that is needed. 

So I want to end with stressing four points that small businesses 

can take. Plan now to prepare for the impact of flu this fall and 

winter; take into account two planning scenarios: similar severity 

and greater severity; protect your workforce by encouraging people 

to stay home if they are sick; and take steps to maintain continuity 

of operations even during high levels of absenteeism. 

We are working across government to try to develop practical, 

clear guidance and tools that small business can use to protect 

their workforce and maintain operations during what I think is 

going to be a challenging flu season. 

Our Nation’s current preparedness is at the greatest stage it has 

ever been, but we all need to work together going forward, and I 

look forward to working with the Congress in answering your questions. 

Chairwoman VELA ́ ZQUEZ. Thank you, Dr. Schuchat. 

[The statement of Admiral Schuchat is included in the appendix.] 

Chairwoman VELA ́ ZQUEZ. And now I welcome Mr. Bridger 

McGaw. He is the Assistant Secretary for the Private Sector in the 

Office of Policy in the Department of Homeland Security. The Private Sector Office engages businesses, trade associations, and other 

nongovernmental organizations to foster a dialog between DHS and 

the private sector. 

STATEMENT OF BRIDGER McGAW 

Mr. MCGAW. Chairwoman Vela ́zquez, Ranking Member Thompson, and members of the Committee, thank you for the opportunity 

to discuss the Department of Homeland Security’s effort to prepare 

small businesses for the upcoming flu season. 

I am Bridger McGaw, the Acting Assistant Secretary for the Private Sector Office, and I have held this position since March of this 

year. As Homeland Security Presidential Directive 5 states, the 

DHS’s role in a pandemic is to act as the principal Federal official 

for domestic incident management. 

In anticipation of this year’s flu season, DHS has worked extensively with our interagency partners to provide H1N1 flu guidance 

for schools, universities, and businesses. This includes the development of a guide for small businesses. By providing this guidance, 

7 

DHS is promoting tools that individuals and businesses can use to 

mitigate the impact of H1N1 and help minimize disruptions in society and the economy. 

Preparedness is a shared responsibility of the public and private 

sector as well as every household and business of every size. As 

this spring’s outbreak developed, Secretary Napolitano stressed the 

importance of getting timely information out to the public, including the private sector, about the extent of the outbreak, the government’s response efforts, and guidance on what the public could do 

to stay healthy. 

We found that businesses of all sizes generally had very similar 

information needs. They want to know what was happening from 

a medical perspective and what they should do to mitigate the potential impact of the outbreak. DHS employed several strategies to 

get this information out to the broadest base possible. We held 

press conferences and phone briefings, sent out e-mail updates, met 

with various stakeholders, and held a flu summit in July. In each 

case, we coordinated with HHS and CDC and our partners in the 

Federal agencies. 

The private sector responded very positively to these outreach efforts. For example, the American Hotel and Lodging Association, 

which estimates that half of their 11,000 members are small businesses, applauded DHS’s updates, using the information to inform 

their membership. 

When the spring outbreak transitioned to a steady state, DHS 

worked with the interagency to take advantage of these summer 

months before the fall flu season to update our planning resources 

for businesses, schools, and universities. As a result the Federal 

Government has released guidance for all three of those elements. 

In conjunction with the business guidance, DHS also created a 

short, user-friendly guidebook on H1N1 preparedness aimed at 

small businesses. This guide highlights how to make a plan to ensure their continued operations, steps businesses can take to protect their environment, and steps that employees can take to protect themselves from H1N1. The small business guide is in the 

final stages of review and will be available at flu.gov soon. 

To reach America’s 30 million businesses, 99 percent of which 

are small businesses, my office partners with umbrella organizations that can disseminate updates and guidance throughout their 

networks. For example, we work with the U.S. Chamber of Commerce, the National Association of Manufacturers, the National Retail Federation, all of which represent small businesses. 

My office also regularly works with local Chambers of Commerce, 

which are typically comprised of small and local businesses. For example, the Business Council of Fairfield County, Connecticut, recently distributed our e-mail update to their 300 members and 

posted links to flu.gov on their Web site. 

This hearing is especially timely, given that September is National Preparedness Month. This month we all need to check in 

with our family, our workplace, and our community to make sure 

we have a plan to stay safe in an emergency. Good emergency planning will continue to yield returns for small businesses beyond this 

fall. By preparing for the flu season, small businesses will also be 

likely to be prepared for other hazards or threats they may face. 

8 

DHS’s site Ready.gov is another resource for individual and business preparedness information. In particular, Ready Business has 

a mentoring initiative designed to help small to medium-size businesses prepare for emergencies. 

Materials for small businesses include a sample emergency plan, 

worksheets to help inventory assets and equipment, and information on dealing with employee concerns, facility management, and 

more. There are also materials to help business and community 

leaders lead preparedness workshops and training sessions. 

My Senator, the late Ted Kennedy, once said, We do not have to 

compel citizens to serve their country. All we have to do is ask and 

provide the opportunity. 

This month we are asking all Americans to help us build a more 

resilient Nation. The opportunity is here. We have provided guidance and planning tools for individuals and businesses to build actionable emergency plans. Now each business and community 

needs to act on this information. 

I would like to also use this opportunity to ask all of you to help 

us get the word out. As advocates for small businesses and leaders 

in your communities, we want to work with you to get this information linked on your Web sites to get you the tools you need so 

you can encourage your constituents to take action now. 

The lines of communication to DHS are open, and we remain 

committed to an ongoing dialog with the private sector and this 

Committee on how can we can build a more resilient and prepared 

Nation moving forward. 

Chairwoman Vela ́zquez, Ranking Member Thompson, and members of the Committee, thank you for this opportunity to testify. I 

look forward to your questions. 

Chairwoman VELA ́ ZQUEZ. Thank you, Mr. McGaw. 

[The statement of Mr. McGaw is included in the appendix.] 

Chairwoman VELA ́ ZQUEZ. Admiral Schuchat, a severe influenza 

pandemic could overwhelm the capacity of our health-care system. 

Can you envision some of the difficult choices we may be forced to 

make about care, and what strain will it place on the practice of 

medicine? 

Admiral SCHUCHAT. The challenges of a busy influenza season 

are great, and we are working actively with the medical community, the health-care system, as well as the private sector to anticipate the kind of challenges that will be out there and to be ready 

for them. We are trying to develop better tools for providers and 

for the public to know when they need to see the doctor or nurse 

and when they don’t so that we can relieve some of the pressure 

on the outpatient offices and avoid those long lines in the emergency department. 

For instance, we have testing recommendations that we really 

don’t need to get a test for everyone. The testing for influenza this 

year really ought to be focused on hospitalized patients. 

We are also working with training to make sure that we have intensive care unit capacity and people who know how to work with 

ventilators and so forth. 

So there are a lot of challenges on the health-care system, both 

the outpatient and inpatient part of it, some of which we can address with training and coordination. 

9 

Chairwoman VELA ́ ZQUEZ. What about choices or who gets care 

and who doesn’t? 

Admiral SCHUCHAT. At this point what we are tying to do is use 

the best scientific evidence to understand what kind of care makes 

the most sense in different circumstances. We also have learned a 

lot from the Southern Hemisphere about what to expect, and they 

didn’t really have to make those difficult choices of who gets a ventilator and who didn’t. They were able to make it through in terms 

of their intensive care unit capacity. 

But we know that there are some communities that are vulnerable, and that is why we have some of the Federal assets available 

for particular special needs. So at this point we are really trying 

to use the science of what is going on to make clinical recommendations of who should get what kind of treatment. So we are not really looking at a rationing. 

Chairwoman VELA ́ ZQUEZ. Let us talk about resources. Given the 

existing shortage of physicians, what strategy is the agency employing to improve the capacity of the physician community to provide care during a pandemic? What does this say about this Nation’s need to address its shortage of physicians as part of healthcare reform? 

Admiral SCHUCHAT. Scarce resources in terms of providers is a 

large problem in many of our communities. For a pandemic we 

really can’t expect to have enough assetseverywhere. In terms of a 

hurricane, for instance, we can send people from one part of the 

country to another part of the country, but with a pandemic, everyone may be affected. 

We are taking steps to try to broaden the provider community, 

trying to enroll the Medical Reserve Corps as something we can tap 

into, for instance, and also understanding when health care professionals are needed or when home care is enough. 

So I think that this pandemic hasn’t come at a good time in 

terms of our health-care system’s capacity, and what we are trying 

to do is get as much support ready for the fall as possible. 

Chairwoman VELA ́ ZQUEZ. Do you have a sense as to where are 

the most vulnerable communities? 

Admiral SCHUCHAT. There has been an effort to work with States 

and cities to understand their gaps. They have been submitting reports to us at CDC and at HHS about their readiness, both their 

health-sector readiness and their public-health readiness, and at 

this point I think it is fair to say that everyone is going to have 

a challenge this fall with managing the kind of health-care challenges we expect, as well as a large vaccination program. 

What we are trying to do is work across the board with everyone 

to share best practices and to get resources out to the States and 

cities, because we know they can’t really handle this without those 

extra resources. 

Chairwoman VELA ́ ZQUEZ. Thank you. 

Dr. Blank, developing general preparedness guidance seems key 

to survival of any small business operation during a pandemic, but 

unlike large firms, the resources of small businesses are much 

more limited. How do you expect a small business to prepare for 

a pandemic without placing serious financial strain on itself, particularly in today’s financial climate? 

10 

Ms. BLANK. It is a very important question. Of course, the answer has to be particular to the specific small business, and will 

vary by type of business. Cross-training of employees in important, 

which small businesses do naturally because more employees often 

cover more functions. Businesses might want to expand that to 

really think about what would happen if one or two key employees 

were out, who would take over, and how they could use remaining 

employees. 

Telecommuting in some places where you are not doing customer 

service may be more possible. They may want to coordinate and 

communicate with other small businesses in the area so that, say, 

if you are a small health-care practice, that you could actually work 

jointly to cover your patients in a way that you wouldn’t in normal 

times. 

Chairwoman VELA ́ ZQUEZ. I hear you, and I know that is the right 

proactive way to plan for a pandemic, but given the constraint on 

financial challenges that small businesses are going through, it is 

quite difficult for them to think proactively. 

Ms. BLANK. I agree with that. I think it is one reason why we 

all here are trying to get the word out to both large and small businesses about the need to do some advanced planning, because if 

this comes, it could come quite quickly to your local area. If you 

haven’t thought about it ahead of time, you will be in worse shape. 

As you pointed out in your opening statement, small businesses 

will be more negatively impacted because they don’t have the same 

flexibility. 

Chairwoman VELA ́ ZQUEZ. Mr. McGaw, in light of the recent 

avian flu scare a few years ago, significant strides have been made 

to prepare businesses for an H1N1 emergency. What kind of support should small businesses expect from State and local governments during a pandemic, and who will coordinate those efforts? 

Mr. MCGAW. Thank you. It is a great question. One of the things 

that we have been really relying on is the fact that this is a true 

partnership between the intergovernmental actors at the Federal, 

State and local level. We are also recognizing that, as we saw in 

the spring, H1N1 presented itself around the country in different 

ways at different times and different places, so what that resulted 

in was an effort to make sure that each of those areas had the 

right information, and that they were interacting with their local 

health officials to make informed decisions based on the impact 

they were seeing locally. 

What we were trying to do and continue to do is to inform the 

decisionmakers, and our Intergovernmental Affairs Office, for instance, works with all the State homeland security advisors and 

emergency managers to make sure that they are informed with the 

information that we have. So we work through our intergovernmental processes at DHS. 

The key here is that the same information is available from any 

actor. So you are going to hear the message from the Intergovernmental Affairs Office to the homeland security advisors; you are 

going to hear it from my office working with our infrastructure protection community and making sure the business community is 

hearing that; and then you are hearing the same information and 

guidance coming from the CDC and the health community. 

11 

So I think what you saw in the planning for 2006, 2007, was an 

example of all of listening to each other and working in a more collaborative manner to make sure everyone has the information to 

make more informed decisions. 

Chairwoman VELA ́ ZQUEZ. Well, I am concerned about the fact 

that the General Accountability Office report, they heard from the 

private sector the fact that it is unclear for small businesses and 

businesses about the respective role and responsibility of the Federal and State governments during a pandemic emergency. My 

question is: Do you feel that there is a coordinated effort between 

State and Federal Governments in working together for a strategy 

in terms of preparedness? 

Mr. MCGAW. From the Department of Homeland Security side 

and then maybe from the public health side, I would say very much 

so; we are coordinating on the governmental level. The shared-responsibility model approach that we have taken is to make sure 

that State actors have what we know when we know it. We are trying to be very open and transparent with the information that we 

have based on the science, but also using the updated guidance and 

making sure that people are kept abreast. In my office we send out 

a weekly e-mail with any updates we have. 

Chairwoman VELA ́ ZQUEZ. I hear you when you talk about providing information. My question is coordination. So if any of the 

others— 

Admiral SCHUCHAT. I think that the public really expects, appropriately, that we have a seamless coordination at the public-health 

level between cities, counties, States, an the Federal level, and very 

much a part of our planning process this summer as we are readying the government for an increase in influenza has been this citycounty-State-Federal partnership. So our Vaccine Task Force that 

is trying to figure out how we implement this large-scale, voluntary 

vaccination program has a steering committee composed of people 

from several different levels of public-health government. And so 

from the strategy to the planning to the evaluation and feedback, 

we are really trying to work seamlessly. 

I think most of what happens with influenza happens at the local 

level, and if we don’t have strong local implementers, we will fail. 

And so we are trying to incorporate that local perspective and the 

State leadership into the Federal planning at every step. 

Chairwoman VELA ́ ZQUEZ. Thank you. 

Mr. Thompson. 

Mr. THOMPSON. Thank you, Madam Chairwoman. 

Once again, thanks to the panel for your service and for being 

here on this important topic. I want to keep going down that line 

of inquiry that the Chairwoman had. 

In terms of collaboration, we have three very important departments represented here that are three or probably even more that 

would be impacted if this pandemic would become a reality. Can 

you give me specific examples of communications and collaborations between your three departments on this particular issue? 

Mr. MCGAW. Starting in April, all of my communications from 

the Private Sector Office have been linked to the CDC. So in all 

of our outreach efforts we are working to include the CDC, and we 

talk about what we are going to say, how we are going to say it, 

12 

and who we are going to say it to. And those communications have 

been—we have had—back in April we had private-sector calls on 

almost a weekly basis that went out to about 1,100 trade associations and other organizations and their leadership as we briefed 

them out, and each of those calls had representatives of the different agencies. As we learned what kind of questions people wanted, we brought in more subject-matter experts. 

We continued that operational tempo through the summer, 

through our business planning guidance, through our K-through-12 

guidance, through our higher ed guidance, making sure our agencies were working together. Those are three examples. I have a half 

dozen others. 

Ms. BLANK. Obviously, the medical leadership here has come 

from outside of Commerce, but Secretary Locke and other senior 

staff have been quite involved in communicating about the guidance. We really see ourself in the role ofinterfacing between the 

CDC and DHS and the guidance it is giving, and the business community. We have the connections into the business community to 

try to be the coordinating agency that gets this message out as 

fully as possible, and in turn sends information back from what the 

business community is saying about what is helpful or what they 

still need. 

Mr. THOMPSON. All right. Secretary Blank, you talked the outreach to the business community, obviously, which is extremely important, from both perspectives, workforce issues, which annually 

with the flu is always a difficult time, especially in small businesses that have a very small workforce and a lot of folk wearing 

a lot of hats in terms of duty and responsibilities, but also on the 

customer side, and especially what could be very devastating to 

commerce is people tend not to go out into public areas as much, 

and the economic impact of that. 

How is the Commerce Department or, working your other partners, getting that message out to small businesses? I have heard 

some great resources and great strategies in terms of managing flu 

symptoms and minimizing exposure and Web sites and all that. 

How are you getting that message to the small businesses? 

Ms. BLANK. Of course, some of this gets out simply through the 

general media. At colleges or places that have come back into session, there has been news about this. This raises awareness, and 

people start looking for resources. You need supply and demand. 

People have to be looking for this help and this information before 

they hear it. 

Secretary Locke has been on a number of phone conferences with 

various representatives of the business community. He has particularly been focusing on talking with travel, toursism and retail businesses, those particular sectors that are likely to be most affected 

if consumers start staying home and not going out into public 

places. And I know that there is a plan to continue those sorts of 

phone calls and outreach as we move into the season with various 

sectors and groups within the economy. 

Mr. THOMPSON. Great. 

Has there been discussions of thoughts of what the potential economic impact could be with this projection of—and especially with 

small businesses as it impacts our cash flow, even for a number of 

13 

weeks in the economy that we have been in, could be absolutely 

critical for small businesses. 

Ms. BLANK. The effects obviously are going to depend very heavily upon how severe this flu season is, and where it hits, and 

whether it is regional, or whether it becomes more national or global as well, because international trade and travel will be heavily 

affected. 

I know that there is a report coming out sometime later this 

month from the Department of Homeland Security done by their 

National Infrastructure Simulation and Analysis Center that is 

going to look at various scenarios of what the impact on the economy could be. 

We do have estimates from past flu incidents. So in 2006, the 

Congressional Budget Office, for instance, estimated that a moderate bird flu pandemic would reduce GDP by around 1 percent, 

where a severe one would reduce it be 4 percent. Those are big, but 

my understanding is that the duration and the severity of an H1N1 

flu is likely to be less than a bird flu. So those would be absolutely 

maximal effects. 

Mr. THOMPSON. One last question. Mr. McGaw, this past week 

I had the privilege of being present when the USDA presented a 

grant and a loan to an ambulance company. I was impressed with 

this, as an old EMT, the new technology, some of this technology 

that had ultraviolet lights in the back of the ambulance specifically 

to address the viruses and keeping a sterile environment. 

Is the Department reaching to the local level with local paid and 

volunteer emergency medical services who, frankly, if the flulike 

symptoms escalate to a point where people need more professional 

care, that they are going to be involved with that. 

Mr. MCGAW. I don’t know of particular targeted outreach to the 

volunteer companies of EMTs and firefighters around the country. 

The same information—we can probably do that, and I will look 

into it. 

I think the importance is we are pushing out this really at the 

State homeland security level and making sure the State homeland 

security advisor has all of the information they need to push down 

to their first-response community. That can be pushed via the 

FEMA avenues as well, the key being all the things that we are 

talking about right now can be accessed by those local fire companies and EMTs. But it is going to be a pull probably from their 

local emergency coordinators. I can look into it. 

Mr. THOMPSON. Thank you. 

Mr. MCGAW. You are welcome. 

Chairwoman VELA ́ ZQUEZ. Mr. Schrader. 

Mr. SCHRADER. Thank you, Madam Chair. Dr. Schuchat, I guess 

I was curious as to how has this particular flu been spreading, and 

what has been its morbidity and mortality in the United States 

compared to past flus we have had? 

Admiral SCHUCHAT. The H1N1 influenza virus has been what we 

are calling a moderate severity. This is not like 1918, what we saw 

in the spring anyway, and the Southern Hemisphere this summer 

does not have the enormity of the 1918 pandemic, which was, of 

course, really absolutely devastating. But what we don’t know is 

exactly how bad things will be this fall and winter. We have been 

14 

trying to learn from the Southern Hemisphere’s flu season. Their 

winter was our summer. So many of the Southern Hemisphere 

countries have just been through a season where the new H1N1 

did dominate. It caused most of the illness in a number of these 

places. There were some places where the health-care capacity was 

really somewhat strained, but in most of the places it was a severe 

year, but not their worst ever. So that gave us a sense of what to 

expect. 

Mr. SCHRADER. Is that actually true? I assume their sanitation, 

health-care opportunities are not quite what we might have in the 

Northern Hemisphere. Is that factored into your calculus when you 

are looking at what to extrapolate? 

Admiral SCHUCHAT. The comparisons I am making are with 

places like Australia and New Zealand that are a little closer to our 

health system capacity. But, importantly, even in some of those 

countries there were hard-hit communities and hard-hit populations. We are concerned in a couple of places we have heard of 

indigenous populations having a higher morbidity and mortality: 

Aboriginal populations in Australia; in Manitoba, some of the Native Americans there. 

So I think that we need to be ready to be flexible and as prepared as possible. We may have this H1N1 on top of the regular 

seasonal strains, we may have sort of two seasons, or almost three. 

Mr. SCHRADER. To that point I guess my next question would be 

how do we gauge of the flow as we get into the fall-winter flu season here in America how we are doing compared to our normal in 

terms of the values, and will the CDC and others continue to be 

slightly alarmist, which may be viewed as your job. But as a small 

businessman, I would like to get some pretty good, solid information as to how we are compared with trends we have seen in the 

past. 

Admiral SCHUCHAT. We have enhanced our surveillance to have 

more timely information that is helpful to people and also to get 

information that is more useful locally. We are already seeing increases in flu, but it is only in some parts of the country; the 

Southeastern States, but not the rest of the country in general. 

The State and local governments are going to try to share the information they have so that you will know in your community what 

is going on. And I think we have learned a lot from the spring 

about interventions. We have learned it was a new virus. We took 

it very seriously. We imposed some interventions to be on the safe 

side. And we have been able to take the knowledge of what the experience really was like to sort of temper those interventions to 

have a good balance between protecting health and safety and not 

in untowardly disrupting the economy. 

Mr. SCHRADER. I just would hope as we go forward we have accurate, timely, somewhat authoritative, as much as you can be with 

a disease, information to guide the small business community going 

forward. 

Ms. Blank, what are we doing to protect the agricultural industry from the misnomer about the flu and the porcine population 

being the big cause of this? What actions do you see the government or Department of Commerce or Chambers or the farm organizations doing to make sure Americans get good information here? 

15 

Ms. BLANK. It is extremely unfortunate that this flu has gotten 

an animal name, which by all accounts is not a very accurate title 

at all. 

Mr. SCHRADER. Keep emphasizing that, please. 

Ms. BLANK. I have cousins who are pork farmers who are quite 

upset about this. Obviously the government has tried very hard to 

use the right nomenclature here, and continues to do that. I think 

the information on the CDC Web site, on the www.flu.gov site, emphasizes this does not relate to eating particular This is a flu that 

is transmissible the way that other flus are, and one should think 

of it in those terms. 

It is hard to counter a name once it gets out there, and I think 

we just have to all keep making sure we use the right language 

and we keep saying the right things and hope that gets through. 

Mr. SCHRADER. Thank you. I would yield back. 

Chairwoman VELA ́ ZQUEZ. Thank you. 

Mr. Leutkemeyer. 

Mr. LEUTKEMEYER. I would like to follow up on a couple of Congressman Schrader’s remarks and questions, just to kind of nail 

down the effect of the flu versus the bird flu. 

Dr. Schuchat, can you give me just how many people were affected with the bird flu, and you said this is going to be less than 

the bird flu? 

Admiral SCHUCHAT. There are two principal differences between 

the avian bird flu that we have been talking about for the past few 

years and the 2009 H1N1. One difference is that the bird flu 

strain, H5N1, was very lethal. Abouttwo-thirds of people who got 

that infection died from it. That is just extraordinarily lethal. The 

H1N1 2009 strain is not of anywhere near that magnitude 

lethality. 

On the other hand, the H5N1 bird flu strain did not acquire the 

ability to spread easily person to person. Almost all of the cases 

that we have, the several hundred cases that we have had since 

2003, have been animal to human, bird to human; very, very few, 

probably a couple, that were human to human; whereas virtually 

everything we are seeing with the 2009 H1N1 is extremely efficient 

person-to-person spread. 

So that bird flu strain, fortunately, has not become pandemic, 

but it is very, very severe. The H1N1 strain has become pandemic. 

It is very easily spread person to person, spreading around the 

world. Fortunately, it doesn’t have that severity or lethality that 

the bird flu strain had or that the 1918 strain had. That is really 

good news right now because we think we can manage this with 

prompt treatment of people who are at risk with antivirals, and we 

are close to having a vaccine to prevent and mitigate disease. 

So the lethality and transmission are the two big differences 

there. 

Mr. LEUTKEMEYER. Mr. McGaw, with regards to Homeland Security, are you monitoring other countries where this is popping up? 

Obviously, some folks have testified with regard to the southern 

part of the hemisphere, much more prevalent. Are you monitoring 

that? If so, are you going to restrict travel between those countries 

if you see a problem with it being exported to our country? 

16 

Admiral SCHUCHAT. I can speak to the monitoring, and he can 

probably do the travel issues. 

We have been intensively monitoring the virus and the disease 

it causes around the world, including Southern Hemisphere countries. So far the virus is the same. It hasn’t mutated. It is the same 

as what we have and what we had last spring. 

Mr. LEUTKEMEYER. Could you name a couple of those countries? 

Admiral SCHUCHAT. Yes. Australia, New Zealand, South Africa, 

Argentina, Chile, those are countries where there has been a lot of 

information. Peru. I may be forgetting a few. So we actually have 

people and partnerships in a number of countries. And at flu.gov, 

HHS has released a report on the Southern Hemisphere that describes the assessment of what we saw there and how that can 

help us anticipate what we are going to have this fall, knowing 

that the health systems might be different. 

Mr. LEUTKEMEYER. My question is if you see that it is a pandemic level there, are you going to restrict travel? Is that an option? 

Admiral SCHUCHAT. There is not a plan for any travel restrictions. At this point the U.S. has as much or more disease than anyone else does. We are strongly encouraging others not to restrict 

travel of Americans, and we are not intending to restrict travel 

elsewhere. We think it is so important for people who are sick to 

stay home and not spread their illness, but we don’t think that one 

country is a riskier place than another right now. Unfortunately, 

the virus is all over the world. 

Mr. LEUTKEMEYER. Okay. Thank you. 

Secretary Blank, very quickly. I am running out of time here. I 

also want to follow up to Congressman Schrader’s remarks with regard to getting a better handle on the name of the flu. Are you 

working with the national media to see if those folks would try and 

not use other words other than ′′H1N1′′? Are you briefing those 

people, and are you keeping track of their lack of doing that? 

Ms. BLANK. I think CDC is involved with this quite closely. 

Admiral SCHUCHAT. We have been working intensely with the 

media to try to ready them to help with the falloutbreaks. We have 

had workshops and tabletops and so forth. We have discussed the 

name issue. I think their view is the name has stuck, and many 

of them are trying to use the H1N1 term that we are using consistently, but I don’t think we will be able to convince the headline 

writers. 

Mr. LEUTKEMEYER. How do you think we ought to address that 

problem, because this is significantly impacting the pork industry. 

Just to say, Well, they are doing their best; is that good enough? 

Admiral SCHUCHAT. One thing we are doing is monitoring understanding. There have been several polls to understand are people 

not eating pork, or are some of those factors happening. We think 

we are actually winning with the American public’s understanding. 

So I think that is probably going to be more helpful. I do think it 

is important to look at all the economic consequences. 

Mr. LEUTKEMEYER. Don’t you think it wold be wise you have a 

meeting once a week, once a month, with the national media and 

say, hey, in your articles following up on this disease, we noticed 

17 

a number of times that you were incorrectly using the name of— 

the slang name for this flu. 

Mr. MCGAW. It is an important point and one that we should 

continue to emphasize. So I will make sure our public affairs offices 

are aware and continue to push. We are all coordinated in our use 

of the H1N1 moniker and away from other names, and so we will 

continue to push on that. 

Chairwoman VELA ́ ZQUEZ. Will the gentleman yield? 

Mr. LEUTKEMEYER. Yes. 

Chairwoman VELA ́ ZQUEZ. Dr. Schuchat, on this point of the name 

issue, for the record, is there a direct correlation between swine 

farms and the H1N1 pandemic? 

Admiral SCHUCHAT. This virus is spreading person to person. We 

have no information that this virus is spreading through swine 

farms. Right now this is a human-to-human problem, and that is 

how we are addressing it. 

Chairwoman VELA ́ ZQUEZ. Mr. Moore. 

Mr. MOORE. Thank you, Madam Chair. 

Dr. Schuchat, I believe you testified—and I don’t have a direct 

quote—but persons should stay home and not spread the disease 

by going to work. You said something to that effect. 

I think probably all of us agree with that. My concern is for hourly employees who may not have paid sick leave. What, if anything, 

do you think we can do to encourage employers to work with people 

in that situation? And I am asking you. Then I want to ask the 

other witnesses if they have any thoughts about it, too. 

To me, this is something that we have to consider, because we 

could—by having that situation, people could inadvertently—not 

intentionally, but inadvertently—spread the flu to others. Any 

thoughts? 

Admiral SCHUCHAT. This is one of the mostheartbreaking parts 

of this, because we need people to stay home and not spread their 

infection and take care of themselves and get better, and we need 

the workplaces to support them. It is a really difficult time in our 

economy. Leadership has sent letters out. We are working with the 

Chambers of Commerce. We are trying to get the word out that 

this is better for everyone, but when it is your paycheck, it is really 

hard to understand. 

Ms. BLANK. I do think that there is really a role here for public 

leadership by saying exactly what you have said as often and as 

publicly as possible; to say to employers this is an unusual time, 

and we need to support workers and what they should be doing to 

keep us all healthy. 

Mr. MOORE. Mr. McGaw, any thoughts? 

Mr. MCGAW. The more that employers understand the severity 

of the disease and how it is going to impact our workforce, the 

more they will understand that the workers aren’t going to be gone 

for long. And so the more that we can communicate just what exactly they need to understand about the severity of H1N1 and the 

concrete steps they can take, and then actually have the conversation with their employees about understanding expectations, the 

more there is a dialogue about this, the better off I think the employees and the employers will feel about the decisions about letting them stay home. 

18 

Mr. MOORE. Thank you very much. I yield back, Madam Chair. 

Chairwoman VELA ́ ZQUEZ. Mr. Ellsworth. 

Mr. ELLSWORTH. Thank you, Madam Chair. 

Thank you all for your hard work that you are about to undertake, and have. I know one of you talked about seamless coordination. I think that is very difficult, especially when that many layers 

of government, and then to the people and private industry. 

I would like to take a little different line. Has there been any discussion of doing absolutely nothing, of staying out of it and letting 

it handle itself? May not be that bad, may not come here. There 

will be a few cases, and we let it handle itself. 

Let me ask you, Mr. McGaw, you said you talked to NAM and 

the Chambers. Have they said, Don’t worry about us, we will take 

care of ourselves? 

Mr. MCGAW. No. They have been a true partner from the beginning. The dialogue that the Department has had with those organizations across a spectrum of challenges in thehomeland arena really paid dividends, and all the planning that went on during the 

avian flu discussions of 2006 and 2007, that paid dividends as well. 

In April, when this first arose, those were some of the first conversations we had were with those organizations, because the reality in trying to reach out to the millions of businesses and people 

that are potentially impacted requires media coordination and communication, and organizations like NAM, the Chamber, the National Federation of Independent Businesses, they can immediately 

put solid information in the hands of decisionmakers broadly. And 

we saw a substantial amount of open rates on e-mails. So the 

media communication between our organizations was pretty significant. 

I have an op-tempo of we went from 100 participants to 518 to 

1,100 participants on conference calls over 4 days. So just us using 

our standard incident command structure, we were able to get information immediately out to those businesses. So standing by and 

doing nothing was never part of the calculation. 

Mr. ELLSWORTH. We read the Constitution quite a bit. I am sure 

you all have the pocket Constitutions and page through those. I 

have never seen H1N1 mentioned in any of the articles or any of 

the text of the Constitution, and yet do you think that the American people expect the government to do something in this and not 

just stay out of it? Would you say that that is an expectation the 

American people have, that government is prepared to do something to prepare for H1N1? 

Admiral SCHUCHAT. I think the administration’s view is protecting the safety and health of the American public is extremely 

important. We this summer did public engagements in 10 cities or 

towns around the country to talk to Americans about what was important to them from the government on this particular threat, 

knowing that we don’t know everything; that we don’t know if it 

will be worse in the spring, if it will affect their own communities. 

What we heard was an expectation that protecting health was important to people, and that this was something where government 

had an important role. 

I think that there is a strong feeling that this is something that 

is really important. It will be wonderful if we work really, really 

19 

hard and seamlessly and it is not a bad year, but I think we can 

hope for that. 

Mr. ELLSWORTH. I am making my comments tongue in cheek. I 

hope you realize that at this point. We heard a lot over the last 

30 days about government keeping its nose out of people’s business, 

let the market handle it, let people do their own thing, we should 

stay out and things would be much better. 

If we did nothing, what do you expect—you know, I am hearing 

about GDP, percentage of GDP of the economy, all the things that 

if this turns sour, which it very well may, if we did nothing, do you 

anticipate that the American people would then turn on government the other way and say, You fumbled this, and you weren’t 

prepared, and this is something why we want our government to 

get involved. 

Mr. ELLSWORTH. What would happen if we just let it go? 

Admiral SCHUCHAT. I think that there is our actively doing nothing, is very hypothetical, but the reality is that, without applying 

the science of what we have learned to the problem, I think we 

would have worse problems from the disease than what the disease 

would cause on its own. 

You know, we saw in the spring a lot of fear, a lot of altered behavior, not all of it constructive. And by learning what this virus 

was doing and what was effective in intervening and what wasn’t 

effective, we could direct people to effective interventions. We could 

make a vaccine. We could learn how better to intervene in schools 

in a way that was sustainable for our communities and healthier 

for families. 

So I think that if government weren’t there, there would be a lot 

of activity and disease and bad impact, but there would also probably be a lot of unintended consequences of people reacting to the 

problem. 

Chairwoman VELA ́ ZQUEZ. Time is expired. 

Mr. ELLSWORTH. Madam Chair, can I just close the comment? 

I agree 100 percent. I commend you for your hard work. As somebody formally in emergency services, there are a lot of things we 

prepared for, hoped we never had to use, tornados, natural disasters, floods, that people were glad we were there when the bad 

things hit. 

Thank you very much. 

Chairwoman VELA ́ ZQUEZ. Mrs. Dahlkemper. 

Mrs. DAHLKEMPER. Thank you, Chairwoman Vela ́zquez, for holding this important hearing today. 

And I thank those on the panel for coming and telling us how 

you are preparing our country for this pandemic and any future 

ones that we may face. 

I did want to ask, as you are looking forward and as you have 

been preparing for this, do you see a need for us in terms of public 

health infrastructure and what we currently have and whether we 

need to invest more for the future? And I will just open it up to 

each one of you. 

Admiral SCHUCHAT. I think that the last several years, there 

have been investments in preparedness, in vaccine development 

and so forth. But our public health infrastructure is really weak 

20 

right now, and there are gaps at many local and State levels that 

are hard hit by the economic realities. 

So I know that for surveillance and prevention and communication, there is a lot of strengthening that would put us in better 

shape for dealing with this kind of problem and then the kind of 

problems that are every day, that aren’t just every 20 or 40 years. 

Mrs. DAHLKEMPER. Where do you see the biggest gaps? If you 

had to ask us as Members of Congress to do something soon, what 

would be the key thing you would say we need to do to improve 

our public health infrastructure? 

Admiral SCHUCHAT. I think that the workforce is a big challenge 

right now in terms of enough workforce and a pipeline of folks. And 

it is very economically driven right now. 

Mrs. DAHLKEMPER. Workforce on a more local level, State level? 

Admiral SCHUCHAT. Yes, I think local is the most vulnerable 

right now, and after that, the State. 

Mrs. DAHLKEMPER. Mr. McGaw, did you want to add to that at 

all? 

Mr. MCGAW. I think we would all agree that public health infrastructure serves a dual purpose and can be used in emergencies, 

and it is also used on a daily basis. So the investment, pays dividends constantly, whether we are concerned about public health 

crises or normal public health activities. 

Mrs. DAHLKEMPER. And I have just one further question, having 

just sent two children off to college, and you saw in the news the 

quarantined dormitory areas. Have we learned anything from what 

has happened in the last few weeks as we sent our children off to 

school? 

Admiral SCHUCHAT. The American College Health Association is 

tracking illness in colleges and in interventions, and the news so 

far is pretty good, that the colleges are following this guidance that 

was issued and trying to keep ill kids separate from others. And 

they are not overreacting. They are appropriately reacting. And I 

think that it has been heartening to see them being able to apply 

practical information. And the professors are understanding when 

the students aren’t turning in their homework and encouraging 

them to stay home and get better. 

We aren’t seeing a different pattern of illness yet. We are—we 

believe that the interventions we have recommended are sensible 

and practical and can work, but it is still too soon to know what 

will be happening around the country. 

A reminder, though, that people from the ages of 6 months to 24 

months—or to 24 years, including those college students, are recommended to receive the H1N1 vaccine when it becomes available, 

and we know that a lot of universities are planning on ways to be 

able to offer it. 

Mrs. DAHLKEMPER. Thank you. 

I yield back, Madam Chair. 

Chairwoman VELA ́ ZQUEZ. Any Member that wishes to make any 

other question? 

Well, let me take this opportunity again to thank all of you for 

your participation and your service and you are all dismissed. 

And I would ask the members of the second panel to be ready 

to take your seat. 

21 

Chairwoman VELA ́ ZQUEZ. I would like to introduce Mr. Anthony 

Demangone. He is the director of regulatory compliance and senior 

compliance counsel for the National Association of Federal Credit 

Unions. The National Association of Federal Credit Unions was 

founded in 1967 to directly shape the laws and regulations under 

which Federal credit unions operate. 

Mr. Demangone, you are welcome and have 5 minutes to make 

your opening remarks. 

STATEMENT OF ANTHONY DEMANGONE 

Mr. DEMANGONE. Good afternoon, Chair Vela ́zquez, Ranking 

Member Graves and members of this committee. I am Anthony 

Demangone, NAFCU’s director of regulatory compliance and its 

senior compliance counsel. 

I am here today on behalf of the National Association of Federal 

Credit Unions. In my role, I represent NAFCU before the Financial 

Services Sector Coordinating Council. This is an organization that 

champions the protection of America’s financial critical infrastructure. I am a member of FSSCC’s Infectious Disease Forum, and I 

was a member of the 2007 Financial Services Pandemic Exercise 

Control Team, which helped to manage a financial services industrywide tabletop exercise on pandemic preparations. 

While the subject of today’s hearing focuses on a very unpleasant 

topic, the unsettling specter of an influenza pandemic, I want to 

commend the leadership of the Small Business Committee for holding this hearing to address readiness and preparation within America’s small businesses. 

NAFCU has been working with financial regulators on this important issue, and we have educated our member credit unions to 

help them prepare for a pandemic. 

I want to recognize the work of the Treasury Department and 

the FSSCC, of which NAFCU is a member, for its diligence in helping financial institutions identify and address the complex issues 

surrounding pandemic business continuity planning. 

Credit unions have been preparing for a pandemic for more than 

3 years. The National Credit Union Administration provided important guidance to credit unions in the first quarter of 2006 to increase awareness concerning the potential threat of a pandemic. 

More recently, financial regulators have been providing guidance 

concerning the current H1N1 pandemic. The NCUA reiterated key 

elements for credit unions in a letter addressed to them just this 

past June. In its letter, NCUA directed Federally-insured credit 

unions to review their disaster preparedness response plans to ensure that their pandemic plan is appropriate and provided a series 

of issues credit unions must consider in their pandemic planning. 

Credit unions have listened to this guidance and have created 

plans that address the following: Pandemic-related communications 

to employees, members, and their communities; policies to implement social distancing, proper hygiene and other preventative 

measures; cross-training of appropriate staff to maintain operations 

during a pandemic; and the review of operations and facility management to ensure a proper response to pandemics. 

Many credit unions have formally tested their pandemic plan in 

a national tabletop exercise. The Treasury Department, in conjuncVerDate Aug 31 2005 13:51 Dec 09, 2009 Jkt 000000 PO 00000 Frm 00027 Fmt 6633 Sfmt 6633 G:\CLERKS~1\HEARINGS\TRANSC~1\52260.TXT DARIEN
22 

tion with the FSSCC and others, sponsored an industrywide pandemic flu exercise in 2007. The results demonstrated that even 

businesses that had pandemic plans in place found a global flu outbreak posed complex issues in areas where more preparation was 

needed. 

While financial institutions have been preparing, some questions 

remain unanswered. The following issues clarified by Congress and 

the Federal Government would help America’s credit unions better 

prepare for future pandemics and handle this one right now. 

First, the financial services sector needs accurate, and timely information about any developments concerning the current pandemic and what steps that Federal, State and local governments 

are taking in response. In addition, information on important infrastructure is vital. For example, will mail service, public transportation and telecommunications infrastructure be available for credit unions and their employees? 

Second, with credit unions facing increased levels of absenteeism 

during a pandemic, it may be difficult for them to comply with certain regulatory requirements. Staff trained to comply with the 

Bank Secrecy Act or that works with the SBA may be at home sick 

for long periods of time. If we have this flexibility plan in place beforehand, financial regulators will not have to answer repeated 

questions during a pandemic, especially when the regulators themselves may have high absenteeism. 

Third, many credit unions continue to ask questions concerning 

who will be responsible in a given area for pandemic related issues. 

Will the Federal, State or local governments decide if a quarantine 

or a closing of a business is necessary, or will this be a private decision made by each business one at a time? On the flip side is the 

question, who will give the all-clear signal once a pandemic has 

passed? 

Fourth, the impact of Hurricane Katrina demonstrated the need 

to have cash available to meet liquidity needs. Current economic 

crisis has demonstrated the importance of liquidity for financial institutions. Should the current pandemic develop more deeply into 

a health-care crisis, it will surely strain the liquidity and put more 

challenges on financial institutions already facing a tough environment. 

Thank you for the opportunity to provide our views on this timely topic. Again, I commend the Small Business Committee for its 

commitment to address concerns relating to pandemics. And I will 

be pleased to respond to any questions that the committee members may have. 

[The statement of Mr. Demangone is included in the appendix.] 

Chairwoman VELA ́ ZQUEZ. Thank you, Mr. Demangone. 

Our next witness is Dr. Jim King. He is a family physician in 

Selmer, Tennessee, and currently serves as the board Chair of the 

American Academy of Family Physicians. The American Academy 

of Family Physicians is one of the largest national medical organizations representing family doctors with more than 94,000 members. 

Welcome back to the committee. 

23 

STATEMENT OF JIM KING, MD 

Dr. KING. Thank you, Chairwoman Vela ́zquez. 

And thank you for having me, Ranking Member Graves and 

other members of the committee. 

I am one of approximately 95,000 family physicians who are located across this country in almost every county. We are in solo 

and small group practices, and I am happy to be here to talk to 

you about H1N1 virus and the economic health of the Nation on 

small businesses because we are small businesses. I am a small 

business. 

The last patient I saw—because it was mentioned earlier in the 

southeast, and I am from Tennessee—was a 10-year-old with H1N1 

flu before I flew up here. Driving here in the car on the radio, the 

first death in Memphis is a high school football player who died in 

the hospital with H1N1 flu. So we are seeing it already. It is a very 

important issue. 

Family physicians are affected with outbreaks of diseases like 

H1N1 in two very important ways. First, we are the frontline of diagnosis and treatment of the disease. Patients who begin to experience H1N1 symptoms often go to their personal physician. Frequently it is the primary care physician who begins to see the pattern of infection. 

Once the outbreak is determined, the primary care physician will 

need to provide health care services to both the infected patient 

and the worried well, the patients who need to be reassured and 

educated. 

Secondly, small group practices like myself may be affected significantly ourselves in doing business. A family physician’s practice, especially in rural areas and underserved city areas, often consist of only one or two physicians in a small clinical and administrative staff. When one staff member begins to show H1N1 symptoms, it is vital that they stay away from the practice and office 

so that patients do not become ill. 

As a result, if the influenza outbreak infects just a few members 

of a practice, that practice may have to close temporarily. Unfortunately, this is likely to be a considerable length of time. We talked 

about this when being a little mild, 3 to 5 days, but you wouldn’t 

want a sick person in that office if you were coming in for maybe 

even longer. 

Last, an outbreak of H1N1 will expose two major deficiencies in 

our health care system: the lack of coordination, and workforce 

shortages. For example, patients can get vaccinations at multiple 

sites, retail health clinics, work-site clinics, health fairs, pharmacies, school-based clinics. While these sites make immunization 

convenient, they lead to fragmentation of patient care; especially it 

makes it very difficult for a practice to ensure that all of the patients have received the necessary shots. 

The Academy along with other primary care groups, including 

the American Academy of Pediatrics, have recommended implementing a patient center and medical home to address the lack of 

coordinated care. The patient center and medical home also would 

connect primary and public health, especially in areas in which the 

medical home and public health functions are more tightly integrated. 

24 

Second, even before H1N1 becomes a pandemic emergency, family physician practices will pay the price for our Nation’s shortage 

for primary care physicians. As the number of infections increase, 

family physicians in small and solo practices will be overwhelmed 

by the number of patients simply because there is nowhere else to 

go. These practices who usually serve rural and inner city populations will not have all of the resources to handle a growing number of infected patients. 

That is why Congress must address education and training of 

primary care providers in health reform legislation. The Academy 

has recommended that Congress increase medical graduate education payment for primary care residency slots. This would provide incentives for the Nation’s teaching hospitals to invest in primary care residencies. 

Family physicians and the Academy are taking the threat of the 

H1N1 outbreak very seriously and are engaged in extensive preparation. We see it as a fundamental responsibility to provide patients with the right information at the earliest possible time. 

However, they and their patients will feel the blunt of the deficiencies in the Nation’s fragmented health care system. We will 

need a better investment in primary care to meet these challenges 

and look to Congress to make this happen. 

Thank you for the opportunity to testify, and I will be happy to 

answer any questions. 

[The statement of Dr. King is included in the appendix.] 

Chairwoman VELA ́ ZQUEZ. Thank you, Dr. King. 

Our next witness is Mr. Harold Jackson. He is the president and 

CEO of Buffalo Supply, Inc., located in Lafayette, Colorado. Buffalo 

Supply has been providing medical and surgical equipment and 

supplies to the Federal Government since 1983. Mr. Jackson is testifying on behalf of the U.S. Chamber of Commerce, which is the 

world’s largest business federation representing 3 million businesses. 

Welcome. 

STATEMENT OF HAROLD JACKSON 

Mr. JACKSON. Thank you. 

Good afternoon, Chairwoman Vela ́zquez And Ranking Member 

Graves and members of the committee. 

Thank you for inviting me to testify before the committee today. 

My name is Harold Jackson. I am the president and CEO of Buffalo Supply, a 15-employee woman-owned small business specializing in the sale and distribution of medical surgical equipment. 

I am pleased to be able to appear today on behalf of the United 

States Chamber of Commerce. I commend the committee for holding this hearing to discuss the challenges of the 2009 H1N1 influenza and its potential impact on small businesses. The committee 

has my prepared statement, and I will give the following summary. 

If I leave the committee with a single point, it is that absenteeism will likely be the central issue that businesses wrestle with 

during this pandemic. Businesses should focus on keeping the 

workplace healthy, including encouraging sick employees to stay 

home to avoid infecting coworkers and maintaining business continuity. 

25 

We are all in this together. H1N1 preparedness is everyone’s 

problem, from households to schools to businesses to government. 

To put it into perspective, according to CDC, in communities where 

the H1N1 flu circulated this past spring, the infection rate was 

about 6 to 8 percent of the population over a 3 to 4 week period. 

During the winter season, infection rates could be two to three 

times as high as both the H1N1 flu and the seasonal flu circulate 

and sicken people simultaneously. Each winter in the United 

States, the seasonal flu kills approximately 36,000 people and hospitalizes more than 200,000. The cost to the U.S. economy is more 

than $10 billion in lost productivity and direct medical expenses. 

Predicting what influenza might do this flu season is challenging, 

and so is predicting the absenteeism. Nevertheless, business owners and managers should prepare by taking a number of actions to 

protect the health of their employees and maintain business operations. Running a small business leaves little time for planning for 

a disaster. Yet a major incident could force a business to close its 

doors permanently. 

Buffalo Supply has taken the following actions to keep our employees healthy and to maintain business operations. We are communicating with employees about H1N1 to increase awareness and 

education. We are cleaning keyboards, desks, file cabinets and 

other equipment regularly with disinfectants. We have installed 

hand sanitation stations much like they are in various buildings on 

Capitol Hill. We are having a visiting nurse give free seasonal flu 

shots to all employees, and we are requesting H1N1 shots when 

they become available. We have purchased additional copies of software that will allow some employees to work from home instead of 

coming to the office. 

Buffalo Supply is taking these and other actions because we 

want our employees healthy and our doors open. Few industries 

will be insulated from the economic effects resulting from absenteeism in the workplace. 

The United States Chamber and the Trust For America’s Health 

have teamed up to produce a guide titled, ′′It is Not Flu As Usual,′′ 

to provide businesses with practical recommendations on how individuals and organizations can prepare for the next wave of H1N1 

flu. This guide includes a list of Internet sites that can provide 

businesses with a wealth of detailed information on topics like vaccines, anti-virals, face masks and respirators. It will be released in 

a few weeks on the U.S. Chamber Web site, and hard copies can 

be obtained from the National Security and Emergency Preparedness Department. 

The U.S. Chamber believes that the Obama Administration deserves praise for the attention it has paid towards planning, preparing and responding to a potentially severe H1N1 flu wave. Since 

the spring outbreak, the administration has captured the right mix 

of communicating concern and encouraging the public to be prepared. Last week, President Obama said, ′′I do not want anyone to 

be alarmed, but I do want everyone to be prepared.′′ 

In conclusion, preparing for a potentially severe flu pandemic is 

everyone’s problem. It is a shared responsibility. To be prepared, 

government health agencies encourage individuals, businesses and 

communities to talk with their local public health officials and 

26 

health care providers, adapt business practices encouraging sick 

employees to stay home, and take steps to stop the spread of 

germs, and stay informed. 

I appreciate this opportunity to testify, and I would be happy to 

answer any questions. 

[The statement of Mr. Jackson is included in the appendix.] 

Chairwoman VELA ́ ZQUEZ. Thank you, Mr. Jackson. 

Our next witness is Dr. David T. Tayloe. He is the president of 

the American Academy of Pediatrics. Dr. Tayloe is also a full-time 

pediatrician in Goldsboro, North Carolina. The AAP is the leading 

medical association representing the interests of over 60,000 pediatrician members. 

Welcome. 

STATEMENT OF DAVID T. TAYLOE, JR., MD 

Dr. TAYLOE. Thank you. 

And good afternoon, Chairwoman Vela ́zquez and members of the 

committee. 

I am Dave Tayloe, Jr., President of the American Academy of Pediatrics. I have been a pediatrician in rural private practice where 

the cash flow of the practice is two-thirds Medicaid and SCHIP in 

Goldsboro, North Carolina, for over 32 years. I appreciate this opportunity to testify today before you regarding the impact of a 

novel influenza H1N1 virus on American small businesses. 

On August 24th, the President’s Council of Advisors on Science 

and Technology estimated that the novel H1N1 flu strain could result in the hospitalization of up to 1.8 million people and cause as 

many as 90,000 deaths, a number that is roughly double the death 

toll from a normal flu season. If these projections prove accurate, 

this flu epidemic will tax every aspect of our Nation’s health care 

system, emergency departments and hospital wards to private 

practices and public health departments. 

Of special concern to the American Academy of Pediatrics is the 

fact that this flu strain is impacting children disproportionately. 

Based on infection rates to date, the Centers for Disease Control 

and Prevention calculate that infection risk in the 0 to 24 age 

group is 4 to 5 times greater than for those in the 25 to 49 age 

group and 20 times greater than for those over age 65. If the virus 

sickens half of U.S. children this season, the number of ill children 

would exceed 37 million. Infection rates could ultimately be even 

higher. 

The President’s Council of Advisors on Science and Technology 

warn that of the 30,000 to 90,000 deaths anticipated, most would 

be concentrated among children and young adults, and we are already seeing that in our State. Pediatric medical practices and 

other medical providers who serve children face a special challenge 

from the H1N1 virus. The AAP anticipates that our membership 

will face a double whammy of business interruption due to staff absence and illness combined with much higher workloads from sick 

children and families seeking vaccination. 

Over 95 percent of office-based pediatricians practice in settings 

defined as small businesses. Many practices operate with very 

small staffs, meaning that one absent nurse or receptionist can all 

but cripple the office’s ability to function. Most small pediatric 

27 

practices are also facing serious challenges in remaining financially 

viable due to the economic downturn and employers’ quests to decrease health insurance expenses. 

AAP membership report that practices have seen increases in 

families with Medicaid, high deductible plans, or no insurance. Also 

the payment differential between private pay and Medicaid is so 

severe that there are significant downstream impacts on pediatric 

practices’ ability to keep their doors open. For example, Medicaid 

and most private insurers pay approximately $20 for vaccination 

administration of adults. State Medicaid program payment to pediatricians ranges from $2 to $17.85 for the same service with 38 

States paying less than $10 for vaccine administration. Nationwide, 

Medicaid pays an average of 72 percent of what Medicare pays for 

the same services and only 64 percent of average commercial payment. 

We are the public health infrastructure for this problem. We understand the vaccine is coming from the Federal Government to the 

States to the health departments, and then our office has a contract with the health department to deliver the vaccine. The Academy has a real ethical dilemma. Do we ask our members to fully 

participate in a program that is going to cause them to take business losses because of the poor Medicaid reimbursement that hasn’t 

been fixed since 1965? 

So this crisis in public health is shining a bright light on the 

problem with the State’s failure to pay adequately for physicians 

to participate in Medicaid. As a result, the more Medicaid patients 

are seen by pediatrician, the greater the financial challenge to the 

practice of the small business. Due to servere strains in the states 

as well as decreased tax revenue, pediatricianse have seen cuts in 

Medicaid payment rates. We took a 3 percent cut this year and will 

take a 3 percent cut next year in North Carolina. 

From a clinical perspective, pediatric practices must also plan for 

greater workloads. The Academy and the CDC recommend all children ages 6 months to 18 years receive the seasonal influenza vaccine, adding 30 million children who need to be vaccinated for seasonal flu only. Then, because the H1N1 strain is different, it is 

going to be a separate vaccine. Children have virtually no immunity, and we anticipate the CDC will instruct us, the pediatricians, 

to give each child two doses of H1N1. So that is three office visits 

for each child. Parents may therefore need to make all these trips, 

taking time off work, to cover seasonal flu and the H1N1. 

The AAP encourages vaccination of children in the medical home, 

and pediatricians want to do whatever they can. And we recognize 

that schools and other nontraditional locations may be utilized as 

vaccination sites in some states. Children, in particular those who 

are 6 months to 5 years, still need access to H1N1 influenza vaccine through their medical home. 

Chairwoman VELA ́ ZQUEZ. Dr. Tayloe, time has expired, and we 

are going to have four votes. But, during the question-and-answer 

period, you will be able to expand on those points that you were 

not— 

Dr. TAYLOE. Fine. Thank you. 

[The statement of Dr. Tayloe is included in the appendix.] 

28 

Chairwoman VELA ́ ZQUEZ. And the Chair recognizes the ranking 

member, Mr. Graves, for the purposes of introducing our next witness. 

Mr. GRAVES. Thank you, Madam Chair. 

Madam Chair, I am very pleased to introduce Mary Kay Thatcher, who is the director of public policy for the American Farm Bureau Federation. The Farm Bureau is an independent nonpartisan 

organization representing farm and ranch families. They are the 

voice of agriculture. The Farm Bureau is local, county, state and 

national and international in scope. 

Ms. Thatcher, thank you for being here, and I appreciate you 

coming in and look forward to hearing your testimony. 

STATEMENT OF MARY KAY THATCHER 

Ms. THATCHER. Thanks very much for allowing us to come forward and share the concerns of agriculture as it relates to the 

H1N1 virus. 

Madam Chairwoman, we had many, many pork producers who 

would have relished the opportunity to come in today and talk and 

testify about their personal experience, how H1N1 has impacted 

the bottom line for pork producers. 

Influenza has indeed impacted many family farmers. Many have 

been forced to make serious changes to their operations. When it 

hit, they had already been struggling through about 18 months of 

losses due to increased expenses, many of those expenses beyond 

their control, and they were looking forward to a summer that 

might bring indeed them out of the negatives. 

The futures market indicates that we are going to have very little chance of profit in the pork industry for at least the next 9 

months. And we anticipate the credit markets will continue to be 

a problem for pork producers and that many of them will be forced 

to sell off a sizeable portion of their inventory to reduce herd size. 

This isn’t going to affect just pork producers but obviously the 

employees who work for them. And those folks will not only be 

without income but also likely without any type of health insurance. 

The impact on our rural communities is also going to be tremendous. The impact of decisions forced on pork producers, partly by 

H1N1, does not stop at the farm gate but also greatly impacts businesses in town. If herd sizes are further downsized, farmers will 

purchase fewer supplies from local businesses, such as the fuel station, propane supplier and veterinarians. Rural communities are 

already struggling to maintain businesses, and the credit issues 

currently facing both the pork and dairy sectors are very likely to 

further erode the viability of many rural communities. 

I want to emphasize the importance of agriculture to the recovery of our economy. While fewer than 1 percent of Americans are 

engaged directly in agriculture, the sector has a huge impact on 

our economy. According to USDA, ag and food account for about 13 

percent of U.S. gross domestic product. Agriculture withstood the 

downturn in the economy longer than most sectors, but the downturn has now caught up with the ag sector in general and our livestock producers specifically. 

29 

The recently sales price received for hogs is down $25 per head 

in only the last 4 months. If the December Chicago Mercantile Exchange lean hog futures price is an accurate forecast of where hogs 

will be priced at year end, producers will be losing $50 per head. 

Even the futures price for April of 2010 indicates a $25-per-head 

loss. 

We believe Congress and the administration could do several 

things that would be helpful to the pork sector specifically and 

would also impact the livestock industry in general. 

The H1N1 influenza strain cannot be transmitted by eating pork. 

It is a food-safety issue, not a food-borne illness. We have talked 

a lot today about the fact that the virus doesn’t spread to meat. 

Pork is safe to eat. We applaud the administration for what they 

have tried to do to get that message out. But we need Congress and 

the administration alike to keep reminding consumers of this fact 

and use every means possible to ensure that some in the media 

quit referring to it by other names than H1N1. 

We also applaud USDA and the United states Trade Representative. We think they worked diligently with our trading partners to 

ensure that they know that U.S. pork and pork products are safe, 

and there is no basis for restricting imports. Yet in China, the 

world’s largest pork export market, 64 percent of its consumers 

stopped eating pork in the early stages of the H1N1 influenza outbreak. More than one in five consumers in China still believe that 

eating pork can result in catching the flu virus. This is according 

to a survey commissioned by the U.S. Meat Export Federation; 54 

percent of those also said in the survey they fear the connection between pork and the flu virus and say it is because the virus has 

been labeled swine flu. 

In the U.S., we have had market access issues in two of our top 

six pork export markets, China and Russia. We believe this is a 

large part of why, during the first 6 months of 2009, U.S. pork exports have dropped 18 percent from the levels in the same 6-month 

period during 2008. 

Also just before the August recess, the House and Senate passed 

legislation that provides $1.85 billion in funding for the Public 

Health and Social Services Emergency Fund to prepare for and respond to an influenza pandemic. The conference report on that legislation states that funds appropriated and not specifically designated may be transferred to and merged with other appropriation 

accounts of the Department of Health and Human Services and 

other Federal agencies as determined by the Secretary of HHS. 

The Senate version of the language actually specifically called for 

the transfer of $100 million to USDA under the heading, ′′Ag Programs, Production, Processing, and Marketing.′′ We have asked the 

administration to transfer at least $100 million of the $1.85 billion 

for use in additional government purchases of pork. Without question, part of today’s decrease in pork prices is due to the media’s 

misuse of the term swine flu rather than the H1N1 virus. 

Pork producers are facing dire circumstances and need the government to step up to purchase more pork products. Any assistance 

that this committee could provide in encouraging the administration to make such a transfer of funds would be greatly appreciated. 

30 

We are very concerned about the many farm families around the 

U.S., and we want to make sure that they continue to raise pork 

and that they are able to sell it here and around the world. We 

must all continue to work with our trading partners to assure them 

we are open for business and U.S. pork is safe. There are many 

hardworking families whose livelihoods depend on us conveying 

this message of safety. We must also use whatever means possible 

to encourage additional purchases of pork in the near future. 

[The statement of Ms. Thatcher is included in the appendix.] 

Chairwoman VELA ́ ZQUEZ. Thank you, Ms. Thatcher. 

And the committee stands in recess subject to the call of the 

Chair. 

[Recess.] 

Chairwoman VELA ́ ZQUEZ. Okay. So I don’t think we are going to 

have any more votes. 

Mr. Demangone, when the H5N1 virus surfaced as a possible 

agent of the next pandemic, many small businesses pushed for information. They prioritized job functions, worked to educate employees, and stockpiled personal protective equipment. For many, 

the initial pandemic scare seriously drained some of the firms’ resources. Among small businesses, what challenges do you see with 

pandemic preparedness? 

Mr. DEMANGONE. Thank you for that question. I agree that there 

was a little bit of pandemic planning fatigue that had taken place. 

The H5N1 virus—and there is only so many times you can hear 

about that. Some of the challenges, though, have been abated by 

the fact that the H1N1 virus has materialized and actually has led 

to fatalities here and in other regions of the world. For that reason, 

some of the stockpiles of the preventative personal protective 

equipment, masks, hand sanitizers, will still be okay. 

And a lot of that planning, I would actually say the fact that we 

were planning for H5N1 actually was a hidden blessing because, at 

that time, no one was to know whether that was going to lead to 

the pandemic. And it was ironic, just 2 years ago, there was an industrywide exercise, and then 2 years later, those lessons could be 

used for this particular pandemic. 

But the challenges, of course, are, for Federal credit unions as 

well as other financial firms, budgets are a little tighter this year, 

and there is some strain. It is still finding the ability to procure 

resources to use them effectively to protect not only your employee 

but your membership in the community. 

Chairwoman VELA ́ ZQUEZ. Thank you. 

Dr. Tayloe, if a pandemic emergency would compromise the ability of local and regional health care systems to deliver basic health 

services to children, if the H1N1 outbreak is severe, how would pediatric practices be affected and what will providers need to do to 

maintain existing levels of care? I know that you touched on that, 

but if you could be more specific. 

Dr. TAYLOE. It will depend directly upon the size of the practice. 

In other words, if you have got three physicians and seven staff, 

and half your staff is sick and one of your physicians is sick, it is 

going to cripple you. 

Our office is 14 pediatricians and 8 nurse practitioners, physician 

assistants. And we operate four offices, kind of a health care sysVerDate Aug 31 2005 13:51 Dec 09, 2009 Jkt 000000 PO 00000 Frm 00036 Fmt 6633 Sfmt 6633 G:\CLERKS~1\HEARINGS\TRANSC~1\52260.TXT DARIEN
31 

tem and since, as Dr. King said, this looks like a relatively mild 

flu that doesn’t last quite as long as the seasonal flu, large practices will be able to shift people around and survive. We will probably end up doing a lot of telephone medicine, and there are triage 

protocols that have already been on the Internet as to how you talk 

with families about this problem. 

So I think it will just depend on the size of the practice. But we 

will be trying really hard to do things right. We have really perfected the medical home concept, particularly in our North Carolina 

Medicaid program, where I think we will be okay. But it is going 

to be a rough—it has already started. It is a rough season. 

Chairwoman VELA ́ ZQUEZ. Do you see foresee some part of the 

country more vulnerable than others in terms of the resources that 

are available? 

Dr. TAYLOE. Well, you would have to say, what will happen in 

rural areas—I note during an H1N1 flare in northern Canada this 

past year, they had so much sickness, they ran out of respirators, 

and they were flying sick patients in to other parts of Canada and 

the United States. So I think the further you are from a tertiary 

hospital with those metropolitan resources, the more trouble you 

are going to have. 

Chairwoman VELA ́ ZQUEZ. Let me ask you. On payment for child 

vaccination, do you see a difference in payment? 

Dr. TAYLOE. Most assuredly. And again, I am sorry I ran out of 

time on my testimony. But when Congress established Vaccines 

For Children in 1993, the Federal Government recommended vaccine administration fees for each State based on Medicare economics, that kind of thing. Only about five States followed that recommendation, and those fees have never been upgraded by CMS. 

Several years ago, Medicare established vaccine administration 

fees. And so where the average fee for pediatricians to give a vaccine is less than $10 from Medicaid, which is Vaccines For Children, Medicare pays $21. So our members feel like it is much more 

difficult to do our immunizations. We have to convince the parent 

to let the child receive the vaccine. That takes forever with all the 

autism hype. Then you have to hold a screaming child and give the 

vaccine. And then children just have more fears and things after 

vaccines. So the fact that we get less than half the money to do this 

makes my members tell me, you need to tell Congress that if pediatricians are going to bear the brunt of this vaccination program, 

our vaccine administration fees need to be at least equal to those 

of Medicare because we have got to value our children. And this 

is seen as just not valuing our children. 

Chairwoman VELA ́ ZQUEZ. Mr. Jackson, how has your business 

prepared to protect staff and maintain operations if a moderate to 

severe pandemic outbreak was to present itself? 

Mr. JACKSON. Obviously that is a significant concern. Buffalo 

Supply, as many other small businesses, is operating alone very 

slim staff if everything goes well. So we take the steps that we 

mentioned in here in trying to keep people healthy, offering the flu 

shots and clean stations and all those sorts of things. As a small 

business, we have always stressed cross-training of employees, but 

we have stressed it even more recently, and what it probably 

means is some of the people that travel stay home and do the job 

32 

of the day-to-day office until we can get the operation and all the 

people back from being sick. 

Chairwoman VELA ́ ZQUEZ. And I would like Mr. Jackson to answer this question, but also I would like any other member of the 

panel to answer as well. Have you offered any sort of flexible leave 

policies for any of your employees, particularly those with children 

that are part of the most at-risk population? 

Mr. JACKSON. Yes, we do. We treat our employees like they are 

family. A lot of them are family in a small business. But we try 

to work with each individual that has an issue to come up with a 

resolution. I would rather do that than writing a policy that kind 

of ties our hands in the future. But we have flex time that we offer. 

We allow people to take a day off if it is to take care of a sick child 

or if they are not feeling well themselves. Interestingly enough, we 

offer the flu shots at no cost to the employees, but I give a stipulation. If you decline to take the flu shot, I don’t pay you for your 

time off. If you take it, I will pay you for your time off. 

Chairwoman VELA ́ ZQUEZ. Any other member wish—Dr. King. 

Dr. KING. Well, of course, in the practice, you have got to take 

into consideration, flu season is our busiest season. So we have 

more people that want to come in and be seen, and they have more 

problems. So giving time off, flex time—we think ′′patient first′′ 

naturally. So we want to expand our hours so patients can get in, 

those things can be done. 

But we do, of course, offer flu shots to all of our employees. But 

you have got to understand, that is one of the things that makes 

this particular flu epidemic different from the seasonal flu 

epidemics we have; we don’t have a vaccine yet. So all the health 

care providers that are seeing patients now that have the flu have 

not been vaccinated. In years past, we always get our vaccine in 

ample time, and we get taken care of. That is the reason there is 

a greater risk of health care providers getting this type of flu. 

And even though they are going to have the vaccine available in 

the middle of October, realize it is going to take time to get it distributed, out to the State, get it out to the practices, and then you 

have got two weeks before you develop any type of immunity from 

that vaccine, it is going to be well into November before anyone has 

really got any immunity to begin with. 

Chairwoman VELA ́ ZQUEZ. Ms. Thatcher, we discussed that there 

is no correlation between swine and pork and the H1N1. And since 

the declaration of four intergovernmental agencies, organizations 

and the Federal Government that stated that H1N1 virus cannot 

be contracted from consuming pork product, have you seen—has 

your business continued to decline? 

Ms. THATCHER. We believe that we have made progress domestically and that the vast majority of people in the U.S. now understand it. I wouldn’t say we are back to exactly where we were in 

sales, but we still believe our biggest problem is in the export markets. And it is always hard to ascertain—we think that the survey 

that meat export folks did that shows that one out of five people 

in China are concerned is very bad news. But we also know that 

countries like China tend to use whatever they can as a trade barrier against us. So there may be some of that playing into the situation, too. 

33 

Chairwoman VELA ́ ZQUEZ. Mr. Graves? Thank you. 

Mr. GRAVES. Thanks, Madam Chairwoman. 

Ms. Thatcher, how much pushback are you getting from the business community, or health care providers, in trying to change the 

paradigm between the term swine flu and the fact that it doesn’t 

have anything to do with H1N1? 

Ms. THATCHER. Mr. Graves, I don’t know that we are getting 

pushback; I am just not sure we are getting as much help. And you 

know, it is easy for all of us to slip and call it the other name instead of H1N1. And so we have worked with those folks, and again, 

I applaud what this administration has done. It is just that we 

have to keep it up because we have too many people I think in the 

business community who say, well, if I call it H1N1, people won’t 

know what it is; but if I call it swine flu, they get it. So it is a real 

change in mindset that we have to continue to— 

Mr. GRAVES. Okay. 

Chairwoman VELA ́ ZQUEZ. Mr. Luetkemeyer. 

Mr. LUETKEMEYER. Thank you, Madam Chair. Just to follow up 

again with Ms. Thatcher and Congressman Grave’s comment here. 

Did you hear that—Mr. McGaw’s comment a while ago when I 

was discussing it with him, to the effect that they were going to 

monitor the media and how they represented the H1N1, and while 

that is fine, to monitor is fine, but I think you need to act on what 

you find, and I didn’t hear him making a commitment. Are you 

working with the Homeland Security folks, so if they do have—they 

do find that there is a continued misnaming of this flu, that there 

is going to be some follow-up? 

Ms. THATCHER. We have done more working through USDA especially and somewhat through USTR in trying to get them to help 

us carry their message at very high levels and have it done that 

way. But certainly we have worked with every department we can 

think of so far. 

Mr. LUETKEMEYER. Okay. Well, I was just thinking if there needs 

to be some interaction there and some cooperation and some oversight to make sure that there is some pressure, and I realize we 

can’t do a whole lot perhaps with the folks from other countries, 

but I would think we should be able to sort of minimize the effect 

here in this country once the information gets out of what is really 

going on here. 

Very quickly, Dr. King and Dr. Tayloe, depending on which one 

wants to answer, maybe both, what is the effectiveness of the vaccine? I know we are talking about the shots here. What is the effectiveness? Is it as effective as most other vaccines, or is it less effective, because it is being promoted? 

Dr. KING. It is being studied. Like I said, we don’t get the flu 

vaccine out until—we don’t know numbers yet for this particular 

vaccine that I know of. 

Dr. TAYLOE. They began the trials in—around the first of August. 

I know Duke has a site— 

Mr. LUETKEMEYER. So we are all— 

Dr. TAYLOE. They haven’t published any data yet that we could 

go on because we are hoping the immunity will be good enough 

that we can get by with just one injection. But with the traditional 

flu vaccine, we have had to give two the first year to all children 

34 

under the age of 9 years. And that is going to create more of a 

problem. And then the question is, will they have a nasal vaccine, 

too? It is rumored that one of the companies will have a nasal vaccine, which will make much easier to do this. 

Mr. LUETKEMEYER. My follow up to that, maybe you won’t be 

able to answer it, have you seen any reactions to the shot, any negative things that come out with people who have taken it? You alluded to autism a while ago. I don’t think this is a problem with 

this particular thing, but is there some other sort of side effects or 

some other negatives that come with this shot that we need to be 

aware of or people need to be informed of? 

Dr. TAYLOE. I am not aware of any new developments in the way 

of the downside to receiving the flu vaccine. The flu vaccine will 

contain thimerosal, the mercury preservative—ethyl mercury preservative that got so much press in the late 1990s, that was removed from most vaccines by going to single dose viles. But this 

vaccine is going to come in multiple dose viles, so it will have thimerosal in it as a preservative. So it does not bother us because 

we are not aware of any problems with human beings as far as the 

trace amounts of the thimerosal that is used as preservative in 

these vaccines. But the patients that come in the office all want to 

talk about it. So the media has just done a number on the public 

health system here, and it is a shame. And anything you can do 

to help us— 

Mr. LUETKEMEYER. You have got a forum right now. Let it rip. 

Dr. TAYLOE. Help us educate the general public about the really 

good, solid safety system we have in place for vaccines, the fact 

that it takes forever for a vaccine to make it through the FDA to 

come to market as a rule. This is a special situation where this vaccine is made like other flu vaccines and it will be treated like other 

flu vaccines and not treated as a brand new vaccine. But as a rule, 

it takes forever to get to market. Then it goes into hundreds of 

thousands of patients as a tracking population by the CDC through 

the Vaccine Data Link System, and that is how we pulled a couple 

of vaccines that looked okay in the thousands of people it was tried 

on before release, but as soon as it got out to hundreds of thousands of people, we knew there was a problem and was pulled. 

So I think our system is a very good system, and I personally am 

in a practice where we do over 100,000 counters a year, and our 

practice is a really big practice; we have never referred a single 

child to the Vaccine Injury Compensation Program for any chronic 

or permanent injury from a childhood vaccine. So I think it is extremely rare. We have a compensation system in place. And we 

need the help of the government in getting the right message to the 

public. 

Mr. LUETKEMEYER. Thank you, Madam Chair. 

Chairwoman VELA ́ ZQUEZ. Mr. Graves, another question? 

Well, let me take this opportunity to thank all of you for being 

here and providing the important information, and we will continue 

to work with the Federal Government and the respective agencies 

to make sure that there is not only a coordinated effort but a 

proactive effort and that we keep in mind that if we deal with a 

pandemic, the impact that it could have in the economy, but particularly on small businesses. 

35 

So, with that, I ask unanimous consent that members will have 

5 days to submit a statement and supporting materials for the 

record. Without objection, so ordered. 

This hearing is now adjourned. 

[Whereupon, at 3:41 p.m., the committee was adjourned.] 

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