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POST–KATRINA RECOVERY: RESTORING HEALTH

CARE IN THE NEW ORLEANS REGION

HEARING

BEFORE THE

COMMITTEE ON OVERSIGHT

AND GOVERNMENT REFORM

HOUSE OF REPRESENTATIVES

ONE HUNDRED ELEVENTH CONGRESS

FIRST SESSION

DECEMBER 3, 2009

Serial No. 111–64

Printed for the use of the Committee on Oversight and Government Reform

(

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

http://www.house.gov/reform

(II)

COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

EDOLPHUS TOWNS, New York, Chairman

PAUL E. KANJORSKI, Pennsylvania

CAROLYN B. MALONEY, New York

ELIJAH E. CUMMINGS, Maryland

DENNIS J. KUCINICH, Ohio

JOHN F. TIERNEY, Massachusetts

WM. LACY CLAY, Missouri

DIANE E. WATSON, California

STEPHEN F. LYNCH, Massachusetts

JIM COOPER, Tennessee

GERALD E. CONNOLLY, Virginia

MIKE QUIGLEY, Illinoia

MARCY KAPTUR, Ohio

ELEANOR HOLMES NORTON, District of

Columbia

PATRICK J. KENNEDY, Rhode Island

DANNY K. DAVIS, Illinois

CHRIS VAN HOLLEN, Maryland

HENRY CUELLAR, Texas

PAUL W. HODES, New Hampshire

CHRISTOPHER S. MURPHY, Connecticut

PETER WELCH, Vermont

BILL FOSTER, Illinois

JACKIE SPEIER, California

STEVE DRIEHAUS, Ohio

JUDY CHU, California

DARRELL E. ISSA, California

DAN BURTON, Indiana

JOHN L. MICA, Florida

MARK E. SOUDER, Indiana

JOHN J. DUNCAN, JR., Tennessee

MICHAEL R. TURNER, Ohio

LYNN A. WESTMORELAND, Georgia

PATRICK T. MCHENRY, North Carolina

BRIAN P. BILBRAY, California

JIM JORDAN, Ohio

JEFF FLAKE, Arizona

JEFF FORTENBERRY, Nebraska

JASON CHAFFETZ, Utah

AARON SCHOCK, Illinois

BLAINE LUETKEMEYER, Missouri

ANH ‘‘JOSEPH’’ CAO, Louisiana

RON STROMAN, Staff Director

MICHAEL MCCARTHY, Deputy Staff Director

CARLA HULTBERG, Chief Clerk

LARRY BRADY, Minority Staff Director

(III)

C O N T E N T S

Page

Hearing held on December 3, 2009 ........................................................................ 1

Statement of:

Brand, Marcia K., Ph.D., Deputy Administrator, Health Resources and

Services Administration, U.S. Department of Health and Human Services; Alan Levine, secretary, Louisiana Department of Health and Hospitals; Joia Crear-Perry, M.D., FACOG, director of clinical services,

Health Department, city of New Orleans; and Clayton Williams, MPH,

director, Louisiana Public Health Institute ................................................ 120

Brand, Marcia K., ...................................................................................... 120

Crear-Perry, Joia ....................................................................................... 145

Levine, Alan ............................................................................................... 131

Williams, Clayton ...................................................................................... 159

DeSalvo, Karen B., M.D., MPH, MSC, executive director, Tulane University Community Health Centers; Cynthia A. Bascetta, Director, Health

Care, U.S. Government Accountability Office; Diane Rowland, executive

vice president, the Henry J. Kaiser Family Foundation; Donald T.

Erwin, M.D., president and chief executive officer, nephrology, St.

Thomas Community Health Center; Michael G. Griffin, president and

chief executive officer, Daughters of Charity Services of New Orleans;

Alice Craft-Kerney, executive director, Lower Ninth Ward Health Clinic; and Roxane A. Townsend, assistant vice president, health systems,

University Hospital, Louisiana State University System .......................... 8

Bascetta, Cynthia A. ................................................................................. 24

Craft-Kerney, Alice .................................................................................... 43

DeSalvo, Karen B. ..................................................................................... 8

Erwin, Donald T., M.D. ............................................................................. 49

Griffin, Michael G. .................................................................................... 55

Rowland, Diane ......................................................................................... 74

Townsend, Roxane A. ................................................................................ 63

Letters, statements, etc., submitted for the record by:

Bascetta, Cynthia A., Director, Health Care, U.S. Government Accountability Office, prepared statement of ........................................................... 26

Brand, Marcia K., Ph.D., Deputy Administrator, Health Resources and

Services Administration, U.S. Department of Health and Human Services, prepared statement of .......................................................................... 123

Craft-Kerney, Alice, executive director, Lower Ninth Ward Health Clinic,

prepared statement of ................................................................................... 45

Crear-Perry, Joia, M.D., FACOG, director of clinical services, Health

Department, city of New Orleans, prepared statement of ......................... 148

DeSalvo, Karen B., M.D., MPH, MSC, executive director, Tulane University Community Health Centers, prepared statement of .......................... 12

Erwin, Donald T., M.D., president and chief executive officer, nephrology,

St. Thomas Community Health Center, prepared statement of ............... 51

Griffin, Michael G., president and chief executive officer, Daughters of

Charity Services of New Orleans, prepared statement of ......................... 57

Issa, Hon. Darrell E., a Representative in Congress from the State of

California, prepared statement of ................................................................ 7

Kucinich, Hon. Dennis J., a Representative in Congress from the State

of Ohio, prepared statement of .................................................................... 107

Levine, Alan, secretary, Louisiana Department of Health and Hospitals,

prepared statement of ................................................................................... 134

Rowland, Diane, executive vice president, the Henry J. Kaiser Family

Foundation, prepared statement of ............................................................. 76

Page

IV

Letters, statements, etc., submitted for the record by—Continued

Towns, Chairman Edolphus, a Representative in Congress from the State

of New York:

Letter dated December 2, 2009 ................................................................ 118

Prepared statement of ............................................................................... 3

Townsend, Roxane A., assistant vice president, health systems, University Hospital, Louisiana State University System, prepared statement

of ..................................................................................................................... 65

Watson, Hon. Diane E., a Representative in Congress from the State

of California, prepared statement of ........................................................... 182

Williams, Clayton, MPH, director, Louisiana Public Health Institute, prepared statement of ........................................................................................ 162

(1)

POST–KATRINA RECOVERY: RESTORING

HEALTH CARE IN THE NEW ORLEANS REGION

THURSDAY, DECEMBER 3, 2009

HOUSE OF REPRESENTATIVES,

COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM,

Washington, DC.

The committee met, pursuant to notice, at 2 p.m., in room 2247,

Rayburn House Office Building, Hon. Edolphus Towns (chairman of

the committee) presiding.

Present: Representatives Towns, Cummings, Kucinich, Tierney,

Watson, Connolly, Quigley, Kaptur, Kennedy, Lee, Issa, Bilbray,

Jordan, Flake, Chaffetz, Luetkemeyer, and Cao.

Staff present: John Arlington, chief counsel—investigations; Jean

Gosa, clerk; Adam Hodge, deputy press secretary; Carla Hultberg,

chief clerk; Chris Knauer, senior investigator/professional staff

member; Phyllis Love, Ryshelle McCadney, and Christopher Sanders, professional staff members; Mike McCarthy, deputy staff director; Leah Perry, senior counsel; Ophelia Rivas, assistant clerk;

Jenny Rosenberg, director of communications; Leneal Scott, IT specialist; Ron Stroman, staff director; Gerri Willis, special assistant;

Lawrence Brady, minority staff director; John Cuaderes, minority

deputy staff director; Rob Borden, minority general counsel; Jennifer Safavian, minority chief counsel for oversight and investigations; Frederick Hill, minority director of communications; Adam

Fromm, minority chief clerk and Member liaison; Kurt Bardella,

minority press secretary; Ashley Callan, minority counsel; and

Molly Boyl, minority professional staff member.

Chairman TOWNS. The committee will come to order.

It has been nearly 4 years since Hurricane Katrina devastated

the New Orleans region. Since then, the area has struggled to regain its footing and slowly rebuild its neighborhoods, businesses,

and critical services. One area particularly hard-hit by the storm

was the region’s health care infrastructure. When Katrina flooded

the city and surrounding parishes, many important hospitals and

outpatient clinics were severely damaged and destroyed.

Before the storm, the low-income population of the region often

relied on hospital emergency rooms and outpatient clinics, mostly

hospital-based, as its main source of primary care. Charity Hospital, which was the major public hospital and the source of many

of these services, particularly for the working poor and uninsured,

was flooded and essentially destroyed. It remains shuttered today.

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Because this and other critical health care facilities were destroyed, many of the region’s residents struggled to obtain health

care after the storm. Those facilities that remain open, particularly

those willing to take the uninsured or poor, had limited capacity

and significant waiting times. While eventually some organizations

were able to open some clinics, major health care delivery gaps remained for months and even years after Hurricane Katrina.

In July 2007, the Department of Health and Human Services,

with money granted from Congress to restore the Gulf Coast region, provided a $100 million grant to the State of Louisiana. This

funding, called the Primary Care Access and Stabilization Grant,

was designed to restore and expand critical and primary care services to the region without regard to a patient’s ability to pay. The

grant was also intended to reduce costly reliance on emergency

room use for primary care services for patients who were uninsured, underinsured, or covered by Medicaid.

The good news is that an impressive network of health clinics

has emerged which are now providing critical health care services.

As of June 22, 2009, over $80 million of the $100 million Federal

grant had been distributed and these clinics are now collectively

providing care for over 160,000 individuals in the Katrina-affected

region, nearly half of whom are uninsured. However, because the

region does not have a clear plan on when it will begin breaking

ground on a replacement for Charity Hospital, and because there

are no clear plans on how to financially sustain these clinics, part

of the region’s population faces an uncertain future.

I am particularly interested in understanding what needs to be

done to ensure that we preserve the critical health services these

clinics are currently providing. In addition, it has now been more

than 4 years since Hurricane Katrina destroyed Charity Hospital.

While a temporary facility is providing critical care to the region,

we will hear today that this interim hospital is reaching capacity.

Four years is long enough for a plan for a replacement facility to

sit in limbo, and I look forward to hearing how and when we can

expect a new hospital will be built.

Let me conclude by thanking our witnesses today, particularly

those who have traveled from the New Orleans region to be with

us today. We really appreciate your being here. Many of you were

in the trenches in the hours and days following this storm and provided critical care to those who otherwise would have gone without,

and we thank you for that. Your story is an important one and

needs to be heard. I applaud your efforts and I am sure all my colleagues remain committed to helping you rebuild the New Orleans

region. Today’s hearing is one more step toward that end.

I will now recognize the ranking member, Mr. Darrell Issa of

California, for his opening statement.

[The prepared statement of Chairman Edolphus Towns follows:]

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Mr. ISSA. Thank you, Mr. Chairman, and thank you for holding

this important hearing.

Although the devastation of Hurricane Katrina occurred over 4

years ago, its effects on the New Orleans region is still being felt

by its residents today. The health care infrastructure was hit especially hard and has not fully bounced back. The picture of health

care in the New Orleans area is still very bleak. Hospitals remain

shuttered, physicians are short in supply, and many residents, as

you said, nearly half, are uninsured.

A key number of hospitals that served the uninsured population

prior to Hurricane Katrina remain closed. As a result of these closures, many New Orleans residents now go to outpatient clinics for

care. This change and the causes necessary are our focus here

today, and in fact, how to get to a healthier community with a permanent hospital remains a vexing problem that we will hear about.

Receiving early care and proper treatments will reduce overall

costs, and certainly reduce the strain on emergency rooms. A primary care focus can reduce overall health care spending by eliminating emergency room costs, room cost shifting. Unfortunately,

many clinics are filled to capacity in the region. And as you said,

Mr. Chairman, the economic conditions in New Orleans continue to

prevent the rebounding of the robust economy that could in fact

fund new hospital maintenance on a permanent basis.

The Federal Government has limited resources. It is clear that

we have to work together to find a way for the region to be selfsustaining when possible. But today we will hear that is not possible today. Certainly we will also hear that a leading factor in the

nationwide physician shortage is the high cost of medical liability

insurance and malpractice insurance. As a result, broader health

care reform is needed here in Congress. We need to look seriously

at tort reform and bring health care costs that make delivery systems so expensive and inefficient down.

Additionally, as the chairman knows, public hospitals today have

certain limited immunity from tort. Bills being considered in the

Congress here today would strip that immunity, thus raising the

cost of public health and their liability insurance.

So I hope in addition to dealing with the devastation of Hurricane Katrina that lingers on in New Orleans, we will recognize

that there is not unlimited amounts of money to pay for health care

unless health care can be delivered in an efficient and effective

fashion. Today we will look at whether or not we can restore New

Orleans’ ability to have primary health care delivered in a way

that is sustainable, cost-effective, and will prevent the citizens from

having either poor health or excessive trips to the emergency room.

Mr. Chairman, I thank you for holding this hearing, and I yield

back.

[The prepared statement of Hon. Darrell E. Issa follows:]

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Chairman TOWNS. Thank you very much for your statement and

also your involvement in this issue over the years.

I would like to introduce our first panel of witnesses that will be

testifying today: Ms. Cynthia Bascetta, Director of Health Care,

U.S. Government Accountability Office; Dr. Karen B. DeSalvo, vice

dean for community affairs and health policy and C. Thorpe Ray

Chair in internal medicine at Tulane University School of Medicine. I would also like to introduce Ms. Alice Craft-Kerney, executive director of the Lower Ninth Ward Health Clinic in New Orleans; Dr. Donald T. Erwin, president and CEO of the Saint Thomas

Community Health Center in New Orleans; Dr. Michael G. Griffin,

president and CEO of Daughters of Charity Services of New Orleans; Dr. Roxane A. Townsend, assistant vice president for health

systems for Louisiana State University; and, Dr. Diane Rowland,

executive vice president of the Henry J. Kaiser Family Foundation.

Ladies and gentlemen, it is a longstanding policy that all of our

witnesses are sworn in. So if you would stand and raise your right

hands.

[Witnesses sworn.]

Chairman TOWNS. Let the record reflect that all the witnesses

have answered in the affirmative.

Dr. DeSalvo, why don’t we start with you. And thank you again

for coming.

STATEMENTS OF KAREN B. DeSALVO, M.D., MPH, MSC, EXECUTIVE DIRECTOR, TULANE UNIVERSITY COMMUNITY HEALTH

CENTERS; CYNTHIA A. BASCETTA, DIRECTOR, HEALTH CARE,

U.S. GOVERNMENT ACCOUNTABILITY OFFICE; DIANE ROWLAND, EXECUTIVE VICE PRESIDENT, THE HENRY J. KAISER

FAMILY FOUNDATION; DONALD T. ERWIN, M.D., PRESIDENT

AND CHIEF EXECUTIVE OFFICER, NEPHROLOGY, ST. THOMAS COMMUNITY HEALTH CENTER; MICHAEL G. GRIFFIN,

PRESIDENT AND CHIEF EXECUTIVE OFFICER, DAUGHTERS

OF CHARITY SERVICES OF NEW ORLEANS; ALICE CRAFTKERNEY, EXECUTIVE DIRECTOR, LOWER NINTH WARD

HEALTH CLINIC; AND ROXANE A. TOWNSEND, ASSISTANT

VICE PRESIDENT, HEALTH SYSTEMS, UNIVERSITY HOSPITAL, LOUISIANA STATE UNIVERSITY SYSTEM

STATEMENT OF KAREN B. DeSALVO

Dr. DESALVO. Good morning, Mr. Chairman and members of the

committee.

My name is Dr. Karen DeSalvo, and I am a practicing primary

care physician in New Orleans. I also serve as the director of the

Tulane University Community Health Centers.

Thank you for the opportunity to speak on behalf of my team and

our patients, and to update you on the progress of health sector recovery in New Orleans, the challenges ahead for sustainability of

the community health network, and describe strategies that may

help us sustain these gains.

In a now too-familiar story, the failure of the Federal levees in

August 2005 resulted in the devastation of the greater New Orleans community, including our health sector. In the face of this crisis, the community realized we had a chance not just to rebuild our

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city but to re-make it into one worthy of our historic importance

to our Nation, one that could be a model for others. This vision extended to redesigning our health sector into one that would provide

all our citizens with access to high quality, affordable health care.

The rationale for re-making our health sector was simple. For

decades it had performed amongst the worst in quality, cost, and

disparities. Any discussion of a redesigned New Orleans health

care sector has to include consideration of the role of the public

hospital. The Medical Center of Louisiana at New Orleans, formerly known as Charity Hospital, served as the principal source of

care for hundreds of thousands of uninsured and underinsured persons in the region. Yet in spite of good intentions, at the time of

the storm the system was overwhelmed and under-funded. Primary

care services offered limited hours that reflected the schedules of

medical student trainees and other doctors rather than patients.

They generally did not see the same doctor on a concurrent visit,

and if they missed an appointment, it was a 12-month wait until

the next available one.

Most of the uninsured received their care through emergency

rooms as a result, and there was also not an alternative network

of community care to pick up the slack. When Charity closed because of Katrina-related flooding, its patients lost access to the

chief source of care available to them. Into the vacuum created by

this closure, a grassroots, largely volunteer effort emerged to provide care. Tulane’s part in this was initially led by a handful of our

medical residents who set up six urgent care stations on the streets

of New Orleans while the city was still under mandatory evacuation and partially flooded.

These trainees realized that people would need care, particularly

the low-income and marginalized populations that Tulane had

cared for at Charity for the past 170 years. One of these makeshift

first aid stations evolved into a permanent primary care site, Covenant House. When the dust had settled, stakeholders set to work

to define a vision for our rebuilt health system. We envisioned one

founded upon community health care marked by quality and efficiency, because the evidence is clear that this kind of framework

leads to better health and it also leads to lower costs. The public

hospital needs to be a part of this new model, but it should not be

the sole source of the primary care safety net.

In the spring of 2007, I testified, along with others, about the

challenges in health care recovery in post-Katrina New Orleans.

We were less than 2 years from the disaster at that point, and had

much work to do to rebuild. The community was unified in asking

for assistance to shore up what had become our new paradigm of

health care in our recovering city—community health. The result

of that hearing was the awarding of the Primary Care Access and

Stabilization Grant [PCASG], a reflection of the bipartisan support

for the community-based model of care.

Tulane has used these PCASG funds to expand access to thousands by increasing the capacity at our main site, Covenant House.

That once makeshift first-aid station has grown into a robust, comprehensive NCQA-recognized patient-centered medical home. Our

team is proud to have built a program that offers primary care for

all ages. We have onsite integrated mental health and resiliency

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programs. We offer social work and legal aid services. We use an

electronic health record. And we have active quality improvement

and evidence-based medicine programs.

We are engaged in work force training for physicians, nurses, social workers, public health students, and pharmacists, all in partnership with local universities. We also partner actively with community organizations and members to empower them to become

physically, mentally, and economically healthier. Demand for our

services has been so high we have outgrown our space and will

soon move to a new location in the same neighborhood. Our new

site will be a renovated building that has been blighted since

Katrina and will serve as a cornerstone of economic development

for that neighborhood.

Tulane has also expanded beyond Covenant House due in large

part to PCASG funding. We provide high quality, culturally competent care throughout the city from mobile units, school-based

health centers, and a new primary care site in collaboration with

the Mary Queen of Vietnam Development Corp. in New Orleans

East.

The people we serve are mostly the working poor. Their employers do not offer health insurance and they are not poor enough to

be eligible for Medicaid. Others have recently lost their insurance

when they lost their jobs, like a man I saw recently in New Orleans East. He had been laid off and was newly uninsured. He developed a new problem that caused him to visit the emergency room

the night before he had been diagnosed with painful gout. This was

a genetic condition he suffers through no fault of his own, and was

exacerbated by his compliance with his blood pressure medications.

The emergency room knew of our services, sent him to us and now

he is integrated into our medical home and has a medical team

that will help him manage his care, and he will not need to rely

on emergency rooms in the future.

I am quite proud of what we have accomplished as an individual

organization, but perhaps more proud of the collective efforts. I believe our experience is a model program for other areas. However,

my enthusiasm is tempered by the knowledge that in the fall of

2010, the funding comes to an abrupt halt. The quality network of

care for our population of largely uninsured working poor will need

to be scaled down dramatically, perhaps as much as 40 percent,

leaving some 50,000 citizens or so without access to primary community and community health.

We will lose our gains from this investment and tens of thousands of citizens will have to revert to the old option of using expensive emergency rooms, which the taxpayers ultimately bear the

burden of cost. Tulane community health programs will not be immune from these cutbacks.

To prevent the loss of gains from this investment, a set of strategies are needed, and none alone are likely to be sufficient. Some

are within the control of the community health providers themselves.

Chairman TOWNS. Dr. DeSalvo, would you wrap up, please? Because you’re beyond your 5 minutes.

Dr. DESALVO. Yes, sir. These include improving efficiency and

business practices at the center, which we have undertaken. Other

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actions are beyond our control and include options such as working

with HRSA for community health center programs and creating ongoing funding for uncompensated care, much the same way hospitals are supported in the DSH programs.

We look forward to working with you on the ways in which we

can sustain this vital component of New Orleans’ recovery. Thank

you.

[The prepared statement of Dr. DeSalvo follows:]

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Chairman TOWNS. Thank you very much. To the other witnesses,

because we have so many witnesses today, we want to try to stay

within the 5-minutes. We have your written statements. If there

are things that you need to add, you can possibly add them during

the question and answer period.

Thank you very much.

Ms. Bascetta.

STATEMENT OF CYNTHIA A. BASCETTA

Ms. BASCETTA. Thank you, Mr. Chairman and members of the

committee. We appreciate the opportunity to be brought together

this morning to discuss the important issues involved in restoring

health care services in New Orleans.

The pre-Katrina health care infrastructure was hospital-based,

very expensive, and yielded generally poor outcomes. As you know,

many low-income and uninsured people traveled downtown to get

their care at emergency rooms and clinics at Charity Hospital. A

better system would be built on a solid foundation of primary care

that would be located closer to people’s homes and would be accessible as their health care needs arise, that would provide continuity

of care over the long term and that would coordinate care for people with chronic or more serious conditions who need to see specialists.

Health services research indicates that primary care also yields

better health outcomes at lower costs. So building primary care in

New Orleans became a key priority in the wake of Katrina, especially for those on Medicaid or without adequate insurance. My testimony today is based largely on our July 2009 report on the use

of Federal funds to support primary care in the area. The lion’s

share of the money, as you know, is the $100 million PCASG grant.

Lesser amounts of Federal funds were provided through the Social

Services Block Grant and the Professional Workforce Supply Grant,

as well as more recent American Recovery and Reinvestment Act

Funds for enhanced Medicaid payments and additional federally

qualified health centers.

The PCASG was intended to restore and expand access to primary care, including mental and dental services, as well as referral

to specialty care and ancillary services like transportation. In addition, the organizations must have had the intent to be sustainable,

that is, to be able to continue providing primary care after the

grant ends in September 2010. So far, the 25 funded health care

organizations have provided more than 1 million health encounters

to over 250,000 patients.

After the storm, provider shortages were a major reason for disruption in health services. We found that the grant organizations

used the funds to hire and retain physicians, nurses, and other providers. They told us that this allowed them to increase access by

cutting waiting times and expanding their hours.

Mental health services were especially hard hit. HRSA’s area resource file documented a 21 percent decrease in the number of psychiatrists in greater New Orleans between 2004 and 2006, compared to a 3 percent increase in counties nationwide. Ten of the

PCASG organizations hired both medical and mental health providers to alleviate service gaps, and 15 of 18 we interviewed for our

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report on mental health services for children identified the lack of

providers as a significant barrier.

Other funds were used to renovate or relocate physical space so

that providers could expand capacity through additional examination rooms and the purchase of new equipment. Despite the

progress made, PCASG organizations face challenges in establishing a full continuum of care with referrals to specialists and they

are concerned about their long-term sustainability. Most continue

to have difficulties hiring and retaining staff due to persistent

problems with housing, schools, and the overall community infrastructure in the greater New Orleans area. In fact, HRSA has designated all four parishes as a health professional shortage area for

mental health, a designation that none had before Katrina, and

most of the parishes as shortage areas for primary care and dental

services.

In addition, financing poses serious challenges. Although Medicaid billing has increased and some are able to bill private insurance, at more than half of the organizations, most of the patient

population and sometimes 70 percent are uninsured. This is a

daunting demographic, given that nearly all the funding is temporary. Many reported that they intended to use health center program funding to improve their sustainability, but with only 16 percent of applicants awarded grants nationwide in fiscal year 2008,

it is unlikely they would all be successful in obtaining a grant.

LPHI provided a sustainability strategy guide to help them ad- dress a possible $30 million annual shortfall in revenues. Recipients have completed and planned actions to be sustainable, but it

is not clear which ones will be successful and how many patients

they will be able to serve after the funds are no longer available.

With less than 10 months remaining, quickly implementing ways

to pay for the large number of uninsured patients will be necessary

to prevent disruptions in these vital services and to prevent the

erosion of gains made in delivering primary care through this

grant.

[The prepared statement of Ms. Bascetta follows:]

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Chairman TOWNS. Thank you very much.

Ms. Craft-Kerney.

STATEMENT OF ALICE CRAFT-KERNEY

Ms. CRAFT-KERNEY. Good morning Chairman Towns and members of the committee. I am Alice Craft-Kerney, and I am the executive director of the Lower Ninth Ward Health Clinic in New Orleans, LA. I appreciate the opportunity to be here to discuss the successful partnership of government and community to deliver health

care services to the citizens of the New Orleans region.

I want to first express my appreciation for the Primary Care Access and Stabilization Grant, which has been a lifeline for the uninsured and under-insured residents of the greater New Orleans

area. The grant has enabled the Lower Ninth Ward Health Clinic,

as well as other health clinics, to employ medical staff and provide

health care services in New Orleans which has been designated, as

we said, as a medically under-served area. It is my hope that Congress will recognize the critical need for our health clinics and take

action to continue this fruitful collaboration which contributed significantly to the recovery of the greater New Orleans region.

Before Hurricane Katrina, I worked as a nursing supervisor at

Charity Hospital in the trauma surgery wards. During that time,

I observed many patients that were not insured. And the reason

why they were there is that they did not have access to primary

health care services. These were unnecessary hospitalizations. But

to understand fully what is going on, you have to understand that

community, which was most impacted by Katrina. You have to understand that this population was very vulnerable and they had

poor health outcomes because there were large numbers of New Orleans residents living at the poverty level. There was low education

levels and high illiteracy rates. There was a high dependence on

the public sector for health care needs. There were high rates of

chronic illnesses, high numbers of, as I said, uninsured residents.

And the use of the emergency room was substituted for primary

health care.

And there was an inadequate emergency preparedness. And on

August 29, 2005, these factors collided with the worst natural and

man-made disaster in the history of the United States, creating a

public health crisis of enormous proportions.

Ms. Patricia Berryhill, a registered nurse, and my colleague, and

I decided to confront the crisis head-on by opening the Lower Ninth

Ward Health Clinic on February 27, 2007. This was a humanitarian mission that we have undertaken at the Lower Ninth Ward

Health Clinic and it is informed by the United Nations Guiding

Principles of Internally Displaced People, a standard of care that

is supported by the U.S. Government to ensure the recovery of people around the world who have become displaced by a disaster.

Principle 19 of the Guiding Principles calls for comprehensive

medical care and special attention to the health needs of displaced

persons. For displaced New Orleaneans, these health needs involved the traumatic experience of the disaster and being uprooted

from homes, as well as the physical impacts of not having access

to life-sustaining medications and treatment. As time passed, no

one came to the Lower Ninth Ward, a community separated from

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the rest of the city by a waterway called the Industrial Canal, and

historically the Lower Ninth Ward was the last to obtain any services.

With that knowledge, we opened the Lower Ninth Ward Health

Clinic in order to improve medical care needed by internally displaced people returning to New Orleans, many of whom have a history of inadequate medical attention.

Initially, the clinic was staffed by volunteer medical providers at

a time when many medical professionals who lived in the city were

physically displaced by the disaster. It was largely through the Primary Care Access and Stabilization Grant that we were able to access the funds to employ and stabilize the medical staff, purchase

medications, medical equipment and supplies, and contract services

for laboratory tests. The grant also provided us with the capacity

to raise funds from other sources.

Today, the Lower Ninth Ward Health Clinic is proud to report

that it employs two part-time physicians with significant medical

experience, two medical assistants, one clinical director, and one

executive director. We serve more than 2,200 patients on an ongoing basis and over 5,000 patients through initial medical visits. We

are grateful to provide a service that has not only contributed to

the medical progress and positive health outcomes of our patients,

but also to their recovery and to the recovery of New Orleans.

While we have made incremental progress, there is still much

work to be done in the areas of quality improvement and disparity

reduction. With the adversity of this disaster, there was also an opportunity to discard ineffective treatments and try new and innovative therapies to improve quality of care and reduce disparities.

The positive health care outcomes to date have been realized in

large part because of the funding of the Primary Care Access and

Stabilization Grant.

We are eternally grateful to all Members of Congress and commend past Secretary of Health and Human Services Michael

Leavitt for his service and his leadership as well as his insightful

actions, which aided the New Orleans region in receiving muchneeded funding for health care services. We are looking forward

with great anticipation to future public-private collaborations

which enhance and sustain the health care status of citizens of our

region.

We are at a pivotal moment in the evolution of providing excellent health care services. We must not forget we have an opportunity to change the trajectory of internally displaced people. We

are now positioned to do phenomenal things to improve the health

and welfare of the people of New Orleans and the Gulf Coast region.

Thank you.

[The prepared statement of Ms. Craft-Kerney follows:]

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Chairman TOWNS. Thank you very much for your statement.

Dr. Erwin.

STATEMENT OF DONALD T. ERWIN, M.D.

Dr. ERWIN. Good morning. I would like to thank the chairman

and members of the committee for their continued interest in the

health care situation of post-Katrina New Orleans and for the opportunity to appear here today.

I am Don Erwin, CEO of St. Thomas Clinic, which is No. 54 on

the map that you have. It was started in 1987 as a communitybased clinic in one of the country’s oldest housing developments.

Prior to Hurricane Katrina, the focus was its neighborhood and our

programs were defined by the availability of public and private

grants. The budgets were small, services were limited. After Hurricane Katrina, through the generosity of many, the clinic reopened

to provide health care for returning citizens and has since become

one of the community’s largest and most comprehensive primary

care centers.

With the PCASG funds, St. Thomas has gone from 2.4 FTE providers to 8 primary care and mental health care providers. We now

have a staff of 45 people and an annual operating budget of $4.5

million. We have a patient base of 14,000 patients and provide over

22,000 patient visits per year. Although we use an open access appointment model, we are still not able to meet the need. Prior to

Katrina, we saw patients from three to five local zip codes. Last

year, we saw patients from 251 zip codes in three States.

In addition to primary care, collaborations have been made to

provide our patients with specialty care in seven major medical

specialties. This specialty care, offered in a primary care setting,

provides coordinated patient-centered care in a cost-effective way.

We are also a training site for medical students, residents, and

nurse practitioners.

As part of a CDC-sponsored national breast and cervical early

detection program, administered by the LSU School of Public

Health, St. Thomas provides breast cancer early detection with digital mammography and ultrasound. For over a year after Katrina,

we were the only mammography site for uninsured women and we

continue to be one of only two in the region. Through a unique collaboration with Ochsner Clinic Foundation and the Association of

Black Cardiologists, St. Thomas offers interventional cardiovascular care for the prevention of heart attacks, stroke, and sudden death. For uninsured patients, this cardiovascular care is generally unavailable or delayed for months.

Included in my written testimony is a copy of a cardiac tracing

that shows an implantable defibrillator operating to serve the life

of a 52-year-old working man who has a wife and two children. He

was at work when he had an episode of silent ventricular fibrillation and the defibrillator saved his life.

Although these defibrillators cost $50,000 each, we have installed

14 of them in uninsured patients, with both the defibrillators and

the cardiologists’ time being donated to St. Thomas. I would like

for you to understand that this man is just one of the many thousands of lives that have been saved by this grant and the services

provided.

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All of the specialty services that we have available at St. Thomas

are offered to any patient of any of the safety net clinics in the New

Orleans community. As a result of the infrastructure made possible

by the Primary Care Access and Stabilization Grants, St. Thomas

has become a federally qualified health center and also a level 3

patient-centered medical home, recognized by the National Committee for Quality Assurance.

We were recently notified that St. Thomas would be honored by

the National College of Physicians, the second largest physician

group in the United States, which is this year awarding St. Thomas its Rosenthal Award for the original approach to the delivery of

health care in a way which will increase its clinical and/or economic effectiveness.

Although St. Thomas has become a federally qualified center, the annual FQHC grant of $650,000 makes up only 14 percent of our

annual $4.5 million budget. We are unable to take full advantage

of the augmented FQHC Medicaid rates, since only 14 percent of

our patients have Medicaid; 72 percent of our patients remain uninsured. Although the percentage of Medicaid-eligible patients will

increase in the future, we think this will take at least 2 years.

Without the funds provided through the Primary Care Access

and Stabilization Grant, it is difficult to project continued viability

for St. Thomas. Although we are steadily moving toward sustainability, with 72 percent uninsured patients, we do not expect to

have replacement revenue to support our operations until there is

expanded Medicaid eligibility. Certainly an early consequence will

be the loss of the infrastructure necessary to support the policy and

procedure requirements to remain a federally qualified health center and a patient-centered medical home.

In our business plan, for 3 years, we project that in the beginning of year three, we could replace the revenues lost by the Primary Care Access and Stabilization Grant. In the intervening 2

years, however, we cannot identify any source of adequate support,

nor do we see any other safety net site in our region which would

absorb our patients. As you have heard, Hurricane Katrina created

a new population of uninsured patients when the storm took people’s homes, jobs and health insurance. The PCASG has enabled us

to begin the restructuring of the delivery system in our State.

We are optimistic about the sustainability of clinics like St.

Thomas, if we are given another 2 or 3 years for the recovery to

continue. But for the present, if there is no bridge funding, we anticipate that our patients will find themselves in the same situation

they found themselves immediately post-Katrina, where the only

source of primary care was the crowded emergency rooms.

Thank you very much for the opportunity to speak with you this

morning and for your continued support of our community.

[The prepared statement of Dr. Erwin follows:]

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Chairman TOWNS. Thank you very much for your statement.

Mr. Griffin.

STATEMENT OF MICHAEL GRIFFIN

Mr. GRIFFIN. Good morning Chairman Towns, Congressman Cao,

and other distinguished members of the Committee on Oversight

and Government Reform. I would like to thank you for allowing me

to offer testimony in this public formum on ongoing health care

concerns and challenges facing the New Orleans region post-Hurricane Katrina.

My name is Michael Griffin. I am the chief executive officer of

Daughters of Charity Services of New Orleans, a primary health

care provider whose organization has roots in New Orleans for 175

years, with services to the poor and vulnerable. The Daughters of

Charity Services of New Orleans [DCSNO], is sponsored by Ascension Health. Ascension Health was founded in 1999 with the

Daughters of Charity and the Sisters of St. Joseph joining their

health ministries into one organization.

DCSNO’s mission is to improve the health and well-being of our

community. We are dedicated to providing primary and preventive

health care services which address the needs of the total individual—body, mind and spirit. I welcome this opportunity to inform

you on how the Primary Care Access and Stabilization Grant program has assisted us in restoring and improving the health delivery system in New Orleans and what challenges are still before us.

When Hurricane Katrina struck the city of New Orleans on August 29, 2005, it severely impaired the health care delivery system.

Medical and other support personnel were displaced and the city

lost several hospitals and numerous primary care providers.

DCSNO was not sheltered from the impact of Hurricane Katrina.

We lost our one and only health center site to flooding in the aftermath of the storm. Yet as our history demonstrates, the DCSNO

board and Ascension Health would remain steadfast and committed

to serving the poor and vulnerable in New Orleans. Within 45 days

after the storm, we opened a new health center in the Metairie

area, next door to the Department of Health. However, the diminished capacity of the overall health care infrastructure in new Orleans severely compromised continuity of care for low-income and minority populations who were attempting to remain or return to the

area.

Katrina resulted in the loss of five hospitals, one of which served

the vast majority of the medically under-served and poor. The

aftermath of Hurricane Katrina was the litmus test which challenged DCSNO to improve access to health care services at additional locations throughout the metropolitan area with the goal of

meeting the primary care needs of the community at large. It was

because of the Primary Care Access and Stabilization Grant awarded by the U.S. Department of Health and Human Services and authorized by Congress that DCSNO was able to rapidly expand from

one to three primary health care centers in the area. Today, these

health care centers are current in providing primary care services

to the under-served populations in the Carrollton area, the Upper

Ninth Ward, and Metairie.

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As a direct result of PCASG funding, DCSNO has been able this

past year to provide affordable or free care to 20,034 patients, totaling 65,509 patient visits. Seventy-two percent of those patients

are uninsured. Let me repeat that: 72 percent of the 20,000 patients are uninsured. Fifteen percent are on Medicaid, 5 percent

are on Medicare, 7 percent are on other insurance. DCSNO has experienced unanticipated growth in this last year of a 49 percent increase in our patient population since last July.

The Primary Care Access Stabilization grant funding allowed us

to retain and hire new doctors. We are offering free pharmacy services and have expanded access to mental health providers for both

children and adults. We have plans to expand dental care and optometry. In addition, we have leveraged the PCASG funding to encourage partners like the Unity Foundation and the March of

Dimes to help fund mobile primary care units, two of which are

mobile prenatal units and the other is one that treats the homeless, and to restore our Seton Resource Center for Adolescent and

Mental Health Development that offers behavioral health and

counseling services at 10 public and parochial schools.

Let me quickly tell you this story. An uninsured mother, who

didn’t have a regular physician, recently attended a health fair

staffed by DCSNO’s mobile unit. She had a history of hypertension,

cholesterol, and glucose issues. While having her testing done, the

woman expressed concerns to her medical provider about her

daughter complaining of not feeling well. She was constantly drinking water and going to the rest room. She wondered if we could just

take a quick look at her daughter. We gave the 9-year-old a glucose

test and found that the glucose level was above 300, which was extremely dangerous. Our clinician recommended that the mother immediately take her child to Children’s Hospital for further treatment. The child was in fact admitted to Children’s Hospital, where

the emergency room doctors informed the mother that any prolonged high blood sugar could have resulted in a stroke, coma or

even death.

I tell this story because it demonstrates the type of community

that we are doing at Daughters of Charity Services of New Orleans

to help those who do not have health insurance and/or a family

physician to call when a child gets sick.

I thank you, Chairman Towns, for this opportunity to testify before Congress, and thank you for your support of New Orleans.

[The prepared statement of Mr. Griffin follows:]

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Chairman TOWNS. Thank you very much, Mr. Griffin.

Dr. Townsend.

STATEMENT OF ROXANE A. TOWNSEND, M.D.

Dr. TOWNSEND. Thank you Mr. Chairman and members of the

committee for the opportunity to address you today regarding the

status of health care in New Orleans on behalf of the Louisiana

State University health system.

In addition to my role at the health system, I also have the privilege right now of serving as the interim CEO to the public hospital

in New Orleans.

When Hurricane Katrina forced the closure of the Medical Center

of Louisiana at New Orleans, we did lose critical infrastructure for

health care. We lost 550 inpatient beds. At that time, we were

doing 23,000 patient admissions a year, we had 120,000 emergency

department visits. But something that is not often recognized and

is really important, we did more than 260,000 outpatient clinic visits in our hospital-based clinics. That included primary care as well

as specialty care.

We had over 640 medical residents and fellows from Louisiana

State University and Tulane University training at that hospital,

along with thousands of other students, dental, nursing, and allied

health, and pharmacy. It was a critical area for teaching for Louisiana, for the work force, for the future. We lost all of that in

Katrina. And when you look at that, the role of that facility, it

wasn’t simply for the New Orleans region. It was a Statewide resource, where people who were uninsured could go to get specialty

care. Oftentimes the specialty care isn’t available to these folks,

even if they have a Medicaid card in the rest of the State. We lost

all of that from Katrina.

Knowing the important role that this facility played, I consider

these people who stayed there during the storm and reconstituted

services after as really true heroes. They went from constructing

tents in a parking lot where they continued to provide services;

they moved those tents into the convention center because it didn’t

flood. So they at least had a roof over their head.

Then they moved those tents into a former department store in

a mall adjacent to the Superdome once the flooding subsided. And

we continue to do specialty care and primary care clinics there

today, because it wasn’t until November 2006 that the former University Hospital campus was able to be transformed and reconstituted into an inpatient facility. That was through the work and collaboration of FEMA and LSU, as well as Louisiana’s Office of Facility Planning and Control. Today we are operating 275 beds, about

half of what we had before the storm. With that, we are running

close to 85 percent occupancy. If you look at hospitals across the

country, 85 percent occupancy is full. In our ICU, we have 36 beds.

They stay full all the time. We have 38 inpatient acute psychiatric

beds for adults. They are always full.

We also provide the only Level I trauma center in Louisiana,

serving a nine-parish area. We have 11 operating rooms, less than

half of what we had before the storm. One of those always has to

be on standby for trauma, since we are Level I. So we are cramVerDate 11-MAY-2000 17:39 Sep 09, 2010 Jkt 000000 PO 00000 Frm 00067 Fmt 6633 Sfmt 6633 U:\DOCS\57790.TXT KATIE PsN: KATIE
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ming all of our operating room cases into 10 operating rooms in

that facility.

And as a well-respected physician in the community, someone

who was there during the storm and after the storm said, we really

are gaining stability but we are still pretty fragile. We are probably

one big bus wreck away from just crippling the entire system down

there. So we still have a way to go.

One of the really exciting things that did happen was through

the generous funding of Congress we got the Primary Care Access

and Stabilization Grant. So we were able to bring six community

clinics up after the storm associated with in the interim hospital.

And this was different from before the storm where everything was

pretty well located on campus. Now these six clinics are allowing

quality patient care to happen close to where people live. And the

quality is evidenced by the NCQA actually giving us recognition

status as patient-centered medical homes in those community clinics.

The grant funding was flexible enough that we were also able to

provide some specialty care services. As we look at this funding

coming to a close, we recognize that our role as an academic medical center is to support these primary care clinics. So we are looking at consolidating some of those clinics into bricks and mortar,

rather than the temporary buildings that they are in now. But we

see that access to the specialty care and inpatient care is extremely

important. So we are trying to partner with the community clinics

that are still there that will hopefully survive after the primary

care grant goes away, so that we can give important services to

those folks. We don’t just treat, we also educate. And we have to

do both of those together.

So I thank you for the opportunity to address the committee

today.

[The prepared statement of Dr. Townsend follows:]

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Chairman TOWNS. Thank you very much.

Dr. Rowland.

STATEMENT OF DIANE ROWLAND

Ms. ROWLAND. Thank you Mr. Chairman and members of the

committee. I am Diane Rowland, executive vice president of the

Kaiser Family Foundation, and since Hurricane Katrina I have

helped lead the Foundation’s efforts to document the needs and

monitor the progress in New Orleans through two city-wide surveys of New Orleans residents in 2006 and again in 2008. We are

also planning our third survey in 2010, just to be able to assess

how the progress has been going.

All of our work underscores the importance of building a strong

health care system to meet the needs of all the residents of New

Orleans as part of making New Orleans again a vital and dynamic

system. You have heard from all of our witnesses of the fact that

New Orleans did not have a fully operating system even before

Katrina. And you have heard about the devastation that Katrina

wrought on the city and on its health care system.

But the devastation was so widespread that it also brought an

opportunity to establish and design a better system, with community-based services and integrated services for the poor and uninsured, instead of a system based on a hospital and disproportionate

share Medicare payments to help sustain it. The public returning

to New Orleans had many of the same problems of the public that

left New Orleans. Many were poor and uninsured and many with

chronic health problems. So Katrina did not wipe away the problems of the residents of New Orleans.

Adequate medical care, rebuilding medical capacity, and the

Charity Hospital system establishing care in clinics and neighborhoods were high priorities of the residents that we surveyed, and

came in next after rebuilding the levees which as you might imagine would have been their major concern. And as we look at a redesigned health care system we need to look at the major elements

that need to be put in place. First and foremost, health care coverage provides the means for people to access health care services

and the financing to support a health care system. For children in

New Orleans, there is a success story. Today, only 8 percent of New

Orleans’ children are uninsured, lower than the national average.

This is due largely to the expansion of coverage through Medicaid

and the LaCHIP program. Today in the city of New Orleans, over

half of the children have Medicaid as their source of coverage,

which helps account for the lack of a large uninsured population.

But for adults in New Orleans, the story is very different. Louisiana, among the poorest States in our Nation, one in four living in

poverty, has one of the most meager programs in terms of eligibility for adults. In fact, a working parent cannot qualify for the

Medicaid program if their income is over $5,513 a year, or 25 percent of the Federal poverty level. No coverage is available for childless adults and those who are in the city now. We account that 29

percent of non-elderly adults are uninsured. These are the same

levels of lack of insurance for adults as before Katrina, and these

are the very individuals who are now seeking care through the

community clinics that have been developed, and will need care in

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an ongoing manner until insurance coverage is made available. Attempts to improve coverage have been stymied, leaving these developing health systems to care for the largely uninsured adult population. Seventy-two percent uninsured is an unsustainable level of

care to be delivered in even a grant-supported clinic.

And the good news, though, is that the community-based system

of clinics for primary care has been able to at least develop with

the support of the Federal grant funds. It is decentralized, it is in

the neighborhoods where people live. A forthcoming Commonwealth Fund study that is evaluating these clinics has found that

the patient experiences show very promising results on quality, on

access and on efficiency for these clinics. The investment in these

clinics has helped to move a new model of care to the city of New

Orleans, and appears to be bringing much-needed care to the city’s

still substantial uninsured population.

But the bad news is that the future sustainability of these clinics

is in jeopardy, largely due to the lack of coverage. And while we

all talk today about national health insurance and universal coverage as part of the health reform efforts, those efforts are still not

going to be phased in if enacted until 2013 or 2014, leaving a huge

gap right now for these clinics to be able to continue. In order to

provide them with the support they need, coverage needs to be expanded, many need to be able to become federally qualified health

centers, and there needs to be continued support for the uncompensated care that they provide to individuals who are uninsured.

Even in the models of community health centers around the

country, we see that the mix of revenues that support them is

grant funding from the Federal Government combined with the

payments for their insured patients through the Medicaid program.

And finally, a fully integrated health care system requires specialty

care and tertiary care capacity, as you have just heard. So reestablishing a teaching hospital with multi-specialty care to back up the

clinics is equally essential.

Without improved coverage of adults, combined with financial

coverage for the uninsured, the neighborhood primary care model

will falter, not in the care it delivers, but in its ability to sustain

operations. Yet this is a critical building block for the future of

New Orleans’ health care and a critical building block as we look

toward national reform. I hope this hearing will help to shed light

on the needs of these clinics and the ability to provide services to

the uninsured and the low-income population of New Orleans.

Thank you for this opportunity.

[The prepared statement of Ms. Rowland follows:]

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Chairman TOWNS. Thank you very, very much. Let me thank all

of you for your testimony. You have been very helpful.

Now we are going to the question and answer period. I will start

by first asking you, Ms. Bascetta and Dr. Rowland, what would it

mean toward the region’s overall recovery to lose these services

that have been described so eloquently here this morning?

Ms. BASCETTA. I think that most importantly, the threat of backsliding on the progress that has been made so far in the primary

care foundation is something that we would not want to see. These

clinics now and this primary care foundation that has been built

is in an expanding mode. It is in a growth mode. And reverting

back to a less effective system where people would have to seek

care in an emergency room would be more expensive and would

yield poorer outcomes, as you have heard.

In addition, like emergency rooms throughout the country, they

are already at capacity. So it would be very dire to lose these primary care clinics.

Chairman TOWNS. Dr. Rowland.

Ms. ROWLAND. Mr. Chairman, I know your concern is for the people of New Orleans. I think what these clinics have demonstrated

is that they need access to care. There are severe gaps in their ability to get the care they need. We know that uninsured people get

less care than those with insurance and that they live sicker and

die quicker. So I think it is an investment not only in the clinics

themselves but especially in improving the health care of the people of New Orleans. And many of the low-income population there

suffer from multiple chronic conditions that are not readily available to emergency room care. So I think you really need to have

in place a good primary care network and to sustain it.

Chairman TOWNS. Right. Thank you very much.

Let me raise this question with you, Dr. DeSalvo, Ms. CraftKerney, Dr. Erwin, and of course, Mr. Griffin. As you know, the

grant ends next year. What Federal assistance are you now seeking

to be able to keep it going, just sort of run down the line real fast

as to what you’re doing to keep this alive. What are you doing?

Dr. DESALVO. What we have done is work toward improving efficiency, quality, so that we are providers of choice for communities,

irrespective of ability to pay. We work collaboratively with organizations like 504 Health Net to ensure that we are sharing best

practices, billing when appropriate, etc. So we are doing our best

to be efficient operations.

The reality is, as you heard, that can only go so far, including

when patients contribute to their care, which they do. We charge

sliding scale fees at these sites. And so the gap will need to be

filled in much the ways that hospitals have a gap filled for uncompensated care. It is just the DSH program doesn’t support primary

care federally in the way that it supports the hospital systems.

So in terms of gap, it may be additional appropriation, it may

also be just thinking about ways that we can use existing funds

that we have, for example, CDBG funds that we got for recovery

are now at the LRA to, that are for urban renewal, principally for

housing, but thinking about the fact that without health care, it

doesn’t make a lot of sense to just build housing, you have to have

the fabric. So that is one opportunity for bridge funding, and then

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to think about whether we want to use a waiver for disproportionate share money to support the clinics going forward, until it is not

needed, because there is coverage for everyone.

Chairman TOWNS. And right down the line.

Ms. CRAFT-KERNEY. The Lower Ninth Ward Health Clinic is

moving toward sustainability by first, making sure that we are

Medicaid providers, Medicare providers, and private insurance providers. We came up a little bit differently, because we came up

post-Katrina, truly a grassroots effort. So we are putting those different things in place, so that we can become more sustainable.

Also, we are looking to the philanthropic community to assist us.

Chairman TOWNS. Dr. Erwin.

Dr. ERWIN. St. Thomas is a federally qualified health center, and

as such, get Federal funds from that. As I mentioned in my testimony, the financial base that is required to maintain the infrastructure, so that you can comply with the policies and procedures

and the 24 hour coverage and that sort of thing, we are working

hard to try to maintain it.

We have a sliding scale, we have increased our patient revenue

money, funds from patient revenue, from zero 2 years ago, 3 years

ago, to an estimated $420,000 this year. The mayor of New Orleans

has also granted us $850,000 for CDBG funds. But this is a one

time only thing.

We have a $2 million allocation from the State, but that is for

capital improvements only. So we have to stay viable in order to

be able to capitalize on that. Our staff meets weekly and we go

over ways that we can improve our sustainability, not only with

grants but by watching our costs as carefully as we can. And we

have unfortunately with the 72 percent uninsured population, it is

just very hard for us to find any kind of viable revenue that could

replace this money until there is some expansion of Medicaid.

We are told that there will be a substantial increase in patients

eligible for Medicaid, but this will likely take 2 years. That is why

in our sustainability projections we estimate that beginning year

three, should this occur, the beginning of year three St. Thomas

will actually be able to replace the $3 million that we would lose

from the Primary Care Access and Stabilization Grant.

We expect to be self-sufficient in year three on the business plan.

As I say, we charge everyone that can pay. There is a sliding scale

and we ask the patients to take responsibility for helping us be viable. But when we are dealing with a demographic of 72 percent uninsured, it is really hard.

Chairman TOWNS. Right. Mr. Griffin, briefly, because my time

has expired.

Mr. GRIFFIN. Daughters of Charity is focused on the growing uninsured population, as we are 72 percent uninsured. Since Katrina,

we have blindly accepted all who come. And that has been majority

adults who do not qualify for Medicaid or uninsured. So we are 72

percent uninsured, we are focused on growing our Medicaid, Medicare, and insured populations. We also are evaluating our expenses

and looking at our care management model, which is pretty comprehensive, seeing how we could be more efficient. And also looking

at fundraising.

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Chairman TOWNS. Thank you very much. My time is expired. I

now yield 5 minutes to the ranking member, Congressman Issa,

from the great State of California.

Mr. ISSA. Thank you, Mr. Chairman. The great State of Califor- nia is $140 billion or whatever, upside down at any given time, actually it is $47 billion right now, they have narrowed it. We are a

State that taxes at a rate more than 25 percent higher than Louisiana, and we have overspent. We provide a lot more public health

assistance in California in many areas than Louisiana does. And

I guess, Mr. Cao, who of course is one of your representatives, will

probably look more specifically into a lot of what can be done and

what can be delivered from the Federal Government. But my questions are going to have to be a little more tough love, not just because I am personally a conservative, but because I have an obligation to California, in addition to the Constitution.

Louisiana’s top tax rate is 8.4 percent, California is 10.4 percent.

You have a 4 percent sales tax, we have an 8.25 percent sales tax.

I know you are all health care professionals. But in spite of this,

is everyone so poor in Louisiana that in fact the State cannot do

more for you? Are you going to be a permanent ward of the Federal

Government? Because when I hear sustainability counting on Medicaid increases, when I hear Mr. Griffin saying, ‘‘well, we take everyone, including those who are not poor enough to qualify for

Medicaid,’’ then I am extending Medicaid past what we define as

the poor.

So let me ask you much more the other part that I didn’t hear.

What is your State, and we will have a second panel from your

State, but what is your State doing to bring all the powers to be

of the State, including finding funding sources for you besides simply the Federal Government? Because obviously the direct effects

of the levees breaking, even if we put them all on the Federal Government, at some point that is paid out. Then we ask the question

of what is going to make you a sovereign State, meeting your own

obligations.

And Dr. DeSalvo, only because I can see that you are saying,

how is this guy asking a doctor this question, would you help me

with this? Because I know that all of you look to all sources of revenue. You are doing a lot to build better doctors and better health

care. But I have to ask in the long run, what are you doing besides

coming to us? And don’t get me wrong, Mr. Cao is absolutely dedicated to making sure we do everything we can do. But if I could

ask each of you that same question, it is really my only question

for the panel. Because I see all of you as doing the right things

within the structure that exists. You are getting money from all

revenue that you can find, you are building great solutions for people who come to you. And I don’t have any quibble with that. I totally see that.

But I will start with Dr. DeSalvo, because this is a question that

a California Member has an obligation to ask, in addition to a Louisiana Member, who is obviously going to say, we have to do more.

Please.

Dr. DESALVO. Thank you for the question. I will begin with the

concept that, when the Federal levees failed and our city was destroyed we began very early to work together to think about how

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we would rebuild this. And in education, for example, there has

been creative thinking, just like there has been in health care.

We did not as a community of stakeholders and health care providers think that there was going to be some manna from heaven

that was going to fall to make it happen. And indeed, as Alice describes, and I tried to as well, and others, it is very grassroots, this

clinic system.

Mr. ISSA. I am totally supporting that.

Dr. DESALVO. I am going to get there.

Mr. ISSA. Where is Louisiana coming in and how are they going

to help New Orleans? Because you are a State first. Cities are not

actually directly recognized by the Federal Government. We recognize States. We are the United States of America, and in a sense,

only States come to us. And when the next panel is up, I am going

to be asking them that same series of tough questions, what is the

State doing to be equal in its support of its people to other States.

Dr. DESALVO. Yes, sir. So I will skip the tax policy, because I

really cannot answer the question. But what I wanted to tell you

is that the past 4 years, the community has come together at policy

tables, Democrats, Republicans, maybe Independents, who knows,

to think about ways that we could finance this kind of system. We

have developed at least three discrete plans: one, the redesigned

collaborative that was a mix of private coverage; another which

was an affordable health insurance plan through private coverage

solely, called COLA; and another one that was a waiver that went

in about a year ago to the Feds to use disproportionate share to

recover to shift the funds. Money we already get, but use it in a

different way that requires Federal support.

So I will just say that we have been working incredibly hard in

Louisiana, across party lines, through two Governors, and have always come up with the same idea as a State: this is what we want

to see happen. We need to figure out how to finance it. At this

point, I can’t speak on behalf of the State, but there are some

things that do need to happen federally to allow us to move forward as a State, i.e., waivers for how we use disproportionate share

money, how we might use the existing recovery authority money

that we got for urban renewal that might require some congressional action to allow it to be for urban rebuilding.

Mr. ISSA. Anyone else that can answer as to just what you see

your State doing? Because Bobby Jindal was a colleague of ours,

a friend of mine, and I want this committee and all the committees

to work hand-in-hand with your Governor, to enable those things.

But we are going to have to ask them the same tough question I

am asking you. So if any of you have an answer to that narrow

question of how Louisiana is working to meet this sustainability requirement that you all talked about. Yes, Dr. Townsend.

Dr. TOWNSEND. I obviously can’t answer for the State, I don’t sit

in that role. But I think when you look at how health care is funded, there are really only three pots of money. And perhaps it is

only two. I mean, there is Federal money, there is State money, or

there is private sector money. So I think one of the things that the

State is trying to do is economic development. Because if you have

an employer who offers an insurance plan, then you have access to

insurance that the Federal Government doesn’t really have to parVerDate 11-MAY-2000 17:39 Sep 09, 2010 Jkt 000000 PO 00000 Frm 00098 Fmt 6633 Sfmt 6633 U:\DOCS\57790.TXT KATIE PsN: KATIE
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ticipate in, nor does the State. So I think that is one of the ways.

We have to improve our education, we have to improve our employment, so that people have access to health care programs that don’t

necessarily have to be funded by tax dollars. So I think that is one

of the things that is happening.

And then I think Dr. DeSalvo talked very eloquently about the

other kinds of waivers and ideas for current funding, not to increase it but to have more flexibility in current funding.

Mr. ISSA. And I know we would like to do that. Mr. Chairman,

I thank you for your indulgence. I am sorry we can’t continue this,

but I assure you, we will be trying to work together with Mr. Cao

to make those waivers happen as your State sees fit. Thank you.

Chairman TOWNS. I now call on a very active member of this

committee, of course, Mr. Cummings from the great State of Maryland.

Mr. CUMMINGS. Thank you very much, Mr. Chairman, and I

want to thank all of you for what you do every day to address the

needs of so many people. You don’t have to say it, I will say it, I

have listened to your testimony, these folks have been left behind.

Let’s not kid ourselves. You all are doing the best you can with

what you have. And in answer to Mr. Issa’s inquiry about tough

love, you can have tough love and die. And you have not provided

the testimony yet, but we have just spent a lot of time in the House

addressing this issue of health care overall. And the statistics

show, and the research shows, that some 45,000 Americans die

every year because they don’t have insurance. Other research has

shown that 1,000 children die every year because of no insurance.

So the question is, where does the tough love, how far do you go

with the tough love if people are dead? So let me ask you this. This

committee, Mr. Chairman, we had some testimony a while back,

and the Members will remember this, where we were talking about

formaldehyde in trailers, where folks were living in trailers getting

sick, big time. And this was a while back. This committee pushed

hard to get the folks out of trailers.

I just wondered if any of you all can comment on that. Where is

that? Because a lot of your work would be made even harder. When

they told us about the ailments that resulted from folks breathing

those fumes, it was quite devastating and we were very upset. I

just wonder, where does that stand? Can one person just tell me

about that? Just one. Somebody please, my time is running out.

Dr. ERWIN. I will just take a stab at it. We still see patients who

are living in trailers, and we still see patients who are exposed to

formaldehyde. The problem as we perceive it is there is just not

adequate housing for them to get out of the trailers.

Mr. CUMMINGS. So housing is still not adequate, is that what you

are saying?

Dr. ERWIN. No, sir, it is not.

Mr. CUMMINGS. And I think going back to what you said, Dr.

Townsend, you were talking about, when you were answering Mr.

Issa’s question, you talked about the whole issue of people living,

being able to have jobs and so forth and so on. What I said from

the beginning was a lot of people have been left behind. I don’t

know how many people on this panel have visited the Ninth Ward,

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probably all of us, and visited New Orleans to see even to this day

areas that have not seemingly been touched that were destroyed.

And I am just wondering, you all talked about the three different

areas that funds could come from. First of all, do you think that

you are doing the best that you can with the funds that you have?

Dr. Townsend, don’t be shy.

Dr. TOWNSEND. Yes, sir, thank you. I do think that everyone is

making a concerted effort to wisely use these dollars to make sure

that we provide the best care for the most people in the most efficient way. I think that is happening right now.

Mr. CUMMINGS. And you said something about you have one half

of the beds but 85 percent capacity, is that what you said?

Dr. TOWNSEND. No, sir. I have about 50 percent of the beds, but

capacity——

Mr. CUMMINGS. Fifty percent of the beds that you had before

Katrina?

Dr. TOWNSEND. That we had before the storm. But we are providing about 60 percent of the inpatient services. So even in the inpatient setting, we have become more efficient and cost-effective. And

in the outpatient setting, we are about 80 percent of the outpatient

capacity that we were before the storm. We are doing about 80 percent of the visits that we were doing before the storm.

Mr. CUMMINGS. An area that I am very interested in is dental

care for children. We had a little boy in my State who died,

Deomonte Driver. He was on Medicaid, but he died at 12 years old

because the tooth infection that would have cost $80 to repair went

to his brain and he died at 12. I am wondering, Ms. Rowland, you

talked about children, only 8 percent of children are uninsured, but

how are we handling our children with regard to dental care? What

is going on there?

Ms. ROWLAND. Well, as you know from the case in Maryland,

dental care is very limited, even under the Medicaid program. It

is a covered benefit, but very few dentists participate. So I think

that is one of the areas that really has to be supplemented and

helped in all the States, as well as Louisiana.

Mr. CUMMINGS. How are we doing in your State? That is what

I want to know?

Ms. ROWLAND. I think that dental care speaks to the broader

issue of how this community of health providers is working together to cover the territory. So for example, some of the dental

care is provided in mobile medical units by some of the organizations in this. They have created a Web site with a map and a grid

that will tell providers where people can go for dental care on any

given day. Charity Hospital has reopened its dental care services.

Daughters of Charity will have dental care services.

But we are not going to replicate that if we are just a couple of

miles apart. We are trying to be very responsible with the funding

to make sure that there is access to services.

Mr. CUMMINGS. Thank you very much, Mr. Chairman. I see my

time has run out.

Chairman TOWNS. Thank you very much.

I now call on the gentleman from Louisiana, Congressman Cao.

Mr. CAO. Thank you, Mr. Chairman, for this extremely important

hearing. I know fully the health care needs of the district. But beVerDate 11-MAY-2000 17:39 Sep 09, 2010 Jkt 000000 PO 00000 Frm 00100 Fmt 6633 Sfmt 6633 U:\DOCS\57790.TXT KATIE PsN: KATIE
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fore I begin addressing those questions, I would like to ask Ms.

Bascetta, do you see any instances of waste, abuse, or fraud from

the Federal money that was channeled down to the area for rebuilding purposes, especially in regard to the health care system?

Ms. BASCETTA. We have not specifically scoped our work to look

at fraud, waste, and abuse. But in the course of our work, we did

not see any of that ourselves and we didn’t hear about that from

any other organizations, the IG, or anyone else.

Mr. CAO. So based on the information that you have received so

far, they have used the money responsibly?

Ms. BASCETTA. That is right.

Mr. CAO. Dr. DeSalvo, I know that you are in charge of Tulane

community-based health clinics. How have you seen the increase in

clinics help address the issue of the uninsured, and whether or not

this is a model that we should be looking at as a Nation in order

to cut down the health care costs that we are struggling with, trying to address?

Dr. DESALVO. The goal is to get people to go to the right place

at the right time for the right care, because that is not only better

quality, but it is more cost-effective. And primary care is usually

the best place for people to go. Clearly, emergency rooms and hospitals are a necessary part of the continuum. But all things considered, like the man I described in my testimony, he is better suited,

with his high blood pressure and his gout, to be treated in primary

care where it is about a quarter of the cost than the emergency

room.

And there is a fair number of people in Louisiana who fall into

this gap. They would not qualify for Medicaid, even being quite

poor. If they don’t have children, they wouldn’t qualify. But most

insurers in Louisiana don’t offer health insurance that is not affordable. So this is an interesting model, PCASG, where we have

actually taken funds and though they are still distributed institutionally, we are paid not based on some sort of, it is a given, we

are going to give you the funds, we are actually paid as organizations to take care of a set population. There is a high expectation

that we are going to be available for those patients, provide quality

care, do it in a very cost-effective way. We are mystery-shopped, we

have satisfaction surveys, so there is pretty intensive oversight of

our programs.

But I think the PCASG is a really interesting bridge model for

urban markets, in particular that want to move away from hospital-based funding of care for the uninsured. There is a gap until

there can be universal coverage. But you want to make sure that

you have distributed the funds so that all of your money is not in

one financially consolidated institution or place.

What we have also learned is that if you pay providers for quality and value and you give us the opportunity to take care of populations instead of just paying us for volume, it naturally leads to

team-based care and opportunities for innovation that I have never

experienced before in 20 years of health care.

Mr. CAO. Dr. DeSalvo and also Dr. Townsend, do you have a system where patients who show up in your emergency rooms, to direct them to community-based health clinics?

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Dr. TOWNSEND. Yes, we do. At the interim LSU public hospital,

when patients arrive at the emergency room, whether the care is

actually emergency room appropriate or not, if they are not assigned to a primary care clinic and particularly if they are uninsured, then we are able to direct them to a primary care provider

in one of the community clinics where they can access care. We

work with them to try to make sure that they understand how to

appropriately access the clinic and the emergency room when necessary.

Dr. DESALVO. Tulane Hospital has been touched in a fashion, of

course, by us because we have clinics in the system, but touched

by the leadership of PCASG meaning very specifically going out

and targeting and talking to the emergency room leadership, the

hospital leadership to be certain they are aware of the program.

We update them with flyers and information about availability.

And there is a Web site they can go to, which I think you have information on, G&O Community, which will tell you in a zip code

what is available, what the hours are, what languages they speak,

and what services they offer. We have been really aggressive about

trying to get people directed from emergency rooms, when appropriate, into medical homes so that they don’t continue using that

other system.

Mr. CAO. How many more medical community-based clinics do

you see that we will need in the future, in order to address the

needs of the people of the Second District? Another question to you

here is, how, what steps do we need to take when the Primary

Care Access Stability Grants end? What plans do we have to continue these community-based clinics and to provide primary care to

those who are uninsured?

Dr. DESALVO. In terms of the number of providers, types and

sites, I think that is a really great technical question that HRSA

can help us with. They have been thinking about that with some

of the providers already. The 91 access points that we have are

really varied in scope and size. Some of them are small, schoolbased clinics or mobile units. I certainly don’t want the committee

to walk away thinking we have 91 community health care centers,

because we are not there yet. And I don’t know if that is the right

number. But it is an important planning issue we do have to decide. The community certainly wants to work together to right-size

it.

Mr. CAO. What plan do you have in order to continue these

projects once the Primary Care Access grant runs out or ends?

Dr. TOWNSEND. I think what you have heard today is that as

long as about 72 percent of the patients who have to access those

community clinics remain uninsured, then the sustainability of

those clinics I think is really impossible without an alternate funding source identified. Like I said, there are really essentially two

pots of money. There are tax dollars and then there is private sector. Other than grants and philanthropy and things like that, I am

not really sure that anyone is able to identify how we are going to

keep this going.

Chairman TOWNS. The gentleman’s time has expired. Now we

will yield, as you know, we have just been called for votes. So we

will try to get at least two more in.

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Congressman Tierney from Massachusetts.

Mr. TIERNEY. Thank you very much. I just want to ask one particular question. We know that sending children to school in a

healthy State is a good thing. Have you had any examples of creative use of the educational funds and system, and cooperation or

coordination with the health care system that have helped you at

all?

Mr. GRIFFIN. There have been discussions and work that has

been done. As I mentioned in my presentation, we actually do behavioral health in 10 schools. We are actively having discussions

with a school system about expanding that. There also have been

numerous efforts and expansion in school-based health centers

throughout the State as well as in the New Orleans area. That is

a more comprehensive provider model that has medical behavorial

health and other services included in those locations.

So there are, I think approximately nine school-based health centers in New Orleans and several more in the metropolitan area. So

those efforts are ongoing in collaborating and coordinating with the

school systems.

Mr. TIERNEY. Thank you. Ms. Bascetta.

Ms. BASCETTA. We had a companion report in July of this year

that we issued on the mental health needs of children in New Orleans. We noted in that report, which I can provide for the record,

that school-based health centers were an important model in the

area.

Mr. TIERNEY. Thank you. If nobody else wants to comment on

that, I’d like to yield to Mr. Kennedy, who I know has some pertinent questions he would like to ask.

Mr. KENNEDY. Thank you, I thank the gentleman from Massachusetts.

I would like to ask, for those of you who would answer, what percentage of those coming into the emergency rooms exhibit mental

health issues and addiction issues? And to what extent do you attribute any of the PTSD, obviously to the natural disaster? And if

you could, address the issue of the trauma that was exhibited as

a result of the hurricane and to what extent there was a lack of

proper mental health services available to address the needs of

folks. From what I understand, clearly, trying to get people’s mental health needs met has been an endemic problem. Clearly, the

enormous crime rate in the area now, I kind of feel like our criminal justice system is a substitute in kind of the last sense for our

mental health system that isn’t there.

So I would ask you to comment on the lack of a mental health

system and also what you see as the consequences of that today in

terms of the number of people showing up with mental health

issues in our health care system as a primary source of issues, and

whether you can reimburse for that, given the exclusion that many

insurers have, if people come in with an accident, that you can’t reimburse for it if they have alcoholism; if they have been drinking

alcohol or ingested, as a result of drugs, that many insurers say

they won’t insure, because that is ‘‘a deliberate thing’’ and they

won’t allow you to get reimbursement for it. If you could comment

on any of those issues.

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Ms. CRAFT-KERNEY. Mr. Kennedy, at the Lower Ninth Ward

Health Clinic, we have seen many come in with mental health

problems. We had a young man who was known to us who said,

‘‘I just want to slit my wrists.’’ We had to get him some help immediately. But we just want you to know that many of the mental

health problems that are taking place, what is happening is because there was a lack of services initially, and there is still ongoing problems with the mental health piece, we are at a point where

we are actually diverting and sending people to the correct places.

But initially, there was a big impact and people are suffering from

depression, this underlying depression. I might be OK today, but

tomorrow I might not be.

So you are seeing people who are just very, very fragile. And we

don’t know what is going to be the breaking point for them. So

there is ongoing assessment of that depression.

And what I did want to say is that the criminal justice system

comes into place because many times people are below the radar.

I am OK today, but you don’t know what is going to happen tomorrow. So what happens is they become entangled with the criminal

justice system, and what happens is right now our biggest provider

of mental health services, inpatient, is the Orleans Parish Prison,

unfortunately.

Ms. ROWLAND. Mr. Kennedy, in our surveys of the residents of

New Orleans in 2006 and 2008, the need for mental health services

was quite apparent. But one of the striking things we found was

in 2006, 1 year after the hurricane, people reported that their mental health status was fairly good, I think because so much was

going on in their lives they didn’t really focus on it. But by the time

we came back in 2008, we saw much higher contact with the health

care system, much more frustration over inability to get the medications they needed, and today saw that 15 percent of those in New

Orleans reported that they had a severe mental illness, such as depression or other things. So I think you are pointing out an area

where the population has severe needs. We will be going back in

2010, and hopefully find better access than we did in 2008.

Mr. KENNEDY. Are you integrating mental health to the ‘‘white

coat docs?’’

Dr. ERWIN. I would like to address that, if I could, Representative. One of the other recipients of the PCASG money is the Metropolitan Human Service District in New Orleans, which is the public

entity responsible for most of the mental health funds. Working

with the State, Secretary Levine, Governor Jindal, they address the

fact that immediately afterwards about the only place for mental

health service was jail.

So we have put into place forensic assertive community teams,

adolescent community teams. I think there has been a remarkable

improvement in the coordination of care with the Metropolitan

Human Service District, which had some problems prior to

Katrina. It has a new executive director, a new medical director,

and is implementing, last week actually, a very coordinated call

center where if a patient shows up either in a hospital or jail,

something like that, then it is very, very close to being coordinated,

so that the case manager will know that the next day and they can

followup on that.

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Also ways of following up when people don’t get their prescriptions filled where they should. So I think that they are not represented here except for me, I am on the board. It does represent

a real success for the Primary Care Access and Stabilization Grant.

I am really happy to get a chance to help you understand that has

made a huge difference in a very dysfunctional problem that we

had.

Dr. DESALVO. In answer to your question, we have integrated at

almost all of the sites mental health services into primary care.

One of the benefits of this program is we can have warm handoffs,

if I identify somebody who seems depressed or anxious, I have services right onsite. I don’t have to send them home or refer them out.

The flexibility in funding has allowed that through this program.

Chairman TOWNS. The gentleman’s time has expired. We have

four votes, so we will reconvene at 12:30. Of course, I would like

to ask unanimous consent that Representative Barbara Lee, the

Chairperson of the Congressional Black Caucus, be allowed to sit

and be allowed to ask questions. Without objection, so ordered.

We will reconvene at 12:30. The vote is on now and we have 4

minutes left on the vote.

[Recess.]

Chairman TOWNS. The committee will reconvene.

The gentlewoman from California will be recognized for 5 minutes.

Ms. WATSON. I want to thank our chairman for holding this most

necessary hearing. I want to commend all of our special guests on

the panel for coming today. I have been on special delegations to

New Orleans, and I was appalled at the promises that were made

and unkept. There were too many pieces of vacant property, there

were too many trailers with formaldehyde. I am a victim of formaldehyde, too, and I know how you can suffer.

There were too few medical institutions. Catholic Charities, I

must give them credit, came in and they set up temporary facilities

to serve. But so many of our schools were destroyed, so many of

our universities were destroyed. My grandmother was born in Louisiana, so I have a very personal, personal affection for Louisiana.

She was in a convent for 18 years. Obviously she came out. [Laughter.]

So I am very much a part of that particular State and the French

Quarter.

You are not to blame. We failed you, and we watched while you

were being failed. I was getting a call from the stadium about how

the buses were passing up the people and wouldn’t stop to pick

them up. I had 14 relatives that we could not find. We dispatched

someone from my capitol, Sacramento, to go to Baton Rouge. We

finally saw one of the relatives hoisted up and taken to a hospital.

So I was very much a part of that.

So I say all that to say, I want to commend you for what you

have done, I want you to tell me now what we need to do in health

care reform, how we can plug up the holes. And this was the biggest natural and national disaster we have ever had, and the world

viewed it. When the dikes broke and that water flowed in like

would flow into a bowl, we were all so tearful. So I know what you

went through. And I want you to tell us what we need to do in

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health care reform that will plug up those holes, and what we need

to do in our system so never again will we have to go through those

levels.

I was not one to support Homeland Security to come and take

all the agencies. Because I thought FEMA should be separate and

apart so it could move on a dime. So in terms of health delivery,

what can we do, Dr. Townsend, Dr. Rowland, all of you? Give us

the input. Because we want to, before the end of the year, come out

with a bill that will cover all Americans the right way, affordable,

sustainable, accessible and with all pre-existing conditions.

I just really appreciate Congressman Kennedy, who put a particular emphasis on health care. I had a family in my home whose

son had a breakdown when he went back home and found out they

didn’t have insurance, they lost everything. And so I know the need

for mental health services.

So let’s just go down the line, starting with Dr. DeSalvo. Why

don’t you give me the input on how we can make sure that health

delivery is sustainable and what we should do?

Dr. DESALVO. Well, Congresswoman, thank you for remembering

and recognizing all that pain. We really do appreciate it.

Ms. WATSON. I shared it.

Dr. DESALVO. I just wanted to thank you. And what can we do?

We have done a lot with very little. And we are not asking for

much. I think what——

Ms. WATSON. By the way, I am from California, the largest State

in the Union and the first State to be a majority of minorities. So

don’t think that every Californian feels the way I do, but you know

how I feel. Go ahead.

Dr. DESALVO. I think what we have built is really valuable. It

is an investment by the taxpayers, post-Katrina. It is helping recover our city. It is building jobs. It is building work force development, new opportunity for people. It is not just about health care. To continue it, the gap is somewhere in the neighborhood of $30

million a year. It means that we can continue this until there are

other options, until finding special mechanisms to pay for the uninsured aren’t really needed because there are no uninsured. And it

would be really a shame to disassemble this investment, which is

really what we are facing in the fall.

So finding those funds could be really as straightforward as allowing the Louisiana Recovery Authority [LRA] perhaps to use

some CDBG funds they have in a more urban renewal fashion instead of just for housing. We don’t want to not give people housing.

But if we think that we have access and we can give them the fabric of community around their house, i.e., health care, that would

be helpful.

And there are some other opportunities, perhaps, with the disproportionate share funds, to redirect it from using it only for hospital-based care but also for community-based care.

Ms. WATSON. Thank you.

Ms. CRAFT-KERNEY. Thank you Congresswoman, and I appreciate the feeling of just knowing that you care. So many people

showed that to us, and it just means so much.

I am not a policy person. I am a person who sees people on the

front lines. I am at ground zero in the Lower Ninth Ward. But I

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can tell you what the impact should feel like. It should feel like a

person should be able to come to the clinic and not worry about

whether I can pay for it or not. It should feel like, I can get the

services that I need, whether it is primary health care or specialty

services. And I just want to say that this has been a wonderful collaboration, because of the Primary Care Access and Stabilization

Grant, we have been able to work together, something that I don’t

think we really did prior to Katrina as much, but we were forced

to. Necessity is the mother of invention they say. And I am telling

you, we definitely forged a lot of friendships, invaluable friendships

and relationships, so that we could give the care to the people that

so desperately needed it.

And when we move forward, when the next catastrophe should

happen, we should definitely keep the people who have been on the

ground, who have built what we have today. They should be the

ones really to give you guidance. It shouldn’t come from the top

down. It should come from the bottom up. Because we have already

shown that we have been very, very effective in what we have been

able to do. And with meager, meager resources, we have given a

lot of care. I have to commend all of the people who are at this

table who have a commitment and who have been mission-driven

to bring about these great results that we have seen today. And

that partnership with government has been invaluable. We

wouldn’t have been able to do it without you guys.

But the people who have been doing the work need to guide the

work. Thank you.

Dr. ERWIN. Thank you very much, Congresswoman. I would like

to reinforce what has already been said. I think first and foremost,

we would like to maintain what we have accomplished and maintain what we have. We all, I think most of us at this table, realize

that health insurance for everyone is a must. When we are dealing

with 72 percent uninsured, we see the ravages of that.

But I would really like to make sure that we understand that we,

and other cities in California and everywhere else, are having financial plights. That is very clear. What we would like to encourage you to think about is that with the PCASG money, you took

a blank slate and you helped us build a health care delivery system

that has a good start. It doesn’t take massive amounts of money

now to nudge it on to where we really could become sustainable

and we could become permanent and we could grow. Because as

you already heard, we are coordinating mental health and primary

care in ways that we had not been able to do before.

So we really feel like that, we understand what it must look like

for us to be asking for money for just one particular part of the

country. But you have really helped, with the PCASG money, you

have really helped rebuild a health care system better than it was

before. Without a little bit of money now, I think, relatively speaking, we will slip back. We will go back to where there isn’t the primary care, there are not the community clinics, there are not the

alternatives to the emergency room care.

So we really do, first, I think, and foremost, want you to understand the money you have spent has really made a difference. You

have really saved a lot of lives. We have really built, starting with

the Governor, Secretary Levine, we have all worked together to

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build a better health care system. I have been there for 30 years

and this is the first time I have seen the kind of collaboration and

the input that we have had both at the city and the State level and

the community clinics.

Ms. WATSON. Doctor, can I just request of the Chair 3 more minutes, so that we can finish up your panel?

Chairman TOWNS. Well, I would love to do that, but we sort

of——

Ms. WATSON. A minute and a half?

Chairman TOWNS. A minute and a half.

Ms. WATSON. Thank you. Mr. Griffin. You use the half, and then

we’ll have the other two ladies split the minute.

Mr. GRIFFIN. Thank you for the question. I think 100 percent access and 100 percent coverage should be, you asked about reform,

that is hopefully where everything is going. And as it relates to the

PCASG grant and what has been accomplished in New Orleans, I

do think there has been a tremendous accomplishment of changing

a system from hospital to primary care. And when you talk about

coverage, excuse me, when you talk about access, nationally there

will be a need for more access to primary care. You could be looking at a model that could be replicated nationally.

The vehicle for primary care development through the Federal

Government in the past has been through federally qualified health

centers. Most of the people sitting at these table, only one of these

entities qualifies as a federally qualified health center. So this has

expanded the opportunity for, through this crisis, other entities to

actually have more dollars going to primary care and having more

primary care delivered in a community. We are changing the lifestyle and the behavior of our population in New Orleans, which in

the long run will reduce costs to the health care system.

Dr. TOWNSEND. I will echo a lot of what you have heard, and that

is, we have the beginnings of a network of care, which I think is

part of the answer for health care reform in the future. And the

other piece that is extremely important in health care reform is

going to be coverage. And we don’t have that piece yet. So I think

what you are hearing is we would like to see a bridge of funding,

whether it is flexibility in the Community Development Block

Grant funds, or whether it is a waiver for the disproportionate

share hospital funding, to help support these clinics that are an integral part of a network of care.

Dr. ROWLAND. I would just echo those comments that the coverage promised in the health care reform legislation passed by the

House would, of course, help many of these clinics to be sustainable. But the implementation date there is 2013, maybe 2014, depending on the Senate action. And you really do need to think

about how to bridge us from where we are today to where we would

want to have these clinics be and the peoples’ coverage be in 2013.

I think that involves both phasing in better coverage for some of

the low-income people, as well as providing for support to these

clinics during the bridge or transition period, and recognizing that

maybe one of the best steps would be to try and develop a plan for

how to turn the clinics from freestanding clinics into those that can

participate in the federally qualified health center program, which

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undoubtedly will have to remain a strong part of our health reform

efforts for medically under-served areas.

Chairman TOWNS. The gentlewoman’s time has long expired.

Ms. WATSON. Thank you, Mr. Chairman.

Chairman TOWNS. But I really felt that the information that we

were getting was just so important that we could not interrupt. I

think the timing of it means so much to us right now here in

Washington. So thank you very, very much.

I now yield 5 minutes to the gentleman from Ohio, Congressman

Kucinich.

Mr. KUCINICH. Thank you, Mr. Chairman, for holding this important hearing on the state of health care in the New Orleans region.

One thing is clear, we must ensure that the clinics and public

hospitals in the area remain as strong as possible. The need is unusually great there. As someone who believes that health care is

a human right, I think the people deserve help from the Federal

Government that will help them to fulfill that need.

In the short term, we must shore up the Primary Care Access

and Stabilization Grant funds before they run out. And we must

build a new public hospital that is financially sustainable, attracts

world class providers, researchers, and students. If such a hospital

provides a little competition for more profitable hospitals with a

lower charity care patient mix, then we should embrace that.

But this situation needs long-term fixes. A strong public hospital

and set of clinics in affected areas are part of that. But New Orleans has for-profit hospitals, Mr. Chairman, around the periphery of

the city, who collectively take less than 15 percent of the charity

care, leaving the rest to go to public hospitals. It is called cherrypicking. It is not profitable to provide health care to those who

need it the most.

So the for-profit health care industry goes out of their way to

avoid it. The result is we are constantly fighting to provide adequate publicly funded health care for the disadvantaged. Now, if we

are going to provide sustainable health care for New Orleans, we

need to make sure the hospitals that are making big profits are

pulling their weight. The failure of profitable hospitals to provide

adequate levels of charity care is not simply a New Orleans problem. Indeed, in Cleveland, Metro Hospital has a steadily growing

patient mix of charity care cases, which presents a growing financial burden that strains their budget, the budget of the county and,

of course, the budget of patients and providers.

So I look forward to working with this committee to address the

role of private hospitals and clinics in bringing health care to New

Orleans and affected communities all over the Nation. I have read

the testimony of the witnesses. And I have heard comments by my

colleagues. I have heard one of my colleagues refer to New Orleans

as a ward of the Federal Government. It is interesting, Mr. Chairman, this discussion occurs 2 days after the President announced

an escalation of a war. We have money for war here, we don’t have

money for health care. We have money for war and Wall Street, we

don’t have money for health care.

You have a $100 million grant, as though you are supposed to

stretch that into the next year, you are running out of money, to

maintain a health infrastructure that was weak before the storm

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hit. New Orleans was already in dire economic straits before the

storm hit. If there has been a hearing that puts in bold relief more

clearly about the distorted priorities of America, I would like to

know what it is, other than this one. We are trying to keep alive

a health infrastructure to assist people, and we are getting ready

to spend $160 billion next year on a stupid war in Afghanistan. Billions.

I read the Kaiser report here which spells out the statistics, the

great health care problems that still exist, the infant mortality that

was high even before Katrina, the number of AIDS cases, diabetes

mortality, comparing Louisiana to the rest of the United States. If

we can’t see that New Orleans is still suffering, if we can’t see that

New Orleans has a health care infrastructure that is not adequate

to meet the needs of people who are still recovering from this hurricane, if New Orleans has to come here with a tin cup to beg for

money for clinics to—you have to fight FEMA to try to get the

money that you should have gotten, they are going to arbitration,

Mr. Chairman. The new hospital is going to cost over $1 billion,

and FEMA is nickel and diming New Orleans in an arbitration as

to whether they are going to get $100 million, $150 million, or the

$492 million that New Orleans wants.

This is a disgrace, really. It is good that you are here to remind

us. But really, our country is falling apart. And what is happening

in New Orleans is a signal condition of where America’s priorities

are totally fouled up. You should not be here begging, essentially,

for recognition.

Thank you, Mr. Chairman, for holding this. But I will tell you,

the more I hear the drum beats for war and we are going to go

bomb poor people in Afghanistan and put a war into Pakistan, we

can’t even take care of our own people here at home, how disgraceful.

Thank you for being here. You have supporters in the Congress

who understand that the fate of America is going to be linked to

how we are able to take care of communities like New Orleans that

are still struggling to survive. And just know that there are people

right here who are standing right with you on it. Thank you.

[The prepared statement of Hon. Dennis J. Kucinich follows:]

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Chairman TOWNS. Thank you very much. I would like to thank

the gentleman from Ohio for his statement.

Congressman Luetkemeyer from the State of Missouri.

Mr. LUETKEMEYER. Thank you, Mr. Chairman.

Because of the specificity of the issue that we are dealing with

here today and its importance to Representative Cao, I would, Mr.

Chairman, yield my time to Mr. Cao. I feel he has more direct impact and probably has more knowledge and a lot more concerns

about this issue than what I would have. But I would certainly be

supportive of him using all my time.

Thank you, Mr. Chairman.

Chairman TOWNS. The gentleman from Louisiana.

Mr. CAO. Thank you, Mr. Chairman.

I would like to thank Mr. Luetkemeyer for yielding me time.

First of all, I would like to thank Congressman Kucinich for his

passion and for his understanding of the situation in New Orleans.

I believe that he is clear on point with respect to the needs of our

people down there. We have been struggling for 4 years to rebuild

the Lower Ninth Ward. New Orleans East, right now there is a

population of approximately 80,000 people in New Orleans East

and no hospitals to address the needs of people there. So the needs

are tremendous. And we will continue to require Federal assistance

to help us move forward in our recovery. And in talking about recovery, I note that the new Charity LSU VA system, or at least the

hospitals that we are planning to build will serve as an economic

center for the city. Dr. Townsend, if you don’t mind, could you

please elaborate more on the plans for the VA LSU hospitals and

where are we with respect to that particular project?

Dr. TOWNSEND. Certainly, Congressman, thank you.

We are in the process of doing the planning for the new academic

medical center. But I think it is important to note that we recognize that the Charity model is not the model of the future. It is not

what we want to see going into health care reform. It is not the

best way to take care of patients.

So what we are building is a new academic medical center. So

LSU, in partnership with Tulane, can train our residents and fellows and other health care professionals in that setting. And as

someone said, we can attract world class physicians, researchers,

do things there like you see in the Birminghams and the Houstons,

where many people in New Orleans go for care today. We are exporting patients for health care, when we should be able to provide

that at home.

So what we are doing is, we are staying on track with the planning process. We are waiting for a resolution from FEMA and once

we get that, we are going to move forward into this new model. We

are on track today to be in that new facility in the beginning of

2014.

So at this point, without knowing the FEMA number, we are still

on track. We have not lost any time. But we have an exciting

project that we are hoping to move forward on.

Mr. CAO. Thank you, Dr. Townsend. Mr. Chairman, the issue

with FEMA is an issue that we have been battling for 4 years now

and Congressman Kucinich is absolutely right, the cherry system

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is so integral for New Orleans. And FEMA is still nickel and

diming the city in order for us to get the system back online.

I would really appreciate if we could have a hearing in which we

could invite FEMA to explain their position and to see how we can

try to overcome some of this impasse that we are experiencing

down there in the district. But I know that the numbers between

the State and the city, there is a difference of around $300 million.

Can you please tell the committee, how important is it that we

should receive the full $492 million to rebuild the system?

Dr. TOWNSEND. Someone mentioned the price tag for the project.

The hospital itself is about a $441 million construction. But the entire complex, so it includes a clinic building so that you can do outpatient, particularly specialty services there on campus. So that

$1.2 billion price tag, the State has already committed $300 million

to that project. And the remainder of the $1.2 billion will have to

be financed. And a new entity is being created that will manage

that new academic medical center.

So they are going to be responsible for some sort of bond issuance

or some way to raise that money. So the difference between raising

$800 million or $400 million is significant. So yes, we are hopeful

that through the arbitration process that is going on right now,

that the State will get a favorable declaration from FEMA and the

number that the State has submitted reimbursement for is $492.

Mr. CAO. Thank you very much. I see that my time has expired.

Chairman TOWNS. Yes, thank you very much. Let me say that we

really tried to have this hearing in New Orleans. But the schedule

just got so messed up that we could not do that. And of course, I

am sure if we had had it in New Orleans that we would have had

others involved as well.

But the point is that we felt it was just too important not to do

it. And also, to commend you on the great work that you have

done, we wanted to do that as well. We think that you have done

an outstanding job in terms of and in spite of the difficult conditions and circumstances.

Now I would like to yield to the gentlewoman from Ohio, Congresswoman Kaptur.

Ms. KAPTUR. Thank you, Mr. Chairman. I want to compliment

you for holding this important hearing, and for your leadership. I

know how much you care, as a health care expert yourself, about

what needs to be done in New Orleans and Louisiana and many

of the coastal areas that were so damaged by Katrina.

I was fortunate to be able to travel to New Orleans and to Mississippi with the Majority Whip, Mr. Clyburn, and with our Speaker and others almost 2 years ago, now, I think it was. That was

very, very instructive. I guess I wanted to say to all those who

traveled here today from Louisiana, it is a gift of the Christmas

season that we get to meet angels who are on this side of eternity

and who are working and doing God’s work. I just want to compliment you for, you could be doing many other things in your life

and you have chosen to do this. The people of my region, I know,

admire it and view it as a very noble effort. So let me compliment

you for what you do and through my remarks help to give you

strength to continue to help those who need it so much.

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My question, I have a question and then a comment. Ms.

Bascetta, in your testimony you talk about an adequate sustainability strategy to help these clinics in the future. Hopefully, we

will be able to get them additional funding. But we would be interested in your suggestions on sustainability. And Dr. Erwin, in your

testimony you say if there is not funding to bridge the gap after

the public clinic, primary clinic funding ends, many of your patients will revert essentially to the same situation they found themselves in immediately post-Katrina. I think it would be important

for you to state for the record what that would be.

Finally, before you answer, let me just say that when I was down

there as a member of the Agriculture Committee, along with my

other duties here, I was struck by the unmet opportunities to use

additional space that is available in New Orleans. I am interested

in having you submit for the record or comment here today on how

the added strength of food power and nutrition in your region is

being implemented. With all those open swaths of land, with the

possibility that primary health care clinics could also become food

stamp redemption sites for people who grow food in the area, I can

tell you in the community that I represent, one of the eight poorest

areas in the country now, we get over $100 million a year of food

stamps in the region. I had a great epiphany a few years ago saying, ‘‘hey, wait a minute, we can turn these into economic development dollars if we can get the people who live in these areas to actually produce the food and turn them into food stamp redemption

sites.’’ It is a no brainer. So we are about that task.

And I am just curious about these efforts perhaps being made by

your associates that could help your health clinics also become nutrition clinics, and to deal with some of the related health problems

that you face. I am curious about your progress on those. But in

terms of my first question, which is sustainability, Ms. Bascetta

and Dr. Erwin, could you comment? And then if anyone wants to

say anything on agriculture, I would be most grateful.

Ms. BASCETTA. I would be happy to. We have heard that where

the rubber hits the road is the uninsurance problem. There simply

aren’t revenues by definition from that population. And it is a very

large population in New Orleans, well above the national average.

Ms. KAPTUR. Could you pull your mic closer? I don’t think I

heard you properly.

Ms. BASCETTA. The uninsurance problem in New Orleans is

much more severe than the national average. That is where the

rubber hits the road in terms of sustainability. By definition, that

population doesn’t provide any revenues to the providers. They are

uncompensated care. Historically, the only, the funding streams

that have provided reimbursement for those people are either the

DSH payments that we have heard about, which are typically to

institutions, to hospitals, unless there is a way to redirect them

through a waiver, and the HRSA health centers also provide funding for people who are, for health centers to take care of people

who are uninsured.

Our view is that CMS and HRSA have already made a significant investment in the area to try to do this model demonstration

of doing health care the right way, primary care first, as the most

important building block of the continuum. It really would be a

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shame to have erosion in the progress that has been made so far

if the funds can’t be made available to shore up these clinics at this

point.

And since the grant ends in September, we really don’t have 10

months. It is pretty urgent now, in January, to make sure that

plans are in place. Because what happens if they are not, providers

begin to worry about their job security, they need to know that

there is going to be an infrastructure in place. Patients begin to become anxious about where they are going to get their care.

So it is important to expeditiously make a decision about whether we are going to continue this investment that has made this

progress so far.

Ms. KAPTUR. Thank you. Dr. Erwin.

Dr. ERWIN. Yes, thank you very much. I would like to make a

comment about both the sustainability and the nutrition, if I could.

As I mentioned earlier, we have tried in a very systematic way to

deal with the issue of sustainability since the grant came out. That

is part of it. We have appreciated that.

Our revenues, the patient care revenues that we generated the first year, were around $238,000. This year it is going to be right

around $420,000. We have a pretty detailed process where we try

to help, we have representatives in the community who work as

our partners explaining to people that it is really important for everybody to pay what they can to help us be sustainable. And so we

are dealing with the fact that almost everybody pays at least $20,

but the fact is, with a 72 percent uninsured population, which is

why we get out of bed every morning, we are not going to try to

get private pay until we find some way for these patients to get

their care met.

We are very hopeful about the expanded eligibility that Secretary

Levine can probably tell you about for Medicaid. But that will be

2 years away. In our budget, we are pretty conservatively working

with our CPA. We really do think that by year three, if we get a

nudge and can continue on, by year three we can be pretty well

sustainable. We really do.

If I could just make a comment about the nutrition, too. We have

had, as part of our ‘‘mental health program,’’ an issue, a program

for community health and resilience, to try to encourage healthy

neighborhoods. We are a small clinic. We don’t kid ourselves about

how broad our impact is. But we have partnerships with one of the

churches, the Sixth Baptist Church. And we have a coffee shop that

is part of our clinic, that is run by the youth group at the church.

There is 8 weeks training to begin working there, after the first 8

weeks, when they work in the coffee shop then they move to the

kitchen, where they make pralines. We are beginning to sell them

on the Internet. We have pepper sauce from a community garden

that we are selling.

So it is sort of a ‘‘light a candle’’ rather than ‘‘curse the darkness.’’ But it has created a really positive mind set with a lot of

the youth, particularly. There are an awful lot of kids who have

nothing else to do. And so we feel like that this type of thing is

well worth our expenditure. We hope that it is the kind of thing

that we can continue to do.

Thank you very much.

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Dr. DESALVO. I think what Don is speaking to is this concept

that health is more than getting people to a doctor. And it is an

underpinning for all of us and what we do. We think of our sites

as centers, places where people can come not only to become empowered, to get regular medical care, to learn about their health,

but almost all of us have programs that reach out into the community and engage and empower them to build economic opportunity,

work force training, as Don is describing, to help develop community gardens, to make it part of the healthier foods in schools. The

model here is really going beyond just the idea of a clinic delivering

medical care. We feel an obligation to address the social determinants of health as well.

Ms. KAPTUR. Thank you, Mr. Chairman. Thank you all.

Chairman TOWNS. I now yield to the gentleman from Utah, Congressman Chaffetz.

Mr. CHAFFETZ. Thank you, Mr. Chairman, and thank you all for

being here.

I would actually like to yield the time to Mr. Cao from Louisiana.

Mr. CAO. I would like to thank the gentleman for yielding. I

would like to ask this question to either members of the panel,

maybe to Dr. Townsend, Dr. Erwin, Dr. DeSalvo. How does the

lack of a flagship hospital affect recruitment? And how does this

lack of recruitment affect the quality of care of the people, especially for the poor people in New Orleans?

Dr. DESALVO. I am happy to start. I think for the university’s

part, the Charity Hospital system has been a really important site

for work force training for us for generations. And it is the reason

I came to New Orleans to train at Charity. It is where I did my

National Health Service Corps payback. It is part of the fabric of

how we develop new physicians, nurses, etc. So there is the element of developing the new work force to work in the community

and to stay there to take care of the population. That is important.

We are also realizing that if you are going to train folks to work

in community health centers or expect them to when they complete, they need to have that opportunity. I think that is really important, to shift that educational paradigm as well.

For our patients, especially for those patients of ours who are uninsured, they are by necessity financially triaged. So the State hospital system has been really critical in providing specialty services

and inpatient services for those folks. As has been described, it is

probably beginning to bulge at the seams a little bit. So we need

to think about how we improve efficiencies of referrals and communication between the system so we don’t overwhelm them needlessly.

Mr. CAO. Dr. Townsend.

Dr. TOWNSEND. I would say that actually, some of our recruitment has been very good post-Katrina. But it is because of the

promise of a new academic medical center, a promise of new labs

for research. So if you are going to have those kinds of, if those

pieces of the infrastructure are going to be present and are going

to stay, we are going to need that new medical center. We need a

flagship hospital. As far as recruitment for residents, I think it becomes a little more difficult because we can’t support the number

of residents. Today, we are supporting about 200 Tulane residents

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and fellows at the hospital, because we just simply don’t have the

volume. The 640 that were there before, they have to be in different places. That education is not as attractive to residents and

fellows. So it makes it a little more difficult to recruit. Our medical

school recruitment is still going well.

I am happy to say, for the dean of the medical school at LSU,

his recruitment, like I said, with the promise of a new academic

medical center, our NIH funding now is actually higher than it was

before the storm. But that hospital is critical. And Dr. DeSalvo is

right, we need the clinics. Because that is part of the training that

is very important. But we have to have that flagship hospital, we

have to have those tertiary and even quaternary care kinds of services that you simply can’t get in the outpatient setting.

Mr. CAO. Dr. Erwin.

Dr. ERWIN. Thank you. It is particular pertinent to me, because

I have a son that is a medical student and we are trying to recruit

him to stay in town. And certainly, the training that you have

heard both of them describe that comes with a flagship hospital

that has academic excellence as well as clinical care is critical. We

also feel that one benefit from recruitment has been the altruism

of the country. We have seen a lot of people come down who really

want to help.

But it is very important, we feel, for people who are going to

work in community clinics, to train in community clinics. They

don’t get that training in the hospital. It is a different type of practice. So the residents, the students who come to town who come out

to our clinics, they make a difference for us. They make a difference in the number of patients we can see, they make a difference in the quality of services that we offer. So that the higher

quality that comes in, they don’t come for us. They are lured by the

flagship hospital. We benefit from it.

Mr. CAO. Now, there are areas in the second district, as well as

in Chairman Melancon’s district, that lack hospital care. And the

statement from Mr. Issa saying that, what the State is doing, in

order to help those people there, my question to you here is, I have

spoken with the State and there might be some issues with respect

to how much the State can contribute. Can LSU and Tulane, can

you all come together in order to address the hospital, maybe the

acute care needs of the people in Northeast and St. Bernard, and

how can the Federal Government assist you all in that endeavor?

Dr. TOWNSEND. I think today, with the hospital that we have, the

public hospital that we have, for citizens in New Orleans East who

are uninsured, I think we are serving them today. As far as being

able to serve them in the area, I think it is really important to

have primary care, a bigger presence there. And there are some

conversations going on right now with the city of New Orleans

about the ability to use the medical office building that was at the

former Methodist Hospital to be able to expand primary care services that would be a natural link then into the inpatient care.

As far as inpatient services, without the hospital in New Orleans

East, obviously, I can’t speak for Tulane, but I know that there are

always contractual relationships that can be formed in order to

have providers provide services at different hospitals. Because we

do that today in the New Orleans region with other hospitals.

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Chairman TOWNS. The gentleman from Utah’s time has expired.

Mr. CAO. Thank you very much.

Chairman TOWNS. I now yield to the gentleman from California

who is the Chair of the Congressional Black Caucus, who has been

very involved and supportive of getting resources into the Louisiana area, Congresswoman Barbara Lee.

Ms. LEE. Thank you very much, Mr. Chairman.

Let me thank you for your very consistent leadership on this

committee, and just as a Member of Congress and as a human

being with regard to your concern and commitment to ensure that

those living in New Orleans actually benefit from what our Government has tried to do in the past. It is unfortunate that this natural

disaster was turned into a human disaster. Your leadership and

this committee’s leadership makes us believe that we will be able

to do the right thing. But we have to do it now. And I thank you

again for inviting me to participate.

As Chair of the Congressional Black Caucus, let me just welcome

all of you, greet you and just say, thank you for being here. Most

members of the CBC have been to New Orleans many, many, many

times. And each time we go, we want to come back. We believe we

are not doing enough yet and we have to do more. So this is an

important step in the right direction.

I hope, Mr. Chairman, that in the future, this committee could

lead a delegation to visit New Orleans once again, but look specifically at the primary care clinics and community care clinics. If that

request hasn’t been made formally, I request that, because I think

it is time we come back. And especially now during this health care

reform debate, and part of what we have been insisting on in at

least in the House bill was an expansion of community clinics. So

some of us would like to see how that would work, post-Katrina.

Because we think if it can work, if it is working in New Orleans,

it can work anywhere because of all of the issues, the tough issue

that you are dealing with.

Let me ask you, a couple of things about medical records. On a

couple of occasions, I visited and went to the hospitals and talked

to some of the personnel and was concerned, they were concerned,

like many of us, and I know you are, about the medical records and

how you retrieve medical information from people who are coming

back. Do you have medical records in terms of the computerization

and the technology necessary for retaining, now, medical records,

or how did all of that happen with regard to those who lost their

homes and had to leave and are now coming back? How do you recapture medical histories?

Mr. GRIFFIN. I would like to respond to that. We have, I think

since Katrina, developed a fairly robust system with electronic

medical records. At Daughters of Charity Services of New Orleans,

we have a paperless system for the most part. It is backed up out

of town so that there is no jeopardy of losing the information. And

our providers are able to access the records remotely. So that has

been a, there are multiple vendors that entities are using. But it

has been, of course, helped by this grant because of the operational

assistance and infrastructure that this grant has provided. So that

has been a true evolution and something that has worked very

well.

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I would just like to thank you for all of your, from the Congressional Black Caucus’ Chair, for all the work you have done and all

you all have done to look at New Orleans and assist New Orleans.

And also I would like to express your sentiment with the chairman.

Mardi Gras is coming up, so you all can have a visit or come down

in 2 months if you like for your site visit. [Laughter.]

Ms. LEE. Thank you very much. And thank you for that invitation.

Dr. DESALVO. I just want to add to what Mike’s saying, that the

opportunity from the loss of our paper records was to rebuild it better. We have done that. We felt as a group of community providers

that we wanted to move toward a paperless system. We think it

has better safety parameters. It is more accessible for providers, if

it is after-hours calls that we take on patients, we have the information at our fingertips to help make care decisions, to let them

decide whether the emergency room is the right place or the clinic.

It has also really helped to advance our programs in quality and

quality improvement and helped us to share information to think

about how we are going to treat chronic disease like diabetes better.

Ms. LEE. But I have to ask you though, for those who lost everything, and I say this as the daughter of an 85-year-old mother who

walks around with a briefcase full of medical notes and records, because where she lives they still aren’t computerized, and there is

no technology. So to remember, for a person who left during the

storm, came back, lost everything, how do you reconstruct a record?

I can’t remember everything that, for instance, every medication

that my mother takes or every diagnosis. How did you do that and

how do people put all that together again?

Dr. DESALVO. It is a lesson learned from this tragedy, really, because we didn’t have a lot of that information. So we did not want

to go back to that situation, if it were to ever happen again. And

we think, for disaster and every day, it makes sense to have the

information available, not just to providers, by the way. The step

we are not at yet is the portal for patients. Because really, they

own that information and should be able to see it any time that

they need to have access to it.

But what it took in the beginning was, honestly, we had records

in the Charity system. That system, some of the dictator boards

and labs were available, some of the hospitals had their inpatient

electronic systems. So we pieced it together, painstakingly with

folks. And it does take quite a long time when you are getting folks

re-entry, over an hour or more, just to find out what happened to

them in their lives and make sure it is not lost again.

Ms. LEE. Yes, and what medications, for example, understanding

the health disparities in the African American community, diabetes, hypertension, lung cancer, breast cancer. How do you reconstruct the medications?

Dr. TOWNSEND. One of the advantages that we had was that the

collaboration through an HCAP grant, there was the PATH partners that many of these folks belong to, including us, we had developed a retrieval system for electronic information. And so that

piece of information, that history was available electronically, even

after the storm. In addition to that, the pharmacies across the NaVerDate 11-MAY-2000 17:39 Sep 09, 2010 Jkt 000000 PO 00000 Frm 00119 Fmt 6633 Sfmt 6633 U:\DOCS\57790.TXT KATIE PsN: KATIE
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tion, if you use a retail pharmacy, you could retrieve that information of filled prescriptions. And then for our patients, most of them

don’t have a pharmacy benefit. So we access patient assistance programs and they get free medications. But there is an electronic system within the safety net that keeps track of what medications

they have received.

That is important information. We were able to reconstitute that

information very quickly.

Ms. LEE. That is great. Let me ask you one more question, Mr.

Chairman, to this panel, as it relates to HIV and AIDS. How are

you faring, and how are the rates in New Orleans as it relates to

HIV and AIDS, and are people able—I remember earlier, right

after the storm, accessing medications and getting people back on

their meds at the right time and what have you was a difficult

task. Are the rates now leveled off in New Orleans, are they going

up, going down? Do we need to look at New Orleans and see what

we need to do and do it better? How are things going?

Dr. TOWNSEND. HIV care in New Orleans, the public hospitals,

clinics, it is called the HOC clinic, the HIV Outpatient Clinic, that

clinic has been reconstituted. People are back in care. They are

able to receive medicines. We have always had a really high diagnosis rate in New Orleans. I actually am not sure what that is

today. My guess is that perhaps because the population is down,

the rates may not be as high as they were. Because we have diagnosed so many of those people. But there are still people who are

not in care. And we are still trying to get those people to the appropriate level of care. This is one place where we have made such

great strides that you can really manage that disease on an outpatient basis.

Ms. LEE. Are you able to do testing initiatives, testing drives?

Dr. DESALVO. We are, and I think Diane can tell—I believe we

have the second highest rate in the Nation of HIV after D.C. It is

a major problem. There are programs in place for screening, education, identification, triaging people to care. One of the recipients

of PCASG is the NO/AIDS Task Force, which has benefited and

been able to grow its programs. So it is on the front of our minds.

We know it is a major problem for the population and quite frankly, the community is very conscious of it. Of the things that we get

requested as a health center to go do screenings on, it is HIV more

than diabetes now.

Chairman TOWNS. Thank you very much. Let me thank the

panel for being here. We really appreciate your coming and sharing

with us, because we see it as being very, very important. And of

course, we want you to know that you do have a lot of support on

this side. We just hope to be able to move some of these things a

lot quicker. But again, your coming here has been extremely beneficial.

Also I would like to just say that I also have a letter that is addressed to both Congressman Issa and myself from Mr. Melancon

regarding this hearing. As you know, he represents several of the

most affected regions recovering from Hurricane Katrina, including

St. Bernard Parish, of course, and Plaquemines Parish as well,

which are just east of the city and still recovering. He has been a

leader on recovery, particularly in the areas of restoring and buildVerDate 11-MAY-2000 17:39 Sep 09, 2010 Jkt 000000 PO 00000 Frm 00120 Fmt 6633 Sfmt 6633 U:\DOCS\57790.TXT KATIE PsN: KATIE
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ing the region’s health care infrastructure. I would like to put this

letter in the record.

[The information referred to follows:]

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Chairman TOWNS. Let me again thank you so much. Now we

move to our second panel. I apologize for the delay because of

votes. But in the meantime, we have to vote around here. If not,

they talk about you. [Laughter.]

So we will now move to our second panel.

Will all the witnesses come forward, please.

Let me just indicate before we start, we swear all of our witnesses in. What we will do is we will allow you to start, but we

will have to have another break to go and vote. I really apologize.

They make an issue of it if you don’t vote around here. So please

stand and raise your right hands.

[Witnesses sworn.]

Chairman TOWNS. Let the record reflect that the witnesses answered in the affirmative.

Let us begin with you, Dr. Brand. Thank you so much for being

here. I really appreciate your being here all day, too. Thank you

so much.

STATEMENTS OF MARCIA K. BRAND, PH.D., DEPUTY ADMINISTRATOR, HEALTH RESOURCES AND SERVICES ADMINISTRATION, U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES;

ALAN LEVINE, SECRETARY, LOUISIANA DEPARTMENT OF

HEALTH AND HOSPITALS; JOIA CREAR-PERRY, M.D., FACOG,

DIRECTOR OF CLINICAL SERVICES, HEALTH DEPARTMENT,

CITY OF NEW ORLEANS; AND CLAYTON WILLIAMS, MPH, DIRECTOR, LOUISIANA PUBLIC HEALTH INSTITUTE

STATEMENT OF MARCIA K. BRAND

Ms. BRAND. Mr. Chairman, members of the committee, thank

you for the opportunity to testify today on behalf of the Secretary

of the Department of Health and Human Services [HHS] and the

Administrator of the Health Resources and Services Administration

[HRSA]. We appreciate your interest and support of primary care

in New Orleans and welcome the opportunity to work with you to

strengthen HHS and HRSA programs in the region.

I appreciate the remarks of the previous panel and I applaud

their fine efforts to provide access to care for the people of New Orleans.

HRSA also helps the most vulnerable Americans receive quality

primary care without regard to their ability to pay. HRSA works

to expand health care for millions of Americans, the uninsured,

mothers and their children, those living with HIV and AIDS, and

residents of rural areas. HRSA recognizes that people need access

to primary health care and through its programs and activities, it

seeks to meet those needs.

My testimony will briefly describe the Centers for Medicare and

Medicaid Services [CMS] Primary Care Access and Stabilization

Grant and ways that HRSA is working with its partners to provide

access to primary care services in Louisiana. In July 2007, CMS

awarded Louisiana the Primary Care Access and Stabilization

Grant, a 3-year grant of $100 million to assist public and not-forprofit clinics in the greater New Orleans area to expand access to

primary care, including primary mental health care, to all residents, low-income and uninsured residents. The grant was deVerDate 11-MAY-2000 17:39 Sep 09, 2010 Jkt 000000 PO 00000 Frm 00124 Fmt 6633 Sfmt 6633 U:\DOCS\57790.TXT KATIE PsN: KATIE
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signed to support the long-term sustainability of primary care in

New Orleans. The grant required sustainability plans within the

grant application and tapered funds over the life of the 3-year

grant. The Louisiana Department of Health and Hospitals made

provisions with the Louisiana Public Health Institute to help the

State administer and oversee this grant’s day-to-day operations.

As we have heard from the previous panel, the organizations receiving PCASG operates 91 primary care and behavioral health

clinic sites across the region, including fixed and mobile facilities.

As of September 2009, these clinics have served approximately

252,000 patients. The Department is pleased with the improvements in primary care access that has resulted form this grant.

HHS looks forward to continuing our close partnership with the

State and local health care organizations to meet the primary care

needs of residents in the Gulf Coast.

HRSA’s efforts to support primary care in post-Katrina New Orleans includes support for health centers, the primary care work

force and infrastructure. Health centers are community-based and

consumer-driven organizations that serve populations with limited

access to health care. These include low-income populations, the

uninsured, those with limited English proficiency, individuals and

families experiencing homelessness, and those living in public

housing. These centers are designed to provide accessible, dignified,

health services to low-income families.

In 2004, prior to Hurricane Katrina, HRSA funded two health

center grantees that supported 10 sites in New Orleans, serving

17,500 people. Since 2006, HRSA has funded seven additional applications. HRSA provides grant support to five health center

grantees in the greater New Orleans area. This includes four existing health center grantees that received $7.1 million in 2009 to operate 18 sites and service 34,000 people.

The fifth health center is a new grantee that received funding

under the Recovery Act. New Orleans has additionally benefited

from Recovery Act funding and has received 13 awards that support new health center access points, increased demand for services

and capital improvement awards. The Recovery Act funding will

allow these primary care providers to see an additional 35,000 patients at more than 20 clinics across the area over a 2-year period.

Two of the health centers are using these funds to provide additional mental and behavioral health services, which we know from

our discussions today are critical to this region.

In addition to providing direct patient care, HRSA strengthens

primary care by placing health care providers in communities

where they are needed most. The National Health Service Corps,

through scholarship and loan repayment programs, helps health

professional shortage areas in the United States obtain primary

care. And Dr. DeSalvo, who was on the previous panel, is an excellent example of the National Health Service Corps loan repayment

program.

In addition to supporting a National Health Service Corps, we directly support health professions programs that provide infrastructure for training and education. This includes the Southwest Area

Health Education Grant.

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We also provide resources to address particular patient population challenges, including women and children. And as of this

summer, we had another grant that would support care for people

living with HIV and AIDS. HRSA provides Ryan White care funds

to the New Orleans AIDS task force. And they provide comprehensive HIV care for about 800 people living with HIV and AIDS.

We are extremely proud of our programs and look forward to continuing to work with you, Mr. Chairman, and members of the committee, to provide quality primary care for all. HHS has invested

a great deal of time and resources in assisting the recovery of New

Orleans, and there is much more work to be done. We are looking

forward to collaborating with you in that effort.

[The prepared statement of Ms. Brand follows:]

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Chairman TOWNS. Thank you very much, Dr. Brand.

Just before we start with Mr. Levine, we are going to break until

2:15. We hate to do this, but we have to make these votes. And

then we will start again. And of course, hope that we won’t have

any more votes until we finish. Thank you, and we hope you understand. So we will actually recess until 2:15.

[Recess.]

Chairman TOWNS. The committee will reconvene.

Mr. Levine, you may begin.

STATEMENT OF ALAN LEVINE

Mr. LEVINE. Thank you, Mr. Chairman. It is an honor to be here

today.

I had prepared some comments, I am going to depart a little

from my prepared comments and sort of get to the crux of what

some of our financial challenges are going forward. You have heard

good stories this morning about the good things that were done as

a result of this grant. There were other grants as well. And Congress and the executive branch have done a lot for the State of

Louisiana and New Orleans. For that, we are grateful.

We are also grateful for the selection of Craig Fugate to be the

Administrator of FEMA. I worked with him during the eight hurricanes that Florida faced during 2004 and 2005, and I don’t know

a more capable person in the country to lead FEMA.

I just want to get to some of the real financing challenges that

we have that really trump all of this. Because all of this will become very difficult for us to sustain, if we can’t solve these specific

issues. First, our State faces the largest reduction in Federal match

in Medicaid in the history of the Medicaid program. January 2011,

our Federal match will decrease by 18 percentage points from an

81 percent match under the stimulus to 63 percent. That is an

annualized loss of $900 million per year that Louisiana will either

have to, will have to reduce from the expenditures in the program.

That is one-sixth of our Medicaid program.

On top of that, we face a reduction in our DSH program. You

have heard a lot about the low eligibility, the 12 percent eligibility

for adults in Louisiana. Part of the reason for that is we have historically used this public hospital system to provide access for people that were low income. You heard that nearly 95 percent of our

children have insurance coverage and we have a very low eligibility

for adults. That is true, because we have this public system.

However, the funding for that public system is in jeopardy right

now because beginning in July, we face what we estimate will be

up to a $150 million reduction in our DSH program, a 20 percent

reduction that begins July 1st. So those two issues combined are

more than a $1 billion reduction to our safety net programs this

coming year. We also are facing obviously the loss in the Primary

Care Access and Stabilization Grant funding.

I just want to tell you a story. My first week on the job, there

was a young police officer named Nikola Cotton who was murdered

on the job. She was murdered by somebody who had been treated

in our institutions, in our mental health institutions in New Orleans and had just been released from a mental health institution.

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We found that the mental health system in New Orleans and

throughout the State of Louisiana has been neglected for 20 years.

So the Governor and I set out, along with the legislature, and

some of them are here today, to establish some major reforms in

our mental health system. We passed several laws, one of them

that we refer to as Nikola’s law, that allows for involuntary outpatient treatment for people who don’t take the medications when

they are determined to be at harm or risk to themselves or others.

We increased funding for mental health by $89 million. We implemented forensic assertive community teams, assertive community

teams, multi-systemic therapy, functional therapy, services that

had never been offered in New Orleans before that today are being

offered.

And because we are doing it and because we have tried to move

the standard from institutional care to a community-based model,

we are serving three times the number of people that have mental

health needs.

I want to say, there was a question earlier about what is Louisiana doing. Let me tell you some of the things that we are doing.

First of all, I mentioned we have increased our funding for mental

health by $89 million last year, even facing economic challenges

that we are facing. The Department of Health and Human Services

just put out a press release a couple of weeks ago, or put out a

statement a couple of weeks ago, saying that Louisiana is one of

the most efficiently operated Medicaid programs, and it is the

model for how to retain coverage for children.

We went from 44th in the Nation for child immunizations to just

a month ago CDC announcing that we are now second in the Nation in child immunizations, pushing our overall health care

rankings to 47th in the Nation. Still very low, but the highest we

have ever had since the rankings have been done.

So there is forward progress being made. But if we do not solve

these challenges, these financial challenges, if the FMAP problem

does not get resolved, the consequences will be extremely devastating for our State and many of the gains that you have seen, particularly the investments that have been made by the Federal Government will be, we think, in peril. To be clear, the reason that the

Federal match is dropping in Medicaid is because of the very

things you have done to help us. It is an ironic twist in the formula. The Medicaid matching formula was never designed for

States that had major disasters. So what happens is, tremendous

investments are made, billions of dollars of investment are made

in our State, economic activity occurs, we have a temporary increase in our per capita income. Our per capita income went up 42

percent from 2005 to 2007. But yet we still have the second highest

rate of poverty and our Medicaid enrollment is the highest it has

ever been.

And yet, 3 years later, because of the Federal formula in law, our

match in Medicaid drops as a direct correlation to the increase in

the per capita income resulting from the recovery.

Mr. Chairman, I know my time is up. I will say that this is something that only Congress can resolve. We literally are asking for

Congress to take a good, hard look at this to help us with this fiVerDate 11-MAY-2000 17:39 Sep 09, 2010 Jkt 000000 PO 00000 Frm 00136 Fmt 6633 Sfmt 6633 U:\DOCS\57790.TXT KATIE PsN: KATIE
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nancing challenge that no State in the history of our Union has

faced in the Medicaid program’s history.

[The prepared statement of Mr. Levine follows:]

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Chairman TOWNS. Thank you very much, Mr. Levine.

Dr. Crear-Perry.

STATEMENT OF JOIA CREAR-PERRY

Dr. PERRY. Hello, thank you for having me. I am Dr. Joia CrearPerry. I am the director of clinical services of the city of New Orleans Health Department and I am an OB-GYN. I would like to

thank the House Committee on Oversight and Government Reform

for giving the city of New Orleans an opportunity to speak today

and for providing us funding for primary care access and stabilization.

This vital funding helps support the city to re-establish a health

system of care, along with providing critically needed medical and

mental health services to the greater New Orleans community and

areas post-Hurricane Katrina.

The causes for our historical social health disparities as a State,

and more specifically in New Orleans, are complex and far-reaching

and not easily counteracted. When Katrina made landfall, 28 percent of New Orleans’ citizens lived in poverty, 25 percent had never

finished high school, 50 percent lived in a single parent home and

25 percent had no health insurance. Hurricane Katrina has only

exacerbated what was already a fragile health infrastructure and

medical service delivery system. The current lack of access to both

primary medical care and mental health services for such a large

portion of our parish is perhaps the strongest correlation to our repeatedly poor health outcomes.

The goal of the New Orleans Health Department is to provide direct medical care and services and help to build a sustainable and

long-term infrastructure along with the opportunity for collaboration and coordination in creating an equitable and accessible health

care system for all residents. Therefore, I would like to focus on

five things: the lack of access to primary medical care services by

our citizens most in need; the professional medical and mental

health provider shortages; a profound lack of mental health services; health disparities; and the need for continued support to finish the rebuilding of the city’s health infrastructure.

Today, with the population of New Orleans having reached an estimated 350,000 people, close to 75 percent of its pre-Katrina numbers, the services offered by the New Orleans Health Department

are much less. The city operates only three primary care clinics:

one homeless clinic, one fixed dental site, and two mobile dental

sites. The geographic coverage is limited. One of the primary care

clinics is located on the west bank, and we have the map up there.

One is located in Central City and one is in New Orleans East,

across the large Industrial Canal. If you look to the right of the

map, where there only a couple little dots in the far right corner,

that is New Orleans East, where our clinic is.

There has been a significant decrease in the number of medical,

mental health, and dental providers seen in Orleans Parish. According to a 2007 Blue Cross/Blue Shield report, only 28 percent

of their original medical professionals returned to practice in Orleans Parish. Last year, the Louisiana Department of Health and

Hospitals reported that less than 25 percent of those providers accepted Medicaid patients.

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There has never been an adequate mental health infrastructure

in New Orleans. And today, the need for care and treatment has

only increased exponentially since Katrina made landfall. During

the last 4 years, the availability of psychiatric beds has been dramatically reduced, combined with a large number of mental health

care providers never returning, which has left the citizens most in

need with the most obstacles in receiving care, needed care and

treatment. And beyond that, being able to meet the mental health

needs of our citizens, it has created a cross-cutting effect on families, communities, work sites, and the broader health care delivery

system—from the hospital emergency rooms to the primary care

physicians to the local jail facilities—which today houses the most

psychiatric beds in the parish.

Just as behaviors and lifestyle choices are the causes of most

chronic and infectious diseases, access to primary, preventive, and

treatment care is what improves health outcomes and decreases

disparities gaps. What research has shown is that health disparities in Louisiana are often found in populations which are poor, minority, high school dropouts, low incomes, uninsured, and lack

transportation.

The New Orleans Health Department identified an extremely

high need in under-served and under-staffed sites in New Orleans

Parish and responded by establishing a clinic site with PCASG

funding. As you can see on the map, it was New Orleans East. New

Orleans East represented approximately 35 percent of total parish

land area and 15 percent of overall population. Yet 4 years later,

there is still no hospital. So I just wanted to put up my little Methodist picture. Can’t have a New Orleans conversation without talking about Methodist Hospital.

Yet separated by the large Industrial Canal, New Orleans East

is considered a suburb of the city, with the fastest-growing part of

the parish in terms of population, business and industry, with a

strong, increasing middle-upper class Black population and Vietnamese population. Like all of New Orleans, but particularly New

Orleans East, data has shown a significant population shift. Each

month that the New Orleans clinic has been open, we have seen

a 15 percent increase in patient volume. We currently offer

gynecologic, pediatric, adult primary care services, WIC and

Healthy Start. We have collaborations with LSU and Tulane

Schools of Medicine for specialty care, diagnostic procedures, and

inpatient management. Sixty-five percent of our patients are uninsured. Our typical patient is a working mother who comes in for

WIC services, brings in her children for pediatric services, participates in Healthy Start parenting classes, gets her PAP smear and

birth control, and has her brother to come in for a blood pressure

check. She can get all of this done at this one site in New Orleans

East.

For a growing population that is geographically isolated, the

PCASG funding has allowed us to provide convenient, compassionate services, because even 4 years later, there is still very limited care in the area.

Since Katrina, there has also been a severe shortage of dental

services. The PCASG funding has allowed us to fill in the gap by

staffing two mobile dental units. One goes to the senior centers,

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and one goes to the school-based health units. On these units we

provided dental exams, prophys, deep scalings, amalgam, bonding,

removable partial dentures, complete dentures, crowns, and

bridges. We have an oral surgeon who can help with more difficult

cases. We have begun oral health education programs with the

schools as well. So you can see one of our vans we are very excited

about.

We are hopeful that the availability of services plus the student

education will span out to beyond the schools and the senior centers in the future. Right now, it is filling a significant need.

So in closing, I know I am over, below are a couple of recommendations from the city of New Orleans. No. 1, to increase

Medicaid eligibility, to increase the number of individuals who

qualify for coverage and are insured. Two, use flexibility within the

Section 1115 waiver for Medicaid for expansion to support the

PCASG funding; expand the number of federally Qualified Health

centers in the region; and to alleviate the disparities in mental

health reimbursement. That is it.

[The prepared statement of Dr. Crear-Perry follows:]

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Chairman TOWNS. Thank you very much.

Mr. Williams.

STATEMENT OF CLAYTON WILLIAMS

Mr. WILLIAMS. Mr. Chairman, thank you and members of the

committee, thank you for the opportunity to address this important

topic today.

I am employed by the Louisiana Public Health Institute,a nonprofit organization that works State-wide to improve health

through public-private partnering. LPHI was chosen as the State’s

local partner in administering the Primary Care Access and Stabilization Grant. I serve as the director of that program.

Today my testimony will, in my 5 minutes, hopefully summarize

how the grant has been used over the past year, 2 years, toward

the grant goals, and discuss the challenges we face in maintaining

the gains we have achieved. The catastrophic flooding throughout

the New Orleans region following Hurricane Katrina wiped out the

health care safety net, as you have heard about today. There is a

map showing the relative flood depths that you could look at in relation to the location of the clinics, which is overlapping.

Also, as you have heard today, the clinic representatives here

today were among those who spent the first couple of years after

Katrina cobbling together resources and trying to get the growing

health care needs met in the region. Then in July 2007, we received the $100 million Primary Care Access and Stabilization

Grant from HHS to stabilize and expand the clinics that were on

the brink of failure at that time. We want to thank you and HHS

very much for making that possible and making it possible under

terms that allowed for the use of those funds in a flexible way, so

that we could be effective toward the goals of the grant.

We strive for a health care system with a public-private network

of primary care clinics as its foundation to facilitate access to the

right care delivered in the right place at the right time. And four

fundamental goals have guided our efforts to use this grant to advance toward this vision. No. 1, increase access to care on a population basis. No. 2, deliver high quality, evidence-based health care.

No. 3, create an organized system of care. And No. 4, develop sustainable business entities: access, systemness and sustainability

have been our mantra.

Twenty-five public and non-profit organizations in the New Orleans region were eligible to participate in the grant program. The

first award of $16.7 million was distributed to the organizations

within 2 months after the issuance of the notice of grant award.

Supplemental awards have been made every 6 months since then

to all 25 entities. And so far, $80,275,000 has been distributed.

The remaining grant funds will be distributed in December of

this year, and the grant funds will be substantially exhausted by

September 30th of next year. However, we expect a no-cost extension will be approved by CMS shortly to help the grantees stretch

these dollars as far as possible. About 80 percent of the funds have

been spent on personnel and contracts for the provision of direct

patient care services and the remainder on equipment and supplies, facility renovations, and other expenses that support care delivery.

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Now, I will summarize the status and progress made toward our

priority goal, to increase access to care on a population basis. The

outstanding performance of the 25 participating organizations in

this priority goal area has led to an increase in the number of service delivery sites in the region from 67 per-grant to 93 today. There

is a map you have seen that shows the distribution of all those

sites across the region. In addition, they have increased the size of

the delivery system by almost 50 percent in 2 years in terms of patients served. You can look at the next exhibit, which is a graph

that shows the increase in patient volume by a 6-month period

since the beginning of the grant. It is a dramatic, dramatic growth

in a system in such a short period of time.

In the past year, they have provided primary and mental health

care services to nearly 175,000 individuals and to a total of 250,000

since the grant began. In the past year, 42 percent were uninsured,

representing about half of the uninsured in the region, and 25 percent had Medicaid. More importantly, over 40 percent of the conditions cared for in the primary care clinics are conditions that would

likely require expensive emergency room care if not effectively

managed in the outpatient setting.

Now on goal No. 2, which is to deliver high quality evidencebased health care, as a condition of receiving grant funds, all participating clinics met minimum quality improvement benchmarks,

such as providing same day appointments for urgent care. In addition, $3.8 million was set aside for a voluntary quality improvement incentive program in partnership with the National Committee on Quality Assurance [NCQA]. This incentive program rewards

clinics that achieve standards set by NCQA in their patient-centered medical home framework.

Significantly, 40 of the clinics received NCQA recognition

through the incentive program. This is the highest concentration of

such recognized clinics anywhere in the country. And just 2 days

ago, we heard that this impressive cross-sector quality improvement will receive a national award from NCQA in March of next

year.

I have 1 more minute here. I am going to skip down to goal No.

4, sustainability, which I think is the focus of the hearing here.

Substantial improvements in billing practices among the participating organizations have been achieved. For example, 82 percent

of the primary care organizations are now billing Medicaid, Medicare, and/or private insurance.

Despite the progress that has been made in this goal area, we

estimate the participating provider organizations would face a $30

million annual operating deficit if they were to maintain their current capacity without the help of this grant or some other such

source. The projected deficit stems from their mission to serve people who are not covered by any insurance and hence from whom

the clinics receive little or no revenue. Over half the participating

organizations depend on grant funds for more than 50 percent of

their operating expenses. And several rely on grant funds for more

than 75 percent of their operating expenses.

Organizations caring for the highest portions of uninsured individuals are most at risk, and some of the highest volume and highest quality clinics that you have heard from today have patient

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populations that include upwards of 70 percent uninsured individuals. This program was envisioned as a bridge to a more favorable

policy environment. However, it is clear that those conditions are

still years away. Unless we work together now to devise and implement solutions to span the gap, the progress that has been made

will quickly erode, and the health system recovery in the New Orleans area will take a giant step backward, resulting in an estimated

30 to 40 percent reduction in services overall among these organizations.

Most organizations will be forced to cut back severely. Several

will likely fail altogether. Many people who currently rely on these

clinics will go without care or end up in the emergency room.

Meanwhile, if and when relief comes down the road in the form of

coverage expansion, the expensive exercise of expanding the health

care delivery system to handle the new demand will have to be repeated. Wouldn’t it be more effective and efficient overall to keep

this network intact than to let that happen?

The desirable result of this hearing would be that all parties involved will redouble their efforts to immediately identify and implement a set of solutions to address these threats. These could include allocation of existing unobligated community block grant recovery funds for this purpose, granting permission for the State to

use Medicaid disproportionate share funds for outpatient primary

care and physician services, and exportation of additional sustainable options for funding.

It has been an honor today to participate in the hearing, and

thank you for your continued support of our efforts to rebuild a

healthier, greater New Orleans. I would welcome your questions.

[The prepared statement of Mr. Williams follows:]

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Chairman TOWNS. Thank you very much. Let me thank all of you

for your testimony.

Let me begin with you, Dr. Crear-Perry. I am interested in that

van. How does that work? Do you go to the same area once a week,

twice a week? How does that work?

Dr. CREAR-PERRY. We actually have an MOU with the schoolbased health clinics. The one that you saw with the children on the

van, that one goes to the schools. They make a schedule, so the

school nurses at the schools will find out which kids need dental

services. They send home a packet with all the kids and their parents fill it out. Then they make a schedule and they let us know

that if we are going to have, say, 10 kids the next day, and we usually have a schedule for the week. We right now are rotating between two different schools. We go to one school 1 week and then

one school the next week.

Each week, we get requests from other schools. Everybody wants

it, because there is such a need for dental services in the city. So

some of the hardest part is just getting through the bureaucracy

to make sure that we can get it there and get the services to them.

But the kids really do enjoy being able to get the services. Because

a lot of times we have kids who haven’t been to the dentist since

the storm. And we have been able to take care of them on the dental units.

Now, for the senior centers, it goes to four different senior centers in the city. It also has a schedule that it changes every day

from one senior center to the other. So the senior centers are more

consistent. They know their schedule. They come in, and so it is a

lot easier to get the senior on the dental van than it is sometimes

to get the children.

Chairman TOWNS. Dr. Brand, and first of all, I want to thank

you for staying all day and listening to the testimony earlier and

then coming and testifying later. I want you to know that when I

became Subcommittee Chair back some years ago, I was going to

change the procedure, because I wanted agency people to hear in

terms of what was being said. Because we always had the agency

people first, and then after that we would bring others in. After the

agency people would testify, everybody would get up and walk out.

And then when the people that had the problems, when they testified, nobody from the agency was around to hear it.

So I was the one who said, from now on, we have the people talk

first and then have the agencies come in afterwards. But I want

you to know that your being here all day today has made me sort

of rethink this thing, because you have been here and you have listened to the testimony. I want to ask you, you have heard what

was said. Do you think it is possible that maybe the agency would

think about, let’s look at sort of establishing or sort of group a task

force, I don’t like the word task force, but a group to work together

to see in terms of how we might be able to move some of these efforts along? I know you might not be able to make the decision sitting at the table today. But can you take this back to request that

we would like to establish a committee to explore ways to continue

restoring health care services to the post-Katrina region?

I think there is still a lot that needs to be done. I know you can’t

right away say. But the point is, if you could take that back and

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let us know if there is any real interest in this. There are many

Members of Congress, along with the representatives from the

area, that would like to see what more we might be able to do.

Sometimes it is not money, it is just getting things coordinated. I

want to get your views on it and recognize that it is not something

you can bang the table and say you will do. But will you take that

back and think about it?

Ms. BRAND. Yes, sir. And it has been very helpful and interesting

to have spent the day listening to my colleagues talk about New

Orleans and access to primary health care as it is at this time, and

how it has changed compared to immediately before and after

Katrina.

HRSA and the rest of the Department I think have worked collaboratively to address these challenges. CMS certainly is the part

of the enterprise that looks at payment. But HRSA is concerned

about access through health centers, work force. Our colleagues in

SAHMSA would be very interested to hear the challenges that the

city still faces in providing access to adequate mental health services. So certainly, sir, I will take your challenge and your charge

back to the Department and see what we might do.

We have been working together collaboratively. But this might

be an opportunity to look at that and see what the next phase

might most appropriately be.

Chairman TOWNS. Thank you very much, Dr. Brand.

Mr. Levine, can you give me a broad outline of your administration’s plan to build a replacement facility for the now-shuttered

Charity Hospital? When will construction begin? How will it be financed and what scope and size? Is there anything that the Congress can do to facilitate this?

Mr. LEVINE. Thank you, Mr. Chairman. We have taken several

steps to move the process along to the extent that we can. Obviously, the financing is the big piece of this that hasn’t been resolved. We are still, unfortunately, in the arbitration phase with

FEMA at the moment. We believe that the State has made adequate, has provided adequate evidence that the State is owed $492

million under the Stafford Act. FEMA’s last offer was $150 million,

up from the original offer of $26 million or so.

We are in the process of acquiring the property. The architects

are doing the design planning phase of the project. So all the

things that can be done while we work out the financing piece of

this is critical.

The other thing that we have done is we have completely

changed the model from the old Charity Public Hospital model. We

have actually looked at what happened in Atlanta with Grady, we

have looked at Tampa General, we looked at others—Shands Hospital in Gainesville with the University of Florida. We have looked

at models of teaching hospitals that used to be public but have converted to the non-profit model. And that is what we have done. We

entered a memorandum of understanding between Tulane, LSU,

and the State that was signed about 2 or 3 months ago.

So all of those pieces have been put in place. The one piece that

has not been put in place is the FEMA piece of this, which is substantial. The way the financing is supposed to work is, the State

has committed $300 million. We had estimated the $492 million

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from FEMA. And then the difference between that and the $1.1 billion and $1.2 billion was going to be financed through the debt

markets. If FEMA doesn’t come through with the significant

amount of money, if the arbitration doesn’t go our way, that could

really imperil our ability to finance this hospital, given the situation. We would have to finance more than the estimated $400 million that we had planned on.

So irrespective of whether somebody believes we should rebuild

the old hospital or build a new one, it is all academic if we can’t

get the money from FEMA. So the question about what Congress

can do, to the extent that FEMA falls short due to the arbitration

process, if it doesn’t go our way, certainly Congress can step in and

provide funding that would bridge that gap. We aren’t asking for

that at this point. That is certainly in the purview of Congress. But

we are trying to work within the scope that has been laid out by

FEMA.

Chairman TOWNS. On that note, I yield to the representative

from the area.

Mr. CAO. Thank you, Mr. Chairman. And Mr. Chairman, I am

very glad to hear today from the GAO that we have been using the

money responsibly. Because traditionally, we have had some negative images with respect to how money is being spent.

With that being said, I was a little bit disappointed, Dr. Crear- Perry, to hear that there are $4 million for mental health that is

left unspent by the city. And you come here to testify of mental

health needs. Can you explain with respect to that discrepancy?

Dr. CREAR-PERRY. We don’t have money for mental health in the

city.

Mr. CAO. I am sorry?

Dr. CREAR-PERRY. We don’t have a mental health grant for the

city.

Mr. CAO. I received information from very secure sources that

the city does have $4 million in mental health money left unspent.

Dr. CREAR-PERRY. I am not sure.

Mr. CAO. Can you look into that, if you don’t mind?

Dr. CREAR-PERRY. Yes.

Mr. CAO. And Mr. Williams, do you have any comments with respect to that?

Mr. WILLIAMS. I believe it would be a strange coincidence if it wasn’t the, if this wasn’t the $4 million carve-out from the Primary

Care Access and Stabilization Grant that was specifically earmarked for the city of New Orleans Health Department to address

not just mental health, although that is an allowable expenditure

of the primary care grant funds, but also to address health care

needs in particularly under-served areas and to provide the dental

services, which are up and running. They got off to a slow start

spending that money, but they are well underway to make good use

of it at this point, as far as I know today. We can get you more

information on that.

Mr. CAO. So of the $4 million, which portion of it was spent on

mental health, which portion of it was spent on the dental trucks?

Dr. CREAR-PERRY. When we applied, we didn’t apply specifically

for mental health. We could use it for dental and the New Orleans

East Clinic. So we have spent it on dental and New Orleans East

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Clinic. So we are on track to spend all of our allocation by the end

of the grant. We will have no money left.

Mr. CAO. OK. Dr. Brand, I was looking at some of the grant allocations that HRSA has granted to the area. I have noticed that a

large portion of it was concentrated in the downtown and uptown

area, where, the areas around the fringes, the northeast areas, St.

Bernard, those areas in Waggaman and Westwego, there have been

very little being done for those areas. Can you address that, please?

Ms. BRAND. Certainly. I believe that Administrator Wakefield

has begun talking, dialoguing with you and your staff about the

fact that those areas do not have ready access to federally qualified

health centers. We continue to work with the Primary Care Association to look at those areas where we might, should resources be

made available to do a new expansion or provide a new access

point. There will not be resources available for a cycle in 2010. We

don’t know what the situation will be for 2011, because that budget

is still being developed. But certainly, we will work with folks in

that community. We will work with the Primary Care Association

to help, an organization that is ready to stand up and be prepared

to either be an FQHC or lookalike, be prepared.

The other opportunity, should resources be available, is something called a planning grant that helps a community organize and

be prepared to apply, and perhaps be more successful in that application process.

Mr. CAO. Mr. Levine, I know that the State has a terrible FMAP

problem. Can you please explain to us how would the FMAP problem affect the issue of the poor in the district, and also I would like

to know whether or not the State has an audit system with respect

to how money is being spent by the city as it comes down from the

State.

Mr. LEVINE. Thank you, Congressman Cao. The FMAP problem

is the single biggest problem our State faces right now, with financing for the poor. We can’t sustain nearly a $1 billion a year reduction in our funding for Medicaid. It would trump everything, all the

progress that has been made here. Whether we talk about the expansion, I know there is a potential expansion of Medicaid in the

reforms. In the House bill, it was 133 percent, in the Senate, it is

150 percent.

For us to go from where we are today, where currently we have

a $275 million deficit in our Medicaid program this year, into a situation next year where we face a $900 million shortfall, and then

go into a period where we then have to do an expansion of Medicaid, it couldn’t be done. The maintenance of effort requirements

under the stimulus, and then in both of the House and Senate bills,

would really put a lot of pressure on provider rates and really, I

think effectively make our program insolvent.

So we really need a solution to this FMAP problem. All of the

good work that has been done, what we talked about earlier about

potential solutions to the PCASG grant, for instance, allowing us

to use CDBG money that is unspent, or applying for a DSH waiver

that would allow us to use disproportionate share funding for community-based clinics, we can do those things. But we also have to

provide State match.

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With the decrease in Federal match that we are facing, we are

not capable of doing that. So I think that the fundamental problems here are: (a), fixing the FMAP problem, (b), acknowledging

this DSH audit rule and the quarter of a billion dollar per-year impact it is going to have on our State, in addition to the FMAP problem, and then (c), the $30 million problem we are going to have

when this grant runs out in less than a year. These are three converging factors that any one of which would be devastating. But all

three of them are virtually impossible for the State to be able to

overcome on our own.

Mr. CAO. Does the State have an audit system to ensure that

money is being spent by the city?

Mr. LEVINE. As it relates to funds that come through the Department, we do. And we have an internal audit function. We also have

the ability through our contract to review all such expenditures, as

does the legislative auditor, I believe, have the authority to audit

any grant funds that come through our department.

Mr. CAO. Could you provide us with a copy of the audit?

Mr. LEVINE. Sure. I won’t say that—have we done any audits at

this point? Yes. The answer is yes.

Mr. CAO. Mr. Chairman, if you will allow me one more question.

Chairman TOWNS. Sure. I will extend the gentleman’s time for

another minute.

Mr. CAO. Thank you very much.

I know Dr. Crear-Perry has addressed the issue of the New Orleans East and the lack of hospitals out there for New Orleans East

and St. Bernard. Dr. Brand and Mr. Levine, is there any way both

of you or both of your organizations can sit down and discuss the

problem and come up with some kind of solution in connection with

Tulane and LSU to see how we can address that particular need

out there, for approximately 120,000 people? 120,000 people right

now do not have access to a hospital.

I know, I live out there in New Orleans East. About 2 years ago,

I had to drive my father close to 40 minutes to get him to the nearest emergency room. He is a diabetic and he has some complications. We had to fight traffic, drive over the high rise, which for

the people of New Orleans East, almost serves as a psychological

block for many of them. So if you could do that, I would really appreciate it.

Ms. BRAND. I think the administration stands ready to work with

the Congress, the State, and the local partners to address all service gaps. Certainly we would be happy to meet with them.

Mr. CAO. Thank you very much. That is all I have, Mr. Chairman.

Chairman TOWNS. Thank you very, very much. Let me thank all

of you for your testimony. You have been very, very helpful and we

look forward to working with you in the days and months ahead,

and to move some of these things forward. I think under very difficult circumstances and conditions that you have been able to do

some amazing things. I want you to know we really salute you for

that.

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Again, thank you so much for your testimony. This hearing is adjourned.

[Whereupon, at 3:20 p.m., the committee was adjourned.]

[The prepared statement of Hon. Diane E. Watson follows:]

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