THE 2003 BUDGET: A REVIEW OF THE HHS HEALTH CARE PRIORITIES
=======================================================================
HEARING
before the
SUBCOMMITTEE ON HEALTH
of the
COMMITTEE ON ENERGY AND COMMERCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED SEVENTH CONGRESS
SECOND SESSION
__________
MARCH 13, 2002
__________
Serial No. 107-100
__________
Printed for the use of the Committee on Energy and Commerce
Available via the World Wide Web: http://www.access.gpo.gov/congress/
house
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COMMITTEE ON ENERGY AND COMMERCE
W.J. ``BILLY'' TAUZIN, Louisiana, Chairman
MICHAEL BILIRAKIS, Florida JOHN D. DINGELL, Michigan
JOE BARTON, Texas HENRY A. WAXMAN, California
FRED UPTON, Michigan EDWARD J. MARKEY, Massachusetts
CLIFF STEARNS, Florida RALPH M. HALL, Texas
PAUL E. GILLMOR, Ohio RICK BOUCHER, Virginia
JAMES C. GREENWOOD, Pennsylvania EDOLPHUS TOWNS, New York
CHRISTOPHER COX, California FRANK PALLONE, Jr., New Jersey
NATHAN DEAL, Georgia SHERROD BROWN, Ohio
RICHARD BURR, North Carolina BART GORDON, Tennessee
ED WHITFIELD, Kentucky PETER DEUTSCH, Florida
GREG GANSKE, Iowa BOBBY L. RUSH, Illinois
CHARLIE NORWOOD, Georgia ANNA G. ESHOO, California
BARBARA CUBIN, Wyoming BART STUPAK, Michigan
JOHN SHIMKUS, Illinois ELIOT L. ENGEL, New York
HEATHER WILSON, New Mexico TOM SAWYER, Ohio
JOHN B. SHADEGG, Arizona ALBERT R. WYNN, Maryland
CHARLES ``CHIP'' PICKERING, GENE GREEN, Texas
Mississippi KAREN McCARTHY, Missouri
VITO FOSSELLA, New York TED STRICKLAND, Ohio
ROY BLUNT, Missouri DIANA DeGETTE, Colorado
TOM DAVIS, Virginia THOMAS M. BARRETT, Wisconsin
ED BRYANT, Tennessee BILL LUTHER, Minnesota
ROBERT L. EHRLICH, Jr., Maryland LOIS CAPPS, California
STEVE BUYER, Indiana MICHAEL F. DOYLE, Pennsylvania
GEORGE RADANOVICH, California CHRISTOPHER JOHN, Louisiana
CHARLES F. BASS, New Hampshire JANE HARMAN, California
JOSEPH R. PITTS, Pennsylvania
MARY BONO, California
GREG WALDEN, Oregon
LEE TERRY, Nebraska
ERNIE FLETCHER, Kentucky
David V. Marventano, Staff Director
James D. Barnette, General Counsel
Reid P.F. Stuntz, Minority Staff Director and Chief Counsel
______
Subcommittee on Health
MICHAEL BILIRAKIS, Florida, Chairman
JOE BARTON, Texas SHERROD BROWN, Ohio
FRED UPTON, Michigan HENRY A. WAXMAN, California
JAMES C. GREENWOOD, Pennsylvania TED STRICKLAND, Ohio
NATHAN DEAL, Georgia THOMAS M. BARRETT, Wisconsin
RICHARD BURR, North Carolina LOIS CAPPS, California
ED WHITFIELD, Kentucky RALPH M. HALL, Texas
GREG GANSKE, Iowa EDOLPHUS TOWNS, New York
CHARLIE NORWOOD, Georgia FRANK PALLONE, Jr., New Jersey
Vice Chairman PETER DEUTSCH, Florida
BARBARA CUBIN, Wyoming ANNA G. ESHOO, California
HEATHER WILSON, New Mexico BART STUPAK, Michigan
JOHN B. SHADEGG, Arizona ELIOT L. ENGEL, New York
CHARLES ``CHIP'' PICKERING, ALBERT R. WYNN, Maryland
Mississippi GENE GREEN, Texas
ED BRYANT, Tennessee JOHN D. DINGELL, Michigan,
ROBERT L. EHRLICH, Jr., Maryland (Ex Officio)
STEVE BUYER, Indiana
JOSEPH R. PITTS, Pennsylvania
W.J. ``BILLY'' TAUZIN, Louisiana
(Ex Officio)
(ii)
C O N T E N T S
__________
Page
Testimony of:
Thompson, Hon. Tommy, Secretary, U.S. Department of Health
and Human Services......................................... 25
Material submitted for the record by:
College of American Pathologists, prepared statement of...... 58
Pallone, Hon. Frank:
Letter dated March 14, 2002, to Hon. Tommy G. Thompson... 60
Letter dated March 15, 2002, to Hon. Tommy G. Thompson... 60
Thompson, Hon. Tommy, Secretary, U.S. Department of Health
and Human Services, responses for the record............... 52
(iii)
THE 2003 BUDGET: A REVIEW OF THE HHS HEALTH CARE PRIORITIES
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WEDNESDAY, MARCH 13, 2002
House of Representatives,
Committee on Energy and Commerce,
Subcommittee on Health,
Washington, DC.
The subcommittee met, pursuant to notice, at 10:15 a.m., in
room 2322, Rayburn House Office Building, Hon. Michael
Bilirakis (chairman) presiding.
Members present: Representatives Bilirakis, Upton,
Greenwood, Deal, Ganske, Norwood, Wilson, Shadegg, Ehrlich,
Pitts, Tauzin (ex officio), Brown, Strickland, Capps, Towns,
Pallone, Deutsch, Stupak, Wynn, Green, and Dingell (ex
officio).
Staff present: Patrick Morrisey, deputy staff director and
counsel; Steve Tilton, health policy coordinator; Eugenia
Edwards, legislative clerk; John Ford, minority counsel;
Bridgett Taylor, minority professional staff; Amy Hall,
minority professional staff; David Nelson, economist; and Karen
Folk, minority counsel.
Mr. Bilirakis. I call this hearing to order. I am extremely
pleased to welcome the Honorable Tommy Thompson, Secretary of
the United States Department of Health and Human Services.
Mr. Secretary, I first would like to wholeheartedly commend
you on your leadership throughout the last year, and it has not
been easy god knows. You have demonstrated remarkable capacity
and ingenuity in the face of unforeseen hardships.
In particular, your leadership has been critical in
developing our Nation's capacity to respond to the threat of
bioterrorism. The purpose of today's hearing as we all know
obviously is to discuss the priorities of the Department as
reflected in the administration's fiscal year 2000 budget
request.
To facilitate a dialog with the Secretary, which Ranking
Member Brown and I are both anxious to do, I hereby request
that members--I am going to limit members, with the exception
of Mr. Brown and myself, and Mr. Tauzin, the chairman of the
full committee, if he chooses to be with us, to 3 minutes.
I would ask all of the members to try to limit their time
if they possibly can to even less than that so we can get
through this.
Hopefully if we can do that, we might be able to go through
a second round with the Secretary. I would ask unanimous
consent that statements of all members of the subcommittee that
are not here be made a part of the record.
The Department of HHS fiscal year 2003 budget continues our
efforts to develop systems and programs to improve the health
and welfare of our country. The HHS request includes $448.8
billion in total outlays, an increase of $29.2 billion, or 6.3
percent over fiscal year 2002 levels.
As we should expect, this budget provides substantial
increases for protecting our Nation against bioterrorism. The
budget request totals $4.3 billion for this effort. As you
know, Mr. Secretary, our committee has taken intense interest
in bioterrorism over the years, and we hope to have legislation
on this issue to the President very soon.
I look forward to continuing to work with you to ensure
that we never have to face the reality of a bioterrorism
attack, and I am certain that this is an area where we all
agree that prevention is certainly the best policy option.
I would also like to thank you and the President for
focusing on improving access to health care and modernizing
Medicare. These issues are critical and we must work to reduce
the number of uninsured in our country.
The focus in modernizing Medicare to include a
comprehensive prescription drug plan is critical. We must act
quickly to ensure that our Nation's seniors have access to the
best available medical care in the world, and at the same time
we must ensure that Medicare will be available to protect the
next generation of Medicare beneficiaries.
The budget requests an increase for the Centers for
Medicare and Medicaid services, CMS. I have been very pleased
with the work that we have completed to improve and streamline
the operation of CMS.
I hope that soon we will have a package of regulatory
relief legislation from the Senate. It has been over there for
quite a while. This is essential legislation that will help you
continue to improve CMS' accountability, and responsiveness to
beneficiaries and providers.
Mr. Secretary, the members of this committee and I look
forward to working closely with you and the President to
deliver policies that address these very difficult problems. We
must protect our Nation against bioterrorism, help the
uninsured, improve our health care system, and modernize
Medicare. I now yield to my good friend, Mr. Brown, of Ohio.
[The prepared statement of Hon. Michael Bilirakis follows:]
Prepared Statement of Hon. Michael Bilirakis, Chairman, Subcommittee on
Health
Good morning, I now call this hearing to order. I am extremely
pleased to welcome the Honorable Tommy Thompson, Secretary of the U. S.
Department of Health and Human Services. Mr. Secretary, I would first
like to commend you on your leadership throughout the last year. You
have demonstrated remarkable capacity and ingenuity in the face of
unforeseen hardships--thank you sir. In particular, your leadership has
been critical in developing our Nation's capacity to respond to the
threat of Bioterrorism.
The purpose of today's hearing is to discuss the priorities of the
Department as reflected in the Administration's FY 2003 budget request.
To facilitate a dialogue with the Secretary, which Ranking Member Brown
and I are both anxious to do, I hereby request unanimous consent that
the opening statement of all Members other than the Chairman and
Ranking Member be limited to one minute, with full statements submitted
for the record.
The Department of Health and Human Services (HHS) Fiscal Year 2003
budget continues our efforts to develop systems and programs to improve
the health and welfare of our country. The HHS request includes $488.8
billion in total outlays--an increase of $29.2 billion, or 6.3% over
fiscal year 2002 levels.
As we should expect this budget provides substantial increases for
protecting our Nation against bioterrorism. The budget request totals
$4.3 billion for this effort. As you know, Mr. Secretary, our Committee
has taken intense interest in bioterrorism over the years, and we hope
to have legislation on this issue to the President very soon. I look
forward to continuing to work with you to ensure that we never have to
face the reality of a bioterrorist attack. I am certain this is an area
where we all agree that prevention is the best policy option.
I would also like to thank you and President Bush for focusing on
improving access to health care and modernizing Medicare. These issues
are critical and we must work to reduce the number of uninsured in our
country. The focus on modernizing Medicare, to include a comprehensive
prescription drug plan is critical. We must act quickly to ensure that
our Nation's seniors have access to the best available medical care in
the world. At the same time we must ensure that Medicare will be
available to protect the next generation of Medicare beneficiaries.
The budget requests an increase for the Centers for Medicare and
Medicaid Services (CMS). I have been very pleased with the work we have
completed to improve and streamline the operations of CMS. I hope that
soon we will have a package of regulatory relief legislation from the
Senate. This is essential legislation that will help you continue to
improve CMS's accountability and responsiveness to beneficiaries and
providers.
Mr. Secretary, the members of this Committee and I look forward to
working closely with you and the President to deliver policies that
address these difficult problems. We must protect our Nation against
bioterrorism, help the uninsured, improve our health care system, and
modernize Medicare. I now yield to my good friend, Mr. Brown of Ohio.
Mr. Brown. I would like to thank the chairman, and thank
the Secretary for joining us today. I respect your leadership,
Secretary Thompson. I wish my message could be more positive
this morning, however.
With all due respect, the administration has not given us
much to work with. There are a couple of initiatives in the
budget that makes sense from a policy perspective, and as the
chairman said, the Bioterrorism Preparedness Provisions come to
mind.
Then there are a number of initiatives which would make
sense if they were not undercut elsewhere in the budget. For
example, you rightly invest generously in NIH, which supports
research into new medical treatments, but you cut funding for
HRQ, which plays a crucial role in communicating that research
to the medical community and to the public.
You create a new program called the Healthy Communities
Innovative Initiative that targets chronic conditions, like
diabetes, and asthma, and obesity. More power to you, but then
you starve well respected and successful programs at CDC, and
you guessed it, that target chronic conditions like diabetes,
and asthma, and obesity. It makes little sense.
The administration puts money in the budget for health
insurance tax credits, ostensibly to reduce the number of the
uninsured, but then it doesn't propose rate regulation or
guaranteed issue, or the other individual insurance market
reforms that must be enacted if we want individuals to actually
use those credits.
And although we know that 900,000 children will lose health
insurance during the 3 year lag in S-CHIP funding, the budget
doesn't correct for that. The President reinforces the health
care safety net, while simultaneously cutting hole in it.
You increase funding for community health centers and the
National Health Service Corps, and I applaud that, but you
eliminate the community access program which helps stretch
limited resources to reach as many uninsured individuals as
possible.
President Bush cuts funding for public hospitals, and
children's hospitals, both of which provide life-saving care to
the uninsured. The bottom line, Mr. Secretary, is that it is
difficult for me to treat this budget as if it is a legitimate
spending blueprint.
It isn't a logical or even viable spending blueprint. It is
a political document. This budget pursues two basic goals, both
of them political. One, President Bush is going after the
entitlements, Mr. Secretary.
He is using this budget to means test Medicare and provide
drug coverage outside the Medicare benefits package, knowing
full well that Medicare's future depends on its ability to
deliver comprehensive health coverage and its availability to
all seniors, regardless of income.
They are using this budget to further the goals of your
HIFA waivers; that is, you are using waivers, and in this case
prescription drug waivers, to transform Medicaid from a Federal
entitlement into a State block grant.
The second objective is as insidious as the first. The
President stars major health care priorities to make room for
more tax cuts. This budget literally ignores millions of
retirees who can't afford their prescriptions. It simply
ignores them.
This budget ignores tens of millions of Americans who can't
afford health insurance. This budget doesn't even maintain
existing public health programs like Ryan White at sustainable
levels.
The budget doesn't include a dime to compensate for current
and projected cuts in Medicare physician payments, even though
no one, no one as far as I know, thinks that these cuts are
appropriate.
There are no dollars in the budget to repeal the completely
arbitrary $1,500 cap on therapy services, and no dollars to
restore the cuts in graduate medical education funding, and no
dollars to restore the 15 percent cut in home health.
But there is a $590 billion tax cut in the bill aimed, and
in the budget, at tax breaks which overwhelmingly go to the
most advantaged, and wealthiest of our constituents. This year
the President is spending $590 billion on another tax cut after
draining much of the surplus last year with a $1.6 trillion tax
cut, instead of providing the prescription drug coverage to
seniors, and addressing other pressing concerns.
That's what makes this a political document and not a
budget. Did the administration think that the implications of
the proposal wouldn't register with us, and that by going
outside of Medicare to cover a basic health care need that you
could weaken support for Medicare down the road.
This budget co-ops the prescription drug issue in an effort
to begin unraveling Medicare and Medicaid, two public programs
that have done more to promote the well-being of retirees,
disabled Americans, and millions of low income children, than
any other initiatives in this Nation's history.
And this budget unveils yet another multi-billion dollar
tax cut, siphoning off dollars that could be used to provide
prescription drug coverage to seniors. Forgive me, Mr.
Secretary, if I don't congratulate you on this budget.
Forgive me if a lot of us on this side of the aisle second-
guess every sentence and every number in this budget. This
administration has chosen tax cuts for the most affluent,
instead of prescription drug coverage for our seniors.
With all due respect to you and the positive contributions
that you, Mr. Secretary, personally have made, but once you
launch an assault on Medicare and Medicaid, trust and
forbearance go out the window.
When it comes to this budget, I only hope that Congress
discards this wolf in sheep's clothing, and starts again from
scratch. Thank you, Mr. Chairman.
Mr. Bilirakis. The chairman of the full committee, Mr.
Tauzin, for an opening statement.
Chairman Tauzin. Thank you, Mr. Chairman. I want to thank
you for holding this hearing and we are very fortunate to have
a dear friend of this committee, Secretary Tommy Thompson,
testify before us today.
And, Mr. Secretary, I want to thank you for appearing again
before the subcommittee, and helping us understand this budget
today. In the short year that you have been here, we have seen
a dramatic shift in both the culture and the responsiveness of
the Department of Health and Human Services.
We have seen this administration place health care very
high on its agenda, and we have seen a real commitment to
addressing the problem of the uninsured and strengthening the
Medicare program, all issues that this committee is vitally
interested in.
And I want to commend you for your dedication on these
issues, and particularly your efforts in the war on terrorism.
Your department, and your leadership, I think has demonstrated
the will of the American people in combating this threat.
And the skill in which you have engineered the improvements
in the departments under your jurisdiction to help America be a
little safer is indeed extraordinary, and I want to thank you
for that.
Today we are focusing obviously on the 2003 budget
proposal, and from all indications it is a good budget. And in
case people have not focused on this, this budget increases HHS
spending by 6.3 percent.
It builds on the President's commitment to combat terrorism
and to strengthen Medicare, and to double low income or to
expand rather low income Americans' access to health care, and
to double the NIH budget.
The NIH is the premier institute for research in America on
health care, and is doing such vital work to find not only the
causes, but the cures for so many diseases that ravage our
citizens.
You came up here last year to tell us about your plans for
streamlining the CMS, and I frankly have to tell you that you
have done an excellent job. We are interested in knowing what
are the next steps in that process, and what we might do.
When we created our patients first initiative, we learned a
great deal, and it was as a result of that initiative and your
work that we passed the regulatory relief and contracting bill
on the floor with almost a unanimous vote for that effort.
During your testimony today, we are interested in learning
what else we might do to lift regulatory burdens on providers
and beneficiaries. We think again last year was just a first
step, and I hope that you do, too.
We are deeply concerned about your efforts to modify the
privacy rule, and obviously research and medical advances in
wellness for our citizens depends upon the collection of
valuable information.
And we feel that the rules still threaten that effort, and
we encourage you to continue your efforts to reform it, so that
we protect a patient's privacy, and also facilitate the
gathering of vital information, not only personal identifiable
information, but information critical to research and
development of new products and services.
We have got an ambitious health agenda, Mr. Secretary. We
want to finalize the bioterrorism bill, and as you know we are
on that conference now. We are going to reauthorize PDUFA as
soon as this committee can get to that important issue, and I
think that is going to happen within a month.
We are working as you know to modernize Medicare and to
reform it, and to produce a prescription drug benefit for the
citizens of this country. We are committed to producing that by
late May and June of this year on the House floor.
And we want to strengthen the welfare reform laws and
enhance our safety net programs, and we invite your help and
your counsel as we go forward. I want to mention that only a
liberal viewpoint would define this budget as spending money on
tax cuts.
The President is not spending money on tax cuts. The
Congress voted to cut Americans' taxes, and to reduce the
amount of money coming into this government that was building
up surpluses.
We are not spending money on tax cuts. That is an
extraordinary view that I hear around this capital. We are
indeed spending more money, however, on HHS, and under your
leadership we expect that money to indeed strengthen our
programs and to work with us indeed to finalize our plans to
promote a healthy America, and I thank you for that effort,
sir, and appreciate you being here.
[The prepared statement of Hon. W.J. ``Billy'' Tauzin
follows:]
Prepared Statement of Hon. W.J. ``Billy'' Tauzin, Chairman, Committee
on Energy and Commerce
Chairman Bilirakis, thank you for holding this very important
hearing. We are very fortunate to have Secretary Tommy Thompson, a true
friend of the Committee, testify before us today.
In just one short year, we have seen a dramatic shift in the
culture and responsiveness of the Department of Health and Human
Services. We have seen this Administration place health care high on
its agenda. We have seen a real commitment to addressing the problem of
the uninsured and to strengthening the Medicare Program.
Mr. Secretary, you are to be commended for your dedication to these
important issues, as well as your efforts in the war against terrorism.
Agencies under HHS jurisdiction had one of the most difficult jobs last
fall, yet they handled the bioterrorism crisis with great skill. On
behalf of our Committee, let me say that we are grateful for your work.
Today, we are focusing on an issue that is particularly timely. We
will be reviewing the Administration's Fiscal Year 2003 Budget
Proposal. From all indications, this is a good budget. HHS spending
increases by 6.3 percent from 2002. The budget builds upon the
President's commitments to combat bioterrorism, to strengthen Medicare,
to expand low-income Americans' access to health care services, and to
double the NIH budget by next year. As a society, we should be thankful
that this Administration has focused so many resources on these
important health care priorities.
Mr. Secretary, last year you came before our Committee to discuss
some of your plans to streamline CMS, the Agency formerly known as the
Health Care Financing Administration. On this issue, you've also done
an excellent job.
In fact, in response to some of your recommendations and
information we obtained from a Committee initiative--Patients First--we
were able to pass a regulatory relief and contracting bill on the floor
with an almost unanimous vote. During your testimony today, we are
interested in learning whether you have additional suggestions about
how we can further reduce regulatory burdens on providers and
beneficiaries. Last year's legislation was only a first step. We
welcome your input on how we can go even further.
We are also very interested in learning how you plan to modify the
medical privacy rule, a rule that if left intact, will place
significant new burdens on medical providers, researchers and patients.
Many Members of our Committee and I remain concerned about how the rule
defines de-identified data for research purposes. We've heard from the
research community that this provision will have a chilling effect on
our ability to collect valuable patient information and that bothers
me. This rule still needs some significant changes, so I ask you to
keep working with us to improve the regulation and strike an
appropriate balance between the legitimate privacy interests of
patients and our medical system's need to utilize patient information
to promote wellness.
There are so many important issues that we want to discuss with you
today. As you know, our Committee has a very ambitious health care
agenda, ranging from finalizing a bioterrorism bill, to reauthorizing
PDUFA, to modernizing Medicare and adding a prescription drug benefit
to the Program, to strengthening the welfare reform laws and to
enhancing our safety net programs for low-income Americans. We could
use your help to move these bills through the legislative process and
to get them signed into law this year. The Administration's budget
rightfully focuses on all of these issues and, while our positions may
differ on some of the details, we know that this Administration is
committed to putting patients first and to promoting a healthy America.
Mr. Secretary, as always, we are grateful that you are appearing
before our Committee. We look forward to hearing your perspective on
the Administration's health care priorities and to working with you to
address the important health care issues confronting our country. Thank
you.
Mr. Bilirakis. Mr. Pallone for an opening statement.
Mr. Pallone. Thank you, Mr. Chairman.
Mr. Bilirakis. All opening statements hereafter are limited
to 3 minutes, a succinct 3 minutes I might add.
Mr. Pallone. Thank you, Mr. Chairman. With all due respect
to the chairman of our full committee, who mentioned liberal
viewpoints, I don't know whatever you want to tag it, but the
reality is that I think that Democrats are concerned about the
fact that this budget really doesn't address the concerns of
the average American.
I don't know if that is a liberal or a conservative
viewpoint, but that is our viewpoint. Mr. Secretary, President
Bush's budget in my opinion is proof that health care is not a
priority of this administration.
Unfortunately, without dramatic changes made by Congress
during the budget and appropriations process, more Americans
will be uninsured, seniors will go without a true Medicare
prescription drug benefit, and more seniors will lose their
doctors due to inadequate Medicare reimbursements from the
Federal Government to their doctors.
And during this economic downturn the President's budget is
particularly cruel to the uninsured, poor, and disabled, who
rely on Medicaid to help with health care costs. The President
has proposed a $9 billion cut over a 10 year period in Medicaid
payments to public hospitals, and comes at a time when Medicaid
rolls are expected to increase by 3 million people, including 2
million children.
If the administration is successful in making these cuts at
a time when more people need Medicaid, we are going to see a
dramatic increase in the number of Americans uninsured. And
these cuts would not only harm Medicaid recipients, but also
aggravate fiscal problems plaguing most States, including my
home State of New Jersey.
I am also disappointed that the President rehashed a token
prescription drug benefit program that does nothing to help
millions of middle income seniors who are not struggling to pay
for their prescription drugs.
The President requested $77 billion for prescription drugs
for seniors, and an analysis shows that this would only cover
about 3 million of the 40 million seniors. This attempt at
proposing a low income drug benefit is clearly a political
attempt for the President to avoid fulfilling a promise that he
made to provide decent health care to seniors.
And I believe that any serious prescription drug plan must
include all seniors who are Medicare beneficiaries. Another
sham proposal offered on prescription drugs is the prescription
drug discount card.
A recent GAO report clearly indicated that savings with
this card would be slim to none. The discount cards are a mere
gimmick, and again this attempt is a political ploy for the
President to back down on seniors' need for a comprehensive
prescription drug benefit.
Finally, the President has severely undermined the need to
provide health care to the uninsured. His approach at providing
inadequate individual tax credits leaves unemployed and
uninsured workers with little leverage over insurers who charge
premiums between $3,000 to $7,000 a year.
I believe that in order to guarantee the uninsured a
package of necessary benefits the government needs to insure
more people by expanding the S-CHIP program to parents of
eligible children, and allowing people 55 and older to buy into
the Medicare program.
Another part of the solution is to expand employer-based
health insurance, in which employers would be required or
somehow provided an incentive to provide health insurance to
their employees in return for government subsidies.
And I don't say this, Mr. Secretary, just to be partisan,
or just to be mean, or something of that nature. I really
believe that health care is a major crisis that we face right
now, and more needs to be done by the administration. Thank
you.
Mr. Bilirakis. Mr. Upton for an opening statement.
Mr. Upton. Thank you, Mr. Chairman, and I have a full
statement for the record. Mr. Secretary, we welcome your
participation here. I want to thank you again for the continued
commitment of this administration and you to double the NIH
budget, and we continue to be on that track within a 5 year
time span.
And it is so important that we find a cure for cancer,
cystic fibrosis, and so many different things. I also want to
welcome your participation, as I know it is there, and the
administration's, as we go through a successful effort to come
up with a prescription drug plan that will benefit our seniors.
I know that we are going to spend some time this morning on
fixing the physician fee as well. I have heard from so many of
my physicians across Southwest Michigan, and I think our State
has been impacted by more than $100 million in reductions in
payments, and an average of more than $5,000 per physician.
I look forward to working with you and the administration
so that we can try to correct this problem. I yield back the
balance of my time.
[The prepared statement of Hon. Fred Upton follows:]
Prepared Statement of Hon. Fred Upton, a Representative in Congress
from the State of Michigan
Mr. Chairman, thank you for holding today's hearing on the
President's fiscal year 2003 health care budget priorities. Last year,
we were at peace and had the luxury of budget surpluses. This year, we
are waging a valiant war against terrorism abroad, moving swiftly to
securing our homeland against future terrorist attacks, and slowly
emerging from a recession. We are going to have to set priorities and
make some very difficult choices in this budget cycle, and this hearing
will help us focus on these challenges.
I share President Bush's and Secretary Thompson's strong commitment
to enhanced funding for biomedical research. That has been one of my
top priorities since coming to Congress in 1987, and I am pleased that
the President's budget includes the final payment to fulfill the
promise to double the NIH budget over five years. Funding biomedical
research is one of the best investments of taxpayer dollars that we
make. It is an investment that pays enormous dividends in improved
health and quality of life for millions of Americans and millions
across our world and in health care cost savings over the long term.
Today, one in twelve Americans is a senior citizen. In just one
generation, one in five Americans will be. So we must invest now in
research on Alzheimers, Parkinsons, cancer, and other debilitating
diseases.
And demographics dictate that act now to modernize and financially
stabilize the Medicare program. When we created the Medicare program in
1965, most seniors' greatest fear was developing cancer or having a
heart attack and being financially drained by lengthy or frequent
hospitalizations. Prescription drugs played a relatively minor role in
treatment. Today, millions of seniors are really struggling with the
high cost of the prescription drugs they need. No senior citizen should
be forced to forego needed medication, take less than the prescribed
dose, or go without other necessities in order to afford life-saving
medications. I look forward to working with the President and HHS to
develop a bipartisan Medicare prescription drug benefit as part of a
Medicare modernization package during this session of Congress.
One area that I believe must be a priority and that is
unfortunately not reflected in the President's HHS budget is fixing the
Medicare physician fee schedule. Fixing the fee schedule is not just a
matter of fairness. Unless we act in a timely and thoughtful way to
correct the problems that are resulting in significant and
unanticipated cuts in Medicare reimbursement to doctors and other
health professionals who are paid under the fee schedule, we are going
to put both access to care and quality of care for today's and
tomorrow's Medicare beneficiaries at very serious risk. Let me talk
about the situation in Michigan as an example. Unless we fix the fee
schedule problem, Michigan physicians stand to lose $105 million this
year, an average loss of over $5,000 per physician. This could well be
enough to push physicians already contemplating retiring or cutting
back their practices over the edge. Some 47 percent Michigan's family
physicians are 50 years old or older, and according to a national
survey, about 80 percent of physicians in this age group are already
thinking about leaving or reducing their practices. With 13.2
physicians per thousand Medicare beneficiaries, Michigan is below the
national average. So mitigating the cutbacks in 2002 and fixing the fee
schedule to produce stable and equitable future updates is particularly
crucial to continued access to care and quality of care for Michigan
Medicare beneficiaries.
Fixing the fee schedule is also particularly critical to access to
care and quality of care in the rural areas of my state and across
America. Rural populations have higher concentrations of the elderly,
and rural elderly Americans tend to be sicker and less well insured
than their urban counterparts. This makes health care providers in
rural America particularly dependent upon Medicare payments, and
particularly venerable to problems in payment policies that result in
payments substantially below their true costs of providing care. And
when rural communities cannot recruit doctors, nurses, and other health
care practitioners, hospitals close, and not only Medicare
beneficiaries, but entire communities lose access to care.
It is important to note that problems in the physician fee schedule
affect many other health care practitioners whose reimbursement rates
are pegged to that schedule. In many rural communities, nurse
practitioners, nurse midwives, nurse anesthetists, and physician
assistants are vital to ensuring access to care and quality of care. If
these rural communities cannot attract or retain these able health care
providers, everyone suffers.
So, again, it is vitally important that we act in a timely and
thoughtful way to ensure that Medicare payment policies are fair and
reflect the real cost of providing care.
At the same time that we are giving priority to ensuring that
Medicare beneficiaries are protected against high out-of-pocket health
care costs and have ready access to physicians' services and the
services of other health professionals, we must also focus on extending
coverage to the uninsured. I was pleased to see that the budget
recognizes the vital role that community health centers play in
addressing the health care needs of the uninsured and Medicaid
populations in my district and across the country. The increased
funding in the budget for this program and for the National Health
Service Corps Scholarship and Loan Repayment programs will go a long
way to helping increase the number of centers and the number of
individuals served.
I look forward to working with my colleagues on the Committee and
with you, Secretary Thompson, on these priorities. It will not be easy,
but we must meet the challenge of balancing competing priorities in a
way that strengthens our nation's health care delivery system and
commitment to biomedical research.
Mr. Bilirakis. Thank you. Ms. Capps.
Ms. Capps. Thank you, Mr. Chairman. I also want to thank
Secretary Thompson for coming to discuss the health budget with
us. I was impressed with the goals and priorities outlined in
the President's budget, and I was pleased about the resources
that he has requested for some of the priorities.
The administration's $4.3 billion request to address
bioterrorism and threats is a good commitment for the coming
year, and the $3.7 billion increase for NIH is the proper
completion of the effort to double our Nation's health research
budget.
These are resources that will make a real difference in the
lives of Americans. So I agree with many of the goals laid out
in the budget. For example, the commitment to strengthening
Medicare.
But the details of this proposal do not substantially move
us toward these goals. The President has stated that a
prescription drug benefit for seniors is a priority. Yet the
funds requested by the administration for this purpose, and the
low income assistance program described here are woefully
inadequate to meet the need.
It simply leaves out too many seniors. Even the Speaker of
the House has said that $300 billion is necessary. The
administration's $190 million proposal is just not enough to
provide meaningful help to the seniors.
And the budget does not include any resources to assist the
physicians and other health care providers facing significant
cuts in their Medicare fees this year. This is such a major
hole in the budget that you, yourself, Mr. Chairman, circulated
a letter asking the budget committee to rectify this problem.
I was pleased to support this effort in the legislation
that you introduced last year. Turning to nurses, I have been
pleased that Secretary Thompson has expressed support for
efforts to address the nursing shortage, and it was good to see
a small increase in Federal resources to that end.
With your support and the support of many of my colleagues
up here today, both the House and Senate were able to pass
versions of the Nursery Investment Act. I hope that we will be
able to count on your further support to move the bill to final
passage and then to fully fund its provisions.
Our health care system desperately needs this help, but I
was disappointed that the budget cuts nearly 75 percent of the
funding devoted to other health professions. In this era, we
should be boosting funding for these programs, and not cutting
it.
The terrorist attacks have made it abundantly clear how
important prepared medical professionals are for our Nation's
security. I hope that we can restore that funding before we
regret its loss.
There are several other cuts that seem counterintuitive to
me as well. The budget eliminates the Community Access Program,
and this program helps communities. The budget also cut $57
million from the CDC's chronic disease programs. This is the
time that we should be increasing efforts there. These are some
of the examples.
Mr. Bilirakis. The Chair apologizes, gentlelady, but your
time is up.
Ms. Capps. I look forward to hearing the Secretary. Thank
you.
Mr. Bilirakis. Mr. Greenwood for an opening statement.
Mr. Greenwood. Thank you, Mr. Chairman. I will take your
admonition to be brief, and Mr. Secretary, I look forward to
your testimony.
In a time when revenues are way down from what we had hoped
they would be because of the economy, it is really
extraordinary that we have been able to have a budget here that
in fact increases spending for health care programs by 6
percent.
The real challenge for all of us is to try and find ways to
save on one piece of the budget so that we can spend more in
other places.
And the one place that I am particularly pleased to see
your budget is that it recognizes a need to get savings from
the average wholesale price of drugs, and you anticipate that
we can save $5 billion plus over the next 5 years, and I look
forward to working with you both legislatively, and if
necessary, administratively, to get that job done.
It is a real place where we are spending money for, and no
good result, and we need to fix that, and I yield back the
balance of my time, Mr. Chairman.
Mr. Bilirakis. I thank the gentleman for yielding. Mr.
Dingell for an opening statement.
Mr. Dingell. Mr. Chairman, I thank you, and I commend you
for this hearing. Mr. Secretary, welcome to the committee. It
is a pleasure to see you here, and I thank you for your
kindness to us.
All of us are keenly interested in the budget of your
department, and the programs that affect so many of this
Nation's citizens. I look forward to hearing from you, Mr.
Secretary, about the President's proposals to help seniors with
the cost of prescription drugs, and to build critical health
care research, and provide uninsured children and parents with
health care coverage.
I am pleased to note that the President's fiscal year 2003
budget for HHS includes a significant increase in funding for
anti-bioterrorism activities, and that is good. Chairman Tauzin
and I, along with our committee members, have collaborated on a
bill in a bipartisan fashion, which would authorize new
resources for hospitals and other health care providers to
prepare for potential bioterrorist attacks.
The President's budget includes support for initiatives
like those in our bipartisan bill, which is currently in
conference with the Senate.
Unfortunately, Mr. Secretary, the remainder of the budget
for HHS does not give me much cause for enthusiasm. Lack of
access to reportable prescription drug coverage through
Medicare is the most pressing problem that seniors and disabled
citizens face today.
The President's budget includes no comprehensive Medicare
drug benefit at all. The only proposed benefit is for low
income seniors, and in this case the benefit is not even
defined.
Moreover, the amount that the President's budget allocates
for all Medicare for the next 10 years equals 11 percent of the
amount of the Congressional Budget Office estimates that
seniors will need to spend on prescription drugs during the
same time period.
I doubt if anyone would agree that this amount of funding
will provide meaningful benefits to our senior citizens. The
President's budget also includes some troubling proposals for
the uninsured, and I fear will do more harm than good.
The President's budget would allow States to expand
Medicaid and CHIP programs to cover more uninsured people
through the Medicaid waiver process. But since these waivers
must then be budget neutral, the only way States can expand
coverage is by cutting the benefits of people already enrolled
in Medicaid and CHIP.
And that is hardly a comforting thought in a time when both
providers and beneficiaries of these programs are already
significantly short of the level of benefits that they in fact
need.
Instead of focusing precious Federal dollars where they are
likely to do the most good, most of the new money that the
budget allocates for the uninsured would go toward tax credits,
a doubtful proposition at best.
The majority of uninsured people are below 200 percent of
poverty, but the President's proposed $3,000 health care tax
credit per family covers first of all less than half of the
average cost of a family insurance policy.
Low income families could spend over 15 percent of their
total income just to buy such a policy, and then hundreds of
dollars more in deductibles and co-payments just to receive
services.
Payments to Medicare physicians decreased this year, Mr.
Secretary, as you very well know, by 5.4 percent, and are
expected to decrease again in 2003 and 2004 as well. This, and
the cuts which are afflicting other parts of the health care
industry, offer a real threat, not just to the industry, but
very frankly to the patients and the beneficiaries of those
programs.
The administration has expressed interest in correcting
this shortfall, but the President's budget implies that
payments to other providers would be cut in order to address
physician fees. Again, robbing Peter to pay Paul.
The only increased payments to Medicare providers are for
managed care plans, despite the fact that 86 percent of the
seniors are enrolled in fee for service programs, clearly a
mis-allocation of resources.
Finally, the public health safety net takes a major hit at
a time when the demand for these services is increasing. The
bill haphazardly cuts, freezes, or inadequately increases the
resources for programs that serve unmet needs.
The Centers for Disease Controls' chronic disease
prevention programs are cut, as are rural health services, drug
abuse prevention, and children's medical education. The nursing
shortage has not disappeared, and yet funds for health programs
are slashed by over 70 percent.
The Community Access Program, which provides grants to
local groups to coordinate services for the uninsured, is
eliminated. Funding levels are frozen for the maternal and
child health block grant, and family planning services, Healthy
Start, and Ryan White AIDS programs.
Mental health activities are frozen, despite the fact that
most people, and more than ever, could benefit from these
crucial services given the stresses of 9-11. Mr. Secretary, you
have my personal sympathy.
I know that you would have liked to have done, but
regrettably you have not been able to do so. But Congress
certainly wants to do better, and the people certainly expect
that better will be done.
And we know that your responsibilities will be multiplied
by the Public Health Service System tests that were imposed
last fall. You responded well, but all of us know that more
needs to be done.
I hope that we can work together to strengthen our Nation's
health care programs in the coming years, but the budget seems
to stand in the way. Thank you.
Mr. Bilirakis. Mr. Deal for an opening statement.
Mr. Deal. Thank you, Mr. Chairman. Mr. Secretary, welcome
to the committee, and I thank you for coming today, and I at
the outset commend you for the efforts that you have made in
running your department and removing many of the bureaucratic
mazes that have perhaps been the highlight of that agency for
far too long.
I think you have made tremendous progress in that regard,
and we all look forward to working with you to make the process
work better in the future.
You know, a 6.3 percent increase, I think for most of the
small businesses and employees in my district, if they knew
they were going to get a 6.3 percent next year, and in a time
of slower economy, they would be very pleased.
I think the challenge that obviously you face, and this
committee, and the Congress itself faces, is allocating our
priorities within those budget constraints. Certainly we look
forward to working with you as to your priorities, and look
forward to your message in that regard today.
Some of us obviously recognize that there are some
discrepancies. Upper payment limits, for example, in States
like mine, we feel we have not been treated fairly, and some of
that is due to legislation of this body, and hopefully we can
correct that, and others would be due to administration within
your agency.
And we look forward to working with you, because when we
talk about public funds and benefits to those that are the
Medicaid eligible individuals, it ought to be a fair treatment
across the Board, and not based on who has the political clout
within the Congress.
And we look forward to working with you to resolve some of
those issues. Thank you, Mr. Secretary. I yield back the
balance of my time.
Mr. Bilirakis. Mr. Stupak for an opening statement.
Mr. Stupak. Thank you, Mr. Chairman. Welcome, Mr.
Secretary. I was going to point out in my opening statement the
concerns that I raised last week at the PDUFA hearing, and I
understand that a report was submitted to you some time ago,
and I understand that we received it this morning.
At last week's hearing, I indicated that I was concerned
about enforcement action under PDUFA we are under, and in your
testimony urging us to quickly approve PDUFA-3. I was concerned
about the post-marketing surveillance of drugs, and the reports
that were supposed to be completed.
And we were using the figures last week, and about 90
percent of the post-marketings were not completed, and I was
concerned about enforcement action, and what enforcement action
the FDA and others have in order to make sure that these
studies are done in time.
In looking at page 10 of the report, and again I have not
had time to read it as it was clearly just given to us today,
it shows that in biologics, approximately 14 percent, 301
commitments have been made, and only 44 post-study reports have
been completed, and in total under FDAMA, twenty-four hundred
total commitments have been made, but only 882 reports have
been completed.
And if my math is correct, that is about 14 percent
completion for biologics, and about 36 percent for the other
prescription drugs out there. Our concern and the concern of
the committee was how do you enforce this.
I mean, if you are in FDAMA-2, and he wants to go to FDAMA-
3, and if we are not enforcing FDAMA-2, what changes would
there be in FDAMA to make sure that there is--I'm sorry, PDUFA,
PDUFA, to make sure that there is enforcement, and that these
studies are done in a timely manner so you get the reports you
want.
As in Serzone, you have been waiting for 6 years for a
report, and Accutane, 15 years for a report. What is your
remedy and what is your enforcement? So some of us have thought
about subpoena power, and also tying the civil penalties into
the sales of these drugs while these studies remain not
delivered to the FDA.
We are trying to find a way to expedite the process so the
safety and effectiveness of these drugs can be given to the
American public. So I will be looking forward to your comments
on that.
Also, the imports question. You were here last year, and we
had a number of questions, and I believe it was in June on drug
imports, and I will have a number of questions along those
lines about that situation.
And with that, Mr. Chairman, I know that you want to limit
our time, and I just want to give some sense of where I am
going with my questioning, and I yield back the balance of my
time.
Mr. Bilirakis. I thank the gentleman. Dr. Ganske.
Mr. Ganske. Thank you, Mr. Chairman, and thank you Mr.
Secretary. The 6.3 percent increase reflects the additional
costs of combating bioterrorism and I am glad that the
administration is working on that.
We are also fulfilling our commitment to double NIH
funding, and I think that is important, too. Now, Mr.
Secretary, my points are these. States like Iowa, my home
State, are hurting with Medicare and Medicaid. Big time.
Iowa is fiftieth out of fifty States in Medicare
reimbursement. Iowa's rural hospitals in particular are
hemorrhaging red ink. Iowa's doctors and other providers are
telling us that they can't take any more new Medicare patients.
Our Congressional budget and the administration's, I think,
must find some additional funding for Medicare and Medicaid. I
don't think we can fix this problem in a budget neutral way. We
need additional funding if we are going to maintain services.
So where do we find that money? Well, here are a few ideas.
How about moth-balling the space station. That is about $50 to
$70 billion. Maybe I will get some more bipartisan support on
Tim Roemer's and my amendment on that.
How about howitzering the Crusader? That's billions of
dollars. There is an awful lot of pork in the budget and
President Bush has talked about this. I think we can find some
additional funding.
With that additional funding, we need to increase real
hospital DRGs, and we need to fix the wage index, and we need
to freeze the physician payment to where it was last year, and
then fix the formula for future years.
The votes are there for that, both in the House and in the
Senate overwhelmingly. And I would say this. I have not even
talked about prescription drug costs. I am pleased that the
administration incorporated some of the ideas from H.R. 1387,
the Drug Availability and Health Care Access Improvement Act of
2001, which I introduced, along with Representative Wynn.
We have bipartisan support for that from across the
ideologic spectrum. But I would say this. What good will it due
my senior citizens in rural and small town Iowa if they have a
prescription drug benefit if they no longer have a hospital and
a doctor to go to in their community?
And that is how important this is in terms of funding, and
finding some additional funding. I look forward to working with
you, Mr. Secretary, and the aqministration, and I don't mean to
say that Congress doesn't have a big say in this.
My colleagues on the other side have complained about the
tax cut. Well, in response, I think there is a lot of spending
items that are wasteful, and that we could do away with, and
divert that funding over into the health care side. And with
that, I will yield back, Mr. Chairman.
Mr. Bilirakis. I thank the gentleman. Mr. Wynn for an
opening statement.
Mr. Wynn. Thank you, Mr. Chairman. Let me also welcome the
Secretary. I am looking forward to his comments. I know that we
all are, and so I will be brief. But it seems as though the
committee has used these opening statements as an opportunity
to add their personal indignations, and so I will probably
follow suit.
And only to say that everyone talks about additional
spending, whether it is prescription drugs, rural hospitals,
increasing access to care for uninsured, and the fact of the
matter is that we don't have enough money.
You are to be commended for the 6.3 percent increase that
you are advocating, and I don't think it is insignificant, but
the needs are far greater, and the fact of the matter is that
we have made a big tax cut predicated on a surplus.
When we had the surplus the tax cut made sense. The
question now before us is that we are now in a deficit, and we
don't have a surplus, and we are facing a deficit, and going
into the Social Security Trust Fund, and how can we justify
continuing this tax cut, and then sit here and bang on you for
more of this, and more of that.
And whether it id diabetes, or obesity, prescription drugs,
or whatever, these are good issues, and we ought to fund them,
and I think we ought to really take a serious look at whether
or not we can afford a tax cut at a time or at a level of
reduction.
With that, I will conclude my comments, and again, I look
forward to your statements.
Mr. Bilirakis. Dr. Norwood for an opening statement.
Mr. Norwood. Thank you very much, Mr. Chairman, and thank
you for the hearing, and, Mr. Secretary, thank you for joining
us today. I want to tell you that I think you have one of the
most difficult jobs in Washington, DC.
Mr. Thompson. I agree with you, more so now than ever.
Mr. Norwood. I also think you are doing a wonderful job,
and I want to send my compliments to Dr. Crawford, who
testified before us last week. He has done a great job, and I
thank him personally for producing the agreement for the
reauthorization of PDUFA in such lightening speed time.
That to me is a fairly good indication of how well your
agency is actually functioning. I know that we all who are
sitting here are saying we want more and more money for health
care.
And I think the only reason we are doing that is that the
American people are saying that to us, and the American people
have made it fairly clear that when they get to be 65 that they
want free health care, and I don't think anybody on this full
committee is ready to vote to abolish Medicare, and Medicaid
for that matter.
So that is really sort of where we are coming from, but you
have a limited budget in which you must work. But I think that
many of us are saying that if we are going to furnish health
care, it needs to be decent health care.
It needs to be where a patient actually does have access to
a doctor. It needs to be a program where physicians in the
country are not trying to get out of as far as they can,
because the sooner they get out, the longer it will take them
to go bankrupt.
In this program, they can get there pretty fast if they
just take on more Medicare patients. I know that your job is to
tell us that we have to be budget neutral, and you know what? I
agree with that.
I just don't think we have to confine that just to your
budget. We all look at the budget of the United States and be
budget neutral in that. There is a great deal of waste in the
Federal Government, and not one member here doesn't know that's
true.
We need to divert funds from wasteful programs and
efficient programs, and put it in health care so we can have a
good program. Now, I have not seen a Presidential budget yet
that I didn't have concerns about, and this one is the same.
I am concerned that the budget does not do enough to ensure
that providers are going to continue to serve Medicare
patients, and it is a fact that they are not. It is going to
stop. Simply put, asking us to be budget neutral is just not
possible to do if we are going to continue with Medicare.
But again we can be budget neutral in your part of the
budget, but we also can be budget neutral in the whole budget
of the United States, and get some money into these programs.
I am concerned that the budget request on Medicaid, AWP, is
going to have a very harmful effect on drug research.
I am concerned about the reductions in health resource
services administration, and health care research and quality
budget, that particularly impact on health care professionals.
We have got to solve this problem, and you have a hard job.
Mr. Bilirakis. The Chair thanks the good doctor. Mr. Green.
Mr. Green. Thank you, Mr. Chairman, and I would like to
thank the Secretary for being here again. I don't know about
our personal indignation at the budget, but obviously in a
process like we have and you had when you were Governor, we all
have differences of opinion.
But just like I don't think we ought to mothball the space
program. I would hope that we would get some more money out of
ethanol, but be that as it may, one man's pork is another
person's important project.
And, Mr. Chairman, I would like to thank you for this
oversight hearing on the budget, and I am again grateful for
our Secretary being here. From the lifesaving research that is
done by the NIH, to the Medicare and Medicaid programs, the HHS
provides such critical services for every American.
And it is imperative that you receive the resources that
you need to continue to improve the health care of all of
Americans. This past year, we realized how important our public
health system is, and we learned that our system is in dire
need of repair.
I am grateful that the President increased his funding for
the CDC and other programs through public health so that it is
better able to combat bioterrorism. But it seems that we have
increased bioterrorism at the expense of other worthwhile
programs.
Health care problems facing our country can't be solved by
one agency or one division. We need to ensure that all
agencies, and not just NIH and bioterrorism, receive adequate
funding.
Unfortunately, the President's budget contains significant
cuts in programs that combat chronic disease, help the
uninsured, and train a new generation of health care providers.
I am particularly concerned because the administration's
decision now for the second year in a row is to zero the
community access program, the CAP program.
CAP enables communities to coordinate and integrate health
care for our Nation's 40 million uninsured by improving the
infrastructure and communication among current agencies that we
have, both on the local level and on the Federal level.
With the decline in the economy and the subsequent rise in
unemployment, more and more Americans are losing their health
insurance, and now should not be the time to cut programs that
the uninsured need to help get through the system.
I am also concerned that the CDC's chronic disease budget
has once again been cut. These programs fund breast and
cervical cancer screening, cancer registries, diabetes
prevention, heart disease, stroke prevention, arthritis
programs, tobacco prevention and cessation, and also obesity
prevention.
These diseases account for 70 percent of all of the deaths
in our country, and more importantly, they are almost all
entirely preventable, and that is what is frustrating.
An ounce of prevention is worth a pound of cure, and I
would like to also point out the shortcoming that has been
point out before, but on the prescription drug benefit for
seniors, and $190 billion creates such a small program for
seniors, and most estimates estimate that we need $450 to $750
billion over 10 years.
And it seems like the administration's proposal would only
buy seniors one pill, and that is the frustrating part. Mr.
Chairman, again, I thank you for the hearing, and I will put my
full statement in the record.
Mr. Bilirakis. I appreciate that. Mr. Shadegg for an
opening statement.
Mr. Shadegg. Thank you, Mr. Chairman, for holding this
important and timely hearing, and thank you, Mr. Secretary, and
welcome here. We appreciate you coming to testify before us.
Now, I want to echo the remarks of my colleague, Mr.
Norwood, with regard to the difficulty of your job, and with
several of the comments by my colleagues on the progress that
has been made.
I think that extraordinary strides have been made in the
last year and I want to thank you for that. I particularly want
to thank you for your advisory committee on regulatory reform.
That committee will be in my hometown of Phoenix as you
know next week, and it is expected to announce its initial
recommendations on EMTALA. EMTALA, while clearly well-intended,
is a law that is not working. It is failing.
And I have worked long hours with the Arizona medical
community on trying to improve that law, and in that effort, I
was successful in persuading your CMS director, Tom Scully, to
come to Arizona in January and spend a day hearing about a
variety of issues.
But particularly about EMTALA and the problems that it is
causing in Arizona, and in Arizona's hospitals, and
particularly in our inner-city hospitals. So I look forward to
working with you on that, and I commend you for that effort, as
well as many others.
I also want to address the issue of the uninsured. I think
that is an issue which our country absolutely must confront.
The chairman held an important hearing on that issue just a few
weeks ago, and one of the witnesses correctly noted that we are
quickly facing a point where our Nation's uninsured may soon
jeopardize the care for millions of other Americans who are
fortunate to have health care.
We simply must face up to the problem of our uninsured,
which is why I am extremely pleased that the President's budget
has put forth a reasonable approach to solving that problem
through refundable health care tax credits.
I think this is a vehicle that is widely misunderstood in
the country, but would give people the ability to choose the
health care they need, and would deal with the funding of
health care for the uninsured, which simply is being ignored
right now.
The reality is for my colleagues who don't believe we can
afford to provide refundable health care tax credits for the
uninsured, they simply don't know that we are already bearing
that cost, and it is being cost-shifted on to those with
insurance and cost-shifted on to Medicare and many other
programs.
So I commend you for that effort, and I look forward to
working with you.
Mr. Bilirakis. Mr. Strickland for an opening statement.
Mr. Strickland. Thank you, Mr. Chairman, and thank you, Mr.
Secretary. As I reviewed the Department of Health and Human
Services fiscal year 2003 budget, I was pleased to see funding
increases for bioterrorism preparedness, drug treatment
programs at SAMHSA, National Institutes of Health, community
health centers, and the National Health Services Corps.
These are important programs that do much to protect and
promote the health and safety of all of all Americans. However,
I was dismayed to find that the budget lacks in areas that seek
to ensure that undeserved communities have access to health
care resources.
There are cuts in funding for the Children's Hospital GME
program, substance abuse prevention grants, and health
professions programs through the Health Resources and Services
Administration.
The budget slashes funding for rural health by proposing a
50 percent cut in funding for the State Offices of Rural
Health, the agency that assists States in the recruiting and
training of health care professionals that serve medically
undeserved rural communities, and administers the Medicare
Rural Hospital Flexibility Program.
The budget fails to provide for the elimination of the now
and necessary, but automatic, 15 percent cut in Medicare rural
home health payments, and it fails to eliminate the caps on
Medicare disproportionate share hospital payments for small and
rural hospitals.
The administration's Medicare budget is grossly inadequate
in my judgment, including just $190 billion over 10 years for
all aspects of Medicare reform, and just $77 billion is
specifically allocated to allow States to provide drug coverage
for low income seniors.
In additional to shifting the responsibility for a
prescription drug benefit under Medicare from the Federal
Government to the States, I find the prescription drug proposal
laid out in this budget to be a fraudulent attempt in my
judgment on the part of this administration to simply placate
seniors who tell me they need a comprehensive benefit plan.
Under the President's plan, there is no guarantee that even
those seniors who are under 150 percent of poverty, and are
eligible for the benefits described in the budget, would
receive assistance because in this proposal there is no
guarantee that the States will act.
It is shameful that this type of proposal has been put
forth as real help for seniors. These budget shortfalls should
not be tolerated. Instead, we must pass a budget that more
closely meets the obligation of the needs and priorities of
working and retired Americans.
And, Mr. Secretary, let me say that nothing that I said
today reflects on you personally. I am a big cheerleader of
Secretary Thompson.
I agree with those who say that you are performing a
difficult job admirably, but I felt that I should express these
opinions, because I do think that they have merit. And I thank
you for what you do, and I yield back the balance of my time.
[The prepared statement of Hon. Ted Strickland follows:]
Prepared Statement of Hon. Ted Strickland, a Representative in Congress
from the State of Ohio
Thank you, Mr. Chairman, for convening today's hearing.
As I reviewed the Department of Health and Human Services fiscal
year 2003 budget, I was pleased to see funding increases for
bioterrorism preparedness, drug treatment programs at SAMHSA, the
National Institutes of Health (NIH), Community Health Centers, and the
National Health Service Corps. These are important programs that do
much to protect and promote the health and safety of all Americans.
However, I was dismayed to find the budget lacking in many areas
that seek to ensure underserved communities have access to health care
resources. There are cuts in funding for the Children's hospitals GME
program, substance abuse prevention grants, and health professions
programs through the Health Resources and Services Administration
(HRSA). The budget slashes funding for rural health by proposing a 50
percent cut in funding for the State Offices of Rural Health, the
agency that assists states in the recruiting and training of health
care professionals that serve medically underserved rural communities
and administers the Medicare Rural Hospital Flexibility Program. The
budget fails to provide for the elimination of the now unnecessary but
automatic 15 percent cut in Medicare rural home health payments and it
fails to eliminate the caps on Medicare disproportionate share hospital
(DSH) payments for small and rural hospitals.
The Administration's Medicare budget is grossly inadequate,
including just $190 billion over ten years for all aspects of Medicare
reform--and just $77 billion is specifically allocated to allow states
to provide drug coverage for low income seniors. In addition to
shifting the responsibility for a prescription drug benefit under
Medicare from the federal government to the states, I find the
prescription drug proposal laid out in this budget to be a fraudulent
attempt on the part of the Administration to placate seniors who tell
me they need a comprehensive benefit. Under the President's plan, there
is no guarantee that even those seniors who are under 150 % of poverty
($12,885 for an individual and $17,415 for a couple) and are eligible
for the benefit described in the budget would receive assistance
because under this proposal there is no guarantee the states will act.
It is shameful that this type of proposal has been put forth as real
help for seniors.
These budget shortfalls cannot be tolerated. Instead, we must pass
a budget that more closely meets our obligation to the needs and
priorities of working and retired Americans. Thank you, Mr. Chairman,
and I yield back the remainder of my time.
Mr. Bilirakis. I thank the gentleman. Mr. Pitts.
Mr. Pitts. Thank you, Mr. Chairman, in keeping with your
wishes, I will be brief. Thank you, Mr. Secretary, for joining
the committee today. I have always found your office, and your
staff very responsive when we sought to meet with them or ask
questions, and we thank you for that.
And we appreciate your efforts to bring efficiency to your
department, and the restructuring of the bureaucracy there. We
look forward to working with you on a number of issues. Your
plate is obviously very, very full, and you have a difficult
task.
But we thank you for your track record, and look forward to
working with you, especially on welfare reform, in some of the
issues that we face. Thank you, Mr. Chairman.
Mr. Bilirakis. The Chair thanks the gentleman. Mr. Ehrlich.
Mr. Ehrlich. I will have mercy, too, Mr. Chairman. I have a
statement that I will submit. Just one quick observation, Mr.
Secretary. I was looking at your charter and thinking about
your charter, and we all have our hot buttons, and you have
heard many of these hot buttons today, of course.
And in just looking through the outline that our committee
prepares with regard to your testimony, a lot of these issues
have been addressed, from low income drug benefits, and all the
reimbursement issues, of course, and Medicaid.
AWP has been mentioned, and the discount card and how best
to get to the prescription drug benefit, and Medicare solvency,
regulatory relief, NIH, work force shortages, the nursing
shortage, which is a hot issue with many of us, and
particularly myself, as it is with Ms. Capps and the chairman
of the Health Subcommittee.
Bioterrorism, genetic non-discrimination, CDC, the
uninsured, FDA, community health centers, National Health
Corps. Are you sure you still want this job?
We appreciate your thoughtful approach to these issues.
This is a very difficult job, and I personally appreciate the
attention my office has received, and I look forward to your
testimony, and I yield back.
[The prepared statement of Hon. Robert L. Ehrlich, Jr.
follows:]
Prepared Statement of Hon. Robert L. Ehrlich, Jr., a Representative in
Congress from the State of Maryland
Mr. Chairman, thank you for holding this important hearing on
funding priorities for the Department of Health and Human Services for
Fiscal Year 2003.
It is our privilege today to have The Honorable Tommy Thompson,
Secretary of Health and Human Services, with us today as our sole
witness. Mr. Secretary, I wish to add to my colleagues' thanks to you
for spending this morning with the members of our Health Subcommittee
to discuss your upcoming budget and matters of concern to us.
Mr. Secretary, I would also like to thank you for your service to
our country. I view HHS as serving a crucial role in our federal
government. Before September 11th, your job was to advance the health
of all Americans, increase access to affordable, quality health care,
and ensure that proper measures and needed research in all health
fields continued. This is a crucial function in our society.
After September 11th, your job is all that and much more. HHS is at
the forefront of the War on Terrorism. You are responsible for a $489
billion organization whose mission it is to protect the health and
safety of all Americans. The newest component of your mission,
Bioterrorism Protection, totaling $4.3 billion in this budget, is
crucial to our national security. I look forward to discussing this
component with you and how it will work with state and local
communities to benefit our safety.
There is one other subject area I look forwarding to hearing you
discuss. I know you have been active in providing additional resources
to address our nation's nursing shortage, and I appreciate your
efforts. As you may be aware, the House passed H.R. 3487, the Nurse
Reinvestment Act, which Chairman Bilirakis, Mr. Brown, Mrs. Capps, Mr.
Whitfield, and I worked together on last year. This legislation will
allow you to provide educational scholarships to nurses who agree to
work in medically-underserved areas.
Mr. Secretary, this legislation is needed to address the nursing
shortage nationally. One of my concerns is that while this legislation
grants you the authority to pursue this program, it may not provide you
sufficient resources to provide scholarships for this purpose. I will
be eager to hear your view on this important issue and what you think
you need in terms of resources to ease the nursing shortage and attract
more bedside nurses to the profession.
Mr. Secretary, once again, thank you for your attendance here
today. I look forward to your testimony and our dialogue.
Thank you, Mr. Chairman.
Mr. Bilirakis. I thank the gentleman. Mr. Deutsch for an
opening statement.
Mr. Deutsch. Thank you, Mr. Chairman, and again I join in
really direct praise of your work, and your Department's work,
in some very specific areas. I think your response in post-911
events has really been excellent, and thoughtful, creative, and
really government efficiency at its best, and management at its
best, and creative leadership at its best.
I really compliment you and I look forward to working with
you in the continuation of that area. I also think that praise
in terms of research funding at NIH is a legacy that you can be
proud of, and I think we on this committee and subcommittee can
really be proud of as well.
I want to know though, and again I know that it is not
directly through your efforts, but it is through your
department's efforts, and it is really the opportunity that we
have to really work with you in terms of the budget as a
committee of jurisdiction.
I join with our ranking Democrat on the subcommittee, and
the ranking Democrat on the full committee, Mr. Brown and Mr.
Dingell, in their very, very specific, and very strong concerns
regarding the Medicare prescription drug benefit issue.
I think it is an area where the administration's attempts
and budget attempts are really almost effectively zero. Out
there in the real world, they really are effectively zero.
And I think that each of us interact with constituents, but
this is not a theoretical issue. This is a very real issue, and
for literally millions, and tens of millions of Americans, this
is a very, very real issue.
It is the difference between lifestyle choices, and in most
cases it is not the difference between eating and not eating,
but it is clearly the difference between going out, visiting
grandchildren, traveling, having electricity or heat at 72
versus 52, and issues like that.
And I think that for us in this budgeting that we are
doing, not to address it when we still have the opportunity to
address it, is a mistake of tragic proportions. And I think
that our job hopefully will be able to give you the opportunity
to push dramatically further than what the administration has
offered on the table, which I think is a non-starter, and
effectively close to a zero for the people who really do need
the help.
And with that, I would yield back the balance of my time.
Thank you.
Mr. Bilirakis. The Chair thanks the gentleman, and I think
that completes our opening statements. Secretary Thompson,
first, I too, want to thank you for the timely furnishing to
the committee of the PDUFA performance goals and closure, which
we have not had a chance to review, but I imagine that there
will be a few questions going forward on that.
Let me ask you, sir, the administration has requested that
we find offsets--are you going to make an opening statement,
Mr. Secretary?
Secretary Thompson. I serve at your pleasure, sir.
Mr. Bilirakis. If you want me to go right to questions, I
will. It is up to you, sir.
Mr. Brown. Mr. Chairman, we can make an opening statement
for him.
Mr. Bilirakis. Feel free to make an opening statement. I
will set the clock at 10 minutes. I think this is just not my
idea.
Mr. Brown. Mr. Chairman, for one moment, can I have
unanimous consent to enter into the record Ms. Capps' article
that she wrote in The Hill and any other extraneous materials
other members have?
Mr. Bilirakis. Without objection.
Mr. Brown. Thank you.
Mr. Bilirakis. Is that okay with Ms. Capps?
Mr. Brown. She asked for that.
[The article and additional statements submitted for the
record follow:
Bush Health Budget Doesn't Live Up to Promises
By Lois Capps
The President has come forward with a budget proposal highlighting
some of the important health care challenges facing our country. I
agree with many of his priorities, but am doubtful that the details of
his proposals will accomplish these goals.
There are many pieces of this budget that are strong and should be
embraced by the Congress. For example, I applaud the Administration's
$4.3 billion request to address bioterrorism threats. Many of the
priorities raised in bills produced by the Homeland Security Task Force
last year are being pursued here.
I am also very pleased the Administration is embracing Congress'
long standing commitment to doubling the NIH budget. This funding
supports important research that benefits all Americans--from finding
cures for Parkinson's and Alzheimer's to determining the most effective
medical practices.
But this budget, while setting impressive goals and increasing a
few valuable programs, falls woefully short in addressing many other
critical health care priorities.
The Medicare prescription drug proposal is one such example. The
Administration has declared that adding a drug benefit for seniors is a
major priority. But the $190 billion allocated in the budget provides
barely half of what Speaker Hastert has claimed is necessary. And the
proposal itself--basically offering coverage to only low income
seniors--would leave millions of seniors without coverage and still
facing enormous drug bills.
In addition, the Administration provides no help to doctors whose
Medicare payments were cut by 5.4% this year and will likely see a
sizeable cut next year. Just two weeks ago the Energy and Commerce
Subcommittee on Health heard testimony on how these cuts will devastate
doctors' ability to provide quality care to our seniors. A bipartisan
group, led by Chairman Bilirakis, Ranking Member Sherrod Brown and
myself, are committed to fixing this problem, but the Administration's
budget leaves no room for any solution.
I join the President in trying to ensure we have enough doctors,
nurses and other health professionals to bring our public health system
up to today's challenges. The terrorist attacks have made abundantly
clear how important prepared medical professionals are for our national
security. Hospitals cite staffing shortages as a major obstacle to
their ability to continue providing quality care. And in my district
and across the country, the crisis in long term health care is
aggravated by a growing shortage of nurses and nurse assistants.
To address this need, the Administration has correctly proposed
increasing the National Health Service Corps and Nurse Education
scholarship and loan programs by about $50 million. But at the same
time, it has proposed to cut nearly $300 million from the programs that
actually train the doctors, physician assistants, pharmacists and lab
technicians we need. With the shortages in these critical areas, these
cuts will devastate our public health system. In the interest of
national security and public health, we should be boosting funding for
training, not cutting it.
We must also improve access to care for the uninsured. The
Administration has proposed funding increases for Community Health
Centers by $114 million. But it has called for eliminating the
Community Access Program (CAP). This $105 million program helps
communities coordinate public and private efforts to provide medical
care to the underinsured and uninsured. CAP limits redundancy in
federal expenditures and leverages private money to provide health
care, ensuring the federal government gets more bang for its buck.
Killing this program would seriously hurt our ability to wisely use
federal dollars to help the uninsured.
The Administration has also appropriately highlighted disease
prevention and allocated $20 million in new money for the Healthy
Communities Initiative. But it has cut $57 million from the CDC's
chronic disease programs, which address illnesses like cancer,
cardiovascular disease, and, diabetes. Chronic diseases account for 60%
of our nation's health care costs. If we want to prevent disease and
its costs, cutting CDC's efforts in this area is a bad idea.
The details of this health care budget often reflect a plan that
takes one step forward and two steps back. In many cases I agree with
the Administration's stated goals, but this budget would not help us
achieve them or improve health care for all Americans. Congress must
improve this proposal.
______
Prepared Statement of Hon. Barbara Cubin, a Representative in Congress
from the State of Wyoming
In the interest of time, Mr. Chairman, I will get right to the
point of my statement.
My primary concern in any budget is its overall effect on rural
states. To say that my home state of Wyoming is rural is an over
simplification because what we are in fact is ``frontier.''
According to the Webster's dictionary, ``frontier'' is defined as a
region that forms the margin of settled or developed territory; a new
field for developmental activity.
As a region with roughly 100,000 square miles, and 480,000 people,
with rugged mountainous terrain, and an unforgiving climate, Wyoming is
perhaps this country's last frontier.
So when vital health programs are cut from the budget, patients in
my district scramble for care, and many health care professionals pack
up their desk and head home for good.
That is not an exaggeration.
While I am very pleased with the President's budget increases for
the National Health Service Corps and Community Health Centers, I am
concerned about the cuts to a variety of other rural health programs
that directly benefit my state.
Examples include: State Offices of Rural Health, the Health
Professions Program, and Rural Health Outreach and Network Development
Grant--to name a few.
While I understand budgetary constraints, we simply cannot cut the
legs out from under rural health communities across this country. The
effects could be devastating.
I look forward to having the Secretary address these rural programs
and, with that, I yield back my time. Thank you.
______
Prepared Statement of Hon. Henry A. Waxman, a Representative in
Congress from the State of California
Secretary Thompson, it is a pleasure to have you with us today.
I know from your testimony and the Administration's budget
documents that you are here to paint a rosy picture of the
Administration budget for HHS. Indeed there are some aspects that are
very positive--increases for the national health service corps,
increases for the important work of NIH, increases for the support of
the Office for Generic Drug review in the FDA, to name a few.
But unfortunately, as I look at this budget, I find the picture is
much more one of disappointment than progress.
First and foremost, it clearly does not provide sufficient support
for an adequate and comprehensive prescription drug benefit under
Medicare. The dollars allocated in this budget fall far short of what
is needed--in fact, I would argue four times as much is needed as the
amount you have allocated--and certainly will not allow us to construct
a decent program that will meet the needs of our senior citizens.
Second, despite the rhetoric about providing coverage for the
uninsured, I see a budget that proposes a system of individual tax
credits that would undermine the current employer based system of
coverage and rely on an individual insurance market that does not
provide affordable coverage for people who are sick or have chronic
health conditions--in other words, the very people who need it. And I
see a budget that does not make use of the strengths and successes we
have had in our public programs of Medicaid and SCHIP. We know those
programs work; we know extending coverage effectively reduces the
number of uninsured.
Further, this budget fails to provide assistance to the States to
maintain and expand their Medicaid programs through endorsement of a
higher Federal matching rate or through correction of declining support
for disproportionate share institutions, and indeed cuts back on
necessary support through arbitrary changes in the upper payment limit
programs.
Nothing in the budget takes us forward through expanding coverage
for the severely disabled, through removing senseless restrictions that
keep States from extending coverage to legal immigrant children,
through expanded coverage for severely disabled children and their
families, through better dental services, to name just a few.
Instead we see proposals that undermine the protections of the
current program through waiver programs that take away from the poorest
beneficiaries to support limited expansion to others.
I'm disappointed that in place after place in the budget, you've
given with one hand but taken back with another, whether it is the
reductions in manpower programs, the elimination of the CAP program,
the effective cut in the prevention block grant, the flat funding of
the Ryan White AIDS program, family planning, and many traditional
public health programs that we know work.
I look forward to hearing from you today, to improving this budget,
and to working to expand and strengthen our programs to protect and
improve the health of the American people. Thank you.
Mr. Bilirakis. Please proceed, Mr. Secretary. I apologize.
STATEMENT OF HON. TOMMY THOMPSON, SECRETARY, U.S. DEPARTMENT OF
HEALTH AND HUMAN SERVICES
Mr. Thompson. Chairman Bilirakis and Congressman Brown, and
members of the committee, I thank you so very much for your
hospitality and your willingness to work with me. I appreciate
it very much.
I would like to point out that we want to be very
responsive to all members of this committee, and to Congress.
We are very happy to report that we have been able to reduce
the response time from CDC and CMS from 70 days when I first
came in here as Secretary, and now down to 20 days, and we are
working toward our goal of 15 days.
And if you do not receive a response, and you feel that it
is not timely, please call me personally, and I will take care
of it.
This budget, Mr. Chairman and members, was sent down with
three priorities.
The first one was of course the war that has taken place,
the second one was homeland security, and the third one is
taking care of the needs of the American public.
So it is an honor to come before you today to discuss the
President's fiscal year 2003 budget for the Department of
Health and Human Services. Mr. Chairman, it is always good to
see you, and thank you for your tremendous leadership in
advancing a sound health care agenda for our country.
Congressman Brown, thank you for your deep concern with
many of the issues that are facing us today. And to all of you,
thank you so very much for your bipartisan support. During the
past 13 months we have witnessed some significant achievements
in the Department of Health and Human Services.
I will detail some of them in the course of my testimony.
The total HHS request for fiscal year 2003 is $489 billion. The
discretionary component totals $64 billion, and budget
authority, an increase of 3.9 percent over the fiscal year 2002
budget.
Let me begin by discussing our efforts on bioterrorism.
After September 11th, I appointed Dr. D.A. Henderson, the
physician who spearheaded the successful drive to eradicate
small pox worldwide, to head a newly created Office of Public
Preparedness.
And about 20 feet away from my office, we have set up a 24
hour a day, 7 days a week, command center, where we receive
information from all over the world about possible bioterrorist
attacks.
And we have been very aggressive and prudent in our work to
prepare for any biological or chemical threat our enemies could
use against us. To prepare further, President Bush and I
requested an additional $4.3 billion, an increase of 45 percent
over the current fiscal year, to support a variety of critical
activities to prevent, identify, and respond to incidents of
bioterrorism.
We are also requesting more than half-a-billion dollars for
our hospital preparedness program, which will strengthen local
hospital preparation for biological and chemical attacks, and
expand the surge capacity.
We are currently providing the $1.1 billion that Congress
on a bipartisan basis appropriated for State governments to
strengthen their capacity to respond to bioterrorism and other
public health emergencies.
We are also developing a system to connect every major
county and metropolitan region with the Health Alert Network.
We have the best opportunity, ladies and gentlemen, to develop
a public health system that all of us can be very proud of.
The Congress on a bipartisan basis appropriated
supplemental money to address immediate public health needs
related to bioterrorism preparedness. We have responded by
making 20 percent of the total funds immediately available to
the States, and the remaining 80 percent will also be
distributed expeditiously.
The NIH is researching better anthrax, plague, hemorrhagic
fever vaccines. We are purchasing an additional 154 million
doses of smallpox vaccine. The result will be that by the end
of this year every man, woman, and child, in America will have
the vaccine he or she needs.
When it comes to bioterrorism, we are growing stronger in
our preparedness each and every day. We are also advancing
important biomedical research, and the budget provides $5.5
billion for research of cancer throughout NIH, and a total of
$3.7 billion for HIV AIDS related research.
We are also requesting $20 million for a Healthy
Communities Initiative. This is a new effort, ladies and
gentlemen, that is going to concentrate department-wide
expertise on the prevention of diabetes, asthma, obesity, and
health disparities in minority communities.
I am deeply concerned, as all of you are, about how obesity
is affecting our health as a people. Roughly 3 out of every 5
adults are overweight, and approximately 300,000 U.S. deaths a
year currently are associated with obesity and simply weighing
too much.
The total direct and indirect costs attributed to being
overweight and to obesity amounted to $117 billion in the year
2000. We also have a serious problem with diabetes. Nearly 16
million Americans have diabetes, and 800,000 more fall victims
to the disease annually.
This epidemic is witnessing a terrible increase, tripling
within the last three decades. Yet, we have got solid research
showing that if you exercise just 30 minutes a day, and walking
is a perfectly suitable form of exercise, and lose 10 to 15
pounds, your risk of getting diabetes falls by nearly 60
percent.
When you extrapolate that, we spend $100 billion a year on
diabetes, and if we were able to reduce the instance of
diabetes by 60 percent, that is a savings of $60 billion.
The President and I, and I know you are as well, are
absolutely passionately committed to our across the board
prevention initiative. Preventive health care saves huge
amounts of money, but more importantly can save untold
thousands of lives.
We are also helping to prepare low income Americans for
their future, and that is why welfare reform remains so
important. The good news is that sine 1996, nearly 7 million
fewer people are on welfare today than in 1996, and 2.8 million
fewer children are in poverty, in large part because welfare
has been transformed, and is transforming.
We are calling for a continued commitment to child care,
including $2.7 billion for entitlement child care funding, and
$2.1 billion for discretionary funding. We are giving the
States the flexibility they need to make effective education
and job training programs with work, as well as money to
strengthen families and reduce illegitimacy.
Strengthening Medicare is another key component of our
across the board effort to broaden and strengthen our country's
health care system. The 2003 budget dedicates $190 billion over
10 years for immediate targeted improvements, and comprehensive
Medicare modernization, including the subsidized prescription
drug benefit, better insurance protection, and better private
options for all beneficiaries.
I know that this committee and other members do not believe
that is enough, but I think we should work together to find the
right amount. The administration recognizes the need to act now
to help seniors obtain prescription drug coverage.
Our budget provides $77 billion and $8 billion through the
year 2006 for States to expand drug only coverage to low income
Medicare recipients whose income is $150 percent of the Federal
poverty rate.
And also the Federal Government will pay 90 percent of the
costs for drugs for individuals from 100 percent of poverty to
150 percent of poverty. Also this year, HHS will continue to
work to implement the President's proposed Medicare endorsed
prescription drug card.
The card will give beneficiaries immediate access to
manufacturer discounts on their medicines and other valuable
pharmaceutical purchases. At the same time, and as was
mentioned several times, we cannot ignore the roughly 40
million Americans who lack health insurance.
Since January 2001, we have approved State plan amendments
in Medicaid and S-CHIP waivers that have expanded the
opportunity for health coverage to 1.8 million Americans, and
improved existing benefits to 4.5 million individuals.
I want to point out that we have handed out 1,500 waivers
and modifications of State plans, and we are no longer behind.
When I came in there were some waivers going back to 1986, and
right now we are current, and we get waivers out within 90
days.
The 2003 budget also seeks $1.5 billion to support the
President's plan to impact 1,200 communities with new or
expanded health centers by 2006. This is a $114 million
increase over fiscal year 2002, and would support 170 new and
expanded health centers, and provide services to 1 million
additional patients.
And last week, we issued 27 grants totaling $12 million
under President Bush's Health Centers Initiative to help more
Americans gain access to quality health care. In addition, the
President's budget includes $89 billion in new health credits
to help American families buy health insurance, which will
provide health coverage for many low income families.
And I know, Mr. Chairman, and members of this committee,
that we have taken some of the suggestions of this committee
last year and put it into the new plan. So that an individual
can apply and get a number from a regional IRS office, and
immediately take that number to an insurance agency, and apply
for it.
It also gives States the opportunity to pool the uninsured,
which will lower their costs. Mr. Chairman, I know that many
members of this committee are concerned about PDUFA
reauthorization. FDA and the industry have been negotiating in
good faith for many months. We spent last weekend tying up the
ends, and today we will have completed our deal.
We have developed a sound plan. The agreement reached
several weeks ago calls for increased resources for FDA,
including more funding for drug safety after drug approval, a
concern that some of you have mentioned already.
The agreement also urges earlier communications between
drug and biologic innovators, and the FDA during the approval
and review process. Working together with you, and with
Chairman Tauzin, and with the other members of this committee,
we can reach an accord on PDUFA that will serve our Nation
well.
Mr. Chairman, this comprehensive aggressive budget
addresses the most pressing public health challenges facing our
Nation, from bioterrorism preparedness to coverage for the
uninsured in order to ensure a safe and healthy America.
I am confident that working together, we can finish to
improve the health and well-being of our fellow citizens. I did
a 20 minute speech in less than 10 minutes, and I want to thank
you, Mr. Chairman, for letting me come before you today. I look
forward now to answering your questions.
[The prepared statement of Hon. Tommy G. Thompson follows:]
Prepared Statement of Hon. Tommy G. Thompson, Secretary, Department of
Health and Human Services
Good Morning Mr. Chairman and members of the Sub-Committee. I am
honored to appear before you today to discuss the President's FY 2003
budget for the Department of Health and Human Services. I am confident
that a review of the full details of our budget will demonstrate that
we are proposing a balanced and responsible approach to ensuring a safe
and healthy America.
The budget I present to you today fulfills the promises the
President has made and proposes creative and innovative solutions for
meeting the challenges that now face our nation. Since the September
11th attacks we have dedicated much of our efforts to ensuring that the
nation is safe. HHS was one of the first agencies to respond to the
September 11th attacks on New York City, and began deploying medical
assistance and support within hours of the attacks. Our swift response
and the overwhelming task of providing needed health related assistance
made us even more aware that there is always room for improvement. The
FY 2003 budget for the Department of Health and Human Services builds
on President Bush's commitment to ensure the health and safety of our
nation.
The FY 2003 budget places increased emphasis on protecting our
nation's citizens and ensuring safe, reliable health care for all
Americans. The HHS budget also promotes scientific research, builds on
our success in welfare reform, and provides support for childhood
development while delivering a responsible approach for managing HHS
resources. Our budget plan confronts both the challenges of today and
tomorrow while protecting and supporting the well being of all
Americans.
Mr. Chairman, the HHS budget request for FY 2003 totals $488.8
billion in outlays, an increase of $29.2 billion or +6.3 percent over
the comparable FY 2002 budget. The discretionary component totals $64.0
billion in budget authority, an increase of $2.4 billion , or +3.9
percent over FY 2002. Let me now discuss some of the highlights of the
HHS budget and how we hope to achieve our goals.
PROTECTING THE NATION AGAINST BIOTERRORISM
Mr. Chairman, as you know, the Department of Health and Human
Services is the lead federal agency in countering bioterrorism. In
cooperation with the States, we are responsible for preparing for, and
responding to, the medical and public health needs of this nation. The
FY 2003 budget for HHS bioterrorism efforts is $4.3 billion, an
increase of $1.3 billion, or 45 percent, above FY 2002. This budget
supports a variety of activities to prevent, identify, and respond to
incidents of bioterrorism. These activities are administered through
the Centers for Disease Control and Prevention (CDC), the National
Institutes of Health (NIH), the Office of Emergency Preparedness (OEP),
the Substance Abuse and Mental Health Services Administration (SAMHSA),
the Health Resources and Services Administration (HRSA) and the Food
and Drug Administration (FDA). These efforts will be directed by the
newly established Office of Public Health Preparedness (OPHP).
On January 31, 2002, HHS announced plans for making $1.1 billion
available to States. This funding is available for hospital
preparedness, laboratory capacity, epidemiology, and emergency medical
response. Approximately 20 percent of this total either has already
been provided (or will be provided within the next few weeks) for
immediate expenditure to all eligible entities in base awards that will
be used to establish core programs and address current needs for
bioterrorism preparedness. The remaining 80 percent will be made
available for expenditure once the Secretary has approved the States'
work plans for their awarded funds. States will submit plans which will
be reviewed by the HHS staff to ensure that funding is used wisely for
bioterrorism efforts.
In order to create a blanket of preparedness against bioterrorism,
the FY 2003 budget provides funding to State and local organizations to
improve laboratory capacity, enhance epidemiological expertise in the
identification and control of diseases caused by bioterrorism, provide
for better electronic communication and distance learning, and support
a newly expanded focus on cooperative training between public health
agencies and local hospitals.
Funding for the Laboratory Response Network enhances a system of
over 80 public health labs specifically developed for identifying
pathogens that could be used for bioterrorism. Funding will also
support the Health Alert Network, CDC's electronic communications
system that will link local public health departments in covering at
least ninety percent of our nations' population. Funding will be used
to support epidemiological response and outbreak control, which
includes funding for the training of public health and hospital staff.
This increased focus on local and state preparedness serves to provide
funding where it best serves the interests of the nation.
An important part on the war against terrorism is the need to
develop vaccines and maintain a National Pharmaceutical Stockpile. The
National Pharmaceutical Stockpile is purchasing enough antibiotics to
be able to treat up to 20 million individuals in a year for exposure to
anthrax and other agents by the end of 2002. The Department is
purchasing sufficient smallpox vaccines for all Americans. The FY 2003
budget proposes $650 million for the National Pharmaceutical Stockpile
and costs related to stockpiling of smallpox vaccines, and next-
generation anthrax vaccines currently under development.
Another important aspect of preparedness is the response capacity
of our nation's hospitals. Our FY 2003 budget provides $518 million for
hospital preparedness and infrastructure to enhance biological and
chemical preparedness plans focused on hospitals. The FY 2003 budget
will provide funding to upgrade the capacity of hospitals, outpatient
facilities, emergency medical services systems and poison control
centers to care for victims of bioterrorism. In addition, CDC will
provide support for a series of exercises to train public health and
hospital workers to work together to treat and control bioterrorist
outbreaks.
The FY 2003 budget also includes $184 million to construct, repair
and secure facilities at the CDC. Priorities include the construction
of an infectious disease/bioterrorism laboratory in Fort Collins,
Colorado, and the completion of a second infectious disease laboratory,
an environmental laboratory, and a communication and training facility
in Atlanta. This funding will enable the CDC to handle the most highly
infectious and lethal pathogens, including potential agents of
bioterrorism. Within the funds requested, $12 million will be used to
equip the Environmental Toxicology Lab, which provides core lab space
for testing environmental samples for chemical terrorism. Funding will
also be allocated to the ongoing maintenance of existing laboratories
and support structures.
The FY 2003 budget also includes $60 million for the development of
new Educational Incentives for Curriculum Development and Training
Program. The goals of this program will be the development of a health
care workforce capable of recognizing indications of a bioterrorist
event in their patients, that possesses the knowledge and skills to
best treat their patients, and that has the competencies to rapidly and
effectively inform the public health system of such an event at the
community, State and national level.
INVESTING IN BIOMEDICAL RESEARCH
Advances in scientific knowledge have provided the foundation for
improvements in public health and have led to enhanced health and
quality of life for all Americans. Much of this can be attributed to
the groundbreaking work carried on by, and funded by, the National
Institutes of Health (NIH). Our FY 2003 budget enhances support for a
wide array of scientific research, while emphasizing and supporting
research needed for the war against bioterrorism.
NIH is the largest and most distinguished biomedical research
organization in the world. The research that is conducted and supported
by the NIH offers the promise of breakthroughs in preventing and
treating a number of diseases and contributes to fighting the war
against bioterrorism. The FY 2003 budget includes the final installment
of $3.9 billion needed to achieve the doubling of the NIH budget. The
budget includes $1.75 billion for bioterrorism research, including
genomic sequencing of dangerous pathogens, development of zebra chip
technology, development and procurement of an improved anthrax vaccine,
and laboratory and research facilities construction and upgrades
related to bioterrorism. With the commitment to bioterrorism research
comes our expectation of substantial positive spin-offs for other
diseases. Advancing knowledge in the arena of diagnostics, therapeutics
and vaccines in general should have enormous impact on the ability to
diagnose, treat, and prevent major killers-diseases such as malaria,
TB, HIV/AIDS, West Nile fever, and influenza.
The FY 2003 budget also provides $5.5 billion for research on
cancer throughout all of NIH. Currently, one of every two men and one
of every three women in the United States will develop some type of
cancer over the course of their lives. New research indicates that
cancer is actually more than 200 diseases, all of which require
different treatment protocols. Promising cancer research is leading to
major breakthroughs in treating and curing various forms of cancer. Our
budget continues to expand support for these research endeavors. The FY
2003 budget also includes a total of $2.8 billion for HIV/AIDS-related
research. NIH continues to focus on prevention research, therapeutic
research to treat those already infected, international research, and
research targeting the disproportionate impact of AIDS on minority
populations in the United States.
PRESCRIPTION DRUG USER FEES
As a result of our investment in biomedical research through the
NIH, new breakthrough drugs and medical treatments will be discovered
to treat and cure serious diseases afflicting millions of Americans. A
major mission for the Food and Drug Administration is to determine
which of these therapies are safe and effective and to get these on the
market quickly. The Prescription Drug User Fee Program known as PDUFA,
enacted by Congress in 1992, has been enormously successful in speeding
up drug approval times. This program is due for reauthorization this
year and is one of the top priorities of the Administration. I commend
you, Mr. Chairman, and the Members of this Committee, for your
leadership in this area and we appreciate your bipartisan commitment to
act quickly to reauthorize this key program during this fiscal year and
to ensure that enactment of this legislation is not put at risk by the
inclusion of controversial provisions.
As you are aware, the FDA and the drug and biologics
representatives have agreed upon a blueprint containing the proposed
specifications for the reauthorization of PDUFA III with input from
consumer and patient groups, health professionals, and other
organizations. This proposal calls for significant increases in user
fees to put the program on sound financial footing and make the
collection of fees more predictable. The proposed drug user fee amount
would be $222.9 million in FY 2003 with increases in the out years to
$259.3 million in FY 2007. The FY 2003 request is approximately a $90
million increase over the $133 million that was collected for FY2001.
The PDUFA III proposal includes several important new initiatives. One
of the more significant among these is the agreement to use industry
fees to significantly expand the capacity of FDA to conduct risk
management activities during the first few years after drugs are
approved. We expect that this will lead to more targeted and effective
drug prescribing patterns by physicians and fewer adverse effects for
patients.
SUPPORTING HEALTHY COMMUNITIES
The FY 2003 budget includes $25 million for a Healthy Communities
Innovation Initiative--a new interdisciplinary services effort that
will concentrate Department-wide expertise on the prevention of
diabetes and asthma, as well as obesity. Of this amount, $20 million is
available in HRSA. The purpose of the initiative is to reduce the
incidence of these diseases and improve services in 5 communities
through a tightly coordinated public/private partnership between
medical, social, educational, business, civic and religious
organizations. These chronic diseases were chosen because of their
rapidly increasing prevalence within the United States. In addition
there is $5 million in CDC for a national media campaign to promote
physical fitness activities, with an emphasis on families and
communities.
More than 16 million Americans currently suffer from a preventable
form of diabetes. Type II diabetes is increasingly prevalent in our
children due to the lack of activity. In a recent study conducted by
NIH, participants that were randomly assigned to intensive lifestyle
intervention experienced a reduced risk of getting Type II diabetes by
58 percent. HHS plans to reach out to women and minorities to help make
this initiative a success.
INCREASING ACCESS TO HEALTHCARE
Of all the issues confronting this Department, none has a more
direct effect on the well being of our citizens than the quality and
accessibility of health care. Our budget proposes to improve the health
of the American people by taking the steps to increase and expand the
number of Community Health Centers, strengthen Medicaid, and ensure
patient safety.
Community Health Centers provide family oriented preventive and
primary health care to over 11 million patients through a network of
over 3,400 health sites. The FY 2003 budget will increase and expand
the number of health center sites by 170, the second year of the
President's initiative is to increase and expand sites by 1,200 and
serve an additional 6.1 million patients by 2006. We propose to
increase funding for these Community Health Centers by $114 million in
FY 2003. Our long-term goal is to increase the number of people who
receive high quality primary healthcare regardless of their ability to
pay. With these new health centers, we hope to achieve this goal.
In addition to expanding Community Health Centers, we are seeking
to expand the National Health Service Corps by $44 million. Currently,
more than 2,300 health care professionals are providing service to
health centers patients and others in under-served communities.
The Medicaid program and the State Children's Health Insurance
Program (SCHIP) provide health care benefits to low-income Americans,
primarily children, pregnant women, the elderly, and those with
disabilities. The FY 2003 budget we propose strengthens the Medicaid
and SCHIP programs by implementing essential reforms in the way we pay
for prescription drugs, by extending expiring SCHIP funds, and by
testing solutions to barriers in community living for disabled children
and adults.
We propose to extend coverage of Medicare Part B premiums for
people with incomes between 120 and 135 percent of the Federal poverty
level, also known as Qualifying Individuals (QI-1s), for one year until
September 2003. Currently, States through the Medicaid program must pay
for the Medicare premiums and cost sharing for certain low-income
Medicare beneficiaries. The funding to pay for Part B premiums for QI-
1s expires in September 2002. This proposal would ensure no
interruption of current benefits while discussions take place about how
better to integrate the QI-1 programs with other Medicaid programs that
also pay Medicare premiums.
For FY 2003, we propose to continue Transitional Medicaid
Assistance for an additional year and provide families with an
important incentive to work. Currently, States are required to provide
up to one year of Medicaid for families who, due to work, would
otherwise lose Medicaid eligibility. The provision is due to expire in
September 2002. We propose to allow families to continue to take those
first steps toward self-sufficiency--often in jobs without health
insurance--without fear that their medical bills will leave them worse
off than before. The initiative would cost $350 million.
Also, we propose to work with stakeholders to develop legislative
proposals that build on the Health Insurance Flexibility and
Accountability (HIFA) demonstration in order to give states the
flexibility they need to design innovative ways of increasing access to
health insurance coverage for the uninsured. The Administration's plan
also would allow at State option those who receive the President's
health care tax credit to increase their purchasing power by purchasing
insurance from private plans that already participate in their State's
Medicaid, Children's Health Insurance, or State employees' programs.
This could help keep costs down and provide a more comprehensive
benefit than plans in the individual market. Further, this will give
tax credit recipients a range of choices among insurance products,
which the new tax credit program will make affordable.
Additionally, as part of the New Freedom Initiative, a nationwide
effort to support community based models of care that help remove the
barriers of equality that face individuals with disabilities, we
propose four demonstrations to test solutions to many of the barriers
to community living for disabled children and adults. Two
demonstrations will provide Medicaid respite services to caregivers of
disabled adults and to caregivers of significantly disabled children. A
third demonstration will allow home and community-based services as an
alternative for children receiving care in a residential treatment
facility. All three of these demonstrations will help the
Administration evaluate the feasibility of providing such services
under the Medicaid program. A fourth demonstration will address the
shortage of direct service workers.
We also need to make an effort to narrow the drug treatment gap. As
reflected in the National Drug Control Strategy, Substance Abuse and
Mental Health Services Administration estimates that 4.7 million people
are in need of drug abuse treatment services. However, fewer than half
of those who need treatment actually receive services, leaving a
treatment gap of 3.9 million individuals. Our budget supports the
President's Drug Treatment Initiative, and to narrow the treatment gap.
We propose to increase funding for the initiative by $127 million.
These additional funds will allow State and local communities to
provide treatment services to approximately 546,000 individuals, an
increase of 52,000 over FY 2002.
STRENGTHENING MEDICARE
The FY 2003 budget dedicates $190 billion over ten years for
immediate targeted improvements and comprehensive Medicare
modernization, including a subsidized prescription drug benefit, better
insurance protection, and better private options for all beneficiaries.
Last year, President Bush proposed a framework for modernizing and
improving the Medicare program that built on many of the ideas that had
been developed in this Committee and by other Members of Congress.
That framework includes the principles that:
<bullet> All seniors should have the option of a subsidized
prescription drug benefit as part of modernized Medicare.
<bullet> Modernized Medicare should provide better coverage for
preventive care and serious illness.
<bullet> Today's beneficiaries and those approaching retirement should
have the option of keeping the traditional plan with no
changes.
<bullet> Medicare should make available better health insurance
options, like those available to all Federal employees.
<bullet> Medicare legislation should strengthen the program's long-term
financial security.
<bullet> The management of the government Medicare plan should be
strengthened to improve care for seniors.
<bullet> Medicare's regulations and administrative procedures should be
updated and streamlined, while instances of fraud and abuse
should be reduced
<bullet> Medicare should encourage high-quality health care for all
seniors.
The President's FY 2003 Budget also includes a series of targeted
immediate improvements to Medicare, which can be implemented as part of
comprehensive Medicare legislation, to provide both immediate benefit
improvements for seniors and to help implement a Medicare drug benefit
and other long-term improvements more effectively.
The improvements the President and I have proposed include not only
a subsidized drug benefit as part of modernized Medicare, but also
providing better coverage for preventive care and serious illness. The
program's lack of drug coverage is just one example of its outdated
benefits and it will have even more difficulty giving beneficiaries
modern and appropriate treatment for their health problems in the
future. We propose that preventive benefits have zero co-insurance and
be excluded from the deductible. We must make these improvements to
more effectively address the health needs of seniors today and for the
future.
Let me assure you, the President remains committed to framework he
introduced last summer, and to bringing the Medicare program up to date
by providing prescription drug coverage and other improvements. We
cannot wait: it is time to act. Recognizing that there is no time to
waste, the President's Budget also includes a series of targeted
immediate improvements to Medicare.
As you know, last year the President proposed the creation of a new
Medicare-endorsed prescription drug card program to reduce the cost of
prescription drugs for seniors. This year, HHS will continue working to
implement the drug card, which will give beneficiaries immediate access
to manufacturer discounts on their medicines and other valuable
pharmacy services. The President is absolutely committed to providing
immediate assistance to seniors who currently have to pay for
prescription drugs.
Assistance, however, will not come only through the prescription
drug card program. The budget proposes several new initiatives to
improve Medicare's benefits and address cost. This budget proposes
additional federal assistance for drug coverage to low-income Medicare
beneficiaries up to 150% of poverty--about $17,000 for a family of two.
This policy would eventually expand drug coverage for up to 3 million
beneficiaries who currently do not have prescription drug assistance,
and it will be integrated with the Medicare drug benefit that is
offered to all seniors once that is in place. This policy helps to
establish the framework necessary for a Medicare prescription drug
benefit and is essentially a provision that is in all of the major drug
benefit proposals to be debated before Congress. That is, the policy
provides new Federal support for comprehensive coverage of low-income
seniors up to 150 percent of poverty. And in all the proposals, the
Federal government would work with the states to provide this coverage,
just as we are proposing with this policy.
In addition, I recently announced a model drug waiver program--
Pharmacy Plus--to allow States to reduce drug expenditures for seniors
and certain individuals with disabilities with family incomes up to 200
percent of the federal poverty level. This program is being done
administratively. The Illinois initiative illustrates how we can expand
coverage to Medicare beneficiaries in partnership with the federal
government. The program we approved will give an estimated 368,000 low-
income seniors new drug coverage.
The President's budget also includes an increase in funding to
stabilize and increase choice in Medicare+Choice program by aligning
payment rates more closely with overall Medicare spending and paying
incentives for new types of plans to participate. Over 500,000 seniors
lost coverage last year because Medicare+Choice plans left the program.
Today close to 5 million seniors choose to receive quality health care
through the Medicare+Choice program. Because it provides access to drug
coverage and other innovative benefits, it is an option many seniors
like, and an option we must preserve. The President's budget also
proposes the addition of two new Medigap plans to the existing 10
plans. These new plans will include prescription drug assistance and
protect seniors from high out-of-pocket costs.
Some of these initiatives give immediate and tangible help to
seniors. But, let me make clear: these are not substitutes for
comprehensive reform and a universal drug benefit in Medicare. They are
immediate steps we want to take to improve the program in conjunction
with comprehensive reform, so that beneficiaries will not have to wait
to begin to see benefit improvements. I want to pledge today to work
with each and every member of this Committee to fulfill our promise of
health care security for America's seniors--now and in the future.
IMPROVING MANAGEMENT AND PERFORMANCE OF HHS PROGRAMS
I am committed to being proactive in preparing the nation for
potential threats of bioterrorism and supporting research that will
enable Americans to live healthier and safer lives. And, I am excited
about beginning the next phase of Welfare reform and strengthening our
Medicare and Medicaid programs. Ensuring that HHS resources are managed
properly and effectively is also a challenge I take very seriously.
For any organization to succeed, it must never stop asking how it
can do things better, and I am committed to supporting the President's
vision for a government that is citizen-centered, results oriented, and
actively promotes innovation through competition. HHS is committed to
improving management within the Department and has established its own
vision of a unified HHS--One Department free of unnecessary layers,
collectively strong to serve the American people. The FY 2003 budget
supports the President's Management Agenda.
The Department will improve program performance and service
delivery to our citizens by more strategically managing its human
capital and ensuring that resources are directed to national
priorities. HHS will reduce duplication of effort by consolidating
administrative management functions and eliminating management layers
to speed decision-making. The Department plans to reduce the number of
personnel offices from 40 to 4 and consolidate constructi