Testimony

Match 24, 2004

Mr. Chairman and Members of the Committee:

Thank you for the opportunity to meet with you today on behalf of the Health Resources and Services Administration (HRSA) to discuss the Fiscal Year (FY) 2005 budget request to Congress.

HRSA's programs reach into every corner of America, providing the foundation for the safety net of health care services relied on by millions of our fellow citizens. HRSA grantees deliver preventive and primary health care to needy, unemployed and underserved individuals and families. Since FY 2001, funding for Health Centers Presidential Initiative has increased $344 million, and significantly impacted 614 communities by establishing 332 new sites and expanding medical capacity at 282 existing sites.

We administer the Ryan White CARE Act that provides primary care and support services for more than half a million people living with HIV/AIDS, and their family members. CARE Act programs are the largest single source of Federal funding for HIV/AIDS health care for low-income, uninsured, and underinsured Americans after Medicaid and Medicare. Funding for Ryan White CARE Act programs has increased $272 million or 15 percent since FY 2001.

We work with States to ensure that babies are born healthy and that pregnant women and children have access to health care. Each year, more than 27 million women, infants, and children are served by one of HRSA's maternal and child health programs. Our goal is to create comprehensive, community-based systems of care that integrate health, education, and social services in efficient, cost-effective ways.

We help train physicians, nurses and other health care providers and place them in communities where their services are desperately needed. We oversee the Nation's organ transplantation, and bone marrow donation systems, and will establish a cord blood stem cell bank after the completion of the IOM study requested by Congress. HRSA also helps States develop and implement regional plans to improve the ability of hospitals, emergency departments, EMS systems, and other health care organizations to respond to possible bioterror incidents.

About 43.6 million Americans had no health insurance in 2002, a number little changed from 1999. The comprehensive care and services provided or financed by HRSA serve as a safety net for many of these uninsured and underinsured Americans. Lack of insurance for this number does not mean lack of health care for at least 19 million people, of which 9.2 million are uninsured, because HRSA's safety net programs provide quality health care for individuals and families who need it.

HRSA's rural health programs service the same areas as health centers in rural America. The President's budget specifically requests $52.4 million for rural health activities in HRSA while many of HRSA's other funded programs also reach into rural areas.

For Americans who are medically underserved, HRSA programs represent the ultimate safety net, a net whose strength depends on collaboration among partners in each community and at all levels of government. HRSA programs draw on the full range of local assets -- schools, churches and other faith-based organizations, and community and neighborhood groups.

In FY 2005, HRSA will maintain a tight health care safety net, providing more and better preventive and primary care services to reduce unnecessary hospitalizations and prevent chronic disease and disability. In pursuing these goals, HRSA requests a total funding of $6,029,279,000, a decrease of $570,469,000 below the FY 2004 appropriation. At this time, please allow me to address some of the major initiatives described in the FY 2005 President's Budget.

PRESIDENT'S HEALTH CENTERS INITIATIVE

The Health Center program, for more than 35 years a major component of America's health care safety net for the Nation's indigent populations, has helped build cost-effective, high-quality primary care delivery systems serving low-income residents in inner cities and in rural and isolated areas.

The President's Health Centers Initiative, which began in FY 2002, will provide 1,200 communities with new access points (new starts and satellites of existing grantees) and significantly expanded sites (to build additional capacity among existing grantees, including new practices, additional hours/space, etc.) in order to serve another 6.1 million patients by 2006. This expansion complements the President's proposals to increase health insurance coverage in private and public insurance programs, to help ensure that all Americans have access to health care. The President's Health Centers Initiative will broaden the Health Center safety net and increase access to primary health care for the Nation's underserved populations.

The Health Center Program completed the first two years of the Initiative (FYs 2002 and 2003) with a strategy that focused on three key elements: 1) Maintaining and strengthening the capacity of the existing safety net to support 11.3 million patients; 2) Utilizing the expertise found in the base of existing centers as a springboard for the majority of the expansion; and 3) Maintaining and improving the quality of clinical services provided by existing Health Centers. At the end of FY 2003, this strategy resulted in the creation of 271 new access points (141 new grantees, 130 new satellites), the provision of 219 grants to significantly expand the medical capacity of existing service delivery sites, and the award of over 270 grants to existing grantee organizations for the expansion of oral health, mental health and substance abuse, and pharmaceutical services. In 2002, the number of Health Center patients increased by more than one million, the largest increase in a single year in the history of the program. When 2003 data are finalized, it is anticipated that there will be an increase of about 1.2 million Health Center patients over the 2002 level for a total of 2.2 million additional patients after the first two years of the Initiative.

Health Centers serve clients that are primarily low income and minorities including migrant/seasonal farmworkers; homeless individuals and families; people living in areas with high levels of crime; people living in rural and sparsely populated areas; large numbers of unemployed and impoverished people with chronic diseases, pregnant teens, substance abusers, and many individuals living with HIV/AIDS infection.

Health Center patients are comprised of varied populations: 64 percent are minorities; 59 percent are females; 27 percent are children under age 12; 45 percent live in rural areas; more than 620,000 are homeless; and 709,000 are migrant/seasonal farmworkers.

In Calendar Year (CY) 2002, 4.4 million (39 percent) Health Center patients were uninsured, an increase of 860,000 uninsured patients or 24 percent from CY 1998. In CY 2002, 10 million Health Center patients were at or below 200 percent of poverty, a 33 percent increase over CY 1998. Also in CY 2002, almost 36 percent of Health Center patients were covered by Medicaid, 7.1 percent by Medicare, 18.5 percent by other public or private insurance; and almost 39 percent were uninsured.

HRSA and its Health Center grantees have pursued a host of strategies to strengthen existing "safety net" providers and to expand effective, quality care to more of the underserved. The strategies for strengthening existing providers are: The Health Disparities Collaboratives, Integrating Delivery Systems, and the enrolling of patients in the State Children's Health Insurance Program (SCHIP).

Due to some States' budget difficulties, many States have imposed SCHIP enrollment caps, increased premiums, and reduced outreach and enrollment. Thus far, we have not seen an impact on Health Centers. However, we anticipate that these changes may result in an increase in uninsured children being treated at Health Centers since Centers cannot deny care, regardless of ability to pay. We will monitor the long-term impact of these changes on Health Centers.

The FY 2005 President's Budget calls for $1.8 billion for Health Centers, an increase of $219 million above the FY 2004 appropriation. These additional funds will support the development of 176 new access points (new starts administered by new grantee organizations and satellites of existing grantees), 156 expanded existing sites, increase the availability of oral health, mental health and substance abuse services, and serve an additional 1.6 million patients. New access points will be established through Health Centers targeting the neediest populations and communities by replicating existing models of success. Expanded access points will be targeted to communities where an existing Health Center's ability to provide care falls short of meeting the documented service delivery needs of the uninsured and underserved populations. By significantly expanding the capacity of existing access points, increased penetration into these populations will be achieved.

RESHAPED HEALTHY COMMUNITIES ACCESS PROGRAM

The FY 2005 Budget requests $10 million to reshape the Healthy Communities Access Program (HCAP) to support the President's Health Centers Initiative through strengthening efficient Health Centers networks and successful chronic disease management activities. These funds will: assist health centers by developing networks and integrating key functions such as information systems, managed care, administration, or finance; and better serve patients living with chronic diseases through interdisciplinary teams that change practices and improve health outcomes.

NATIONAL HEALTH SERVICE CORPS

Over its 30-year history, the NHSC has offered recruitment incentives, such as scholarship and loan repayment support to more than 24,500 health professionals committed to service to the underserved. NHSC clinicians have expanded access to high quality health services and improved the health of underserved people.

Currently, approximately 50 percent of the NHSC clinicians serve in Health Centers around the Nation. The President's Health Centers Initiative supports a 5-year expansion plan to increase and expand the number of Health Center sites by 1,200 and increase the number of patients served by 6.1 million. In order to expand, Health Centers will need to increase their primary care provider staff. The NHSC will continue to work with Health Centers to help meet their clinician needs. The NHSC also places clinicians in other community-based systems of care that serve underserved populations targeting Health Professional Shortage Areas of greatest need.

The FY 2005 request is an increase of $35 million above the FY 2004 appropriation. The total request is in support of the President's Management Reform, which will enable the NHSC to better utilize its resources to increase access to high-quality primary medical, dental, and mental and behavioral health care to the Nation's underserved.

Within this increased funding, $25 million will be directed to a new effort to recruit nurses and physicians in the Public Health Service (PHS) Commissioned Corps. Officers will incur an obligation to serve in underserved areas similar to other NHSC scholarship and loan repayment recipients. These officers can be directed to serve where the need is greatest. While these health care providers will be employees of community facilities, they will also have a long term reserve corps commitment to the PHS Commissioned Corps. This effort will be led by the Office of Public Health and Science and the Health Resources and Services Administration.

NURSE EDUCATION

As the population continues to grow and age, and medical services advance, the need for nurses continues to increase. The FY 2005 Budget requests $147 million for nursing education programs, an increase of $5 million above the FY 2004 appropriation. Since 2001, funding for nursing education programs has increased 75 percent.

The Budget request increases support for the Nurse Education, Practice and Retention Grant program by $10 million for a total of $42 million. For the Nursing Education Loan and Scholarship Repayment Program (NELRP) $32 million is requested, a $5 million increase. This request maintains the $20 million from FY 2004 for the Loan Repayment Program, which supports 807 contract awards for RNs agreeing to work in designated public or nonprofit health facilities. Loan repayments provide an economic incentive to these nurses to start and/or continue practice in health care facilities with a critical shortage of nurses. The remaining $12 million of the request will be used to provide 275 nursing scholarships to address the need for financial aid to obtain a nursing education. These scholarships will reduce the financial barrier by providing funds for tuition and fees as well as a stipend. A condition of the scholarship is a service commitment payback of at least two years in a facility with a critical shortage of nurses. The FY 2005 Budget also requests $21 million for nursing diversity programs, a $5 million increase, and maintains $8 million investment in loans for nurse faculty and support for comprehensive geriatric education. The Budget reduces funding for advanced education nursing, as these grants do not address the overall basic nursing shortage.

RYAN WHITE CARE ACT

After Medicaid and Medicare, CARE Act programs are the largest single source of Federal funding for HIV/AIDS health care for low-income, uninsured, and underinsured Americans. As a result, the CARE Act programs are often the focal point for Federal discretionary resources for medical care and social support needs for persons living with HIV disease in the United States including women, children and youth. Since the CARE Act is the "payer of last resort," the unique statutory mandates in the Act regarding participatory planning help to insure that the CARE Act programs truly meet the needs of persons living with HIV/AIDS. The programs demonstrate a comprehensive and aggressive approach in how government has targeted dollars toward the development of an effective service delivery system by partnering with States, heavily impacted Metropolitan Areas, community-based and faith-based providers, and academic institutions.

The FY 2005 request of $2.1 billion is $35 million above the FY 2004 appropriation. The increase will provide additional funding for the State AIDS Drug Assistance Program funded under Part B (Title II of the CARE Act). For FY 2005, as part of efforts to target minority communities, the request includes $129,578,000 for activities targeted to reduce HIV related health disparities and improve health outcomes in communities of color. In addition, the FY 2005 request continues to fund Special Projects of National Significance at $25,000,000 from the PHS Act evaluation set-aside.

MATERNAL AND HEALTH CHILD BLOCK GRANT

The FY 2005 request of $730 million maintains the FY 2004 appropriation and supports activities that underpin the public health infrastructure for mothers and children. These funds will enable States to develop and coordinate needed services striving for a seamless, comprehensive system of care for children which will enable HRSA and the States, as well as Medicaid and the SCHIP, to achieve their goals. Title V programs serve as a safety net for uninsured and underinsured children, including children with special health care needs. Title V continues to play a valuable, complementary role to SCHIP and Medicaid programs. States will also be able to continue using MCH Block grant funds for newborn hearing screening activities.

ORGAN TRANSPLANTATION

HRSA's efforts to increase organ donation and transplantation mean the difference between life and death for tens of thousands of Americans and their families each year. Each day approximately 68 people receive an organ transplant, but another 17 people die because the demand for transplantable organs far exceeds the available supply and the gap continues to widen. The Budget request includes $25 million to maintain support for the Organ Transplantation program, which funds the network that manages the distribution of organs throughout the United States and the National registry of transplant recipients that assists in organ allocation.

Each year approximately 38,000 people under 55 years old are diagnosed with fatal illnesses, and about 16,000 of them cannot be successfully treated with therapy other than a bone marrow transplant. When doctors have a patient in need of bone marrow transplantation, they initially try to locate donors related to the patient. If no donors are available, as is the case for approximately 70 percent of patients, doctors use the HRSA-funded National Bone Marrow Donor Registry to search for a suitable unrelated donor. The FY 2005 Budget requests $23 million to maintain the National Bone Marrow Donor Registry, which enables patients to search for a suitable, unrelated bone marrow donor.

Blood stem cell transplants offer the possibility of a cure for people with leukemia and various other life-threatening blood disorders. Blood stem cells for these transplants can be obtained from the bone marrow or circulating blood of volunteer adult donors, or collected from the newest source, the umbilical cord and placenta after a normal birth. The FY 2005 Budget continues the $10 million to maintain the newly funded Cord Blood Stem Cell Bank. This level of funding, along with the FY 2004 funding, will increase the National inventory of cord blood stem cells by approximately 25 percent.

HOSPITAL AND HEALTH CARE PROVIDER EMERGENCY PREPAREDNESS

The FY 2005 Budget includes the Hospital Preparedness and the Bioterrorism Training and Curriculum Development programs, which are requested under the Public Health and Social Services Emergency Fund (PHSSEF). These programs are administered by HRSA in collaboration with the Assistant Secretary for Public Health Emergency Preparedness and are coordinated with other entities that assist State and local health entities with bioterrorism preparedness. FY 2005 will be the fourth year of funding to States for preparing hospitals to provide medical and public health services in the event of a bioterrorist attack or other public health emergency. The Budget includes $476 million for the Hospital Preparedness program to continue progress towards the goal of 100 percent of States having surge capacity plans.

The Budget also includes $28 million for the Bioterrorism Training and Curriculum Development program to support the training of public health and health care professionals who are prepared to recognize indications of a terrorist event and treat patients in a safe and appropriate manner. A competitive application process will award the FY 2005 funds. FY 2004 funds will be used to support the second (and final) year of the 19 continuing education awards and the 13 curriculum development awards made in FY 2003.

RURAL HEALTH

The rural provisions of the recently enacted Medicare Prescription Drug and Modernization Act will substantially increase the resources available to rural communities by approximately $8 billion over the next 5 years. Specifically, the Act will increase payments to hospitals in rural areas through providing urban standardized amounts and enhancing Disproportionate Share Hospital payments. The Act also makes it easier for some hospitals to qualify as Critical Access Hospitals, one of the main purposes of the Hospital Flexibility grants.

The FY 2005 requests $52.4 million for targeted rural health programs, including $22 million for the Denali Commission. A total of $17 million is requested for State Offices of Rural Health that monitor and direct State level strategy for rural health care, and for the Federal policy research studies and rural health information dissemination. An additional $13 million is requested for Rural Health Outreach and Network Development grants, which enable community partnerships to implement creative strategies to meet their unique health needs, and for grants to purchase life-saving emergency devices.

PROGRAM MANAGEMENT

To make these worthy programs work at maximum efficiency, HRSA continues to reduce operating costs and increase productivity at every possible opportunity, but innovative programs such as HRSA's do not self administer. Adequate funds are required to ensure that needed personnel and support systems are in place to ensure quality services at the most efficient costs. HRSA's request includes funding to support the Departmental efforts to replace five legacy accounting systems currently used across Operating Divisions with the Unified Financial Management System (UFMS), and continues support for the J-1 Visa program.

CONCLUSION

U.S. health care is among the finest in the world, and it gets better as we include access to care for those children, women, and men in our safety net programs. We provide access to care so that those in America who are disadvantaged, medically underserved, and special populations can be treated successfully with early interventions become medical emergencies requiring more intensive, more expensive hospitalizations.

Through this Budget request of over $6 billion, HRSA will continue to cast the Nation's health care safety net to pull in and anchor its indigent populations into the health care system through community-based primary care, services for low-income individuals and people with HIV/AIDS, health services for mothers and children, and targeted health professions training. HRSA will also continue to work in partnership with State and local governments and private organizations to expand access to care and thus improve the health and lives of millions of Americans.

Mr. Chairman and members of the Committee, I will be pleased to address any questions or comments you may have on specifics of this Budget request.

Last revised: March 24, 2004

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