Health and Human Services United States. Congress. House. Committee on Appro.

Departments of Labor, Health and Human Services, Education, and related agencies appropriations for 1997 : hearings before a subcommittee of the Committee on Appropriations, House of Representatives, One Hundred Fourth Congress, second session (Volume 2) online

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Online LibraryHealth and Human Services United States. Congress. House. Committee on ApproDepartments of Labor, Health and Human Services, Education, and related agencies appropriations for 1997 : hearings before a subcommittee of the Committee on Appropriations, House of Representatives, One Hundred Fourth Congress, second session (Volume 2) → online text (page 1 of 73)
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^DEPARTMENTS OF LABOR, HEALTH AND HUMAN
| hn SERVICES, EDUCATION, AND RELATED AGENCIES
APPROPRIATIONS FOl

Y 4.AP 6/l:L 11/997/PT.2 / ^ S,T ^



Departments of Labor, Health and Hu. ^J^|

BEFORE A

SUBCOMMITTEE OF THE

COMMITTEE ON APPROPRIATIONS
HOUSE OF REPRESENTATIVES

ONE HUNDRED FOURTH CONGRESS

SECOND SESSION




SUBCOMMITTEE ON THE DEPARTMENTS OF LABOR, HEALTH AND
HUMAN SERVICES, EDUCATION, AND RELATED AGENCIES

JOHN EDWARD PORTER, Illinois, Chairman

C. W. BILL YOUNG, Florida DAVID R. OBEY, Wisconsin

HENRY BONILLA, Texas LOUIS STOKES, Ohio

ERNEST J. ISTOOK, Jr., Oklahoma STENY H. HOYER, Maryland

DAN MILLER, Florida NANCY PEDOSI, California

JAY DICKEY, Arkansas NITA M. LOWEY, New York
FRANK RIGGS, California
ROGER F. WICKER, Mississippi

NOTE: Under Committee Rules, Mr. Livingston, as Chairman of the Full Committee, and Mr. Obey, as Ranking
Minority Member of the Full Committee, are authorized to sit as Members of all Subcommittees.

S. Anthony McCann, Robert L. Knisely, Susan E. Quantius, Michael K. Myers,
and Joanne L. Orndorff, Subcommittee Staff



PART 2



DEPARTMENT OF HEALTH AND HUMAN SERVICES

Page

Secretary of Health and Human Services 1

Health Care Financing Administration 157

Administration for Children and Families 387

Administration on Aging 891

Special Tables 991

Printed for the use of the Committee on Appropriations



/



DEPARTMENTS OF LABOR, HEALTH AND HUMAN

SERVICES, EDUCATION, AND RELATED AGENCIES

APPROPRIATIONS FOR 1997

HEARINGS

BEFORE A

SUBCOMMITTEE OF THE

COMMITTEE ON APPROPRIATIONS
HOUSE OF REPRESENTATIVES

ONE HUNDRED FOURTH CONGRESS
SECOND SESSION



SUBCOMMITTEE ON THE DEPARTMENTS OF LABOR, HEALTH AND
HUMAN SERVICES, EDUCATION, AND RELATED AGENCIES

JOHN EDWARD PORTER, Illinois, Chairman

C. W. BILL YOUNG, Florida DAVID R. OBEY, Wisconsin

HENRY BONILLA, Texas LOUIS STOKES, Ohio

ERNEST J. ISTOOK, Jr., Oklahoma STENY H. HOYER, Maryland

DAN MILLER, Florida NANCY PELOSI, California

JAY DICKEY, Arkansas NITA M. LOWEY, New York
FRANK RIGGS, California
ROGER F. WICKER, Mississippi

NOTE: Under Committee Rules, Mr. Livingston, as Chairman of the Full Committee, and Mr. Obey, as Ranking
Minority Member of the Full Committee, are authorized to sit as Members of all Subcommittees.

S. Anthony McCann, Robert L. Knisely, Susan E. Quantius, Michael K. Myers,
and Joanne L. Orndorff, Subcommittee Staff



PART 2



DEPARTMENT OF HEALTH AND HUMAN SERVICES

Page

Secretary of Health and Human Services 1

Health Care Financing Administration 157*

Administration for Children and Families 387

Administration on Aging 891

Special Tables 991



Printed for the use of the Committee on Appropriations



U.S. GOVERNMENT PRINTING OFFICE
24-954 WASHINGTON : 1996

For sale by the U.S. Government Printing Office

Superintendent of Documents, Congressional Sales Office, Washington, DC 20402

ISBN 0-16-052784-8



COMMITTEE ON APPROPRIATIONS

BOB LIVINGSTON, Louisiana, Chairman



JOSEPH M. McDADE, Pennsylvania

JOHN T. MYERS, Indiana

C. W. BILL YOUNG, Florida

RALPH REGULA, Ohio

JERRY LEWIS, California

JOHN EDWARD PORTER, Illinois

HAROLD ROGERS, Kentucky

JOE SKEEN, New Mexico

FRANK R. WOLF, Virginia

TOM DeLAY, Texas

JIM KOLBE, Arizona

BARBARA F. VUCANOVICH, Nevada

JIM LIGHTFOOT, Iowa

RON PACKARD, California

SONNY CALLAHAN, Alabama

JAMES T. WALSH, New York

CHARLES H. TAYLOR, North Carolina

DAVID L. HOBSON, Ohio

ERNEST J. ISTOOK, Jr., Oklahoma

HENRY BONILLA, Texas

JOE KNOLLENBERG, Michigan

DAN MILLER, Florida

JAY DICKEY, Arkansas

JACK KINGSTON, Georgia

FRANK RIGGS, California

MIKE PARKER, Mississippi

RODNEY P. FRELINGHUYSEN, New Jersey

ROGER F. WICKER, Mississippi

MICHAEL P. FORBES, New York

GEORGE R. NETHERCUTT, Jr., Washington

JIM BUNN, Oregon

MARK W. NEUMANN, Wisconsin



DAVID R. OBEY, Wisconsin

SIDNEY R. YATES, Illinois

LOUIS STOKES, Ohio

TOM BEVILL, Alabama

JOHN P. MURTHA, Pennsylvania

CHARLES WILSON, Texas

NORMAN D. DICKS, Washington

MARTIN OLAV SABO, Minnesota

JULIAN C. DDCON, California

VIC FAZIO, California

W. G. (BILL) HEFNER, North Carolina

STENY H. HOYER, Maryland

RICHARD J. DURBIN, Illinois

RONALD D. COLEMAN, Texas

ALAN B. MOLLOHAN, West Virginia

JIM CHAPMAN, Texas

MARCY KAPTUR, Ohio

DAVID E. SKAGGS, Colorado

NANCY PELOSI, California

PETER J. VISCLOSKY, Indiana

THOMAS M. FOGLIETTA, Pennsylvania

ESTEBAN EDWARD TORRES, California

NITA M. LOWEY, New York

RAY THORNTON, Arkansas

JOSE E. SERRANO, New York



James W. Dyer, Clerk and Staff Director



(ID



DEPARTMENTS OF LABOR, HEALTH AND
HUMAN SERVICES, EDUCATION, AND RE-
LATED AGENCIES APPROPRIATIONS FOR
1997



Thursday, April 18, 1996.
DEPARTMENT OF HEALTH AND HUMAN SERVICES

WITNESS

hon. donna e. shalala, u.s. secretary of health and human
services

Introduction of Witness

Mr. Porter. The subcommittee will come to order.

This morning we have the first of our hearings with our three
cabinet secretaries, and, Secretary Shalala, we are pleased to wel-
come you this morning to kick off what will be two weeks of hear-
ings on your Department's 1997 budget request. We recognize that
it is a challenging circumstance for all of us to consider 1997 fund-
ing without having reached final agreement on the 1996 program
levels, but the imperatives of our calendar require us to begin the
1997 cycle, and, hopefully, the 1996 bill will be resolved by the
time we have your Department complete its testimony here.

We also would like to thank you for providing us with the jus-
tifications on time.

I call on Mr. Hoyer for any comments he would like to make.

Mr. Hoyer. Thank you very much, Mr. Chairman.

I certainly want to welcome the Secretary to this hearing. I think
you rightfully observed that I chuckled. It is a real challenge for
the agencies that have not been funded for 1996 to then begin 1997
not being assured of what the base line is or what the parameters
are.

Mr. Chairman, I want to congratulate the Secretary. I think she
has done an outstanding job, and I think one of the President's best
choices for Cabinet Secretary was Secretary Shalala, and I look for-
ward to her testimony and to this hearing.

Thank you, Mr. Chairman.

Mr. Porter. Thank you, Mr. Hoyer.

Secretary Shalala, you may proceed any way you would like.

Opening Statement

Secretary Shalala. Thank you very much, Mr. Chairman, and
thank you, Congressman Hoyer.

(l)



Thank you for giving me the opportunity to discuss the Presi-
dent's 1997 budget for the Department. Our budget builds upon the
progress in the last three years as deficit reductions and targeted
investments in health science continue to pay off for the American
people.

Today childhood immunization rates are at the highest levels in
history, and vaccine preventable childhood diseases are at an all
time low. Child poverty is down and child support collections are
up.

Since March of 1994 welfare case loads have declined by more
than 1.4 million, and a larger percentage of those still on welfare
are engaged in work-related activities.

In fact, Mr. Chairman, 75 percent of all of the people on welfare
in this country are now in programs that are under waivers.

Our investments in biomedical research have helped lead to the
discovery of three genes linked to hereditary breast cancer, the ap-
proval of five new antiviral drugs for people living with HIV-AIDS,
and the first treatment for the most common form of stroke.

The President's proposed budget for 1997 builds on this success.
It requests a total of $222 billion in spending for programs that fall
under the jurisdiction of this subcommittee. Of this amount, discre-
tionary spending totals $3 1 billion, an increase of five percent over
the 1996 policy level.

We believe that we can balance the budget in seven years, en-
sure fiscal accountability and reform Welfare, Medicare and Medic-
aid, while still protecting our nation's fundamental priorities and
values, and that's what the President's fiscal year 1997 budget
does.

For those trying to move to independence, the President's budget
for welfare makes changes that encourage work, demand respon-
sibility and protect children. We do this by replacing the current
Aid to Families with Dependent Children program with a new con-
ditional entitlement in which assistance is provided only in return
for work and preparation for work.

Overall, our proposal would save $40 billion over seven years,
while still protecting vulnerable children.

The President's budget also reforms Medicaid the right way. It
saves $59 billion over seven years, it maintains a strong Federal-
state partnership while giving states unprecedented flexibility to
meet the needs of their citizens, it retains nursing home quality
standards, it maintains Medicaid's national guarantee of health
care for our most vulnerable citizens.

The President's Medicare plan reduces the growth of projected
spending by $124 billion over seven years and guarantees the sol-
vency of the hospital insurance trust fund for more than a decade.
We are making our Medicare life line more efficient and responsive
to our citizens by giving seniors more choices among private health
plans, cracking down on health care fraud and abuse and cutting
the growth of provider payments while still holding Part B pre-
miums at 25 percent of program costs.

To meet our citizens' health care needs we must also guarantee
quality and fiscal accountability, and that is exactly what we are
doing. In fiscal year 1995 our Inspector General, the Health Care
Financing Administration and the Administration on Aging teamed



up with officials in five key states to crack down on health care
fraud and abuse. It is called Operation Restore Trust, and we want
to expand it to every state over the next three years.

Our fiscal year 1997 budget calls for $597 million to give HCFA
and the Office of the Inspector General the secure and stable fi-
nancing that they need not only to punish health care fraud and
abuse, but also to stop it before it occurs.

Mr. Chairman, we are changing the way we do business at HHS
not only in Medicare, Medicaid and welfare, but throughout the De-
partment. As part of the President's plan to dramatically shrink
the size of the Federal Government, we reduced our staff by nearly
3,300 FTE, a full five percent, between fiscal year 1994 and fiscal
year 1995 alone. And, to meet the President's goals, we have com-
mitted ourselves to a seven-year right-sizing effort that will reduce
the Department's personnel by 7,000 FTE by the year 2000.

To streamline our Department we have merged some of our oper-
ations and eliminated entire management levels. We have merged
the operations of the Assistant Secretary for Management and
Budget with the Assistant Secretary for Personnel Management,
thereby eliminating one assistant secretary slot, and we freed the
Assistant Secretary for Health from day-to-day management re-
sponsibilities in order to strengthen the absolutely critical leader-
ship and policy role in the Department's public health and science
agenda. We have also created an innovative agency, a program
support center, whose sole purpose is to provide administrative
services on a fee-for-service basis for HHS and other Federal agen-
cies.

Under the leadership of Lynnda Regan, a former business man-
ager at Westinghouse, the PSC will be internally financed, competi-
tive and create real incentives for long-term savings. It is truly a
model built for the future, and it is all part of a fundamental com-
mitment to business-like management throughout the Department.

Let me take a moment to tell a story that I think best exempli-
fies the kind of vision and tough-minded management approach
that we brought to the Department in the past three years:

It is a story of Head Start, Congressman Hoyer, a program that
when done right, works superbly to give our most vulnerable chil-
dren a hand up on the educational ladder and a hand up in life.
But as we found out when we got here, and as you pointed out to
us, in some communities Head Start wasn't always being done
right. So we brought in the best experts in the country and asked
them for a candid assessment of what needed to be improved, and
then we rolled up our sleeves and got right down to work. With
those experts and a bipartisan effort in Congress, we developed
ways to set quality standards that provided resources to help cen-
ters meet them and to enforce strict penalties for those who don't.

Since 1993 we have helped 100 grantees improve their programs
and provide quality services to their children, but that is only half
of the story. We have also gotten tough by cracking dov/n and ulti-
mately shutting down those programs that aren't meeting quality
standards. In just two and a half years, some 40 programs have
been terminated before they have really received their grants.

Mr. Chairman, while we work to implement smart, tough man-
agement throughout the Department, we have continued our com-



mitment to investing in the future health and well-being of all
Americans. From day one, Head Start and our overall commitment
to our neediest children has been a top priority to this Administra-
tion. For fiscal year 1997 we have proposed an increase of $350
million to serve 46,000 more children than we served in 1995. As
part of this enrollment increase, an additional 7,400 infants and
toddlers will be able to participate in the early Head Start program
between fiscal year 1995 and 1997.

The President believes strongly that the best safety net for our
children is, and always will be, strong families, and whether par-
ents are struggling to get jobs or to keep them, we know that they
need good child care to keep their children safe. And, that is why
we are requesting over $1 billion for the child care block grant so
that more children of low income families can have high quality
child care, and their parents can have peace of mind while they
work, train or go to school.

We have all heard the horror stories of abused children, ne-
glected children, forgotten children. The President wants to work
with states and communities to stop these tragedies, and that is
why he is requesting $419 million in discretionary spending to help
abused and neglected children by encouraging parental responsibil-
ity when possible and providing foster care and adoption when nec-
essary.

Our commitment to children doesn't stop there. The President
believes that we must help parents guide their children along the
right path, the healthy path, the safe path in life. That means in-
creasing our investment in AIDS prevention by $34 million. It
means building on the President's historic child tobacco initiative
by supporting innovative community partnerships that give chil-
dren the facts about a deadly addiction that could take years off
their lives. It means working with the White House Drug Policy
Coordinator, General Barry McCaffrey, to ensure that engines of
our drug strategy — prevention, treatment, research, interdiction
and law enforcement — are working together.

When it comes to preventing teen pregnancy, it means building
on our success from targeted demonstration grants to Welfare
waivers that require teen mothers to stay in school and live with
a responsible adult.

To ensure a clear message of abstinence and responsibility while
addressing the broader health needs of young people, our budget
also includes a new $30 million initiative. This effort helps commu-
nities all over America implement local strategies with promising
track records of reducing teen pregnancy.

Next, our fiscal year 1997 budget continues to put fighting dis-
ease and foster good health at the top of our priority list where
they belong. To that end, we have requested $310 million to turn
the 40-year old Warren G. Magnuson Clinical Center at the Na-
tional Institutes of Health into a state-of-the-art clinical research
center and hospital. This investment in a new clinical center will
mean the highest quality clinical research performed by the world's
very best scientists in a research hospital that is more efficient,
more affordable and more flexible in adapting to today's realities
and tomorrow's challenges.



Our budget also provides $6.6 billion to NIH to fund a record
total of 25,400 extramural research grants. Our commitment to re-
search has already brought some real successes in the fight against
AIDS, but this fight is a long way from being won and that is why
the President has requested a consolidated appropriation of $1.4
billion, nearly 34 percent over the 1993 levels, for the Office of
AIDS Research so that we can ensure a flexible and coordinated re-
sponse to the epidemic.

Today new and emerging infectious diseases are a reality that
threaten all of us in our water, in our air and in our food. The
President's budget almost doubles the $45 million for our invest-
ment in the Centers for Disease Control and Prevention's national
strategy for identifying, investigating and ultimately stopping new
infectious diseases around the world.

We also request $4 million to renovate and repair critical con-
tainment laboratory space at the CDC in Atlanta, laboratories that
are this nation's first line of defense against these deadly diseases.

Mr. Chairman, these investments pay off not only in dollars and
cents, but most importantly in healthier lives and brighter futures,
and that is what our 1997 budget is all about. It is about balancing
the budget, it's about being tough managers and making a sus-
tained investment in the preventive tools all of our citizens from
the youngest to the oldest will need to thrive in the 21st century.

We look forward to working with this subcommittee in our fiscal
year 1997 budget request.

Thank you again for giving me the opportunity to present our
budget to the subcommittee, and I would be happy to answer any
questions that you may have.

[The prepared statement of Secretary Shalala follows:]



( 4-



THE SECRETARY OF HEALTH AND HUMAN SERVICES

WASHINGTON. DC. 20201



Testimony of

Donna E. Shalala

U.S. Secretary of Health and Human Services

before

The House Appropriations Subcommittee on

Labor, Health and Human Services, Education and

Related Agencies



April 18, 1996



Good morning, Mr. Chairman and Members of the Subcommittee. Thank
you for the opportunity to discuss President Clinton's FY 1997 Budget for the
Department of Health and Human Services.

This budget is built on a remarkably strong foundation of accomplishments
that have resulted from carefully chosen investments in the health and
independence of all Americans. Time and time again these investments have paid
off.

For example, childhood immunization rates have reached an all-time high
and the incidence of childhood infectious diseases is declining.

Welfare case loads are down by more than 1.4 million, a decrease of 10
percent, since March 1994; child poverty is down and child support enforcement
collections are up.

Our investments in biomedical research have helped lead to the discovery
of three genes linked to hereditary breast cancer.

We have also witnessed the first drug treatment for severe sickle cell
anemia and the first treatment for the most common form of stroke.

And our investment in medicine has helped scientists win approval for five
new anti-viral drugs for people living with HIV/AIDS, including three very
promising protease inhibitors, two of which were approved in record time.

We have already granted waivers to 37 states that are now reforming
welfare for 10 million parents and their children - that's about 70 percent of all
AFDC recipients.

With this strong foundation in mind, we have designed a budget to help
Americans help themselves in pursuing more healthy and independent lives.

This FY 1997 budget requests a total of $222 billion in spending for
programs that fall under the jurisdiction of this Subcommittee. Of this request,
discretionary spending totals $31 billion, which is an increase of 5 percent over
the FY 1996 policy level. [The FY 1996 policy level is based on levels of the
ninth continuing resolution, including an incremental policy adjustment.]

The President believes that we can balance the budget in seven years,
ensure fiscal accountability, reform welfare, and strengthen and improve Medicare
and Medicaid.

Our budget for FY 1997 helps us do just that.



The President's Medicare plan reduces the growth of projected spending by
a net $124 billion over seven years, and guarantees the solvency of the Hospital
Insurance Trust Fund for more than a decade. We are reforming Medicare to
make it more efficient and responsive to beneficiary needs, to give seniors more
choices among private health plans, to attack fraud and abuse, to cut the growth of
provider payments, and to hold the Part B premium to 25 percent of program
costs.

The President's budget also reforms Medicaid the right way: it maintains a
strong federal-state partnership, while giving states unprecedented flexibility to
meet the needs of their citizens. The plan would save $59 billion over seven
years while retaining nursing home quality standards, and maintaining Medicaid's
national guarantee of health care for our most vulnerable citizens.

We also have a tough plan to guarantee program integrity and fiscal
accountability in the Medicare and Medicaid programs.

In FY 1995, the HHS Inspector General (OIG), Health Care Financing
Administration (HCFA), and the Administration on Aging teamed up with officials
in five key states to crack down on health care fraud and abuse. This program is
called Operation Restore Trust. We want to expand this program to every state
over three years.

Our FY 1997 budget calls for an expenditure of $597 million to give
HCFA and the OIG the secure and stable funding they need not only to punish
health care fraud and abuse, but also to stop it before it occurs. Our budget
would increase spending to eliminate fraud, waste and abuse with expected net
savings to the trust funds of $3.4 over seven years.

Our budget also includes President Clinton's comprehensive welfare reform
plan that promotes work and responsibility and achieves $40 billion in program
savings. The President's plan would replace the AFDC program with a
conditional entitlement with tough time limits and work requirements, while
retaining a strong national safety net for children.

Mr. Chairman, we're changing the way we do business at HHS - not only
in Medicare, Medicaid and welfare but throughout the Department.

As part of the President's plan to dramatically shrink the size of the federal
government, we reduced our staff by nearly 3,300 FTE, a full 5 percent, between
FY 1994 and FY 1995 alone. To meet the goals of the President's plan, we have
committed ourselves to a seven-year right-sizing effort that will reduce the
Department's personnel by 7,000 FTE (from the FY 1993 level) by the year 2000.



In March 1995, we successfully launched the Social Security
Administration (SSA) as an independent agency, thanks to the careful planning of
both HHS and SSA staff.

Based on this change and on the implementation of the Vice President's
Reinventing Government program, we have streamlined the structure of our
Department. We merged some of our operations and eliminated entire
management layers - we have freed the Assistant Secretary for Health from day-
to-day management responsibilities in order to strengthen this absolutely critical
leadership and policy role in the Department's public health and science agenda.

We also have merged the operations of the Assistant Secretary for
Management and Budget with the Assistant Secretary for Personnel Management.
The final result of these reorganizations is a lean, tightly organized Office of the
Secretary.

We also have created an innovative new agency, the Program Support
Center (PSC), whose sole purpose is to provide administrative services on a fee-
for-service basis for HHS and other federal agencies. This agency is internally
financed and competitive, and it is offering its services on a low-cost fee-for-
service basis. Fees and service levels will be approved by a Board consisting of
representatives of both customers and service providers.

After a nationwide search, I have just appointed Lynnda Regan as the first
Director of the PSC. Ms. Regan is a highly respected executive from
Westinghouse and brings to the Department valuable private sector knowledge and
experience. With Ms. Regan's leadership and the management structure we have



Online LibraryHealth and Human Services United States. Congress. House. Committee on ApproDepartments of Labor, Health and Human Services, Education, and related agencies appropriations for 1997 : hearings before a subcommittee of the Committee on Appropriations, House of Representatives, One Hundred Fourth Congress, second session (Volume 2) → online text (page 1 of 73)