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Testimony on Public Health Service Act Programs and Reauthorization by Philip R. Lee, M.D.
Assistant Secretary for Health
U.S. Department of Health and Human Services

Before the House Committee on Commerce, Subcommittee on Health and Environment
August 1, 1996

Mr. Chairman and Members of the Subcommittee:

It is a pleasure to be with you this morning to discuss pending Public Health Service bills and our priorities for reauthorization during this Congress. I am accompanied by Dr. Ciro Sumaya, Administrator of the Health Resources and Services Administration (HRSA), and Dr. Frank Sullivan, Associate Administrator of the Substance Abuse and Mental Health Services Administration (SAMHSA).


On March 3, 1995, we forwarded to the Congress a proposal to reauthorize and consolidate four programs of the Health Resources and Services Administration: Community Health Centers; Migrant Health; Health Care for the Homeless; and Health Care for Residents of Public Housing.

Established by Congress to address defined sets of needs in a specific way, the health centers programs have for almost thirty years effectively responded to the challenges of medical underservice and assured access for millions of underserved and uninsured individuals. In response to today's changing health care environment, the health centers have become increasingly involved in managed care arrangements and have developed networks of care with other community partners. Whether today, or in the future, health centers will continue to play a critical role in the delivery of services to underserved and vulnerable populations.

Reauthorization of these health center programs is critical. The centers provide a medical home for millions of underserved and uninsured people, assuring access to cost-effective, high quality preventive and primary care services and improving the health status of the Nation's underserved and vulnerable populations.

Continued Lack of Access to Preventive and Primary Health Care Services

Although we have recently witnessed many changes in the financing and delivery of health care services -- for example, the rapid growth of managed care and the accelerated development of health care networks -- there are still many people who lack access to basic primary and preventive care services. These individuals are disproportionately poor and minority, lack adequate or do not have any health insurance, all of which combine to result in sicker patients and more expensive treatment and care. Further, these individuals face geographic and cultural barriers, as well as health provider shortages.

HRSA's health centers programs are an important part of addressing this problem. Currently, a Federal health center investment of approximately $750 million leverages a $2 billion network (including Medicare and Medicaid billings) of over 700 organizations and 2,100 service delivery sites, providing services to over 7.7 million people. This health center investment has acted as the safety net for millions of people otherwise at risk for poor health outcomes.

Health Centers and the Changing Health Care Environment

Health Centers across the country are responding to the rapid changes in today's health care marketplace. In particular, health centers are recognizing the critical importance of forming or being a part of an integrated system of health delivery in order to continue serving their patients under managed care arrangements. The trend within the health care industry, in general, and the States, in particular, has been a movement towards managed care.

Health centers have responded to this trend by participating in the development of networks. The basic premise of health center involvement in integrated service networks is that as the delivery of services moves toward managed care arrangements for the Medicaid population, health centers must participate in these arrangements in order to assure access for underserved individuals. As of July 1996, approximately 450 health centers are involved in integrated networks.

To assist the health centers in the development of such networks, the HRSA's Bureau of Primary Health Care launched the Integrated Service Network (ISN) Development Initiative in FY 1994. ISN grants were awarded in FY 1994 and FY 1995. At present at total of 54 grantees are funded. In addition, as more and more health centers have become involved in managed care, health maintenance organizations have increasingly recognized the advantages of contracting with the health centers programs.

Administration's Proposal

In general, the Administration's proposal reauthorizes and consolidates the health centers and service programs under one new health center authority. All of these programs provide community- based, organized systems of preventive care and primary care for medically underserved populations. Although some of the programs are targeted to specific populations most are jointly funded thus assuring access to whole communities as well as the targeted populations.

The "cluster" approach proposed by the Administration is consistent with our commitment to simplify the way in which communities seek Federal assistance. By consolidating the funding previously requested under the separate programs the total number of grants will be reduced producing a reduction in Federal administrative costs. Also, it will make grants more flexible, and less burdensome for communities applying for and receiving the grants.

The Senate Labor and Human Resources Committee has approved legislation (S. 1044) which in large part accepts our recommendations. We urge you to move forward with the reauthorization and consolidation of HRSA's health centers and services programs.


The Administration is committed to establishing a sound legislative foundation for furthering leadership and strategic support in the field of health workforce development, including the health professions programs.

These programs have achieved remarkable success as a national resource --

  • They have significantly enhanced the quality of primary care curriculum and fostered a growth in the interest of medical students in generalist practice.

  • Funding of residency training opportunities in family medicine, general internal medicine, and general pediatrics have increased our national supply of much needed primary care physicians.

  • They have opened opportunities for greater numbers of minorities to pursue and succeed in health professions careers and thereby expanded the access of millions of Americans to basic medical care.

  • They have spurred unprecedented growth in student enrollment among the mid-level professions of nurse practioners, nurse midwives, nurse anesthetists, and physician assistants.

  • Through establishment of interdisciplinary training centers in geriatrics we have improved the quality of health care received by older Americans and the training given to their health care professionals.

As you are aware, Titles VII and VIII of the Public Health Service Act authorize a large number of individual programs of support to health professions and nursing schools and students. Last year, as part of our effort to reinvent Government, we sent to the Congress a proposal to replace these multiple existing categorical grant authorities with new "cluster" authorities addressing five broad areas of program need:

  • Health Professions Workforce Development;

  • Enhanced Area Health Education Centers;

  • Minority/Disadvantaged Health Professions;

  • Primary Care Medicine and Public Health Training; and

  • Nursing Education and Practice.

This proposal, if enacted, would reduce the total number of awards and provide administrative savings through a reduction in required applications and reports by consolidating dozens of specific authorities into the functional categories listed above. In addition to simplifying program administration, the consolidations would sharpen the focus of these programs on outcome and encourage collaboration among the health and educational institutions.

The Senate Labor and Human Resources Committee has approved legislation (S. 555) very similar to our health professions proposal. In addition, S. 555 includes a provision regarding fellowships and training authority for the Centers for Disease Control and Prevention and reauthorization of the office of Minority Health. We support S.555 and urge you to give it your careful consideration.


In this Congress, the Administration has proposed Performance Partnership Grants (PPGs). This is a new approach in which the Federal Government and the States work together as partners to achieve significant improvements in health outcomes. Performance Partnerships create an opportunity and a structure within which the Federal government and States can channel their efforts and resources to achieve specific improvements in the health status of the American people.

The potential power of these partnerships flows from a focus on measurable results, and the energy and commitment that come from a shared vision. Washington cannot legislate a vision or strategy that is right for every State, Tribe and community in the country. We can, however, create a process through which national, State and local interests can be negotiated and agreements reached that are tailored to needs and priorities of our communities.

In some respects, PPGs are somewhere between traditional block grants, which do not provide either accountability for the expenditure of Federal funds or achieving measurable outcomes, and categorical grants for earmarked block grants which limit the role of the States, communities and consumers because health priorities are set at the Federal level. But in other respects, they constitute an entirely new, stronger approach that builds on other outcomes-oriented activities such as State benchmarking, and Healthy People 2000.

The PPG approach fundamentally changes the roles and expectations of the Federal government and the States. The Federal role will be to facilitate a continuous national dialogue about the health objectives that are key to achieving better health status among all Americans, to work with States to support their efforts, to identify areas of risk and opportunity, to provide technical assistance, and to report regularly on how the Nation and individual States are performing. States will have the flexibility to select objectives that meet their determined needs and priorities and will be accountable for making progress toward meeting them. Monitoring and reporting on performance -- results achieved under the grants -- will keep the Congress and the American people informed about what they are getting in return for funds spent.

How PPGs will Work

At the core of performance partnerships -- as proposed by the Administration and the Senate's SAMHSA reauthorization bill -- is a menu of performance objectives. States are to select objectives from the menu, or to propose comparable "off menu" objectives. A negotiation will then occur between the Secretary and each State to reach agreement on the objectives to be pursued -- this will be a negotiation between partners who share the same goals of reducing risks to health and improving health outcomes. Once agreement is reached, the Department and the State work together to achieve the agreed upon outcomes.

The Secretary will monitor the State's performance under the grant and provide technical assistance, training and support to help the State accomplish its objectives. Both the Federal and State governments will be accountable to taxpayers, State legislatures and the Congress for achieving the objectives of the grants. Central to the success of PPGs is the ability to measure results that can be achieved through the grant programs -- the focus will be on accountability for results, that is our goal.

Status of PPG Activities

When the Administration first made this proposal, States and various stakeholder groups expressed reservations about the approach, and particularly noted the difficulty of identifying meaningful objectives that could be measured with existing data systems.

To establish the feasibility of the concept, and to begin the critical step of collaboration, the Secretary initiated a process to develop a menu of objectives. We began with a series of four regional meetings involving key stakeholders -- State, Tribal and local governments, consumers, providers, advocacy groups, public health experts, and interested citizens as well as Federal officials. In a structured setting the participants identified the results or prototype objectives they believed would be the best measures of success. Over 1400 individuals participated, coming from every State, the Pacific Islands, Puerto Rico and numerous Indian tribes.

The information generated in the regional meetings has been provided to an independent technical panel at the National Research Council. The panel members have a comprehensive knowledge of national and State data systems and practical knowledge of the specific program areas. Their charge is to refine the results produced in the regional meetings into performance objectives for each grant area, and to identify which of the objectives can be measured with existing data systems. The panel will issue a draft report in mid-September, inviting public comments and then provide a final set of recommendations to the Secretary by early 1997.

While the regional meetings and the technical panel were established to support the implementation of PPGs, their importance extends beyond this particular legislative initiative. They have become an important first step in establishing the foundation for a new type of Federal-state partnership in data collection and bench marking. A number of the States participating in the meeting have indicated that they will utilize the panel's reports in their own bench marking processes. The meetings provided the further benefit of bringing together program officials and constituencies whose interests are strongly linked, but who rarely have the opportunity to consider how to best manage their separate programs to achieve shared objectives. The opportunity for improved communication and priority setting among programs directed at the same populations should enhance the effectiveness of all programs in achieving defined and measurable results.

The Senate Labor and Human Resources Committee has unanimously approved legislation (S. 1180) that closely parallels the Administration's approach. We are very interested in working with this Committee, and in collaboration with our partners at the State and local level, including consumer and advocacy groups, to advance the performance partnership model. PPGs are designed to provide State and public health officials the flexibility and resources to do their jobs -- improving the health of their populations -- while improving the health of this country. We believe the model will be effective and hope to continue progress in this congress towards achieving it.


Today, Congress is engaged in a watershed national debate about the role of government in society and about the setting of priorities in times of tight fiscal constraints. By any measure, investments in public health are money well spent. Therefore I urge you to move these important legislative initiatives forward during this Congress.

Thank you. I would be glad to answer your questions.

**Attached is 1 chart entitled, "PPG Process"

Chart #1

There are 5 phases in a 12-20 month span:
Phase I Information Gathering
Phase II Technical Analysis
Phase III Consultation on NAS Report
Phase IV Development of State Plans
Phase V Negotiation

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