2001.01 : U.S. Senate Finance Committee, Washington, D.C.

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STATEMENT BY: TOMMY G. THOMPSON, SECRETARY-DESIGNATE OF HEALTH AND HUMAN SERVICES PLACE: U.S. Senate Finance Committee, Washington, D.C. DATE: January 2001

U.S.Senate Finance Committee Confirmation Hearing

Mr. Chairman and members of the Committee, I am humbled and honored to be sitting before you today. I thank you for your consideration of my nomination to be President-elect Bush's Secretary of the Department of Health and Human Services.

I especially want to thank Senators Herb Kohl and Russ Feingold, two well-respected members of the Senate. I would also like to thank my friend Senator Bob Dole for taking time out of his busy schedule to appear here today. And to Secretary Shalala, whom I think had done an outstanding job. To my friends and colleagues and the members of this committee who have extended their support and very kind words, please accept my heartfelt thanks for your kind introductions and remarks.

For those here who may not know much about me, let me give you some insight by saying this: Welfare reform. Health care reform. Long-term care for seniors. Greater opportunities for the disabled. Helping the poor find work and helping the working poor find reward in their efforts. Biotechnology and scientific research. I am passionate about these issues. And we have worked hard on them.

These are issues I have dedicated 35 years of public service to solving, the last 14 as governor of my great state of Wisconsin. And, should I be confirmed, I will continue to dedicate myself to working with you and the President- elect to address these challenges.

If we have learned anything in the past year, it is that our citizens are clamoring for action to deal with some of the most critical issues affecting their day-to-day lives. Modernizing Medicare, providing access to a prescription drug benefit, improving access to quality healthcare for all Americans, taking welfare reform to its next level - these are not partisan issues. These are issues that are fundamental to the health and well being of our country, and more importantly, to the people we serve.

These are not easy tasks. But solving tough issues is why we all got into this business.

Like the President-elect, I have spent my career bringing people together, plotting a course of action, and moving forward. In fact, the motto of Wisconsin is Forward! Now, I hope to bring that spirit with me to Washington. I hope that we can sit down, work together regardless of party, and move this great nation forward.

The Department of Health and Human Services has enormous responsibilities. Its programs can touch every life in this country from birth through the golden years. HHS runs over 300 programs that include providing health care to our seniors, nutrition services for women and children, and groundbreaking research conducted by the National Institutes of Health. The Department is entrusted with the second largest budget in the federal government.

I know that this committee understands that well. The legislation affecting HHS that has come out of this committee has transformed the social contract in this country. The "Personal Responsibility and Work Opportunity Reconciliation Act of 1996" and "The Balanced Budget Act of 1997" were forged in this very room, and were ultimately passed with overwhelming bipartisan support.

If I am fortunate enough to be confirmed by this body, I recognize that we've got a lot of work ahead of us, and I will be knocking on each and every one of your doors for your ideas and assistance. Let me touch briefly on some of the most pressing issues we face.

MEDICARE

We must face reality and be pragmatic. Any organization that does business the same way it did 35 years ago is obsolete. As the baby boom generation approaches retirement, even greater demands will be placed on Medicare.

I know the members of this committee have taken Medicare reform very seriously in recent years. Both sides of the aisle have devoted a great deal of time and energy to studying the challenges faced by the Medicare program. The National Bipartisan Commission on the Future of Medicare made significant progress in addressing this issue. That is a good place for us to start. You have laid the groundwork. Now it's time for us to take the next bold step and begin the process of modernizing Medicare and putting it on firm financial footing.

PRESCRIPTION DRUGS

An integral part of a modernized Medicare will be to provide all seniors with access to prescription drugs. The great advances our nation is making in science and medicine is producing an array of life-saving drugs. But the costs of these drugs are beyond the reach of too many of our citizens, particularly seniors who need these drugs most. While comprehensive reform may take some time to achieve, the American people are demanding a prescription drug benefit today. We must move immediately to help millions of low-income senior citizens who cannot afford the life preserving prescription drugs they so desperately need.

President-elect Bush made prescription drugs a top priority in his campaign and it will be a top priority in his Administration. I know this is a top priority for members of this committee as well, so I am eager for the opportunity to work with you in solving this problem quickly and effectively.

ACCESS TO QUALITY HEALTHCARE

As we found in Wisconsin, lack of access to affordable health care is a serious problem, especially for the working poor. Although personal health care expenditures now exceed $1.3 trillion or 13 percent of our gross domestic product, more than 42 million Americans are still uninsured. That is unacceptable.

When I was in the state legislature, I started thinking about the role government should play to help those folks out there working hard, supporting their families, and who just couldn't afford health insurance. When I was elected Governor, I worked closely with the legislature to develop a new approach to solving this problem. The result is BadgerCare, a program that provides health care for low-income working families who make too much money to qualify for Medicaid, but can't afford insurance on their own. Over 77,000 people were enrolled in this program by the end of 2000. And it has helped us maintain our status as one of the best states in the nation providing health coverage for its citizens, as 93% of Wisconsinites currently have health insurance. The success of this program is one my proudest achievements as governor.

Now, is BadgerCare the answer for everyone? I would like to think so, but the truth is, there is no cure-all for every issue that government faces. But it underscores the potential for a bold new partnership between the federal and state governments, and the tremendous good that can come from better teamwork between the two levels of governments. We must encourage innovation and reward success, but we must also recognize that the needs of Madison are fundamentally different than the needs of Los Angeles, or Bozeman, Montana, or Ames Iowa.

Now don't get me wrong. I'm not saying the federal government should just step aside and cede all authority and power over these programs to the states. It shouldn't. The federal government plays an important role in overseeing federal programs and the use of federal taxpayer dollars. But the federal government does not need to be heavy-handed or locked into a one-size-fits-all solution.

The federal government should give states the flexibility to develop programs that meet those high standards it sets in a manner that is efficient and cost-effective. And the federal government should hold states accountable in exchange for greater flexibility, and step in when states aren't measuring up to expectations. Giving states greater flexibility under the State Children's Health Insurance Program (S-CHIP) is part of this solution.

This philosophy is one I have advocated for years, as many of you know. But it is one that forges a stronger partnership between the state and federal government for solving tough societal problems more effectively.

We must also preserve the private health insurance market and work with states to put health insurance within reach of working families through a series of commonsense measures to increase the affordability and the availability of insurance. President-elect Bush made this a cornerstone of his campaign, proposing measures that will allow small employers to band together to enjoy the same economies of scale that larger employers enjoy and providing tax credits to low-income families to assist them in purchasing private health coverage. Furthermore, it is critical we do not ignore those who are most vulnerable and without access to care. The medically underserved who live in our inner cities and rural communities often lack access to basic primary care. We must strengthen our health care safety net by supporting our community health centers and forging public-private partnerships to assist our hospitals and providers who serve these communities.

WORKFORCE DEVELOPMENT

Another task we will face, should I be confirmed, is the reauthorization of the "Personal Responsibility and Work Opportunity Reconciliation Act of 1996." People refer to this as welfare reform. But we didn't reform the old welfare system; we replaced it with something entirely new.

The changes to the welfare system that began in Wisconsin and spread throughout the country have resulted in the single most effective job program we have ever seen. I don't have a Welfare Department in Wisconsin. I have a Department of Workforce Development.

Before we embarked on changing welfare in Wisconsin, I had a luncheon at the Governor's Residence with the very people whom the programs were intended to serve-mothers who were on welfare.

I asked them what the major barriers to leaving welfare were and we set out to design the program around their major needs. Our program, called Wisconsin Works or W-2, provides the support necessary for individuals to enter the workforce. For those who still need assistance, we provide financial and employment planners, transportation assistance, job access loans, childcare assistance, and access to health care.

I have always said - as loudly and publicly as I can - that for welfare reform to be successful, you have to make an investment up front. It can't be done on the cheap. The savings to taxpayers - and they are substantial savings - come on the backend as public caseloads decline. Perhaps nowhere has the public payoff for a taxpayer investment been more evident than in the fundamental changes we have made to the welfare system in this country.

As an example of the success, I'd like to share a portion of a moving letter I recently received. It came from a woman I first met at a luncheon at the residence. Leilani Duarte wrote, W-2 "has enabled people to better their lives and to support their families.Thank you Governor Thompson for the creation of the W-2 program and believing in me." That is the most important action we have taken to date - believing that those we are serving can succeed.

But now it's time to consider the next steps in this process. We must face head on the huge challenges faced by those still receiving direct benefits. As you know, these are often the people with significant health problems or people struggling with substance abuse.

And we also have a duty to help those families who have successfully moved into the workforce continue to move up the ladder of economic success.

Another important step is to sound the call to recruit what President-elect Bush has called the "armies of compassion." Faith-based communities are closest to those who have the most need of government services. Serving these communities is a responsibility that can and should be shared to reach the greatest number of people in the most compassionate and effective way. Many of these efforts are not just about offering a program or service but about transforming lives.

One lesson we have learned in Wisconsin from the changes to the welfare system is that government alone can't help families succeed. It takes the concentrated effort of government, employers, educators, family and friends, churches and the community.

REFORMING THE DEPARTMENT

We have much work to do on programs that currently exist. But in addition to the programs, the Department itself must be reformed to address the needs of its clients in the 21st Century.

As many of you know, I have spent much of my career fighting the bureaucracy in Washington. Wisconsin has sought more waivers from federal programs than any other state.

If I am confirmed, I will make sure the Department always places the highest priority on serving its many constituents -- families, children, seniors, patients, the disabled, providers, and states. I will work to streamline the maze of rules and regulations that these constituencies face when seeking assistance from their federal government.

In all my years as Governor, I have never stopped asking if we are doing things the best way. And, if confirmed, I won't stop now. The retort: "Because that's the way it's always been done" is not acceptable to me.

One clear example is the Health Care Financing Administration. HCFA's role has been continually expanded over the last several years, charged with administering increasingly complex programs. HCFA faces tremendous demands and challenges as an agency, administering a budget estimated to reach $340 billion in FY 2001 to provide health care for more than 70 million Americans.

But patients and providers alike are fed up with excessive and complex paperwork. Rules are constantly changing. Complexity is overloading the system, criminalizing honest mistakes and driving doctors, nurses, and other health care professionals out of the program. HCFA needs a thorough examination of its mission, the competing demands, and the available resources. We need to assure that HCFA has the tools it needs to succeed.

CONCLUSION

It is inspiring to see a leader in President-elect Bush who isn't afraid to call all of us to action on a bipartisan basis as we address these difficult problems. A leader who recognizes that government alone can't reduce poverty or solve societal ills. It takes all of us working together as partners, including the faith community.

If you should see fit to approve my nomination, it will be an honor to serve the president and work with you as we aggressively seek to make the lives of millions of Americans better, and restore hope and opportunity for those who have been left behind in this great country.

As I've always said: a person of compassion is one of action, not words. Compassion means being bold and caring enough to act to solve societal problems. Therefore, I respectfully seek your confirmation of my nomination so I can begin working with President-elect Bush and you to tackle problems facing the citizens of America. This is going to be a time of action in America, and I would be proud to be a part of it.