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Recipients of Poorer Quality Health and Long Term Care. Several recent reports from the United States General Accounting Office (GAO) have raised concern about the quality of care provided in several health care environments. These reports include: Health Care: Limited State Efforts to Assure Quality of Care Outside of Hospitals; Medicare: Assuring the Quality of Home Health Services; and Board and Care: Insufficient Assurances That Residents' Needs Are Identified and Met.

Federal Commitment: Most of the federal effort to date has been focused on the Medicare program for hospital care and in the Medicaid and Medicare program for nursing home care. Little attention has been focused on care provided outside the nursing home or the hospital. Virtually no attention has been focused on uninsured or privately insured patients. A new effort has begun to look at health care effectiveness but it is targeted at federally funded services. The Administration is currently proposing to begin charging health care facilities (e.g., hospitals, nursing homes, clinical laboratories and home health agencies) a "user fee" for the costs of Medicare and Medicaid survey and certification.

Poorer Pregnant Women and Children. The United States ranks 22nd in infant mortality among the industrialized nations of the world. The Medicaid program is the primary health care financing program for low income children and pregnant women. Recent budget reconciliation acts have expanded Medicaid's coverage for pregnant women and young children. OBRA '89 requires States as of April 1, 1990, to cover all pregnant women and children up to age six with family incomes up to 133 percent of the Federal Poverty Level. At their option, States may cover pregnant women and infants (up to age one) with family incomes up to 185 percent of the Federal Poverty Level.

Federal Commitment: The FY 1991 Medicaid budget contains no new initiatives though it shows an increase of $300 million to provide for recently enacted mandatory coverage to pregnant women and young children who are living at or below 133 percent of the federal poverty level. Additionally, the Maternal and Child Health Block Grant program is authorized at $686 million in FY 1991 and each year thereafter. In FY 1991, the Administration proposes to fund the Title V Block Grant at the same level as last year, $554 million. The Administration also proposes to spend an additional $25 million to fund a "one stop shopping" Maternal and Child Health program initiative, where states would be encouraged to improve access to a variety of health and social services for pregnant mothers and infants through improved coordination.

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Women and Racial and Ethnic Minorities. Almost five million mid-life and older women nearly one of every eight fall below the poverty line. When the "near poor" are also included, this figure rises dramatically to include four in every ten older women (41%). Considering that there are over 23 million midlife (45-64) women in America and another 16 million older women (65+) women, the ranks of the female mid-life and older poor are large and growing. Over one in three Black women over the age of 65 are poor and one in four older Hispanic women are poor. Almost one-quarter of Black males over age 65 and almost one-fifth of Hispanic males over age 65 are also poor.

Federal Commitment: In the 1991 budget, the President is not requesting any major initiative to directly address the problems of elderly women or elderly racial and ethnic minorities. He does propose $117 million for a new initiative to help increase the number of minority health professionals in the United States and aid minority medical schools. These funds would also be devoted to enhancing health services career recruitment among minorities and developing innovative community-based service strategies.

The CHAIRMAN. The Chair now recognizes Mr. Rinaldo.

STATEMENT OF REPRESENTATIVE MATTHEW J. RINALDO

Mr. RINALDO. Thank you very much, Mr. Chairman. Mr. Chairman, I commend you for calling this hearing today to examine the impact of Federal policies on vulnerable populations, and I want to especially welcome Secretary Sullivan in his first appearance before the committee.

Mr. Secretary, you face a tough task, as we all know, in administering one of the largest departments and seeking to help millions of Americans at a time of continuing budget deficits, but I think everyone here has been impressed by your commitment and your convictions. In my view, you are doing an outstanding job, and we certainly look forward to working closely with you on some of these issues over the next few years.

This committee has worked in a bipartisan fashion in the past in its approach to such issues as retirement income, health and other matters, and it's no different with the topic we are dealing with this morning. While the administration has called for a $52 billion cut in Medicare spending, no one realistically expect that reduction to be enacted. And frankly, it shouldn't be.

Just a few weeks ago, for example, I met with representatives of the New Jersey Hospital Association, and I am sympathetic with their situation. Anyone that was at that meeting would have to be. When Congress enacted the DRG system in 1983, it was supposed to hold down the escalation of inpatient costs, but we have seen the reimbursement levels restrained year after year below the rate of inflation in the health care industry, not for policy reasons, but for budgetary reasons. It's time we stepped back to assess the impact of this decision and started focusing on the policy implications of what we do.

That is why I am particularly glad that you are here with us today. You have set a top priority of protecting vulnerable Americans, and that is something that we should all support. Nearly half of Medicaid dollars currently pay for nursing home care, and that is important, particularly when you realize that Medicare pays for virtually no long-term care.

But there are many other areas that also need to be addressed. Secretary Sullivan, you have set an ambitious agenda in targeting services to the poor, and I think you are right in that direction, and you are certainly to be commended. You are right on target in seeking to improve infant mortality and reducing excess deaths among minorities.

I remember very well when Congress, in 1983, debated the Social Security refinancing package, and that package raised the age for eligibility for full Social Security benefits to 67 years of age. Many people, however, pointed out that the life expectancy for a black male was only 65. We have to make sure that our Federal policies don't discriminate; and just as importantly, we have to be certain that all Americans receive the health care they need and are entitled to. Again, I want to express my appreciation to Secretary Sullivan for joining us this morning. I look forward to your testimony. And, Mr. Chairman, I yield back the balance of my time.

The CHAIRMAN. Thank you, Mr. Rinaldo. Mr. Synar.

STATEMENT OF REPRESENTATIVE MIKE SYNAR

Mr. SYNAR. Just briefly, Mr. Chairman, I want to welcome the Secretary with us and commend him for the outstanding job that he's done not only in this area but in the tobacco forefront.

It's that type of leadership which is very welcomed by this Congress, and we look forward to working with him.

The CHAIRMAN. Thank you, Mr. Synar.

The Chair now recognizes Mr. James.

STATEMENT OF REPRESENTATIVE CRAIG T. JAMES

Mr. JAMES. Thank you so much for appearing and helping us understand some of the problems, Dr. Sullivan. I hope some of your testimony, or some of the answers to your questions will help us address this new report.

You may not be prepared yet on it, the Pepper Commission Report, have some comment if you might as to what direction the administration, et cetera, should go in that regard.

And thank you so much. I look forward to hearing your testimony.

The CHAIRMAN. Mr. Regula.

STATEMENT OF REPRESENTATIVE RALPH REGULA

Mr. REGULA. Thank you, Mr. Chairman.

And Dr. Sullivan, we welcome you. We appreciate your leadership in the office. I look forward to hearing your comments on the potential for the bill we will be introducing on preventive medicine for the seniors.

I think perhaps that is a field that has great opportunity for long-term savings and also for enhancing the quality of life for our senior citizens.

I yield back.

[The prepared statement of Representative Regula follows:]

OPENING STATEMENT OF THE HONORABLE RALPH REGULA, R-OHIO

Mr. Chairman:

SELECT COMMITTEE ON AGING

MARCH 5, 1990

I commend you for calling this hearing which will provide us the opportunity to discuss with Secretary Sullivan what priorities we believe should be maintained and incorporated into federal health policy.

Many challenges face us as we go through 1990 ranging from the typically expected budgetary and quality considerations to significant policy changes in the areas of Social Security, long-term health care, and the medically indigent.

For example, in order to meet this year's Gramm-Rudman deficit target of $60 billion approximately $37 billion must be reduced from current spending policies. Under the President's budget proposal, nearly $13 billion comes from domestic spending. More specifically payments to health providers, such as hospitals and physicians, will be reduced by $5.5 billion next year and $46.2 billion over the next five years. question is whether these areas require further belt-tightening or should we begin to look elsewhere for the necessary reductions.

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Also, there is the Social Security system.

Several bills have been

introduced which would eliminate the large and growing Social Security (QASDI) surpluses. Most of these proposals would repeal the 1990 increase in the payroll tax immediately and return the OASDI system to "pay-as-yougo" financing in 1991. Under current law, the Social Security Trust Funds

are increasing over $110 million per day and rising. In fact, by the year 2000 the surplus will grow to $1.4 trillion. Should we mess with these

monies or leave current law intact. Just last week our committee heard testimony on this complex issue and there are no easy answers.

I look forward to the comments of the distinguished Secretary Sullivan on these important issues. However, let me mention one more concern that I feel very strongly about in our federal health system.

National health policy has been driven by the engine of cost-effectiveness over the past decade. We have also instituted significant, and necessary, quality control mechanisms but these actions have not accomplished the dramatic gains in cost reductions that we would like to believe. Instead, a large portion of these expenses have merely been shifted to other thirdparty payers, particularly in the private sector. Rather than focus merely on reimbursement strategies future federal policy must encourage the better practice of medicine and the most efficient delivery of that care. Then we will see real changes in cost-effectiveness with better access and quality of care.

Possible examples include Medicare coverage of certain preventive health care services, greater reliance upon home care rather than

institutionalized long-term care, and better case-management systems across the spectrum of care.

Again, I am confident the Secretary's testimony will provide an insight into these important matters.

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