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firms that universities are using. This system will take all of their financial statements, all the audits of the financial statements, all of our audits, all the work done by GAO, and all the work done by the Division of Cost Allocation, put them in the computer and do computer analyses and try, as you suggest, to identify factors and aberrations that would allow us to better target schools.

Even with a system such as this, I will tell you that it is a very heavy investment to go beyond a university's books and records to try to determine whether they have fairly allocated costs or not. It really requires a major undertaking. It is not one of those things where you can just walk in the front door and say, "We want you to explain why you have charged so much for groundskeeping against the research grants at this school.” It goes far beyond that.

In fact, as you know, in the Stanford case it was a major battle. It seems that schools have plenty of money when it comes to hiring their own auditors to make their case. Believe me, if you want to see a lot of pin stripes, go into a school and challenge them on something. You will find more attorneys coming out of the woodwork than you could possibly imagine. There are major battles when you do it on a case-by-case basis.

A case-by-case basis is an option. But I mention it as the last one because I am hesitant to say, “Give me more research and I will go out there and engage in a holy war against these people.”

I think the basic underlying problem is that this is not a good way to do business. There is something screwy when we give money to a researcher to do research and then we, the Federal Government, go to the same university that this researcher wants to go to and cut a separate deal with them.

Senator HARKIN. That may be the best option. I circled that here, in fact. We ought to really take a look at that.

Mr. KUSSEROW. I would be pleased, if you like, to work with your staff to give you more specifics on all these options.

Senator HARKIN. I intend to pursue this diligently this year.


Mr. Williams, did you have something?

Mr. WILLIAMS. I want to make one comment. I agree with everything that Mr. Kusserow said.

Mr. KUSSEROW. I am sorry, Mr. Chairman, I forgot. I should have introduced my good shepherd.

Senator HARKIN. You do not have to. I know Mr. Williams.

Mr. WILLIAMS. The only other thing I would emphasize here is that one really has to recognize that in our public/private system there is a great diversity in terms of the kinds of facilities that we are doing business with, and the kinds of administrative systems that are operated within these universities. There is a great variety of costs for a variety for reasons.

Some universities are located in areas that are high cost areas, while others are located in areas where there are low wage rates. If you are located in the South, as opposed to the Northeast, you might have lower heating costs. Others have higher heating costs. So there are a lot of legitimate reasons why direct costs and indirect costs are different. This makes true comparison very difficult. There are also a variety of ways of operating within a university. To give you one simple example, secretarial assistance might be included as a direct cost because that individual works directly in a lab. In another university, a lab may rely on a secretarial pool which is available to a wide range of people, and that might be classified as an indirect cost. In that university, the indirect cost might be somewhat higher as a result.

I do not mean to say that there are not a lot of things that we should look at and explore. But one needs to recognize the diversity that is out there and the difficulty of comparison.

The only other thing I would mention, and this is what I think the Secretary emphasized the other day, is that in looking at this we ought to keep in perspective that we have a very important research enterprise out there. Biomedical research is a very important part of it. As we look at this, we do not want to take backward steps and endanger the great results we are getting from these universities. That is not to say we should not look at the cost, but we would not want to do things that endanger the overall results we are getting from this system.


Senator HARKIN. Then how about the suggestion that we basically give the grants to the principal researcher, hold that principal researcher accountable for how those moneys are spent, and let that researcher go to the university or some other university or whoever that researcher feels that he or she can get the best support mechanism for the money that they have to conduct that research?

Mr. WILLIAMS. We would say it is an idea that one ought to look at. Again, though, I think the ability of a researcher to just pick up and move someplace else, although fine in theory, in practice is not so easy. If you have a large laboratory with lots of equipment, and have invested a lot of time and effort in recruiting staff, moving around from place to place is not always easy. One needs to look at the incentives that such a situation might create, as well as the possible benefits. I only say you should be cautious about what you do.

Mr. KUSSEROW. I think that Mr. Williams eloquently states some of the complexities of this issue. That is why, when you mentioned your being perplexed, I made the quip about your not being alone. Now we are beginning to see one of the reasons why.

There is something very intriguing in my mind, though. Maybe it is because I have been in Washington too long and I have developed a perversity. There is something very intriguing about the notion of taking some raw meat and throwing it on the floor between two tigers and telling them to fight over it.

Believe me, if you put out research money to a principal investigator and say, "Here it is, now you go negotiate with the university how much of it should be in support of the direct research effort and how much should be the indirect support from the university,” I am not so sure that you would not see a lot of growling. At least the Government would not be part of it. It is very difficult to be 3,000 miles away from my alma mater and to try to figure

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out whether or not the direct and indirect costs necessary to support a direct research effort of a grant there are appropriate.

Mr. WILLIAMS. It is not a foregone conclusion that the researcher would win that battle once you put the money in his hands.

Senator HARKIN. I understand that. Staff is saying that perhaps the researcher would be the loser in that battle, but if future research dollars are dependent upon the quality and the research that is being done by that principal researcher and the university wants that done there, they are going to want that researcher to be happy and satisfied.

Mr. WILLIAMS. As I said before, I think it is worth looking at the incentives. But who wins that battle and what the balance is will also vary a great deal, depending on the situation of the university and the situation of that individual researcher. If you are a Nobel Prize scientist, that is one thing. If you are a new scientist just starting out, it is probably a lot different in terms of your ability to leverage this issue.

Senator HARKIN. You are right. That is true. I am still a little perplexed by it.

Mr. KUSSEROW. We all are, Mr. Chairman.

Senator HARKIN. I want to pursue it. I do not know where exactly this will lead.

Mr. KUSSEROW. I do think it is worthwhile to pursue it. I do not think that you should interpret anything that I or Mr. Williams have said as discouraging. I think that by really studying this issue and really looking at it, only good can come from it. I do not know whether we can say at the outset that we know where we will come out. But I think that it will provide food for thought, and maybe we will come up with some ideas as to how to make the system run better.

Senator HARKIN. We want to do that, and we will pursue it. We will see if we can come up with some ideas or some pilot tests that we might want to run or something like that.


Let me ask you a little bit about infant mortality: We had the Secretary up here the other day. I have talked to him personally on the phone, and then we had him here in the witness room the other day.

The budget proposed a new initiative to combat high infant mortality rates in 10 target cities. Again, I do not want to engage you in any policy debates. That is not your bailiwick, but I just want to ask you about the existing infant mortality initiatives that we have been planning for several years for the community health centers known as the Comprehensive Perinatal Care Program, CPCP.

Has your office done any studies of this initiative?

Mr. KUSSEROW. We were also aware that this issue came up at the hearing with the Secretary. I have brought with me, coincidentally, a copy of our report on that very subject. I would be pleased to leave it with the committee.

What you observed, in fact, is very much correct. We found some real problems in targeted populations and in reaching them, and we have made some suggestions as to how to overcome them.

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Basically, the key to this program has been that you work through community health centers. People apply to them for grants to deal with the infant mortality problem. The two flaws that we found which should be remedied are, first, that these community health centers do not exist uniformly across the country in areas where there is a great need.

Senator HARKIN. They do not do what?

Mr. KUSSEROW. The community health centers that grantees must work through are not uniformly distributed in areas with high infant mortality rates. Therefore, in those communities that do not have community health centers to support the system, you will have a lot of people falling through the cracks.

Second, what we found is that in some of the areas that needed the most help, the people who were applying for grants really were not professional grant writers. They did not have all the proper terms down pat and did not know how to cross their T's and dot their l's correctly. So a lot of people who did apply for grants were turned down for technical reasons.

We feel that a couple of things need to be done. Both of them involve trying to make the program more flexible, to insure a more uniform distribution of the resources to deal with infant mortality.

When we submitted this report to the Department, they were very supportive of it. In the report itself I have attached the comments of the Assistant Secretary for Planning and Evaluation, who is the coordinating arm for the Secretary on policy, and of the Public Health Service, which is operating this particular aspect of the program. They were very supportive.

So I think that a lot of the questions you might have about this issue are contained in this report, which I did not realize would be so timely. If there are additional questions, or if you would like to have additional details on any of the work that we performed in this area, I would be pleased to have our people come talk to your folks.

Senator HARKIN. I am interested. I was not aware of this. I can guarantee you I will read it.

Mr. KUSSEROW. It was very well received by the Department because, quite frankly, the Department sensed that the process was not working quite the way they had wanted it to and they were interested in knowing why. So when we came in with the results of this study, they began to get some of the answers. We not only told them what was wrong, but we tried to give them some options and some guidance as to what steps they might take to correct it.

They are in the process of correcting it. We will be following up with them to see how aggressive they are in taking corrective action.

DISTRIBUTION OF INFANT MORTALITY GRANT FUNDS Senator HARKIN. Correct me if I am wrong. You are the statistician; I am not. Just from reading these paragraphs that my staff has underlined here for me, it looks to me that there is a direct correlation between cities of 100,000 or more, a direct correlation of high rates of infant mortality and noneligibility for CPCP funds.

Mr. KUSSEROW. You are correct.
Senator HARKIN. All right. I just wanted to see if I was right.

A direct correlation?
Mr. KUSSEROW. Yes, sir.

Senator HARKIN. Let me ask you this. Do you think if grants were available to other health care providers

Mr. KUSSEROW. Let me just, if I could, give you a quote that really states just exactly what you said. That is, nearly one-half of the Nation's largest cities with high infant mortality rates greater than 12 deaths per 1,000 live births have not been eligible for CPCP funds because they have no community health centers funded through sections 329 and 330 of the EPHS Act. That exactly makes the point you were making.

That creates kind of a big hole. But again, as you know from talking to the Secretary, he has more than just a passing interest in this area. He is really avid in trying to deal with the infant mortality rates that we have in this country, which are abominably high when you compare them to other Western and European countries. He has everybody pretty much harnessed to this effort.

As I say, this is one report where we did not have a lot of resistance. In fact, it was greeted with a great deal of appreciation. I think the trick is to see what happens now that they are armed with this information and with recommendations; whether they follow through with them or not as aggressively as they should.

Senator HARKIN. Do you think if grants were available to other health care providers also that we could target funds to high impact areas more effectively?


Senator HARKIN. I have something new to look at now. I wish I had known about that before the Secretary came up. I know the Secretary, and I have talked with him personally about this. This is a high-priority item for him. This is something he really wants to pursue.

Mr. KUSSEROW. Very high. It is something that we hear about every week from him. He cannot understand how it is that this Nation, which leads the world in biomedical research and in the quality of health care, could have such an abysmal infant mortality record when compared to other industrialized nations. He definitely wants it changed. He wants to harness all the efforts of the Department to that.

Now, we have had some complicating factors. In fact, if you would like to go into greater detail on this issue, we have issued some other reports that relate to it. We have done some work in the area of crack babies and border babies which talks about the effect crack is going to have on our society, is already having now that we have addicted mothers giving birth to addicted children.

What it underscores inore than anything else is the very great importance, the paramount importance, of getting to that mother in the first trimester of her pregnancy and engaging her in some preventive programs. This is essential if we want to avoid a health care cost in the future that is going to be so gargantuan that it is almost unimaginable.

If you like, I would be pleased to make all these reports available to the committee. Crack is a complicating factor that is having a very big effect on infant mortality today.

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