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be used to support innovative State or local projects. This would require legislation.

The 1992 budget does include an estimated $404 million to improve access to health care for rural Americans. of this amount, $336 million will provide health services to rural communities and $68 million will support research which will evaluate the unique circumstances facing providers and consumers of rural health care. In addition to these specifically targeted programs, rural communities are eligible to apply for funds through most other HHS programs. These include the infant mortality initiative you mention which is proposed for 10 areas, as well as receiving their fair share of Federal block grants to States.

Finally, although the 1992 request does not include significant funding increases for rural health programs, I am absolutely committed to the President's Rural Economic Development effort. Rural America is facing a number of social and economic problems of which health care is a symptom. I plan to continue to work very closely with the Secretary of the Department of Agriculture on issues of health and social services policy and believe this White House effort will contribute to solving the health care problems of rural communities.


Question. Has the Department developed a comprehensive plan laying out each objective, which changes in federal programs or increases in federal funding should be made so that we can achieve in the Year 2000 what we did not achieve in 1990?

Answer. The success of Healthy People 2000 will depend upon changes in both individual behaviors and on the ability of the health care profession to prevent as well as to treat disease. The President's Budget shows a commitment to those aspects of Healthy People 2000 which can be supported at the national level, e.g. a six percent increase for biomedical & behavioral research and better access for minorities and the disadvantaged. The budget also contains increases to address specific 1990 Healthy People goals which were not fully achieved, e.g., $171 million in targeted assistance to reduce infant mortality rates. Success in meeting the goals of Healthy People 2000 requires that local communities throughout thi country translate national objectives into state and local action. A new edition of model standards, Health Communities 2000: Model Standards, Guidelines for Attainment of Year 2000 Objectives for the Nation, provides a flexible planning tool to enable communities to share in the various efforts necessary to obtain these objectives.



Mr. Secretary, your budget for the Social Security Administration calls for more than doubling the backlog of disability claims, and seems to accept high busy signal rates on the toll-free "800" telephone service. In the Medicare program, your budget would produce huge backlogs in hearings over disputed claims, and allow millions of public inquiries about Medicare to go unanswered.

Mr. Secretary, I can tell you, if these proposals actually occur, you'll be getting a lot more mail and phone calls from members of Congress asking you to expedite services on behalf of disgruntled constituents. How did these service cutbacks get into your budget?

Answer. The limited growth for domestic discretionary programs envisioned in the Budget Enforcement Act will make it difficult to process growing workloads. The FY 1992 budget forced us to make difficult choices in these accounts. The administrative budgets for both SSA and HCFA are workload-driven budgets budgetary requirements are partially determined by the growth in the beneficiary population and the number of Social Security and Medicare claims received each year. Key workloads, which are rising faster than the domestic discretionary caps, put considerable pressure on these budgets. Our budget will allow us to meet our obligations by processing mandatory workloads, but the quality of service may diminish in some areas such as you've mentioned.


Do you have a long-range solution to deal with the enormous growth in Medicare claims and social security workloads?

Answer. We are moving forward in both programs to meet this challenge in future years. SSA is developing a strategic plan which will define service requirements, means to increase productivity and efficiency, projected investments in new technology, and, in general, provide a picture of how SSA will deliver high quality service to the American public. Future budget requests will reflect the strategies developed in the Strategic Plan, targeting resources so that the quality of service will be maintained or improved in the face of rapidly rising workloads. is considering options for the long-term reform of Medicare Administration which should further economize on resources used to process Medicare bills over the next decade.



Question. Mr. Secretary, what policy review do you have in place to insure that as soon as research results are available they are released and disseminated in the most aggressive fashion to the practicing medical community where they can be of benefit to those in need of medical assistance irrespective of the publication requirements of medical journals?


We are fully aware of the growing public demand for more and better information about new treatment opportunities that emerge from the scientific research supported by the National Institutes of Health and the Alcohol, Drug Abuse and Mental Health Administration.

The NIH began a process in 1988 of issuing clinical alerts mailings to physicians, professional associations and other providers that announce promising new research results before these findings are included in the scientific journals. NIH is in the process of evaluating the policy of issuing clinical alerts, how often these alerts should be issued and for what kind of study results. I would point out that fourteen such alerts have been sent out in recent


In addition, NIH is working with the researchers and editors of journals to speed up publication of research results.

We fully recognize the impact that an official government alert or announcement has on a physician's practice and the management of a patient's disease, and there is a commitment on the part of NIH to build consensus as to how this process can best be managed.


Question. Mr. Secretary, your FY 1992 request for the National Institutes of Health includes $1.9 billion for indirect costs associated with the grant awards NIH expects to make in FY 1992. The indirect cost rates range from 6.3 percent for the foundation at the New Jersey Institute of Technology to 155 percent for the Michigan Cancer Foundation.

As you know, indirect cost rates vary for a number of reasons. According to a study done by the Inspector General in 1987 one of the reasons for indirect cost rate variance is the space used by facilities. For example, in 1987 the University of California at San Francisco and the University of Washington had very comparable amounts of NIH research work. However, one University devoted 1,178,000 square feet to that research and the other devoted only 531,000 square feet to the research they did. The cost of the space in

both cases was reimbursed through the indirect cost payment.

This past year I know you are aware of the problems that have been reported at Stanford University where the cost of the University's yacht and flowers for the President's home have been charged to indirect costs. Mr. Secretary, as you know, the Appropriations Subcommittee for the Department of Agriculture, imposed a 25 percent indirect cost rate cap in FY 1990, and in FY 1991 that cap was reduced to 14 percent.

Is there a problem with the way the indirect costs system works now at NIH?

Answer. Because research dollars are limited, I am committed to assuring that every dollar is well spent. While NIH is a major contributor to universities through indirect cost reimbursements, NIH does not set the rates. NIH merely pays the grantee institution the indirect cost rate which is negotiated by the Office of the Assistant Secretary for Management and Budget, HHS or by one of the other responsible government agencies assigned by the Office of Management and Budget to negotiate indirect cost rates with federal grantees. I might add that problems such as those uncovered at Stanford are most likely the result of insufficient or inadequate auditing of grantees' requests for reimbursement of indirect costs. This auditing task is usually not the responsibility of either the organization that negotiates indirect cost rates or of the agency which ultimately makes payments for indirect grant costs. In the case of HHS, the Office of the Inspector General is responsible for auditing of indirect costs.

Question. Do you believe that we should consider a cap on indirect costs as did the Agriculture Subcommittee?

Answer. When the grantee bills the government honestly for indirect costs, the expenses for which the institution seeks reimbursement are legitimate, real costs of conducting research utilities, administrative support, equipment and facilities maintenance. While an indirect cost cap may serve to reduce the costs of research in the short-term, an unreasonably low cap will also undermine seriously the ability of many institutions to conduct research the government deems desirable. I also might add that the NIH'S "market share" of research grants to universities across the country is considerably larger that of the Department of Agriculture more than forty times larger consequently the effect of a cap on NIH indirect cost payments would be magnified considerably.

A cap is not the only way to contain or reduce indirect costs, and until we look at all the options available to us, I am unable to say yes or no. I do

know that the nominee for NIH Director, Dr. Bernadine Healy, shares my view that we must assure that each of our research dollars is spent well.


Question. Mr. Secretary, although we have every hope that Dr. Healy will be confirmed in the very near future, the position of the Director of NIH has now been vacant for 19 months.

You established an advisory committee to review the NIH Director's position to determine what changes in that position were needed to make it more attractive.

One of those recommendations was to establish a $20 million discretionary fund and provide the NIH Director with cross-Institute transfer authority, up to 1 percent of an Institute's budget. We did both of those things last year in the appropriations process. There were several other recommendations made by your advisory committee including that the NIH Director should have substantially increased authorities including final appointment power for senior NIH scientists and administrative staff, and for scientific appointments to NIH advisory committees, councils and boards. It was also recommended that the NIH Director's position should be a 6 year term appointment.

Mr. Secretary what is the status of the recommendations made by your advisory committee on the National Institutes of Health's Director?

Answer. The Advisory Committee on the NIH was chartered to advise me on ways to strengthen the position of the NIH Director. The Advisory Committee focused on changes which would ease the recruitment of a director from outside the NIH community. The major recommendations of the Advisory Committee included:

Appoint the NIH Director to a renewable six-
year term.
Make compensation and benefits of the NIH
Director and senior scientists more
competitive with compensation provided by
U.S. medical schools.
Delegate to the Director the authority to
make SES appointments without review of the
Provide the Director with a discretionary
Provide the Director with the authority to
transfer funds between institutes
Strengthen the NIH Director's role in
Departmental Science policy and planning


Subsequent to the Committee issuing its recommendations the President requested, and Congress

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