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RELEASE AND DISSEMINATION OF INFORMATION TO THE MEDICAL COMMUNITY

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?

Answer. 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 years.

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.

INDIRECT COSTS

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

I do

no.

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.

NIH DIRECTOR

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
Secretary
Provide the Director with a Discretionary
Fund.
Provide the Director with the authority to
transfer funds between institutes
Strengthen the NIH Director's role in
Departmental Science policy and planning
processes.

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

approved for FY 1991, a $20 million Director's Discretionary Fund, and authority for the Director, NIH to transfer up to one-percent of each Institute's budget for the purpose of responding to biomedical research emergencies. The FY 1992 request again seeks both authorities. In addition, Congress authorized establishment of a 350 member Senior Biomedical Research Service which will allow senior scientists to be compensated at a rate not to exceed Level I of the Executive Schedule ($138,900). Congress also approved new pay levels for the Senior Executive Service which now range from $87,000 to $108,300.

Finally, on March 15; 1991 I wrote to the Director of the Office of Personnel Management to recommend that the President establish the position of Director of NIH at Level IV of the Executive Schedule and that the position be designated as one of the 30 critical Executive Schedule positions (as authorized by 5 U.S.C. Section 5377). The latter designation would allow the NIH Director to be paid at the rate for Executive Level I.

Question. Do additional enhancements need to be made for this position?

Answer. Over the past year we have made great efforts to rejuvenate the prestige of the NIH Director. During this time the position has also received several new authorities which with out a doubt will enhance the Director's ability to manage and lead the NIH. Once confirmed, I will meet with Dr. Healy to discuss the changes made to the Director's position and, if necessary, consider what further changes might be made. I do expect to meet with Dr. Healy on a monthly basis.

DELAYED OBLIGATIONS

Question. Mr. Secretary. the Administration's request for NIH increases approximately $500 millon over last year, although $400 million of that would not become available until September 19, 1992, with just twelve days of the fiscal year remaining. There are similar situations in your budget for the Social Security Administration, the Low-Income Home Energy Assistance program and the Child Care program. Several of the agencies have suggested to us that this is going to create operational difficulties. While I understand this is being done to constrain outlays do you feel this is a desirable practice from a management or operational perspective?

Answer. We do not believe that delaying obligations will contribute to any significant operational problems. Work load associated with the awards that will be delayed can be accomplished well in advance of the actual signing of the award. While such a practice may not be the most desirable, I believe it

is a reasonable action in light of the constraints imposed by the Budget Enforcement Act.

COST MANAGEMENT PLAN

Question. Mr. Secretary, as you know, both the House and the Senate last year asked the NIH to develop a cost management plan in an effort to bring some stability and predictability to NIH funding patterns. This draft plan was submitted to us on January 15 and has a number of key features including: 1) establishing 4 years as the average length of research grants; 2) requiring that the average cost increases for research grants be held to the biomedical price index; 3) funding the number of training slots recommended by the National Academy of Sciences; 4) abolishing the use of the concept of approving grant applications; and 5) increasing funding for other mechanisms to reflect inflationary costs.

Do you

Mr. Secretary, we have yet to receive the final cost management plan from the department. support the draft cost management plan that has been prepared by NIH?

Answer. The Public Health Service submitted the NIH cost management plan to my office on Friday, March 15, 1991. We are in the process of reviewing the document, and therefore I can not comment in detail on the proposal. I do agree in principle with the five "key features" of the plan that you mentioned, however, I wish to examine how NIH specifically proposes to address these issues. I also must caution that the availability of resources may not be sufficient to accomplish all of the objectives of the plan immediately, but will take some time.

LOW-INCOME HOME ENERGY ASSISTANCE

Question. Mr. Secretary, you originally proposed cutting the Low-Income Home Energy Assistance program by $1,142,000,000, leaving only $468,000,000 for nine Northeastern States. Apparently, the administration rejected this proposal revising the fiscal 1992 request to $1,025,000,000. This is still a whopping $585,000,000 cutback, which would force States to eliminate two millon people from the program.

Can you tell us why you originally proposed eliminating this program in all but the Northeast, which would have left Iowa and many other "cold" States with no LIHEAP funds?

Answer. We are faced with making difficult budgetary decisions, and with regard to LIHEAP we believe that the Federal government should provide benefits only in circumstances of exceptional need. Many options were considered for the LIHEAP program,

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