Dr. Ginsburg: The question about the structure of the GAF appears to address the appropriateness of both the type of index and actual measures used, both of which are analyzed extensively in our 1991 report to Congress. With regard to the type of index, the Commission has concluded that an input price index is appropriate for adjusting a resource-based fee schedule. Many have supported an expenditure index, based on data about actual physician expenditures. In addition to the tremendous data collection effort that such an index would require, an expenditure index is not consistent with the intent and structure of the resource-based fee schedule.

The Commission has studied the measures used by HCFA in the GAF and has concluded that they are the best alternatives available. The issue of urban/rural price differences as captured by several of the measures was studied extensively, and no biases were found in the measures used. However, the Commission has recommended that the Congress expand the data collection and reporting responsibilities of a federal agency to include a measure of commercial rents across the nation. The HUD apartment rents used in the GAF appear to be the best option available and lead to relative prices that are similar to those suggested by two alternative sources. This is, however, the weakest measure used in the GAF.

The second question reflects the concern that has been raised about the variation in revenue shares between urban and rural practitioners. Data show that urban and rural practitioners spend different shares of revenues on net income, practice expenses and malpractice expenses. This may be due in large part to the difference in services provided by practitioners in the different settings. Under OBRA89, the geographic adjustment of the fee schedule will be done by service, with the three price indexes combined to reflect the work, practice expense, and malpractice expense relative value shares for each service. Therefore, the price measures are combined in the same proportions as the relative values. The net income, practice expense, and malpractice expense revenue shares for an area will therefore reflect the relative work, practice expense and malpractice expense components of the services provided in the area as well as the geographic adjustment of those components. The Commission has

concluded that this will probably lead to a geographic pattern of payments that accurately reflects local revenue shares, compared with a single geographic factor created from fixed shares. There is some reason to suspect that the current geographic pattern of revenue shares is somewhat affected by current payment policies and so should not be viewed as an infallible benchmark.

Expanded Activities under OBRA 1990

Senator Harkin: Dr. Ginsburg, in addition to its original work on Medicare physician payment reform, the Commission's agenda was broadened in 1988 to include a review of how best to slow the growth in expenditures for physician services. The Omnibus Budget Reconciliation Act of 1990 broadens the Commission's scope yet again to cover such issues as graduate medical education costs, the effectiveness of peer review procedures, options for controlling the cost of health insurance to employers, and malpractice liability reform.

That sounds like a pretty significant expansion in the Commission's annual workload. Yet, you are requesting only two additional full-time positions in 1992, and the remainder of your increase is concentrated in rent, utilities and communications costs.

Dr. Ginsburg, do you believe you will have sufficient resources to fulfill the Commission's mandate in 1992?

Dr. Ginsburg: OBRA90 did include a substantial expansion in the Commission's mandate that both builds on our previous work and introduces new issues. We have asked for a budget that we think is adequate given the work plan we have set out for the coming year. We are requesting funds for only two additional staff, because the statutory ceiling on the number of Commission staff positions (26) allows us to recruit only two more individuals. We intend to add a physician and one other senior professional in order to maximize the capability of new staff to take on some of the new issues in the Commission's mandate. The other budget category in which we are

requesting a significant increase is Communications, Utilities and Other Rent. Included in this category are funds for mainframe computer and programming services which would increase by 65 percent (from $545,000 to $900,000) under our budget request. This is a direct reflection of the expansion in data base development and quantitative analysis that will be required under the Commission's broadened mandate. A modest increase in funds for outside contracts will also help to extend and support the work that can be conducted directly by Commission staff.

CORPORATION FOR PUBLIC BROADCASTING

STATEMENTS OF:

MARSHALL C. TURNER, JR., CHAIRMAN OF THE BOARD OF DIRECTORS

DONALD E. LEDWIG, PRESIDENT AND CHIEF EXECUTIVE OFFICER ACCOMPANIED BY FREDERICK De MARCO, SENIOR VICE PRESIDENT, STATION RELATIONS AND TREASURER

BUDGET REQUEST

Senator HARKIN. Now we will hear from the Corporation for Public Broadcasting. I would like to welcome the President and Chief Executive Officer, Donald Ledwig, as well as Marshall Turner, Chairman of CPB's Board of Directors.

The Corporation for Public Broadcasting is the primary vehicle for providing Federal financial assistance to the radio and television stations which currently compose the noncommercial broadcasting system.

CPB is forward funded for 2 years. For fiscal year 1994, CPB is requesting $279 million for its Public Broadcasting Fund, a 10-percent increase. The President's request is $260 million, or 2.6 percent over the prior year.

In addition, CPB is requesting $76 million for a new unauthorized public telecommunications-for-education fund.

Mr. Ledwig, welcome again to the subcommittee. I recognize Mr. Turner. If you would introduce Mr. DeMarco and his position. We will put your statement in full in the record, and please summarize it if you will.

INTRODUCTION OF ASSOCIATES

Mr. TURNER. Thank you, Mr. Chairman, members of the subcommittee.

My name is Marshall Turner. I am Chairman of the Board of Directors of the Corporation for Public Broadcasting, or CPB. I am accompanied today by Mr. Donald Ledwig, President and Chief Executive Officer, and by Mr. Frederick De Marco, Senior Vice President, Station Relations and Treasurer of CPB.

I welcome this opportunity to appear before you today for two main reasons: to record my support for the Corporation's request for an appropriation of $279 million for fiscal year 1994 for general appropriations and to testify in support of the Corporation's request for an appropriation of $76 million for the new public telecommunications-for-education fund. This fund would be used exclusively to create and deliver new educational programming and services to all Americans.

Before I continue, I wish to thank the subcommittee for its unwavering support and enthusiasm for public broadcasting for the last 24 years.

Mr. Chairman, we at the Corporation are well aware that within the jurisdiction of this subcommittee alone there are scores of programs that help people meet one of life's basic necessities, quality health care, as well as other important social needs such as raising educational standards and providing safer working environments for America's work force. When it comes to choosing among worthy programs, CPB appreciates the hard choices that this subcommittee makes each year and particularly this year.

During the last 24 years, you have helped create and build an outstanding system of public radio and television stations and many of the outstanding programs we air. Public broadcasting is broadly supported and heavily used by viewers and listeners today. Public broadcasting strives to give Americans the opportunity to see or hear educational, cultural, and public affairs programs of the highest quality and almost always succeeds.

EDUCATIONAL POTENTIAL OF PUBLIC BROADCASTING

But there is one glaring opportunity where the infrastructure that is public broadcasting is greatly underutilized in relation to its potential to help address a critical national need, education. Our country faces no greater challenges than improving education and upgrading our work force. Our ability to solve other problems will require the success at these too. CPB firmly believes that public broadcasting is positioned to contribute much more to solving these serious problems than it has in the past.

We are certain that one way to maximize the value of our programming and services is by extending their impact through outreach activities and conversion of programs to educational materials. For example, what made "The Civil War" such a magnificent achievement was not just its ability to rivet the Nation's attention over a 5-night period last fall. The more compelling value is in its use now as a television course by schools, colleges, universities, people in their work forces, people in many locations where they happen to be.

What makes public broadcasting's education, information and outreach programming so effective is not the broadcast of a single program or series during the year. It is the rippling effect of those programs to touch human lives, to involve citizens at the local level in finding local solutions to national problems. Recognizing the potential to maximize the level of service public broadcasting provides, CPB, with strong support from the public broadcasting system, began to examine the possibilities for redirecting and expanding public broadcasting's capacity and ability to improve educational services.

Using this input and with the help of several key public broadcasting organizations and stations, CPB has designed a multiyear plan to expand significantly the role of public broadcasting in developing and delivering new educational programs and services. The plan utilizes public broadcasting's accumulated experience and infrastructure as a foundation from which public broadcasting will