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concerned that the United States is losing its position of scientific superiority to foreign competition by lagging behind in the utilization and application of this revolutionary technology.

In the United States, we have captured the attention and interest of leading biomedical scientists across the nation. However, sometimes we have had to give away or lend instruments because these American scientists can't get the money to buy them.

We are a small company and we can't afford this private sector philanthropic program. We continue to lend instruments in hopes that ultimately they will be purchased. It is time, though, that the federal government get more serious about this problem. Let me explain why by just focusing on one disease, Alzheimer's.

It costs our society approximately $90 billion each year to care for the estimated 4 million patients who have been diagnosed with Alzheimer's. Diagnostic techniques currently in use are relatively primitive. Probably as many as 40 percent of these people do not in fact have Alzheimer's, for which there is little useful treatment. They have other diseases for which treatment may be available at relatively little


It takes no great genius to figure that the cost of Alzheimer's will continue to escalate unless something is done soon. Our collaboration with Massachusetts General Hospital on Alzheimer's disease is valued at approximately $1 million, spread out over three years. That doesn't get the job done quickly but we were told that more money is not available.

We feel that our goal should be a national database that would make it possible to rescreen all of the nation's Alzheimer's patients using readily available biological samples and also to provide a solid foundation of data for developing possible pharmaceutical treatment. We and our collaborators think $10 million over three to five years would do it not just for Alzheimer's but for Parkinson's and Huntington's also.

What would be the financial impact if we are right? There are 4 million people presently diagnosed as having Alzheimer's. These 4 million people cost the United States $90 billion per year for their health care. How much could be saved if our program is successful? Conservatively we estimate half of the current expense or $35 to 40 billion could be diverted to other social or governmental programs or to reduce the budget deficit.

But more importantly, some of the 4 million Alzheimer's victims now consigned in error to hopeless custodial care, might get a chance to live again.

Thank you very much.


MAY 1, 1991.


Chairman, Labor, Health and Human Services, and Education Appropriations Subcommittee, U.S. Senate, Washington, DC.

DEAR SENATOR HARKIN: Thursday, April 25, after my HHS testimony, you asked me how soon an effective differential diagnostic for Alzheimer's disease versus other degenerative disorders could be developed. Conservatively for the record I answered "3-5 years with adequate funding, possibly sooner".

I was cautious in my answer because we have performed much research on Alzheimer's with company funds that has not been published or referred. Although we have made significant progress, I was reluctant to speak "on the record" without other confirming data. Off the record, here is the result of some of our work.

In November 1989 at the 2nd International Alzheimer's and Parkinson's Conference in Kyoto, we reported that using one thousand autopsied brain tissue samples we could differentiate between Alzheimer's and other disorders with an error rate of approximately 20 percent.

In our laboratories we recently analyzed cerebrospinal fluid samples obtained through Massachusetts General Hospital, the Datatop Parkinson's program, and McLean Hospital. 60 samples were from Alzheimer patients and 200 were from Parkinson's, Huntingon's and others. We were able to diagnose Alzheimer's with a better than 10 percent error (which is equal to or better than the best diagnostic accuracy of major clinical centers). Our procedure of biochemical pattern recognition is a $100 test done in 30-60 minutes versus the $4,000-10,000/patient spent on diagnosis within the centers. We currently estimate that it will cost about $10M over 1-3 years to achieve the goals of (1) having a test based on an easily obtainable sample such as a nasal swab or a blood fingerstick and (2) having a simple turnkey instrument and database derived from our existing research instruments. The time

required to achieve these goals is principally dependent on the rate at which funding resources are available.

The findings discussed above have been submitted to NIH as part of a supplemental grant to the MGH Alzheimer's Center to investigate the extension of the diagnostic protocols to blood and nasal swabs.

Under the proposed supplemental grant, we expect to progress further in developing a diagnosis for Alzheimer's, as well as the develop a test around an easily obtainable biological sample.

Despite your efforts to increase funding for Alzheimer's research in fiscal 1991, it appears that only a very modest amount has trickled down for further development using our technology. There is still a need for more funds to be made available for this purpose. I would be happy to discuss this in further detail if you wish.




Senator HARKIN. Thank you. Again, welcome back to the subcommittee. You have been here before.

I understand there are no specific requests here for money, but how soon do you expect that we could have accurate diagnostic tests for Alzheimer's, for example?

Mr. BLOCK. With adequate funding, 3 to 5 years, possibly sooner. Senator HARKIN. I appreciate that. This is an area we ought to move ahead in. Thanks for all your good work at ESA.

Mr. BLOCK. Thank you.

Senator HARKIN. Thank you very much, Mr. Block.


Senator HARKIN. Thank you all for being here. I would like to thank all the witnesses who have appeared before us with regard to the proposed fiscal year 1992 budget request.

Today's testimony completes our hearings of public witnesses, the subcommittee will now stand in recess until 2 p.m., when we will hear testimony from Hon. Lamar Alexander, Secretary of Education.

[Whereupon, at 1:38 p.m., Thursday, April 25, the subcommittee was recessed, to reconvene at 2 p.m., the same day.]

Material Submitted Subsequent to Conclusion of


[CLERK'S NOTE.-Additional material was received by the subcommittee subsequent to conclusion of the hearings. The statements will be inserted in the record at this point.]



The American Association of Colleges of Osteopathic Colleges (AACOM) is pleased to present its views on FY 1992 funding for federal programs that support the education of health professionals, particularly the federal loan and loan guarantee programs under the Higher Education Act and the Public Health Service Act that are widely used by health professions students, especially the 6,615 students at the fifteen osteopathic medical colleges.

In years past, AACOM testified before this Subcommittee about the partnerships formed between the osteopathic medical colleges and the federal government in pursuit of mutual goals such as primary care and family medicine, geriatrics, and improved rural health care. These remain major goals of the colleges of osteopathic medicine, as well as the federal government. However, continued success in each area depends upon the ability of the colleges of osteopathic medicine to recruit and retain students who share these goals. Many of these students will need federal loan support.

Osteopathic medical students have higher borrowing needs on average than other health professions students. They depend to a greater extent on federally guaranteed and subsidized loan programs for these funds and their ability to begin and complete their education depends in large measure on the Subcommittee's continued support for the various federal student loan programs. This dependence is substantial. Ninety-six percent (96%) of the seniors graduating from osteopathic medical schools did so with debts averaging $71,500. This compares to about $45,000 for the 79% of allopathic medical students who graduated irdebted.

It is important to understand the major factors that cause this dependence on higher borrowing. The first is that many osteopathic medical students come from families with lower incomes. Forty-eight percent come from families with annual incomes under $40,000. Their families cannot help them significantly, so they must seek financial aid. Second, osteopathic physicians in large proportion practice primary care in smaller communities. Thus they do not generate the kind of income that permits substantial giving to their colleges to help build large endowments. This means that tuition revenue is important and is about 50% of total revenue at many osteopathic medical schools. For allopathic medical schools tuition averages only about 8% of total revenue because of other income from endowments, state support and faculty practice income. Third, the majority of the osteopathic medical colleges (9 of 15) are private and do not have the cross subsidies, such as state appropriations, that are available to many other health professions schools. Nor do osteopathic medical colleges, because of their emphasis on primary and preventive health care, generate the kind of practice income that is typical of many other medical schools which do not emphasize primary care.

Despite the high rate of borrowing by these students, osteopathic medical graduates have the lowest rate of defaults among the various health professionals in the Health Education Assistance Loan (HEAL) program. AACOM is proud of the record they have achieved to date. However, recent changes in federal law eliminating the tax deductibility of interest on student loans and limiting deferral of loan payment during residency have put more pressure on osteopathic medical graduates' ability to repay their loans. They must now begin repayment during residency training, a time of low earnings for all young physicians. AACOM is concerned that more defaults may occur as a result of these changes and is working hard with the authorizing committees to try to change these provisions.

The HEAL program is one of the most important loan programs used by osteopathic medical students and is relied upon by 56% of these students. In 1980 only 2.2% of our students used the HEAL program; however, they have moved to this program because of the increasing cost of osteopathic medical education and the limits on borrowing under the Department of Education loans. Students may borrow $20,000 annually

under HEAL and many students use the maximum amount every year. Full funding of HEAL is of critical importance to them, as is unimpeded and unrestricted borrowing under this program.

The current $260 million credit ceiling that the FY 1991 appropriations law places on HEAL borrowing will cause major problems for all health professions students within the next two months because there will be no funds left. AACOM urges an immediate lifting of the ceiling so as not to limit access to this essential program. AACOM shares this Subcommittee's concern over the problem of defaults in HEAL, and is committed to devising solutions to stem the current default situation. But the education of current and future osteopathic medical students should not be threatened as Congress, health professions educators and the financial community work on solutions to these widely recognized problems.

What is particularly troubling is that some of the lowest cost HEAL loans may not be able to grow due to this limit. Two programs --the HEAL "NOW Loan Program offered to all osteopathic medical students through the Kirksville (MO) College of Osteopathic Medicine, and the Knight Tuition Plans/Key Bank of Maine "HEAL DEAL" program for M.D., D.O. and D.D.S. students -- have just negotiated improved terms that could have positive benefits in terms of future debt management. The credit ceiling may prevent these programs from proceeding. AACOM urges the Subcommittee to lift the credit ceiling as soon as possible. It penalizes disciplines, such as osteopathic medicine, that have very good repayment and default profiles.

AACOM is strongly opposed to the Administration's proposal to phase out the HEAL program and to prevent new borrowers from entering it. This would have a devastating impact on our students, particularly at the private colleges of osteopathic medicine. AACOM does not understand this policy which seems to run counter to the aims of the Administration to encourage primary care training. AACOM urges this Subcommittee to reiterate its commitment to maintaining a strong HEAL program and to reject the Administration's proposal.

AACOM supports the recapitalization of the Health Professions Student Loan Program (HPSL) at the authorized level of $15 million. AACOM does not consider HPSL an adequate substitute for the HEAL program, as has been suggested by the Administration. Osteopathic medical students need to have access to both programs if they are to put together an affordable financial package.

Last year Congress reauthorized the National Health Service Corps (NHSC) and significantly increased funding for the scholarship and loan repayment programs. This program is critical to assuring that the most underserved areas of the country have primary medical care services available. AACOM encourages the Subcommittee to provide $60,000,000 for the scholarship and loan repayment programs. This will allow NHSC to continue to respond to critical health problems, such as high rates of infant mortality, so prevalent in underserved areas.

Several programs help meet the financial needs of disadvantaged and underrepresented minority students in health professions schools. The Disadvantaged Health Improvement Act of 1990 established a number of beneficial programs designed to encourage the participation of minority and disadvantaged students in the health professions. For example, the Scholarships for Disadvantaged Students (SDS) program, the Minority Faculty Loan Repayment Program and the Grants to Communities-Health Professions Scholarship Program are all excellent initiatives. These programs can benefit students at osteopathic medical colleges which have achieved a 100% increase in first year enrollment of underrepresented minorities over the last four years. AACOM urges that the SDS program receive $18 million in appropriations; the Minority Faculty Loan Repayment should be funded at $2 million; and AACOM recommends funding of $2.5 million for the Grants to Communities program.

In addition to the programs under the Department of Health and Human Services, our students make extensive use of Department of Education loans and loan guarantees under the authority of the Higher Education

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