CORPS SCHOLARSHIPS Senator BUMPERS. I assume you do not talk to students about Corps scholarships until you are reasonably certain they are going to be admitted by some medical school. Is that correct? Dr. GASTON. Yes; that is correct. Senator BUMPERS. You cannot just find someone and give them the money before you know whether they are going to be admitted or not. Dr. HARMON. No; they must be admitted to a medical school. Dr. GASTON. There is an established process through which they apply, and are interviewed. There is an application designed to really see, No. 1, who is going into primary care, because it is important to be sure that we are supporting the family doctors, the internists, the obstetricians, the pediatricians. That process also seeks to determine who is more likely to serve the underserved and not go into a high-tech subspecialty. So based on a number of different factors that are ascertained during the interview, scholars are ranked and go on a scholarship list. Then the next step in the process, following completion of training, is that they match to a specific site from a list of available sites in high-priority, underserved areas. Senator BUMPERS. Of the 71 scholars in 1990, how many were minorities? Dr. GASTON. In 1990, 44 percent were black, 11 percent were Hispanic, 1 percent was an American Indian, and 4 percent were Asian. Senator BUMPERS. Forty-four percent or forty-four people. Dr. GASTON. Forty-four percent. Senator BUMPERS. And Hispanic were 12? Dr. GASTON. No; 11 percent; 4 percent were Asian; 34 percent were white; and 6 percent were unknown. Senator BUMPERS. I am not sure I understood the process a while ago. If somebody comes to you and says, look, I am not interested in making money. I want to be in the Public Health Service, or I want to go into unserved areas, or the inner city, or the Mississippi delta, or whatever, that is the first consideration, I take it. At least it is a primary consideration with you in awarding a scholarship, right? Dr. GASTON. Yes; the first consideration is that they go into a primary care specialty. Senator BUMPERS. But of course they have to be needy, I guess. They have to need the money. Dr. GASTON. Yes; that is a consideration. Senator BUMPERS. Do you have an income criteria? Dr. GASTON. Yes; former exceptional financial need [EFN] scholarship recipients have preference. Senator BUMPERS. Of a household, just like we do on Pell grants and so on? Dr. GASTON. Yes; because we give preference to former EFN scholars. Senator BUMPERS. I will tell you what I am driving at. If you have minority students in my State who qualify for this, I do not want them to feel obligated to go out of State. I want them to feel free to go to the University of Arkansas Medical School. Do they have to have been admitted or accepted to a medical school before you will talk to them? I never did get that straight in my mind. Dr. GASTON. Yes; they have to be in a medical school before they can even apply. And you know, it is very difficult. Let me just take 1 minute and talk about this. Last year we received over 1,000 applications for scholarships, and we could only award around 70, so that it is very difficult. As we experience increased funding for recruitment, we can begin to award more scholarships and make more placements. We have had to make very hard decisions with the limited resources we have had in the last several years. NHSC PLACEMENT SITES Let me also add that there are priorities, in terms of the sites where scholars can place, those are prioritized according to the highest need areas. We have to make hard decisions on that side, too, in terms of what sites get on the list. There is a three-step process in terms of deciding. First, where are the HPSA's, the health professional shortage areas. Then we prioritize those HPSA's based on high infant mortality, low birthweight, access, poverty to develop a more restricted listing. This listing is further prioritized after that, the high priority HPSA's, into the high priority sites to which obligors match for service. Senator BUMPERS. Well, where do the doctors, for example, who graduate from Howard Medical School, where do they go to practice? You have plenty of areas right here in D.C. that are considered underserved? Do you have National Health Service Corps doctors here in the District? Dr. GASTON. Yes; we do have a few placements. Let me just say that, historically, when you look at the data, minority students are more likely to go into primary care, as compared to other students. Minority students are also more likely to go to an underserved area, and certainly more minority students are in need of scholarship and loan repayment help. Let me also mention, too, that if you want to talk about Meharry, which is another school where we have scholars, they emphasize service to the underserved, so that their students are already being trained in that arena, and a high percentage of the Meharry graduates do go into unserved areas, especially into the rural areas of the South. Senator BUMPERS. Well, I do not want to pursue this too long, but first of all I am a great champion of this program. There are areas in Arkansas that would be totally unserved, if not for Corps doctors. But I am concerned about what proportion of the applications you received last year were from applicants who deserved funding. Dr. GASTON. The majority of them would have been funded. Some of those 1,000 applicants did not indicate a commitment to primary care and service to the underserved and we would not have funded them. Senator BUMPERS. Boy, it is a tragedy we do not have the money to do that. Dr. GASTON. Well that is why we know that we will have no trouble with awarding over 400 this year. We know we will get over 1,000 applications again, and we will be able to fund upward of 450. STATE LOAN REPAYMENT PROGRAM Senator BUMPERS. Well, Dr. Gaston, I want to say that my primary concern is, if you give a National Health Service Corps grant to a scholar from my State, and they wind up going to Meharry or Howard or any other school outside Arkansas, our chances of their ever coming back to serve Arkansas are slim. Dr. GASTON. Well, you know, that is another reason that it is important that Arkansas and other States really get involved in our State loan repayment program. At the present time they are not. We are funding 14 States that will provide payment of loans for students in that State to stay in the State, so that this is another key approach to trying to maintain Senator BUMPERS. Now, what is this program? I am not sure I am following you on this. Dr. GASTON. This is a new program that is just about 2 years old now. We have 14 States we give money to. They also match, according to a certain percentage, and then they find the students. It is like the Federal loan repayment, except that it is State managed, and our Federal dollars go totally to the State and then go to the student or the provider. Dr. HARMON. We are working closely with your State health officer, Dr. Elders. We have a cooperative agreement on primary care with your State, and we have funding available for rural health outreach, and also rural health office support. And so these are ways that each State can seek more assistance in designating and filling shortage areas. That is an important growing direction in the Federal/State working relationship. Senator BUMPERS. Well, you know, the Mississippi delta has sort of become my obsession. Did you know we had 500 kids die in this country last year of diarrhea. And the incidence of death by diarrhea is so much bigger in the delta than almost any other part of the country. A primary reason for these deaths is that people just do not have doctors to go to in that area. And that is the reason I am hot for this program and I am hot to get as many scholarships in Mississippi and Arkansas and that area as I can, in the hope that they will serve that area. VACCINE INJURY COMPENSATION Mr. Chairman, one last thing, and this is for your benefit for the markup on supplemental appropriations as well as to make a record here. Dr. Harmon, I guess you are the right person to ask about the vaccine injury compensation program. We appropriated $62 million for that program in fiscal year 1991. Now, we have over 4,000 claims of people whose children were adversely affected by a DPT shot, mostly prior to October 1988. As you know, we let all of those people file claims until January 3 of this year, and the flood tide hit. We now have 4,000 claims. It is estimated the total cost of those 4,000 claims, if all of them were compensated, something like $3.5 billion. We have a vaccine compensation fund which has, I guess, $200 million or $300 million in it now; I am not sure how much it is. And that takes care of the claims that are filed under this law after October 1988. But our big problem now is funding those pre-1988 cases. We have got $62 million to pay those claims. We have already spent $18 million, Mr. Chairman, and if we do not put some money in the supplemental, we are going to run out of money probably in the next 60 days, maybe 90 days. And we are not going to be able to pay these claims that are coming through the pipeline. Now, some people have suggested that we take money out of the trust fund that is being generated now, for those claims from October 1988 forward. But I am opposed to that, because those funds are going to be needed for those pre-1988 claims. And you start depleting that fund, the pharmaceutical companies will conclude that they are going to wind up being liable, and they are going to raise the price of their vaccines. And this is a sort of a one-shot deal. In other words, it is not a continuing thing. But I am afraid that if we do not appropriate money for that vaccine compensation fund now in the supplemental, we are going to run out of money and we are going to create all kinds of problems for ourselves. What do you say to that, Dr. Harmon? Dr. HARMON. Well, the Department is currently analyzing the impact of this large number of older claims that have come in. We do not yet know the precise impact of that, and it is going to be a while before we have that available. We also are concerned about how to pay for those claims, and that is a subject of considerable review right now as well. The fund is now approximately $300 million. Fortunately, the rate of claims in the new cases has been below projections. Senator BUMPERS. Yes. Dr. HARMON. And so that needs to be monitored carefully. Senator BUMPERS. How many so-called new claims do we have? Dr. HARMON. I would like to ask Dr. Fitzhugh Mullan, the Bureau Director, to comment on that, Senator Bumpers. Senator BUMPERS. Dr. Mullan. Dr. MULLAN. As of March 12, 51 claims have been filed. Dr. MULLAN. Yes; 51 post-October 1, 1988, claims as of March 12. Well, I just want to make this point for the record, and that is, if we do not appropriate money to take care of all these 4,000 plus claims that accrued before October 1988, we are obviously going to be way short at the end of the year and we are going to have a crisis on our hands. I would rather pay it as we go. I do not know how Congressman Waxman feels about it over in the House, but I think we have got a real problem on our hands. Do you agree with me that if we start tapping that trust fund in order to pay old claims, that we are going to have the pharmaceutical companies trying to raise their prices again? Dr. HARMON. It is hard to say, Senator. That is undergoing review in the Department right now. It depends on what the future tap will be on the trust fund and, again, fortunately, the rate of claims has been below projections. I believe in the history of this legislation they projected up to 75 claims per year. We are also monitoring the science of this issue as far as what is the real cause and effect going on here. It could be that as we learn more, we will be able to adjust the vaccine injury table. That needs review. Just because we have awarded so far at the rate of 70 percent of claims does not mean it will always be that way. HRSA's role in this is to medically review the claims and work with the Justice Department in the court so that only those claims that are justified are paid. And we are dedicating ourselves to doing that in the best way possible. Senator BUMPERS. Well, we have paid out $18.1 million so far out of the $62 million. I may be an alarmist. Maybe it is not as big a deal as I think it is, but I think it is pretty serious. Dr. HARMON. Well, no. There is cause for concern, the statute states that if at any time there are insufficient funds to pay all of the claims payable under subtitle 2 of title XXI of the Public Health Service Act for 180 days, such subtitle shall cease to be in effect until sufficient funds to pay all of the claims under such subtitle become available. This could force us back into litigation. Senator BUMPERS. I think that would be the worst thing that could happen to us. Dr. HARMON. We tend to agree with that, so we do need to seek a solution. Senator BUMPERS. Thank you, Dr. Harmon. Mr. Chairman, thank you very much. NHSC SCHOLARSHIP PROGRAM Senator HARKIN. Thank you, Senator Bumpers, for raising the issues, especially the Public Health Service or National Health Service Corps in rural and underserved areas. The questions you ask are right to the point. On the loan repayment program, again, that happens after you are finished. You have got to get through first. It is not a bad program; it is a fine program. But the States are strapped, too, in providing those up-front moneys for those loans to get those kids through school. Senator BUMPERS. Incidentally, Mr. Chairman, do you pay tuition plus a stipend, or just tuition on the National Health Service Corps? Dr. HARMON. Plus stipend. Senator BUMPERS. Depending on the location and so on? Dr. HARMON. Right. Tuition varies quite a bit, of course. I wanted to comment also, Senator Bumpers and Senator Harkin, I spent 4 years between your States as the Missouri State health officer, and so I worked with both your State health officers. I know the delta, because the bootheel of Missouri is part of that, and I have observed those problems and agree with you. We have some challenges on our hands and need to work harder. Senator HARKIN. The other thing about the scholarships and these kids going to schools outside of Arkansas, a lot of them are going to private schools. It seems to me that it would be cheaper |